REPUBLIC OF THE PHILIPPINES vs. FRANCISCO RICARTE G.R. No.

L-46893 November 12, 1985

Facts: This case is based on the ground that the issues involved purely the questions of law. Defendant- appellee Francisco Ricarte filed his income tax return for the year 1958 on March 1959 which was correspondingly assessed by the Office of the Collector of Internal Revenue fixed at P222.00 based on th defendants income tax liability pursuant to the express provision of Section 51 (a) of the National Internal Revenue Code (Commonwealth Act No. 466). He then paid his income tax in two equal installments each on May and August 1959. However on June 1959, Republic Act 2343 took effect amending Commonwealth Act No. 466 including Section 51(a). Under the amendatory act, the taxpayer assesses himself, files his return and pays the tax as shown in his return upon filing thereof. In 1961, the Bureau of Internal Revenue, after investigation, found that the defendant had a deficiency of P 1,136.87 in his income tax for 1958. On January of the same year, assessment notice No. 17-A-708424-58 for the amount afore stated was issued and, together with the corresponding audit sheet and letter of demand, was mailed to the defendant. For failure of defendant to pay his deficiency income tax liability, plaintiff, on January 14, 1966, filed a complaint for collection of unpaid taxes before the City Court of Cebu. After trial and hearing, the court a quo rendered a decision dated October 29, 1966 dismissing the case on the ground of prescription of action. The trial court reasoned out that the assessment was made by the Bureau of Internal Revenue on April 6, 1959, but the present case was filed only on January 14, 1966 or more than the prescriptive period of five years as provided for in Section 332(c) of the National Internal Revenue Code. On appeal to the former Court of First Instance of Cebu, the parties entered into a stipulation of facts. On September 1968, the former Court of First Instance, on the basis of the stipulation of facts, rendered its decision dismissing herein appellant's complaint. The said court stated that what the Bureau of Internal Revenue sought to collect from the appellee was based on an assessment which the Bureau made under the provisions of a new law, R.A. No. 2343, which was not yet in effect at the time of the filing of appellee's income tax return for 1958; and that the action against the appellee had already prescribed. On October 16, 1968, appellant sought reconsideration of the lower court's decision. The motion was denied on December 14, 1968, hence this appeal. Issue: Whether or not the lower court has erred in holding:

a. b. c.

that the deficiency assessment has no legal standing. the deficiency assessment has prescribed. the plaintiff failed to prove service upon defendant of the deficiency assessment dated January 19, 1961 (p. 5, Brief for Plaintiff-Appellant; p. 14, rec.).

Ruling: In holding that the subsequent assessment made by the Bureau of Internal Revenue on January 19, 1961 has no legal basis, the lower court was of the impression that the same was made under the provision of a new law, R.A. No. 2343, which was not yet in effect at the time of the filing of the 1958 income tax return in question. Said court observed that the unamended provision of Section 51(a) of the National Internal Revenue Code which was enforcible when the appellant filed his 1958 income tax return should apply to this case and not that of Section 51(b) of the same Code, as amended by R.A. No. 2343, which went into effect only on June 20, 1959. Thus, the subsequent assessment made on January 1961 was based on the amendatory act. Appellee filed his income tax return for the year 1958 on March 2, 1959 and the same was assessed by the Bureau of Internal Revenue on April 6, 1959. The tax was paid in two installments. The Bureau of Internal Revenue reviewed the said return and found out a deficiency in the assessment it previously made and the income tax paid by the appellee. A notice of assessment was sent to the appellee on January 19, 1961. Such subsequent assessment undertaken by the Bureau of Internal Revenue was based merely on the income tax return filed by the appellee where no assessment has been made by him. As has been said, the amount of tax due was previously computed by the Bureau of Internal Revenue. Finding that it made an error, the Bureau reassessed the income tax return of the appellee; but such reassessment was made pursuant to the old law and not under the amendatory act. However, the lower court that the present action was filed after the prescriptive period of five (5) years provided for in Section 332(c) of the National Internal Revenue Code.. Although a subsequent notice of assessment was allegedly made and sent to appellee on January 19, 1961, it was the finding both of the former City Court of Cebu and the defunct Court of First Instance of Cebu that no evidence has been presented by the appellant that the appellee actually received a copy of that assessment notice regarding the alleged deficiency tax. Such finding, being one of fact, can no longer be reviewed by this Court. Even in the stipulation of facts entered into between the parties, there is no stipulation showing that the appellant actually received the subsequent notice of assessment. Thus, the prescriptive period provided for in Section 332(c) of the tax code should be counted from April 6, 1959, the date when the Bureau of Internal Revenue assessed the income tax return of the appellant. From said date until the filing of this case on January 14, 1966, six years and nine months had elapsed. Verily, the action had already prescribed. WHEREFORE THE APPEALED DECISION DATED SEPTEMBER 29, 1968, IS HEREBY AFFIRMED. NO COSTS.

OUANO ARRASTRE SERVICE, INC., vs. THE HON. PEARY G. ALEONOR, Presiding Judge, Regional Trial Court of Cebu, Branch XXI and INTERNATIONAL PHARMACEUTICALS, INC., and THE COURT OF APPEALS, G.R. No. 97664 October 10, 1991

Facts Private respondent International Pharmaceuticals, Inc. ("IPI") filed a complaint before the Regional Trial Court of Cebu City against Mercantile Insurance Company, Inc. ("Mercantile") and petitioner Ouano Arrastre Service, Inc. ("OASI") for replacement of certain equipment imported by IPI which were insured by Mercantile but were lost on arrival in Cebu City, allegedly because of mishandling by petitioner OASI. Petitioner OASI's answer was filed by the law firm of Ledesma, Saludo and Associates ("LSA") and signed by Atty. Manuel Trinidad of the Cebu office or branch of LSA. However, sometime thereafter, Atty. Trinidad resigned from LSA and Atty. Fidel Manalo, a partner from the Makati office of LSA, filed a motion to postpone the hearing stating that the case had just been endorsed to him by petitioner OASI. On January 1990, after trial which Atty. Manalo handled for OASI, the trial court rendered a decision holding Mercantile and petitioner OASI jointly and severally liable for the cost of replacement of the damaged equipment plus damages, totalling P435,000.00. Yet, only Mercantile appealed from the decision. On June 1990, IPI filed a motion for execution of the decision against petitioner OASI which public respondent judge granted on 25 June 1990. Consequently, the petitioner's counsel, through Atty. Catipay of the Cebu Branch of the LSA, filed a notice of appeal. The petitioner, through the same counsel, filed a motion for reconsideration of the order granting the writ of execution alleging that: (1) the failure seasonably to file an appeal was due to excusable neglect and slight "oversight" claiming that there was miscommunication between LSA-Cebu and LSA main office as to who would file the notice of appeal; and (2) Mercantile's timely notice of appeal should benefit petitioner OASI, a solidary co-debtor. However, on July 1990, public respondent judge denied OASI's motion for reconsideration declaring that the appeal cannot be given due course for lack of merit and ordered that the writ of execution be enforced. On appeal, the Court of Appeals dismissed petitioner's appeal upon the grounds that: (1) there had been a valid service of the decision; (2) the decision had become final and executory as to petitioner OASI; and (3) Mercantile's appeal does not inure to the benefit of petitioner as they do not share common defenses.

