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ROBLES v. HERMANOS G.R. No. L-26173 July 13, 1927 Street, J.

Doctrine: • The lessee may prove an independent verbal agreement on the part of the landlord to put the leased premises in a safe condition. • The appraised value of the property may be used to determine the price.

Facts: A parcel of land was originally owned by the parents of the present plaintiff, Zacarias Robles. Upon the death of his father, plaintiff leased the parcel of land from the administrator with the stipulation that any permanent improvements necessary to the cultivation and exploitation of the hacienda should be made at the expense of the lessee without right to indemnity at the end of the term. As the place was in a run-down state, and it was foreseen that the lessee would be put to much expense in bringing the property to its productive capacity, the annual rent was fixed at the moderate amount of P2,000 per annum.

The plaintiff made various improvements and additions to the plant. The firm of Lizarraga Hermanos was well aware of the nature and extent of these improvements.

When the plaintiff’s mother died, defendant came forward with a proposal to buy the heirs’ portion of the property. In consideration that the plaintiff should shorten the term of his lease to the extent stated, the defendant agreed to pay him the value of all betterments that he had made on the land and furthermore to purchase from him all that belonged to him personally on the land. The plaintiff agreed to this.

On the ensuing instrument made, no reference was mad e to the surrender of the plaintiff’s rights as lessee, except in fixing the date when the lease should end; nor is anything said concerning the improvements which the plaintiff had placed. At the same time the promise of the defendant to compensate for him for the improvements was wanting. Accordingly, the representative of the defendant explained that this was unnecessary in view of the confidence existing between the parties.

On the part of the defendant it was claimed that the agreement with respect to compensating the plaintiff for improvements and other things was never in fact made.

Issue: 1. Whether or not the lessee may contest the validity of a written contract with oral evidence 2. Whether or not the appreciation value can be used to determine the price

Held: 1. Yes. In case of a written contract of lease, the lessee may prove an independent verbal agreement on the part of the landlord to put the leased premises in a safe condition. The verbal contract which the plaintiff has established in this case is therefore clearly independent of the main contract of conveyance, and evidence of such verbal contract is admissible under the doctrine above stated. In the case before us the written contract is complete in itself; the oral agreement is also complete in itself, and it is a collateral to the written contract, notwithstanding the fact that it deals with related matters.

2. Yes. The stipulation with respect to the appraisal of the property did not create a suspensive condition. The true sense of the contract evidently was that the defendant would take over the movables and the improvements at an appraised valuation, and the defendant obligated itself to promote the appraisal in good faith. As the defendant partially frustrated the appraisal, it violated a term of the contract and made itself liable for the true value of the things contracted about, as such value may be established in the usual course of proof. Furthermore, an unjust enrichment of the defendant would result from allowing it to appropriate the movables without compensating the plaintiff thereof.

G.R. No. 4348

September 12, 1908

MAURICIA MAJARABAS, ET AL., plaintiffs-appellees, vs. INOCENCIO LEONARDO, defendant-appellant. Crispin Oben for appellant. Benito Gimenez-Zoboli for appellees. MAPA, J.: The defendant and appellant in this case set up a question by means of a demurrer relative to the legal nature of the contract upon which the complaint was based. It is alleged therein that the plaintiff had rendered services as wet nurse and governess to an infant daughter of the defendant by virtue of a verbal agreement entered into with the now deceased parents of the defendant, who, to use the language of the complaint, " promised to liberally compensate the services of the plaintiff, providing the maintenance of herself, her husband and their child, during all the time that the services of the plaintiff where required as such wet nurse and governess." It is maintained in the demurrer that the obligation contracted by the parents of the defendant was to support the plaintiff and her family, and that the reason of the death of the former, as stated in the complaint, under the provision of article 150 of the Civil Code, the said obligation has been extinguished in fact and in law, and the plaintiff can not therefore, bring suit for compliance herewith. The demurrer was overruled by the court below on the ground that aforesaid agreement constituted a contract for services, although the price was to be measured by the cost of the maintenance of the plaintiff. This ruling has been assigned as error by the appellant in his brief. The objection made by the latter to holding of the court below on the contract set out in the complaint, is that the fixed price for the services required of the plaintiff is not stipulated therein, and that without specified price no lease of services can exist, said requirement being essential to such contract. Article 1544 of the Civil code provides as follows: In a lease of works or services, one of the parties binds himself to execute a work or to render a service to the other for a specified price. According to this definition, a fixed price is a requisite in a contract for services, and, as is justly maintained by the appellant, is therefore an essential part thereof. The question is reduced to determining what, in a legal sense, is understood by a fixed price. In the matter of contracts of purchase and sale wherein the said requisite is also a necessary and indispensable condition, article 1447 of the said code provides: In order that the price may be considered fixed, it shall be sufficient that it be fixed with regard to another determinate thing also specific, or that the determination of the same be left to the judgment of a special person. According to this it is not necessary that the certainty of the price be actual or determined at the time of executing the contract, but that it is sufficient compliance with the law if the same can be determined by the speculations of the contract made by the party thereto. In the present case the contracting parties fixed the maintenance of the plaintiff and her family as the price for the services required of her. Said maintenance is the specific and determinate thing that in its turn fixes the price,