Issues 1. Whether or not there was valid service of the decision of the trial court upon petitioner's counsel; and 2. Whether or not the seasonable appeal filed by petitioner's co-defendant Mercantile should stay the execution as against petitioner.

Ruling The Court believes that petitioner has failed to show reversible error on the part of the Court of Appeals ("CA") in rendering its Decision dated 10 January 1991. The Court is not persuaded by the contention that the period to file a notice of appeal had not commenced to run as there had been no valid service of the trial court's decision upon petitioner's counsel. The Court of Appeals found as a fact that a copy of the decision was served upon Atty. Catipay but that he refused to receive it Petitioner's counsel was and is the firm of Ledesma, Saludo and Associates (and not any particular member or associate of that firm) which firm happens to have a main office in Makati and a branch office in Cebu City. Thus, the trial court's decision was validly served upon petitioner's counsel. The argument of petitioner to the effect that execution should not be allowed during the pendency of appeal of its co-defendant inasmuch as the same would result in an absurd situation in case the findings of the trial court are reversed by the Court of Appeals, has no leg to stand on. The law is clear and admits of no other interpretation. A final judgment must be executed against the defeated party. Petitioner's and Mercantile's defenses actually conflict with each other. Petitioner claims that the goods were received by it from the carrier vessel in bad condition; Mercantile, on the other hand, maintains that the goods did not sustain any damage or loss during the voyage. Moreover, Mercantile claims that, in any case, the insurance contract with IPI had already lapsed, a defense which petitioner, as the arrastre company responsible for the damage, cannot invoke to avoid liability. Finally, by failing to appeal, petitioner effectively waived any right it might have had to assert, as against the judgment creditor, any defense pertaining to Mercantile. In other words, petitioner by its own act or inaction, is no longer in a position to benefit from the provisions of Article 1222 of the Civil Code. In fine, the trial court's judgment can now be enforced against petitioner OASI. We do not pass upon because ACCORDINGLY, the Petition for Review is hereby DENIED for lack of merit. Costs against petitioner.

BISAYA LAND TRANSPORTATION CO., INC., ANTONIO V. CUENCO and BENJAMIN G. ROA vs. MARCIANO C. SANCHEZ AND THE HON. INTERMEDIATE APPELLATE COURT G.R. No. 74623 August 31, 1987

Facts
This is a petition for certiorari to review the decision of respondent Intermediate Appellate Court which affirmed the decision of the Regional Trial Court, 7th Judicial Region, Branch XII, Cebu City, in Civil Case No. R-18830 which was a suit for Specific Performance with Preliminary Injunction and Damages.

Petitioner Bisaya Land Transportation Company, Inc. (BISTRANCO, for short) has been engaged in the shipping business, operating several passenger-cargo vessels, and among the ports of call of these vessels has been Butuan City. As early as 1954, private respondent Marciano Sanchez (Sanchez, for short) was an employee of BISTRANCO, specifically, a quartermaster in one of its vessels, In 1959, he ceased to be an employee as he engaged in stevedoring services in the port of Butuan City and rendered steverdoring services for the vessels of BISTRANCO. In May 1975, he was appointed by BISTRANCO as shipping agent in Butuan City for the vessel M/V Don Mariano. Later, on March 1976, when BISTRANCO was under receivership,
Sanchez was appointed by its Receiver, Atty. Adolfo V. Amor, as acting shipping agent, also for M/V Doa Remedies, in addition to M/V Doa Filomena, in the port of Butuan City Thereafter, or on July

1976, a formal Contract of Agency was executed between BISTRANCO, represented by Receiver Atty. Adolfo V. Amor and Marciano C. Sanchez, represented by his authorized representative Exequiel Aranas. But after Sanchez found that the Contract of agency was quite prejudicial to him, he executed with BISTRANCO a Supplemental Shipping Agency Contract, which was duly signed by Receiver Atty. Adolfo V. Amor on behalf of BISTRANCO and Marciano C. Sanchez himself. Unfortunately, both the Contract of Agency and the Supplemental Shipping Agency Contract were never submitted by Atty. Adolfo Amor to the receivership court for its approval. By virtue of the Contract of Agency and the Supplemental Shipping Agency Contract (hereinafter referred to as Contracts), Sanchez performed his duties as shipping agent of BISTRANCO, and he received his corresponding commissions as such shipping agent. While the shipping business of BISTRANCO in Butuan City flourished, evidently to the mutual benefit of both parties, on December 1979, co-petitioner Benjamin G. Roa, as Executive Vice-President of BISTRANCO, wrote Sanchez a letter advising him that, effective 1 January 1980, BISTRANCO would commence operating its branch office in Butuan City. Prior to this, Sanchez was invited to attend a meeting of the Board of Directors of BISTRANCO wherein he was told by co-petitioner Antonio V. Cuenco that the Board was to open a branch office in Butuan City and he was asked what would be his proposals. Sanchez submitted his proposals in writing but these were not acceptable to BISTRANCO.

Realizing that the letter, was in effect a repudiation of the Contracts, Sanchez filed an action for specific performance with preliminary injunction and damages with the Regional Trial Court of Cebu City on December 1979. BISTRANCO actually opened and operated a branch office in Butuan City on 15 January 1980. BISTRANCO through its new representative contacted the shippers in Butuan City and neighboring towns, advising them to transact their business directly with its new branch office in Butuan City. Under these circumstances, the business of Sanchez, as shipping agent of BISTRANCO in Butuan City, was seriously impaired and undermined He could not solicit as many passengers as he used to, because the passenger tickets issued to him by BISTRANCO were limited. The cargoes solicited by Sanchez were loaded on a "chance basis" because those that were solicited by the branch office were given priority. 12 After due hearing and their respective memorandum filed, the trial court rendered judgment in favor of Sanchez.Thereafter, BISTRANCO appealed to the Court of Appeals which, as heretofore stated, affirmed the decision of the trial court in toto. Hence this Petition for certiorari brought to this Court. Issues Whether or not a court appointed receiver can validly enter into a contract without court approval? 1. Whether or not the opening by BISTRANCO of a branch office in Butuan City a violation of the contract of agency and supplemental shipping agency contract. 2. Whether or not the award for unearned commission and damages justified

Ruling

The general powers of a court-appointed receiver are provided in Section 7, Rule 59 of the Rules of Court. Under such rule, the receiver is "subject to the control of the court in which the action is pending" and he can "generally do such acts respecting the property as the court may authorize". The act of Receiver Amor in entering into a contract of agency with Sanchez is not one of the acts specifically allowed in the mentioned rule. While such act of Amor may be arguably implied from the power of the receiver to "take and keep possession of the property in controversy", and that the act of Amor is covered by the broad phrase that a receiver can "generally do such acts respecting the property as the court may authorize", still, it is necessary that the acts of the receiver have the approval or authorization of the court which appointed him as a receiver. The determination, therefore, of whether the questioned contracts are void or merely unenforceable is important, because of the settled distinction that a void and inexistent contract can not be ratified and become enforceable, whereas an unenforceable contract may still be ratified and, thereafter, enforced.

In the case at bar, the contracts of agency were entered into for the management and operation of BISTRANCO's business in Butuan City. Said Contracts necessarily imposed obligations and liabilities on the contracting parties, thereby affecting the disposition of the assets and business of the company under receivership. But a perusal of the Contracts in question would show that there is nothing in their cause, object or purpose which renders them void. The purpose of the Contracts was to create an agency for BISTRANCO with Marciano Sanchez as its agent in Butuan City. Even as to the other provisions of the Contracts, there is nothing in their cause or object which can be said as contrary to law, morals, good customs, public order or public policy so as to render them void. It is also undisputed that Atty. Adolfo Amor was entrusted, as receiver, with the administration of BISTRANCO and it business. But the act of entering into a contract is one which requires the authorization of the court which appointed him receiver. Consequently, the questioned Contracts can rightfully be classified as unenforceable for having been entered into by one who had acted beyond his powers, due to Receiver Amor's failure to secure the court's approval of said Contracts. These unenforceable Contracts were nevertheless deemed ratified in the case at bar, based upon the facts and circumstances on record which have led this Court to conclude that BISTRANCO had actually ratified the questioned Contracts. Furthermore, it is clear that BISTRANCO received material benefits from the contracts of agency of Sanchez, based upon the monthly statements of income of BISTRANCO, upon which the commissions of Sanchez were based. Besides, the doctrine of estoppel precludes BISTRANCO from repudiating an obligation voluntarily assumed by it, after having accepted benefits therefrom. To countenance such, repudiation would be contrary to equity and would put a premium on fraud or misrepresentation. Anent the issue of whether the Memorandum of Agreement and the Working Agreement which were executed by the parties in this case on 4 February 1977 and 28 May 1979, respectively, novated the questioned Contracts, the answer is also in the negative. In the case at bar, it can be deduced that the Agreements were not meant to novate the herein questioned contracts. Rather, the intent of the parties was to suspend some of the provisions of the Contracts for a period of one (1) year, during which, the provisions of the Agreements will prevail. As par. 8 of the Memorandum of Agreement provides: "It is in this spirit of cooperation with the Receiver to enable him to pay huge obligations of the company that the agent Marciano Sanchez has acceded to the request of Messrs. Miguel Cuenco and Antonio Cuenco to accept the reduction of his commissions." It would not be equitable to Sanchez to say now that the Contracts were extinguished and substituted by the Agreements. It would be tantamount to punishing Sanchez for the concessions he extended to BISTRANCO. Besides, the changes were not really substantial to bring about a novation. The changes pointed out by BISTRANCO between the Contracts and the Agreements do not go into the essence of the cause or object of the former. Under the Agreements, Sanchez remains the

agent of BISTRANCO in Butuan City. There is really no clear proof of incompatibility. In fact, the Contracts and the Agreements can be reconciled. The provisions of the Agreements which were more of changes on how to enforce the agency, prevailed during the period provided in them, but after their expiration, the conditions under the Contracts were implemented again. The term of the agency contract which was for a period of five (5) years still continued, until 27 July 1981. Considering that the contract of agency and the supplemental shipping agency contract are valid and binding between BISTRANCO and Sanchez, the former's opening of a branch in Butuan City was, in effect, a violation of the Contracts. Sanchez entered into the agency Contract because of the expected income and profits for himself. It may be true that there is no express prohibition for BISTRANCO to open its branch in Butuan City. But, the very reason why BISTRANCO agreed not to employ or appoint another agent in Butuan City was to prevent competition against Sanchez' agency, in order that he might recover what he invested and eventually maximize his profits. The opening by BISTRANCO of a branch in Butuan City virtually resulted in consequences to Sanchez worse than if another agent had been appointed. In effect, the opening of a branch office in Butuan City was a violation of the Contracts of agency. In the case at bar, good faith required that BISTRANCO refrain from opening its branch in Butuan City during the effectivity of the agency contract with Sanchez, or until 27 July 1981. Moreover, the opening of the branch office which, in effect, was a revocation of the contracts of agency is not sanctioned by law because the agency was the means by which Sanchez could fulfill his obligations under Exhibits "F" and "G". Article 1927 of the Civil Code, among others, provides: "An agency cannot be revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already contracted". As to the issue of whether the award of P588,000.00 to Sanchez for unearned commissions and damages is justified, the answer is also in the affirmative, considering that BISTRANCO violated the Contracts of agency and that Sanchez, before the breach by BISTRANCO of said agency Contracts, was already earning an average monthly commission of P32,000.00, as shown by the statements of commissions prepared by BISTRANCO itself. WHEREFORE, the petition is denied. The decision of the respondent Court is affirmed.