inasmuch as its cost determines the price according to the agreement of the parties to the contract. There might be a question as to the actual cost of the plaintiffs maintenance, but this is a matter of fact which in such a case would have to be proven. Be it as it may, whatever might be the cost of said subsistence, it would constitute the price for the services rendered by the plaintiff; said price is unquestionably the specified one since it refers to a specified thing designated by the parties as the rate regulating the amount thereof. therefor, the appellant's allegation is unfounded, and the order of the court below overruling the demurrer must be affirmed. The second error assigned by the appellant refers to the fact, duly considered by the court below that the defendant and his father had entered with the plaintiff into the agreement alleged in the complaint. The finding of the court below is supported by the testimony of several witnesses, who attest that the said agreement was made in their presence, and that it was made on the morning of the 8th of January 1901 at the house of the plaintiff, in the barrio of Sto. Angel, municipality of Sta. Cruz Province of La Laguna. The appellant endeavored to show that as vice-president of the municipality of Santa Cruz, during the insurrection, a town already occupied by the American forces, it was absolutely impossible for him at the time to reach the aforesaid barrio of St. Angel, because as were all revolutionists, he was the subject of active pursuit on the part of said forces. It appears, however, from the testimony of a witness, that in those days the defendant used to visit his family, who resided in the barrio of Calios, or so within the jurisdiction of Santa Cruz; that he paid his visit in the afternoons and also very early in the morning. According to the testimony of the appellant on folio 18 of the record, the barrio of Calios is the nearest in the town of Santa Cruz. If he was able to enter Calios, it is difficult to understand why it was impossible for him to reach the barrio of Sto. Angel, which is farther away from the town of Santa Cruz where the American forces were encamped. This being the case, and as the impossibility alleged by the appellant did not exist, the finding of the court below, supported has been stated by the testimony of the plaintiff, does not in any manner appear to be contrary to the weight of the evidence. Neither does the other finding in the judgment, the daughter of the defendant was nursed by the plaintiff from January, 1901, to the end of June, 1903, that is, during a period of two year and a half; the pretention of the appellant so far as it sustains the contrary is therefore unfounded. It is true that the testimony of the witnesses of the plaintiff and those of the defendant conflict on this point, that the judge below, taking into consideration all the circumstances of the case, gave more credit to the former than to the latter, we can hardly say that in so doing he acted against the weight of the evidence. Finally, the appellant assigns as error the declaration made by the judge below to the effect that the defendant is obliged to refund the plaintiffs for the expense they have been put to in caring for defendant's daughter, at the rate of P15 per month or P0.50 a day. The appellant states that the record contains no data whereby the amount of the expenditure incurred by the plaintiff in nursing the child may be reckoned, and that in any case the rate of P0.50 per day is manifestly excessive. According to the statement of the defendant, the remuneration agreed upon for the services of the plaintiff was the cost of her maintenance and that of her family, and it was alleged in the complaint that she spent P0.50 a day for this purpose. This was the point disputed in the matter of the amount that the defendant should pay for the care of his child, and the one that should in consequence have been proven by the plaintiff. And, as a matter of fact, the latter testified that she spent the said some everyday as living expenses for herself and her family; her testimony was confirmed by another witness and the testimony of both has not been weakened or contradicted by any proof to the contrary. Inasmuch as the defendant bound himself to bare the cost of the plaintiff's maintenance, in exchange for the care of his child, and since such maintenance cost P0.50 per day, it may well be said that the expense occasioned by the care of the child amounted to the aforesaid sum. In our opinion, the judgment appealed from should thus be understood in so far as it refers to this point. At all events the diversity of expression or the more or less precision thereof does not affect, nor can it

. nor the essential rights of the contending parties.J. . Torres. concur.affect in any manner the existence of the facts discussed and proven. Carson.. Arellano. So ordered. The judgment appealed from is hereby affirmed with the costs of this instance against the appellant. Willard and Tracey JJ. C.