MARIMPERIO v. CA G.R. No. 40234, December 14, 1987

Facts This is a petition for certiorari under Section 1, Rule 65 of the Rules of Court seeking the annulment and setting aside of the decision of the Court of Appeals. In 1964 Philippine Traders Corporation and Union Import and Export Corporation entered into a joint business venture for the purchase of copra from Indonesia for sale in Europe. James Liu President and General Manager of the Union took charge of the European market and the chartering of a vessel to take the copra to Europe. Peter Yap of Philippine on the other hand, found one P.T. Karkam in Dumai Sumatra who had around 4,000 tons of copra for sale. Exequiel Toeg of Interocean was commissioned to look for a vessel and he found the vessel "SS Paxoi" of Marimperio available. Philippine and Union authorized Toeg to negotiate for its charter but with instructions to keep confidential the fact that they are the real charterers. Consequently on March 1965, in London England, a "Uniform Time Charter" for the hire of vessel "Paxoi" was entered into by the owner, Marimperio Compania Naviera, S.A. through its agents N. & J. Vlassopulos Ltd. and Matthews Wrightson, Burbridge, Ltd. to be referred to simply as Matthews, representing Interocean Shipping Corporation, which was made to appear as charterer, although it merely acted in behalf of the real charterers, private respondents herein. In view of the aforesaid Charter, on March 30, 1965 plaintiff Charterer cabled a firm offer to P.T. Karkam to buy the 4,000 tons of copra for U.S.$180.00 per ton, the same to be loaded either in April or May, 1965. The offer was accepted and plaintiffs opened two irrevocable letters of Credit in favor of P.T. Karkam On March 29, 1965, the Charterer was notified by letter by Vlassopulos through Matthews that the vessel "PAXOI" had sailed from Hsinkang at noontime on March 27, 196-5 and that it had left on hire at that time and date under the Uniform Time-Charter. The Charterer was however twice in default in its payments which were supposed to have been done in advance. The first 15-day hire comprising the period from March 27 to April 1-1, 1965 was paid despite follow-ups only on April 6, 1965 and the second 15-day hire for the period from April 12 to April 27, 1965 was paid also despite follow-ups only on April 26, 1965. On April 14, 1965 upon representation of Toeg, the Esso Standard Oil (Hongkong) Company supplied the vessel with 400 tons of bunker oil at a cost of US $6,982.73. Although the late payments for the charter of the vessel were received and acknowledged by Vlassopulos without comment or protest, said agent notified Matthews, by telex on April 23, 1965 that the shipowners in accordance with Clause 6 of the Charter Party were withdrawing the vessel from Charterer's service and holding said Charterer responsible for unpaid hirings and all legal claims.

On April 29, 1965, the shipowners entered into another charter agreement with another Charterer, the Nederlansche Stoomvart of Amsterdam, the delivery date of which was around May 3, 1965 for a trip via Indonesia to Antwep/Hamburg at an increase charter cost. Meanwhile, the original Charterer again remitted on April 30, 1965, the amount corresponding to the 3rd 15-day hire of the vessel "PAXOI" but this time the remittance was refused. On May 1965, respondents Union Import and Export Corporation and Philippine Traders Corporation filed a complaint with the Court of First Instance of Manila, Branch VIII, against the Unknown Owners of the Vessel "SS Paxoi" for specific performance with prayer for preliminary attachment, alleging, among other things, that the defendants (unknown owners) through their duly authorized agent in London, the N & J Vlassopulos Ltd., ship brokers, entered into a contract of Uniform Time-Charter with the Interocean Shipping Company of Manila through the latter's duly authorized broker, the Overseas Steamship Co., Inc., for the Charter of the vessel SS PAXOI' under the terms and conditions appearing therein ...; that, immediately thereafter, the Interocean Shipping Company sublet,the said vessel to the plaintiff Union Import & Export, Corporation which in turn sublet the same to the other plaintiff, the Philippine Traders Corporation (Amended Record on Appeal, p. 17). Respondents as plaintiffs in the complaint obtained a writ of preliminary attachment of vessel PAXOI' " which was anchored at Davao on May 5, 1969, upon the filing of the corresponding bond of P1,663,030.00 (Amended Record on Appeal, p. 27). However, the attachment was lifted on May 15, 1969 upon defendant's motion and filing of a counterbond for P1,663,030 (Amended Record on Appeal, p. 62). Thereafter, the complaint was amended to Identify the defendant as Marimperio Compania Naviera S.A., petitioner herein (Amended Record on Appeal, p. 38). In answer to the amended complaint, by way of special defenses defendant (petitioner herein) alleged among others that the Charter Party covering its vessel "SS PAXOI" was entered into by defendant with Interocean Shipping Co. which is not a party in the complaint; that defendant has no agreement or relationship whatsoever with the plaintiffs; that plaintiffs are unknown to defendant; that the charter party entered into by defendant with the Interocean Shipping Co. over the vessel "SS PAXOI" does not authorize a sub-charter of said vessel to other parties; and that at any rate, any such sub-charter was without the knowledge or consent of defendant or defendant's agent, and therefore, has no effect and/or is not binding upon defendant. By way of counterclaim, defendant prayed that plaintiffs be ordered to pay defendant (1) the sum of 5,085.133d or its equivalent, in Philippine currency of P54,929.60, which the defendant failed to realize under the substitute charter, from May 3, 1965 to May 16, 1965, while the vessel was under attachment; (2) the sum of E68.7.10 or its equivalent of P7,132.83, Philippine currency, as premium for defendant's counterbond for the first year, and such other additional premiums that will have to be paid by defendant for additional premiums while the case is pending; and (3) a sum of not less than P200,000.00 for and as attomey's fees and expenses of litigations (Amended Record on Appeal, p. 64). On March 16, 1966, respondent Interocean Shipping Corporation filed a complaint-inintervention to collect what it claims to be its loss of income by way of commission and expenses in the amount of P15,000.00 and the sum of P2,000.00 for attorney's fees (Amended Record on Appeal, p. 87). In its amended answer to the complaint-in-intervention petitioner, by way of special defenses alleged that (1) the plaintiff-in-intervention, being the charterer, did not notify the defendant shipowner, petitioner, herein, about any alleged sub-charter of the vessel "SS PAXOI" to the plaintiffs; consequently, there is no privity of contract between defendant and plaintiffs and it follows that plaintiff-in-intervention, as charterer, is responsible for defendant

shipowner for the proper performance of the charter party; (2) that the charter party provides that any dispute arising from the charter party should be referred to arbitration in London; that Charterer plaintiff-in-intervention has not complied with this provision of the charter party; consequently its complaint-in intervention is premature; and (3) that the alleged commission of 2 1/2 and not become due for the reason, among others, that the charterer violated the contract, and the full hiring fee due the shipowner was not paid in accordance with the terms and conditions of the charter party. By way of counterclaim defendant shipowner charged the plaintiff-in-intervention attorney's fees and expenses of litigation in the sum of P10,000.00 (Amended Record on Appeal, p. 123). On November 22, 1969 the Court of First Instance of Manila, Branch VIII rendered its decision in favor of defendant Marimperio Compania Naviera, S.A., petitioner herein, and against plaintiffs Union Import and Export Corporation and Philippine Traders Corporation, respondents herein, dismissing the amended complaint, and ordering said plaintiff on the counterclaim to pay defendant, jointly and severally, the amount of f 8,011.38 or its equivalent in Philippine currency of P75,303.40, at the exchange rate of P9.40 to 1 for the unearned charter hire due to the attachment of the vessel "PAXOI" in Davao, plus premiums paid on the counterbond as of April 22, 1968 plus the telex and cable charges and the sum of P10,000.00 as attorney's fees and costs. The trial court dismissed the complaint-in-intervention, ordering the intervenor, on the counterclaim, to pay defendant the sum of P10,000.00 as attorney's fees, and the costs (Amended Record on Appeal, p. 315). Plaintiffs filed a Motion for Reconsideration and/or new trial of the decision of the trial court on December 23, 1969 (Amended Record on Appeal, p. 286); the intervenor filed its motion for reconsideration and/or new trial on January 7, 1970. Acting on the two motions for reconsideration, the trial court reversed its stand in its amended decision dated January 24, 1978. Defendant (petitioner herein), filed a motion for reconsideration and/or new trial of the amended decision on February 19, 1970 (Amended Record on Appeal, p. 382). Meanwhile a new Judge was assigned to the Trial Court (Amended Record on Appeal, p. 541). On September 10, 1970 the trial court issued its order of September 10, 1970. On Appeal, the Court of Appeals affirmed the amended decision of the lower court except the portion granting commission to the intervenor- appellee, which it reversed thereby dismissing the complaint-in- intervention. Its two motions (1) for reconsideration and/or new trial and (2) for new trial having been denied by the Court of AppealsHence, petitioner filed with this Court its petition for review on certiorari on March 19, 1975. After deliberating on the petition, the Court resolved to require the respondents to comment thereon, in its resolution dated April 2, 1975. On October 20, 1975, the Court resolved (a) to give due course to the petition; (b) to treat the petition for review as a special civil action; and (c) to require both parties to submit their respective memoranda within thirty (30) days from notice hereof. Respondents filed their memoranda on January 27, 1976 petitioner, on February 26, 1976 (Rollo, p. 338). Respondents' reply memorandum was filed on April 14, 1976 and Rejoinder to respondents' reply memorandum was filed on May 28, 1976.

On June 11, 1976, the Court resolved to admit petitioner's rejoinder to respondents' reply memorandum and to declare this case submitted for decision. Issues 1. Whether or not respondents have the legal capacity to bring the suit for specific performance against petitioner based on the charter party, and 2. Whether or not the default of Charterer in the payment of the charter hire within the time agreed upon gives petitioner a right to rescind the charter party extra judicially. Ruling According to Article 1311 of the Civil Code, a contract takes effect between the parties who made it, and also their assigns and heirs, except in cases where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. Since a contract may be violated only by the parties, thereto as against each other, in an action upon that contract, the real parties in interest, either as plaintiff or as defendant, must be parties to said contract. Therefore, a party who has not taken part in it cannot sue or be sued for performance or for cancellation thereof, unless he shows that he has a real interest affected thereby. It is undisputed that the charter party, basis of the complaint, was entered into between petitioner Marimperio Compaia Naviera, S.A., through its duly authorized agent in London, the N & J Vlassopulos Ltd., and the Interocean Shipping Company of Manila through the latter's duly authorized broker, the Overseas Steamship Co., Inc., represented by Matthews, Wrightson Burbridge Ltd., for the Charter of the 'SS PAXOI' (Amended Complaint, Amended Record on Appeal, p. 33; Complaint-in-Intervention, Amended Record on Appeal, p. 87). It is also alleged in both the Complaint (Amended Record on Appeal 18) and the Amended Complaint (Amended Record on Appeal, p. 39) that the Interocean Shipping Company sublet the said vessel to respondent Union Import and Export Corporation which in turn sublet the same to respondent Philippine Traders Corporation. It is admitted by respondents that the charterer is the Interocean Shipping Company. Even paragraph 3 of the complaint-in-intervention alleges that respondents were given the use of the vessel "pursuant to paragraph 20 of the Uniform Time Charter ..." which precisely provides for the subletting of the vessel by the charterer (Rollo, p. 24). Furthermore, Article 652 of the Code of Commerce provides that the charter party shall contain, among others, the name, surname, and domicile of the charterer, and if he states that he is acting by commission, that of the person for whose account he makes the contract. It is obvious from the disclosure made in the charter party by the authorized broker, the Overseas Steamship Co., Inc., that the real charterer is the Interocean Shipping Company (which sublet the vessel to Union Import and Export Corporation which in turn sublet it to Philippine Traders Corporation). In a sub-lease, there are two leases and two distinct judicial relations although intimately connected and related to each other, unlike in a case of assignment of lease, where the lessee transmits absolutely his right, and his personality disappears; there only remains in the juridical relation two persons, the lessor and the assignee who is converted into a lessee (Moreno, Philippine Law Dictionary, 2nd ed., p. 594). In other words, in a contract of sub-lease, the personality of the lessee does not disappear; he does not transmit absolutely his rights and obligations to the sub-lessee; and the sub-lessee generally does not have any direct action