is the widow of Galo Lichauco. MARIA VICTORIA LICHAUCO Y FONSECA and LICHAUCO & CO.R. R. JOSE PASCUAL. the recording of the deed as alleged.000. in which it was falsely recited that there was a consideration of P24. the sale of the property by the sheriff. JULIO LICHAUCO Y FONSECA. It is then alleged that on January 16. 1923. and the certificate of title No. is a domestic corporation. 455 be ordered cancelled. STATEMENT The plaintiff is a foreign corporation duly licensed to transact business in the Philippine Islands. German.000.000 which was then due and owing from the Lichauco Corporation to the Galo Lichauco estate. the Lichauco Corporation. deceased. for herself and as guardian of the persons and property of Lina. Maria Luisa Corcuera. and certificate of title No. No. Faustino Lichauco for Lichauco & Co. that even though the deed was not legally executed. 28495. and Ramon N. of that portion of the property described in clauses 4. executed and caused to be recorded an illegal and fictitious deed of conveyance from the Lichauco Corporation to the defendant. MARIA LUISA CORCUERA. to April 23. 455 was issued in favor of the Galo Lichauco Estate. Lawrence & Selph as amicus curiæ. defendants-appellees. 1920.000. was grossly inadequate. Maria Luisa Corcuera. the complaint. conspiring with the defendant. 1928 ASIA BANKING CORPORATION. R. L-28496 March 31. that the conveyance was not included. As in G.1 and the same is true as to the execution of Exhibit A. and made a part of. The allegations in the complaint as to the real estate are identical with those made by the plaintiff in G. Maria Luisa Corcuera. 1922... Lichauco & Co. 28495. and that the consideration of P24. 1922. with a yearly income of P7. and that the sheriff's deed to plaintiff be ordered registered in the registry of property for the Province of Pampanga. as those made in G. when she was discharged. No. F. Lichauco y Corcuera. a copy of which deed is attached to.. plaintiff-appellant. and the defendant. and made a part of. and the refusal of the register of property to receive and record plaintiff's sheriff's deed because the deed to Maria Luisa Corcuera was previously recorded. No. and for the purpose of defrauding and delaying the plaintiff in the collection of its indebtedness against the Lichauco Corporation.. For answer the defendants made a general and specific denial. and the binding in by the bank for P16. and the mother of the minor heir defendants. the corresponding Exhibits A and B are attached to. 28495. even if it had never been paid. and that the heirs of Galo Lichauco are the sole and exclusive owners of the property.. . Jose Varela Calderon and Jose A. No. and as an affirmative defense alleged the execution of the deed to the land in question on January 16. registered with the registry of property for the Province of Pampanga. with interest from January 20. as administratrix. She was also administratrix of the estate of Galo Lichauco from October 15. Like allegations are made as to obtaining of the judgment against the Lichauco Corporation. vs. and made a part of. it was on August 12. Gibbs and McDonough for appellant. the complaint. et al.G. That the property conveyed had a reasonable value of at least P100. R. 1921. for a consideration of P24.000. Espiritu for the other appellees. that the Lichauco Corporation was not indebted to the estate in that or any other amount. Plaintiff prays that the deed to her be declared fraudulent and void. INC. Inc.000. 1922. Ross. in. 5 and 6 of paragraph IV of the complaint. minors. the assets of the estate of Galo Lichauco. at 12 per cent per annum due and owing from the Lichauco Corporation to the estate of Galo Lichauco.

1922. The release having been executed. In the instant case. Inc. which Galo Lichauco loaned to the corporation on January 9. in favor of Galo Lichauco was released. The deed is also signed and acknowledged in the same manner and by the same persons as the deed to Asuncion Nable Jose and in the instant case.707. and ordered that transfer certificate No.01. That is to say. made a default. The deed in question among other things recites that on January 9. and the bank. and declared her to be the sole and exclusive owner of 23/25 parts of the hacienda Matabig. page 479: The courts will not weight the value of the goods sold and the price received in very nice scales. as administratrix. the Lichauco Corporation received from the late Galo Lichauco P24. it appears from Exhibit PP. the account book of the corporation. and a fraud upon the creditors of the Lichauco Corporation.000 in cash as a loan. and the evidence is conclusive that the Lichauco Corporation was then insolvent. 1920. and dismissed the counterclaim of Maria Luisa Corcuera.000. and the amount of land conveyed was 410 hectares. Inadequacy of price does not mean a honest difference of opinion as to price. 1922. the property in question was conveyed to secure a preexisting debt of P24. on page 39.000. 1920.The defendant Lichauco & Co. was null and void. 28494. volume 12.: The underlying basic facts in this case are almost identical with those in G. and on January 16.. with interest at 12 per cent per annum as shown by a deed acknowledged on January 20." that there is a charge against Galo Lichauco of P86. by the terms and provisions of the deed. but a consideration so far short of the real value of the property as to startle a correct mind. administratrix. for a purported consideration of P24. Upon the rendition of the judgment.000 in the instant case was 88 hectares. the deed in question was executed on January 16. JOHNS. 1920. and the lower court first rendered judgment that the conveyance of the Matabig hacienda to Maria Luisa Corcuera. Maria Luisa Corcuera filed a motion for consideration which the court granted and set aside its judgment against her.30. is null and void. and that a certificate of title be issued in favor of the plaintiff bank. No. R. under the head of "suspense. with costs against her. was without consideration. in particular. J. As stated in Ruling Case Law. there is a very important distinction between the remaining facts. In the other case the true consideration for the deed was P34. 455 issued in her name be cancelled.000 there is but little other evidence as to its value.. from which the bank appeals and contends in substance that the deed from the Lichauco Corporation to Maria Luisa Corcuera. The amount of land conveyed for the consideration of P24. and to secure its payment. as the appellant contends.819. 1920. . as here. the mortgage in his favor was released. there should be reasonable and fair proportion between the one and the other. the deed in question was executed and accepted and the mortgage of January 9.000. the corporation executed a mortgage on sixteen of its bancas in favor of Galo Lichauco. so that the bancas in question could be given as security to the China Banking Corporation. and entered another in which she was absolved from the complaint. Be that as it may. outside of the fact that the 88 hectares was carried on the corporate books at a valuation of P50. The evidence was taken upon such issues. and on page 43 of the same book. There. and that with the consent of Galo Lichauco. there is an entry which shows that Galo Lichauco has a balance of P34. but all circumstances considered.