against the owner of the premises as lessor, to require the compliance of the obligations contracted with the plaintiff as lessee, or vice versa (10 Manresa, Spanish Civil Code, 438). However, there are at least two instances in the Civil Code which allow the lessor to bring an action directly (accion directa) against the sub-lessee (use and preservation of the premises under Art. 1651, and rentals under Article 1652). It will be noted however that in said two Articles it is not the sub-lessee, but the lessor, who can bring the action. In the instant case, it is clear that the sub-lessee as such cannot maintain the suit they filed with the trial court (See A. Maluenda and Co. v. Enriquez, 46 Phil. 916). While in the instant case, the true charterers of the vessel were the private respondents herein and they chartered the vessel through an intermediary which upon instructions from them did not disclose their names. Article 1883 cannot help the private respondents, because although they were the actual principals in the charter of the vessel, the law does not allow them to bring any action against the adverse party and vice, versa.. On the other hand, the answer to the question of whether or not the default of charterer in the payment of the charter hire within the time agreed upon gives petitioner a right to rescind the charter party extrajudicially, is undoubtedly in the affirmative. Clause 6 of the Charter party specifically provides that the petitioner has the right to withdraw the vessel fromthe service of the charterers, without noting any protest and without interference of any court or any formality in the event that the charterer defaults in the payment of hire. The payment of hire was to be made every fifteen (1 5) days in advance. It is undisputed that the vessel "SS PAXOI" came on hire on March 27, 1965. On March 29, Vlassopulos notified by letter the charterer through Matthews of that fact, enclosing therein owner's debit note for a 15-day hire payable in advance. On March 30, 1965 the shipowner again notified Matthews that the payment for the first 15-day hire was overdue. Again on April 2 the shipowner telexed Matthews insisting on the payment, but it was only on April 7 that the amount of US $22,500.00 was remitted to Williams Deacons Bank, Ltd. through the Rizal Commercial Banking Corporation for the account of Vlassopulos, agent of petitioner, corresponding to the first 15-day hire from March 27 to April 11, 1965. On April 8, 1965, Vlassopulos acknowledged receipt of the payment, again with a debit note for the second 15-day hire and overtime which was due on April 11, 1965. On April 23, 1965, Vlassopulos notified Matthews by telex that charterers were in default and in accordance with Clause 6 of the charter party, the vessel was being withdrawn from charterer's service, holding them responsible for unpaid hire and all other legal claims of the owner. Respondents remitted the sum of US$6,000.00 and US$10,000.00 to the bank only on April 26, 1965 representing payment for the second 15-day hire from April 12 to April 27, 1965, received and accepted by the payee, Vlassopulos without any comment or protest. Unquestionably, as of April 23, 1965, when Vlassopulos notified Matthews of the withdrawal of the vessel from the Charterers' service, the latter was already in default. Accordingly, under Clause 6 of the charter party the owners had the right to withdraw " SS PAXO I " from the service of charterers, which withdrawal they did.

The question that now arises is whether or not petitioner can rescind the charter party extrajudicially. The answer is also in the affirmative. A contract is the law between the contracting parties, and when there is nothing in it which is contrary to law, morals, good customs, public policy or public order, the validity of the contract must be sustained Wherefore, he decision of the Court of Appeals affirming the amended decision of the Court of First Instance of Manila, Branch VIII, is hereby REVERSED and SET ASIDE except for that portion of the decision dismissing the complaint-in-intervention; and (2) the original decision of the trial court is hereby REINSTATED.

BADILLO vs. FERRER G.R. No. L-51369 July 29, 1987

Facts This case was certified to this Court by the Court of Appeals that the issues raised therein are pure questions of law. The instant case is treated as a petition for review on certiorari. Macario Badillo died intestate onFebruary 4, 1966,survived by his widow, Clarita Ferrer, and five minor children: Alberto, 16, Nenita, 14, Hilly 12, Cristy, 9, and Maria Salome, 5. He left a parcel of registered land of 77 square meters in Lumban, Laguna, with a house erected thereon, valued at P7,500.00, (the "PROPERTY", for short). Hence, each of the five minor plaintiffs had inherited a 1/12 share of the P7,500.00, or P625.00 each, which is less than the P2,000.00 mentioned in Article 320 of the Civil Code. On January 18, 1967, the surviving widow, in her own behalf and as natural guardian of the minor plaintiffs, executed a Deed of Extrajudicial Partition and Sale of the PROPERTY through which the PROPERTY was sold to defendants-appellants, the spouses Gregorio Soromero and Eleuteria Rana. The Register of Deeds at Sta. Cruz, Laguna, extended recognition to the validity of the Deed of Extrajudicial Partition and Sale, recorded the same, and issued a new transfer certificate of title to defendants-appellants. ... On November 11, 1968, Modesta Badillo, a sister of Macario Badillo, was able to obtain guardianship over the persons and properties of the minor plaintiffs, without personal notice to their mother, who was alleged "could not be located inspite of the efforts exerted" (ROA, p. 26). On July 23, 1970, their guardian caused the minor plaintiffs to file a complaint in the case below for the annulment of the sale of their participation in the PROPERTY to defendants-appellants and, conceding the validity of the sale of the widow's participation in the PROPERTY, they asked that, as co-owners, they be allowed to exercise the right of legal redemption. Issues 1. Whether or not the court erred in finding that the period of thirty (30) days provided for by article 1623 of the new civil code for plaintiffs to redeem the share of their mother in the property subject of their co-ownership sold by the latter to defendants has not yet elapsed. 2. Whether or not the court erred in declaring the sale by clarita ferrer badillo of the 5/12 share of his children on the property involved to defendants as null and void and relative thereto the court consequently erred in its failure to order plaintiffs minors to return to defendants the purchase price as well as the value of the improvements made by defendants on the property. 3. Whether or not the court erred in ordering the defendants to re-sell to plaintiffs the remaining 7/12 portion of the property in question in the amount of p4,375 .00.

Ruling Under their first assignment of error, the appellants advance the view that "the requisite notice in writing provided for by Article 1623 of the New Civil Code was already received by the minorsplaintiffs thru their then legal guardian, Clarita Ferrer Badillo, their mother, on the date the deed of extrajudicial partition and sale was executed on January 18, 1967. And the thirty-day period of redemption must be reckoned from this date."3 Stated differently, under Article 320 of the New Civil Code, the right granted to Clarita Ferrer Badillo to administer her children's property if the same is less than P2,000.00 includes the right to receive for her minor children such notice in writing. When she received her copy of the Deed of Extrajudicial Partition and Sale, Clarita Ferrer Badillo in effect received a notice in writing of the said sale in behalf of her minor children. In other words, the father, or in his absence the mother, is considered the legal administrator of the property pertaining to his child under parental authority without need of giving a bond in case the amount of his child's property does not exceed Two Thousand Pesos. In this case, the co-owner plaintiff, upon reaching the age of majority, sought to redeem a portion of a large tract of land which was sold to the defendant while the former was still a minor. The plaintiff, during his minority, became a co-owner of an undivided property which he, together with his cousins, acquired by donation from his grandmother. A legal guardian was duly appointed by the court to represent the minor co-owners. This legal guardian later sold, with the necessary permission of the court, the shares of three co-owners to the defendant. When the plaintiff reached the age of majority, he wanted to redeem the said shares. The present appellant not only had such a guardian but it was this very guardian, Jose C. Villasor who, as guardian of plaintiff's cousins and former co-owners, sold the lots in question to the defendant-appellee. This guardian not only could have repurchased those lots for the plaintiff within nine days but could have sold them, with the court's authority, directly to the plaintiff himself instead of to Medalla. 5 The court does not believe that the framers of the Civil Code ever intended to countenance a situation so unjust to one of the parties and prejudicial to social interest. The construction of article 1524 which the plaintiff offers would keep the property in a state of in division even if one of the co-owners wanted to separate. This is contrary to the express policy of the law that "No co-owner shall be obliged to remain a party to the community, but each may, at any time, demand partition of the thing held in common." (Article 400, Civil Code.) It would be extremely unfair to the purchaser and injurious to the public welfare to keep in a state of suspense, for possibility as long as 20 years or more, what his co-owner might do when he becomes of age. While the uncertainty continued the purchaser could not make any improvement on the property without running the risk of losing his investments and the fruits of his labor. 6 In the case at bar, the value of the property of each appellee minor does not exceed Two Thousand Pesos. The Court of Appeals found that each of them inherited only an undivided portion worth P625.00.7 Therefore, after the minors' father died, their mother, Clarita Ferrer Badillo, automatically became their legal guardian. As such, she acquired the plenary powers of a judicial guardian except that power to alienate or encumber her children's property without judicial authorization.8