with costs. There is another important distinction between the two cases..000. the judgment of the lower court is affirmed. 28495.000. in view of the findings of fact made by the lower court.500 would not impair or destroy the validity of the deed made by the Lichauco Corporation to the Galo Lichauco estate on January 16. and the consideration for the deed being P24. all things considered. the conveyance does not come under the terms and provisions of article 1292 of the Civil Code.The amount of land involved in the instant case being 88 hectares only. So ordered. JJ. that the consideration of P24. Romualdez and Villa-Real. No. as a matter of law.000 was inadequate or that the conveyance was a fraud upon the creditors of the Lichauco Corporation. . C.J. and. We freely admit that this case is not free from doubt. we cannot say. Villamor. hence. neither do the facts bring it within article 1292 of the Civil Code. and that the last and final judgment was wrong. 1922. concur. yet the record is conclusive that the debt was due and owing and enforcible at the time the deed in question was executed. but in this case the question of inadequacy of consideration is not so clear or convincing as in G. R. All things considered. and for want of any other evidence as to the actual value of the land. and the fact that thereafter Faustino Lichauco conveyed other and different properties to the estate of Galo Lichauco for a consideration of P22. Avanceña. The appellant vigorously contends that the original judgment in the lower court in this case was right. Although in this case it is also true that the consideration for the deed was a preexisting debt.. Ostrand. But the record is conclusive that the consideration for the deed of the Lichauco Corporation was P24.

which means that the said court was not the proper forum to settle said matters. The lower court correctly disregarded the Photostat copy of the marriage certificate which she presented. and even denied her petition. Issue: Whether or not the trial and appellate court is correct on their ruling on the validity of marriage of Antonietta Garcia to Roberto Chua. Upon the death of Roberto. 1998 Facts: Roberto Chua was the common-law husband of Florita A. Transfer Certificate of Title issued in the name of Roberto L. A valid. This was latter appealed to the appellate court. original marriage contract would be the best evidence that the petitioner should have presented. Chua married to Antonietta Garcia. Income Tax Returns for 1990 and 1991 filed in Davao City where the status of the decedent was stated as married. The best evidence is a valid marriage contract which the petitioner failed to produce. De Chua vs. claiming that she was the sole surviving heir of the decedent being his wife. and a resident of Davao City. . Ruling: The Supreme Court held that the lower court and the appellate court are correct in holding that petitioner herein failed to establish the truth of her allegation that she was the lawful wife of the decedent. this being a violation of the best evidence rule. Transfer Certificates of Title. passport of the decedent specifying that he was married and his residence was Davao City.Vda. but it decided in favor of herein respondents. The petitioner failed to submit the original copy of the marriage contract and the evidences that she used were: a photocopy of said marriage contract.R. Vallejo filed with the Regional Trial Court ofCotabato City a petition for the guardianship and administration over the persons and properties of the two minors. Roberto Chua died intestate inDavao City. Residence Certificates. Residence Certificates from 1988 and 1989 issued at Davao City indicating that he was married and was born in Cotabato City. 116835 March 5. CA G. together with other worthless pieces of evidence. No. passports and other similar documents cannot prove marriage especially so when the petitioner has submitted a certification from the Local Civil Registrar concerned that the alleged marriage was not registered and a letter from the judge alleged to have solemnized the marriage that he has not solemnized said alleged marriage. and that the decedent was a resident of Davao City and not Cotabato City. On 28 May 1992. Failure to present it as evidence would make the marriage dubious. The trial court ruled that she failed to establish the validity of marriage. Herein petitioner filed for its dismissal. Vallejo and had two illegitimate sons with her.

cultivation and occupation of the disputed properties. the Santoses to subdivide 2 parcels of land and executed an absolute deed of sale in favor of the latter. No. 4. The case involve several transfers of the subject real property. but it is not evidence. had repudiated the defenses raised in his answer and against his own interest. and that throughout the successive transfers. who inturn promised to improve the land. the Santoses transferred the properties to the Cuencas who in turn transferred it to the Verroyas who executive a mortgage over the lot. Rescission and damages against the 5 transferres and mortgagees. The RTC ruled in favor of petitioners declaring the transfers null and void. 1984 Ponente: Melencio-Herrera. Santos likewise admitted against his own interest that the petitioners did not receive from him any consideration. which corroborated the declarations of the petitioners. which was for a subdivision and not a sale transaction. CA Digest G. In their Answer. 3. but this is not an absolute and inflexible rule. and that the deed of sale was to be registered for the protection of the Santoses considering the moneys that the latter would be advancing. . Issue: Whether or not the admissions made by Santos in the pleadings are admissible NO. The CA affirmed in toto the RTC but reconsidered it decision and ruled that the sale of land to Natividad’s are valid. in open Court. Then Verroya executed a deed of transfers to the Natividads. Hence. The testimony of Ariosto Santos is at variance with the allegations in his Answer. As a general rule. Both the Trial Court and the Appellate Court believed in his credibility and we find no reason to overturn their findings thereon. Santos himself. the Gardners filed an action for declaration of Nullity. 1. The Subdivision Joint Venture Agreement and the Supplemental Agreement express that the true and real nature of the agreement between the parties.: Facts: 1. the petitioners continued to remain in possession. facts alleged in a party's pleading are deemed admissions of that party and binding upon it. the Santoses claimed that the sale to them was conditional in the sense that the properties were to be considered as the investment of the petitioners in the subdivision venture and that in the event that this did not materialize they were to reconvey the lots to petitioners upon reimbursement by the latter of all sums advanced to them.Gardner v. It appears that petitioners the Gardner spouse enter into an agreement with Respondent spouses. the Adverse Claim of the Gardners continued to be carried. J. Apparently. Note that from the titles of the Cuencas (the Second Transferees) to the titles of the Natividads (the Fourth Transferee). his testimony is deserving of weight and credence.R. An Answer is a mere statement of fact which the party filing it expects to prove. 2. L-59952 August 31. The real truth is that what occurred was a sale ‘in trust’ since the petitioner obtained an amount of money from the respondents.

void ab initio and inexistent. therefore. All Five Transfers were absolutely simulated and fictitious and were.2. has. never been paid by the purchaser to the vendor. . which appears therein as paid. Contracts of sale are void and produce no effect whatsoever where the price. in fact.

and FLORIDA A. Court of First Instance. SOTERO B. BAS. GO. DAJAO ADELAIDA D. Attorney. Jr. On July 8. with due notice to all his co-heirs. Petitioner spouses were promisees in a Mutual Agreement of Promise to Sell executed between them and private respondent Sotero B.: Petition for certiorari with prayer for the declaration of nullity of the Order 1 1 dated February 18. Alaric P. filed with the Probate Court in Special Proceedings No. title was transferred to respondent Go. CUVEAS J. JR. the lower court issued an Order 2 2 authorizing the administrator to sell the therein described properties of the estate and such other properties under his administration at the best price obtainable. WILLIAM L. both dated August 15. and directing him to submit to the court for approval the transaction made by him On August 15.00. Branch 1. 1980.In-Fact. On June 25.G. petitioners. NUEZA. ESTER AIDA D. respondent-administrator pursuant to said authorization. Sotero Dionisio III. 1980. 1980. there being no opposition. respondent administrator Sotero Dionisio. GENATO. Attorney-In-Fact. On the same date. LAO. On August 18. Dajao for respondent Ester Aida D. ABUTON Attorney-In-Fact.. represented by RESTITUTO N. Dionisio. Berenquel for respondent William L. the subject property for P75. 842 a Motion for Authority to Sell certain properties of the deceased to settle the outstanding obligations of the estate. Ramon C. Go.. MAURICIO O. SOTERO A.. DIONISIO III. are the children and only compulsory heirs of the deceased. Felipe G. BELLEZA. 1985 JUAN LAO and CANDELARIA C. Heirs of ROSALINDA D. . Dionisio III. 1981 of the then Court of First Instance of Misamis Occidental-Branch I which confirmed and approved the two Deeds of Sale. ERLINDA DIAZ. involving a commercial property belonging to the estate of the deceased Rosenda Abuton. sold to his son. 1980. vs.000. 1980. heir and administrator of the intestate estate of the deceased.00 per deed of sale 3 3 acknowledged before Notary Public Triumfo R. Sotero Dionisio III executed a deed of sale 4 of the same property in favor of respondent William Go for a consideration of P80. Tac-an for petitioners. No. BAS SR. as Administrator of the Intestate Estate of ROSENDA ABUTON. HON. whereby the promisor bound himself to sell the subject property to petitioners. L-56451 June 19. LUZMINDA D. Eligio O.R. Acosta for private respondent as Administrator.. MELECIO A. Bas. Jr. as Presiding Judge. after hearing. Private respondents. represented by Atty.000. except Sotero Dionisio III and William Go. respondents. Velez. DIONISIO. Misamis Occidental. represented by FELICENDA D. son of respondent Sotero A. BELLEZA. NUQUI.

and that between the latter and respondent William Go. his title to the property is indefeasible pursuant to law. respondent Nuqui filed a Reply to said Opposition. They likewise filed a Manifestation on February 5. 1980. stating that the two sales were but a single transaction simultaneously hatched and consummated in one occasion as shown by the Notary Public's document Nos.000 which was reduced to P220. 1981. On September 10. for the amount of P270. . but the negotiation and transactions were directly and personally entered into between the administrator and petitioners.000. their prayer for the cancellation of the registration of sale transaction between respondent. they ares till interested to purchase the property for the same amount of P200. he executed a Deed of Absolute Sale in favor of his son. who later found out that the subject property was sold to William GO. then the contract of sale to Go would be without consideration. for had it not been for the Motion for Annulment. petitioners paid the earnest money in the amount of P70. The respondent-administrator filed an opposition to said motion of co-heir Nuqui alleging that the actual consideration f the sale made by him is P200. 1980.000. respondent-heir Florida Nuqui. 1981 alleging that the Court order merely authorized the sale of the subject property but did not approve the same. without revealing that the property had already been sold to William Go. On February 6. Thus.00 since it is located along the corner of two main streets in the commercial center of Oroquieta City. filed a Motion for Annulment/Revocation of the Deeds of Absolute Sale for the reasons that the sale and subsequent transfer of title of the property were made in violation of the court's order of July 8. hence.On August 27. wherein they alleged that respondent-administrator. that both contracts of sale were made to defraud the estate and the other heirs. that it was agreed upon that the balance of P150. as requested by respondent-administrator. that assuming the consideration of P200. petitioner spouses filed a "Manifestation In Intervention of Interest to Purchase Property Authorized by the Court to be Sold".00 shall immediately be paid upon the production of the Transfer Certificate of Title and the execution of the final Deed of Sale. 1980 and that the consideration of the two sales were grossly inadequate as in fact many are willing to buy the pr property for P400. and that the transaction is an evidence of the administrator's intent to defraud the estate and his co-heirs.administrator and his son. OQT-40063026 drawn out in favor of Sotero Dionisio III. Respondent Go filed a Motion for Leave to Intervene to protect his rights.00 and that it is the agreement of the heirs that if any of the heirs or close relatives is interested in buying the property. all the co-heirs of respondent-administrator filed a Manifestation to Adopt the Motion for Annulment/Revocation of Deeds of Absolute Sale.000.00 by IBAA Check No.000.00 as previously agreed.00 and being a purchaser in good faith and for value. that despite repeated demands the administrator refused to execute a final Deed of Sale in favor of petitioners. 1980. that immediately upon the execution of the agreement. he would not have disclosed the true and actual consideration of the sale.00. it would become fictitious and simulated and there is no other recourse left to the court but to declare the sale null and void.000. was merely a nominal party.00 supplied by William Go to Sotero Dionisio III who was not gainfully employed. manifesting that he paid Sotero Dionisio III the actual consideration of P225. preference will be given to him or her in order to keep the property within the family of the deceased. for technically according to the administrator. because Sotero Dionisio III is without means or income and so has no capacity to buy the property. On September 9. that the sales were in reality a single deal between the administrator and William Go. entered into a Mutual Agreement of Promise to Sell 5 5 to herein petitioners. that the contract of sale has been perfected considering that the earnest money was already paid. that although the agreement was executed in the name of Sotero Dionisio III the 'latter.000.000. Petitioners also manifested that in the event that the court should finally declare the sale null and void. 56 & 57 and with the same witnesses.000.