When Clarita Ferrer Badillo signed and received on January 18, 1967, her copy of the Deed of Extrajudicial Partition and Sale, the document evidencing the transfer of the property in question to the appellants, she also in effect received the notice in writing required by Article 1623 in behalf of her children. This manner of receiving a written notice is specifically sanctioned by the case of Conejero, et al. vs. Court of Appeals, et al.9 Thus, in this case, the period of redemption began to toll from the time of that receipt. On the other hand, the judicial guardian of the appellee minors, Modesta Badillo, was only appointed as such on November 11, 1968. She thereafter manifested her desire to redeem the property from the appellants, formalizing such intention in the complaint that was finally filed for this case on July 23, 1970. Since the required written notice was served on January 18, 1967 and the offer to redeem was only made after November 11, 1968, the period for legal redemption had already expired and the appellants cannot now be ordered to reconvey to the appellees that portion of the undivided property which originally belonged to Clarita Ferrer Badillo. Under the second assignment of error, the appellants contend that the Deed of Extrajudicial Partition and Sale, in so far as it sold to them the appellee minors' share of 5/12, is a voidable contract pursuant to Article 1390 of the New Civil Code. They then quoted verbatim the text of the said article without Identifying the particular portion of that provision which directly supports their contention. The Deed of Extrajudicial Partition and Sale is not a voidable or an annullable contract under Article 1390 of the New Civil Code. Article 1390 renders a contract voidable if one of the parties is incapable of giving consent to the contract or if the contracting party's consent is vitiated by mistake, violence, intimidation, undue influence or fraud. In this case, however, the appellee minors are not even parties to the contract involved. Their names were merely dragged into the contract by their mother who claimed a right to represent them, purportedly in accordance with Article 320 of the New Civil Code.10 The Deed of Extrajudicial Partition and Sale is an unenforceable or, more specifically, an unauthorized contract under Articles 1403 (1) and 1317 of the New Civil Code. Clearly, Clarita Ferrer Badillo has no authority or has acted beyond her powers in conveying to the appellants that 5/12 undivided share of her minor children in the property involved in this case.11 The powers given to her by the laws as the natural guardian covers only matters of administration and cannot include the power of disposition.12She should have first secured the permission of the court before she alienated that portion of the property in question belonging to her minor children.13 The appellee minors never ratified this Deed of Extrajudicial Partition and Sale. In fact, they question its validity as to them. Hence, the contract remained unenforceable or unauthorized. No restitution may be ordered from the appellee minors either as to that portion of the purchase price which pertains to their share in the property or at least as to that portion which benefited them because the law does not sanction any. The third error assigned need not be discussed further because Our pronouncement on the first assignment of error has rendered it academic. Suffice it to state that since the 30-day period for

redemption had already lapsed, the appellants cannot be ordered to re-sell to the appellees the remaining 7/12 portion of the property in question. In view of the foregoing, the appellants are hereby ordered to restore to the appellees the full ownership and possession of the latter's 5/12 share in the undivided property by executing the proper deed of reconveyance. The appellants' ownership over the remaining 7/12 share in the undivided property is hereby confirmed. WHEREFORE, the decision under review is hereby modified accordingly and appellants are directed to deliver possession of above appellees' share, with no pronouncement as to costs.

JEFFERSON LIM vs. QUEENSLAND TOKYO COMMODITIES, INC. G.R. No. 136031. January 4, 2002

Facts

This is a petition for review assailing the June 25, 1998, decision of the Court of Appeals in CA-G.R. CV No. 46495 which reversed and set aside the decision of the Regional Trial Court of Cebu, Branch 24, dismissing the complaint by respondent for a sum of money as well as petitioners counterclaim. Private respondent Queensland Tokyo Commodities, Incorporated (Queensland, for brevity) is a duly licensed broker engaged in the trading of commodities futures with full membership and with a floor trading right at the Manila Futures Exchange, Inc. Sometime in 1992, Benjamin Shia, a market analyst and trader of Queensland, was introduced to petitioner Jefferson Lim by Marissa Bontia, one of his employees. Marissas father was a former employee of Lims father. Shia suggested that Lim invest in the Foreign Exchange Market, trading U.S. dollar against the Japanese yen, British pound, Deutsche Mark and Swiss Franc. Before investing, Lim requested Shia for proof that the foreign exchange was really lucrative. They conducted mock tradings without money involved. As the mock trading showed profitability, Lim decided to invest with a marginal deposit of US$5,000 in managers check. The marginal deposit represented the advance capital for his future tradings. It was made to apply to any authorized future transactions, and answered for any trading account against which the deposit was made, for any loss of whatever nature, and for all obligations, which the investor would incur with the broker.] Because respondent Queensland dealt in pesos only, it had to convert US$5,000 in managers check to pesos, amounting to P125,000 since the exchange rate at that time was P25 to US$1.00. To accommodate petitioners request to trade right away, it advanced the P125,000 from its own funds while waiting for the managers check to clear. Thereafter, a deposit notice in the amount of P125,000 was issued to Queensland, This was sent to Lim who received it as indicated by his signature marked Then, Lim signed the Customers Agreement. Petitioner Lim was then allowed to trade with respondent company which was coursed through Shia by virtue of the blank order forms, all signed by Lim. Respondent furnished Lim with the daily market report and statements of transactions as evidenced by the receiving forms, some of which were received by Lim. During the first day of trading or on October 22, 1992, Lim made a net profit of P6,845.57 Shia went to the office of Lim and informed him about it. He was elated. He agreed to continue trading. During the second day of trading or on October 23, 1992, they lost P44,465] Meanwhile, on October 22, 1992, respondent learned that it would take seventeen (17) days to clear the managers check given by petitioner. Hence, on October 23, 1992, at about 11:00 A.M., upon managements request, Shia returned the check to petitioner who informed Shia that petitioner would rather replace the managers check with a travelers check Considering that it was 12:00 noon already, petitioner requested Shia to come back at 2:00 P.M.. Shia went with petitioner to the bank to purchase a travelers check at the PCI