filed a Motion Ex Parte 77 stating among other things. Dionisio III and that executed by Sotero B.000.00. hardly bespeaks of "innocence" or "good faith". had accounted for the actual price received by him out of the transaction between him and Sotero B. 8807. Dionisio. Nuqui dated August 27. subject matter of this intestate Estate No. respondent Judge allowed all the interested parties to bid for the property at the highest obtainable price pursuant to his Order of July 8. and to finally consider the matter treated in the Motion of Florida A. 842.00. all the heirs. Nuqui filed an Opposition to William Go's Motion to Intervene averring therein that the deed of sale executed by Sotero Dionisio. in open court. the heirs of Rosenda Abuton hereby declare that they have no objection to the confirmation and approval of the sales/transactions executed by Sotero A. all the parties. Jr. and to direct the Register of Deeds of the Province of Misamis Occidental at Oroquieta City. 1980 and adopted by all the other heirs forever closed and terminated. in favor of Sotero Dionisio III created no legal force and effect. able and to pay to the heirs an additional amount of Eighty Thousand (P80. On February 16. 1980 executed by respondent-administrator in favor of Juan Lao. Dionisio III and that between the latter and William L. Dionisio III in the amount of Two Hundred thousand (P200. for the cancellation of the notice of lis pendens annotated on Transfer Certificate of Title No. spot cash. Court confirming and approving the transaction executed by Sotero A. de Nuqui. Dionisio. Jr. now pending before the Court of First Instance of Oroquieta City. Rosenda Abuton Vda. Go. of the Lao spouses and Sotero Dionisio III. 1981. William L.At th hearing of the said incident involving the questioned sales petitioners submitted a copy of the Contract of mortgage 66 dated July 18. On February 17. WHEREFORE. with the exception.000. that the offer of William Go appears the highest obtainable price and that the offer of petitioners is not well taken as the same has not been made within a reasonable period of five (5) days from February 11.000. Dionisio. respondent Go offered to buy the property in the amount of P280. Branch I. 1981. 1981.00) Pesos and that in the interest of a peaceful settlement William L. submitted for approval an Amicable Settlement 88 stating: xxx xxx xxx That after the administrator. Dionisio III in favor of the intervenor. except the administrator. that it therefore follows that the succeeding sale to Go and consequent issuance of the title to him are also null and void from their inception and that the admission by William Go of the actual and true consideration of the sale at his stage. February 17.days of hearing. Go has offered and is ready. Jr. After several . Jr..000. one of the petitioners.." Respondent heir Florida A. Sotero A. 1980. whereby the former mortgaged "all his undivided interest in the estate of his deceased mother. and they likewise have no more objection to the lifting and cancellation of the notice of lis pendens from TCT No. in favor of Sotero B. xxx xxx xxx . it is most respectfully prayed that an order issued by this Hon. Go.00 ) Pesos an arrangement which is most advantageous to the heirs and which they willingly accept to their satisfaction.. 1981. 8807. since the validity of the sale absolutely depended on its approval by the court. Petitioners counter-offered at P282. in favor of Sotero B. On that same day. Oroquieta City.

" . although not specified. respondent Judge issued an Order 99 on February 18.On February 18. the Deed of Absolute Sale executed by the administrator in favor of his son is without consideration. is the Administrator of the estate of his deceased mother Rosenda Abuton. 1981. (c) The Amicable Settlement is a device to defraud the Government of Capital Gains Tax. 1981 approving the Amicable Settlement. which is presently mortgaged to herein' spouses. the Court would abet the commission of the crime of estafa as the mortgage has not yet been paid and released. As such Administrator. they (petitioners) are ready and willing to buy the property at that amount. Despite said opposition. Although he is not a guarantor or insurer of the safety of the estate nor is he expected to be infallible yet the same degree of prudence. which definitely is the best price obtainable in the market and most beneficial to all the heirs. through the aforesaid Order made it an emphatic duty on the part of the administrator Dionisio. petitioners filed an opposition to the approval of the Amicable Settlement on the following grounds: (a) They have an interest in the property as vendees in a promise to sell and as Mortgagee. charges and other fees because the Deeds of Sales do not reflect the true consideration. and (d) The Deeds of Sale sought to be confirmed included the undivided share of Sotero A. he occupies a position of the highest trust and confidence. Petitioners' motion for reconsideration having been denied. serves as the standard by which his conduct is to be judged. and 2) in not accepting the offer of the petitioners in the amount of P300. it is fictitious and simulated hence it cannot be confirmed or ratified pursuant to Article 1409 of the New Civil Code. Dionisio. The subsisting obligation referred to. In order to guarantee faithful compliance with the authority granted 1111 respondent Judge.000. avoid litigation or put an end to one already commenced". Jr. by making reciprocal concessions. thus." . of an undivided share of one of the heirs but they were not signatories to the amicable settlement.00 but since there was no formal offer in writing. the sale was made necessary "in order to settle other existing obligations of the estate. confirming and ratifying the two questioned Deeds of Sale. they now come before Us through the instant petition raising the issue of whether or not respondent Judge is guilty of grave abuse of discretion in 1) approving the amicable settlement and confirming the two (2) Deeds of Sale in question.00 for the purchase of the lot in question. In the case at bar. Jr. which was executed prior to the sale. . to submit to this Court for approval the transactions made by him. He is required to exercise reasonable diligence and act in entire good faith in the performance of that trust. therefore. Jr. must be those due and owing to the creditors of the estate and also the taxes due the government. Petitioners likewise pointed out in their opposition that respondent Judge had intimated in open court that somebody offered to buy the property for the price of P300. hence it is contrary to Article 2028 of the Civil Code providing that "A compromise is a contract whereby the parties. Sotero Dionisio. if approved. (b) The Amicable Settlement seeks the confirmation and approval of the questioned transactions but as borne out by the pleadings and oral arguments. This purpose is clearly manifested in the Motion for to Sell 1010 filed by Dionisio. . the administrator should act with utmost circumspection in order to preserve the estate and guard against its dissipation so as not to prejudice its editors and the heirs of the decedents who are entitled to the net residue thereof. care and judgment which a person of a fair average capacity and ability exercises in similar transactions of his own.000. In the discharge of his functions.

000.000. Abad Santos and Escolin JJ. of the P75. the assailed Order dated February 18. No doubt. to his very son Sotero Dionisio III and for the grossly low price of only P75.. As against the price stated in the assailed Compromise Agreement the former amount is decidedly more beneficial and advantageous not only to the estate. Florida A. 1981 of the respondent Judge approving the questioned Amicable Settlement is declared NULL and VOID and hereby SET ASIDE. he is still a dependent of his father. J. Aquino.00. Nuqui. to the probate court for its approval and just so its validity and fairness may be passed upon and resolved. The Transfer Certificate of Title issued to the latter is hereby CANCELLED. 13 13 This sale is one of the illegal and irregular transactions that was confirmed and legalized by His HONOR's approval of the assailed Amicable Settlement. was compelled to admit that the actual consideration for the sale made by him was P200. and the government by the non-payment of the correct amount of taxes legally due from the estate.000. of the "Motion for Annulment/Revocation of Deeds of Absolute Sale" 12 12 questioning the genuineness aid validity of the transactions. No pronouncement as to costs.000. concur in the result. Neither did he submit said transaction as mandated by the order authorizing him to sell. The offer by the petitioner of P300. But of all people. that Dionisio. Jr.. That sale was indubitably shown to be fictitious. The proper Regional trial Court of Misamis Occidental to whom this case is now assigned is hereby ordered to conduct new proceedings for the sale of the property involved in this case.00 for the purchase of the property in question does not appear seriously disputed on record. Concepcion Jr. but more importantly to its creditors. .. the heirs of the descendants. On top of that. SO ORDERED. It was only upon the filing by one of the heirs. IN VIEW OF THE FOREGOING CONSIDERATIONS. No satisfactory and convincing reason appeared given for the rejection and/or nonacceptance of said offer thus giving rise to a well-grounded suspicion that a collusion of some sort exists between the administrator and the heirs to defraud the creditors and the government. Jr.00 stated consideration was ever accounted for nor reported by Dionisio. administrator Dionisio. the sale in favor of Sotero Dionisio III and by the latter to William Go is likewise declared NULL and VOID. Makasiar. respondent Judge's questioned approval violates Article 1409 of the New Civil Code and cannot work to confirm nor serve to ratify a fictitious contract which is non-existent and void from the very beginning.00. to the probate court. In fact. The fact that practically all the heirs are parties-signatories to the said Compromise Agreement is of no moment. it clearly appearing that Dionisio III has no income whatsoever. not a single centavo. Concur. Their assent to such an illegal scheme does not legalize the same nor does it impose any obligation upon respondent Judge to approve the same to the prejudice not only of the creditors of the estate. Consequently. for whose account and benefit the sale was made.The sale was made. Jr.