Bank, Juan Luna Branch at 2:00 P.M.. Shia noticed that the travelers check was not indorsed but Lim told Shia that Queensland could sign the indorsee portion.Because Shia trusted the latters good credit rating, and out of ignorance, he brought the check back to the office unsigned as much as that was a busy Friday, the check was kept in the drawer of respondents consultant. Later, the travelers check was deposited with Citibank On October 26, 1992, Shia informed petitioner that they incurred a floating loss of P44,695 on October 23, 1992. He told petitioner that they could still recover their losses. He could unlock the floating loss on Friday. By unlocking the floating loss, the loss on a particular day is minimized. On October 27, 1992, Citibank informed respondent that the travelers check could not be cleared unless it was duly signed by Lim, the original purchaser of the travelers check. A Miss Arajo, from the accounting staff of Queensland, returned the check to Lim for his signature, but the latter, aware of his P44,465 loss, demanded for a liquidation of his account and said he would get back what was left of his investment. Meanwhile, Lim signed only one portion of the travelers check, leaving the other half blank. He then kept it. Arajo went back to the office without it. Respondent asked Shia to talk to petitioner for a settlement of his account but petitioner refused to talk with Shia who made follow-ups for more than a week beginning October 27, 1992. Because petitioner disregarded this request, respondent was compelled to engage the services of a lawyer, who sent a demand letter to petitioner. This letter went unheeded. Thus, respondent filed a complaint against petitioner, docketed as Civil Case No. CEB-13737, for collection of a sum of money. On April 22, 1994, the trial court rendered its decision dismissing the complaint without pronouncement as to costs. The defendants counterclaim is likewise dismissed. On appeal by Queensland, the Court of Appeals reversed and set aside the trial courts decision. Petitioner herein filed a motion for reconsideration before the Court of Appeals, which was denied in a resolution dated October 6, 1998. Dissatisfied, petitioner filed the instant recourse alleging that the appellate court committed errors.

Issue

Whether or not the appellate court erred in holding that petitioner is estopped from questioning the validity of the Customers Agreement that he signed.

Ruling It is uncontested that petitioner had in fact signed the Customers Agreement in the morning of October 22, 1992 knowing fully well the nature of the contract he was entering into. The Customers Agreement was duly notarized and as a public document it is evidence of the fact, which gave rise to its execution and of the date of the latter.Next, petitioner paid his investment deposit to respondent in the form of a managers check in the amount of US$5,000 as

evidenced by PCI Bank Managers Check No. 69007, dated October 22, 1992. All these areindicia that petitioner treated the Customers Agreement as a valid and binding contract. Moreover, on petitioners part, there was misrepresentation of facts. He replaced the managers check with an unendorsed travelers check, instead of cash, while assuring Shia that respondent Queensland could sign the endorsee portion thereof. As it turned out, Citibank informed respondent that only the original purchaser (i.e. the petitioner) could sign said check. When the check was returned to petitioner for his signature, he refused to sign. Then, as petitioner himself admitted in his Memorandum, he used the travelers check for his travel expenses. Petitioner already availed himself of the benefits of the Customers Agreement whose validity he now impugns. As found by the CA, even before petitioners initial marginal deposit (in the form of the PCI managers check dated October 22, 1992 was converted into cash, he already started trading on October 22, 1992, thereby making a net profit of P6,845.57. On October 23, he continued availing of said agreement, although this time he incurred a floating loss of P44,645] While he claimed he had not authorized respondent to trade on those dates, this claim is belied by his signature affixed in the order forms, marked as Exhibits G, G -1 to G-13 Thus, by his own acts, petitioner is estopped from impugning the validity of the Customers Agreement. For a party to a contract cannot deny the validity thereof after enjoying its benefits without outrage to ones sense of justice and fairness. It appears that petitioners reason to back out of the agreement is that he began sustaining losses from the trade. However, this alone is insufficient to nullify the contract or disregard its legal effects. By its very nature it is already a perfected, if not a consummated, contract. Courts have no power to relieve parties from obligations voluntarily assumed, simply because their contracts turned out to be disastrous or unwise investments Notably, in the Customers Agreement, petitioner has been forewarned of the high risk involved in the foreign currency investment as stated in the Risk Disclosure Statement, located in the same box where petitioner signed. Contrary to petitioners contention, the respondent did not violate paragraph 14 of the Guidelines for Spot/Futures Currency Trading. Respondent claims it informed petitioner of its policy not to accept dollar investment. For this reason, it converted the petitioners US$5,000 managers check to pesos ( P125,000) out of respondents own funds to accommodate petitioners request to trade right away On record, it appears that petitioner agreed to the conversion of his dollar deposit to pesos. Neither is there merit in petitioners contention that respondent violated the Customers Agreement by allowing him to trade even if his manager s check was not yet cleared, as he had no margin deposit as required by the Customers Agreement. But since the respondent advanced petitioners marginal deposit of P125,000 out of its own funds while waiting for the US$5,000 managers check to clear, relying on the good credit standing of petitioner. Contrary to petitioners averment now, respondent had advanced his margin deposit with his approval. Nowhere in the Guidelines adverted to by petitioner was such an arrangement prohibited. Note that the advance was made with petitioners consent, as indicated by his signature affixed in the deposit notice sent to him by respondent. By his failure to seasonably object to this arrangement and by affixing his signature to the notice of deposit, petitioner is barred from questioning said arrangement now.

Anent the last assigned error, petitioner faults the appellate court for not taking judicial notice of the cease and desist order against the Manila International Futures Exchange Commission and all commodity traders including respondent. However, we find that this issue was first raised only in petitioners motion for reconsideration of the Court of Appeals decision. It was never raised in the Memorandum filed by petitioner before the trial court. Hence, this Court cannot now, for the first time on appeal, pass upon this issue. For an issue cannot be raised for the first time on appeal. It must be raised seasonably in the proceedings before the lower court. Questions raised on appeal must be within the issues framed by the parties and, consequently, issues not raised in the trial court cannot be raised for the first time on appeal WHEREFORE, the instant petition is DENIED for lack of merit. The decision of the Court of Appeals dated June 25, 1998, in CA-G.R. CV No. 46495 is AFFIRMED. Costs against petitioner.