DE LUMANLAN and the COURT OF APPEALS (FIFTH DIVISION). 1969. petitioner. (Page 2 of Decision. 1968 J. petitioned for a review by certiorari of the decision issued by the Court of Appeals (Fifth Division) in its case CA-G. September 10.R. so that she asked that her rights be recognized and the complaint dismissed. Sept. approved by the Court of First Instance of Quezon City.. Tuason & Co. . and that the compromise agreement legalized the possession of respondent. pursuant to this Supreme Court's ruling in Evangelista vs. Macalindong. Quezon City.L. Tuason and Sison for petitioner. have been taken cognizance of in many decisions of this Court (Evangelista vs. therefore. situated at Barrio North Tatalon. ESTRELLA VDA. INC. That in the complaint filed in this case by plaintiff. Deudor vs. These pronouncements are assailed by the petitioner in this appeal as legally incorrect and contrary to the decisions of this Court. cit. 2) between the petitioner Tuason & Co. L-18768. 1949 unlawfully entered into possession of 800 square meters. 1949. Deudor. Tuason & Co. Inc. .ñët . Inc. and therein constructed his house so that plaintiff prayed for ejectment and damages for the occupancy. The terms of the compromise agreement between the heirs of Telesforo Deudor and J. hereinafter called Tuason. 29. J. reversing the judgment rendered by the Court of First Instance of Rizal (Civil Case No. No. the basis is that it being the registered owner of the property known as Santa Mesa Heights Subdivision. the Compromise Agreement (Exh. REYES.. vs. Quezon City. she had bought the property she was occupying from one Pedro Deudor. Jaramillo.00 a month until restoration of the premises to plaintiff.J. barrio Tatalon. the Fifth Division of the Court of Appeals held that. and defendant in her answer set forthaffirmative defense that on 12 March. . Q-4243) that ordered defendant (now respondent) Estrella Vda. 1963. L-23497 April 26.M. Lower Court sustained plaintiff. J. Dizon for respondents.. M. M. Actg. The facts are stated in the decision of the Court of Appeals (accepted by both parties) in this wise: 1äwphï1. J. . M.. defendant's said evidence was "completely immaterial". and that in a compromise agreement between Pedro and Tuason on 16 March 1953. . but on the basis of the evidence presented by both parties in the trial. that said respondent had a right to compel petitioner to accept payment for the lot in question. 1961. 1959. et al. petitioner bound and committed itself to sell to respondent Lumanlan the lot occupied by her at a reasonable price.. paying P240. Annex "A" of Petition. Oct. and to remove therefrom the house and other structures constructed thereon. 1963. M. Jose Chuico and Wilfredo E. respondents. de Lumanlan to vacate the lot occupied by her in Sta. M. .R... Tuason vs.) Upon the facts thus stated. Deudor. Tuason & Co. Dec. and the question being purely one of possession. that under paragraph 7 of said Compromise Agreement. and L-20105. on 30 April..G. herein defendant sometime in April. L-15398. L-12826. L-18932-34.. and the Deudors constituted a valid defense against the possessory action filed by Tuason & Co. C. No. Tuason & Co. Tuason vs. J. jam. Mesa Heights Subdivision. TUASON and CO. J. she was one of the buyers therein recognized.B. 27259-R. M.: J. holding that Tuason being the registered owner. 30. 31. May 30.

M." The DEUDORS HEREBY advised the OWNERS that the buyer listed in Annex "B" herein with the annotation "continue" shall buy the lots respectively occupied by them and shall sign contracts. and to make them sign. The Deudors had therein recognized the registered title of Tuason & Co.. she charged in paragraph 6 of her special defense (Rec. M. and. was to grant the Deudor buyers preferential right to purchase "at current prices and terms" the lots occupied by them. Inc. are described in the lists submitted by them to the OWNERS which are attached hereto marked Annexes "B" and "C" and made part hereof. How then can she now claim to take advantage and derive rights from that compromise? . Inc. ceded. and much less the intervention of the herein defendant. ante).. new contracts of purchase for said property".conspired together and helped each other . but the sums already paid by them to the DEUDORS amounting to P134. This is what is expressly provided. the same in no way obligated Tuason & Co.00 to be paid to them. and the Deudor vendees (as ruled by this Court in Evangelista vs. paragraph seventh of the compromise agreement (case Q-135 of the court of origin) provided: That the sales of the possessory rights claimed by the DEUDORS.922. Inc.) as required by the aforementioned compromise agreement. the paragraph plainly imports that these buyers of the Deudors must "recognize the title of the OWNERS (Tuason) over the property purportedly bought by them" from the Deudors. Inc. title and interest in the property including the land sold to herein defendant. shall be credited to the buyers. and to credit them for the amounts they had paid to the Deudors. and received payment of certain sums of money. whenever possible.M. Tuason & Co. Sept. but as the Deudors had. Jaramillo.201. over the lands claimed by them. .182. M.. therefore. . Careful analysis of this paragraph of the compromise agreement will show that while the same created "a sort of contractual relation" between the J. Tuason & Co. . for the purchase of the lot occupied. Further. M. vs. the buyers listed in Annex "C" herein with the annotation "Refund" have decided not to continue with their former contracts or purchases with the DEUDORS and the sums already paid by them to the DEUDORS TOTALLING P101. to sell to those buyers the lots occupied by them at the price stipulated with the Deudors. Mesa Heights Subdivision'".42 (subject to verification by the Court) shall be refunded to them by the OWNERS and deducted from the sums that may be due to the DEUDORS from the OWNERS (J.. by entering into a supposed Compromise" whereby "Pedro Deudor and his co-owners renounced.201. Tuason & Co. Tuason & Co. L-18932... Whatever amounts may have been collected by the DEUDORS on account thereof.00. but at "the current prices and terms specified by the OWNERS (Tuason) in their sales of lots in their subdivision known as 'Sta. instead of recognizing the title of the owners (Tuason & Co. Nowhere in her answer did the respondent Estrella Vda. de Lumanlan claim that she had signed a new contract with J. It shall be the joint and solidary obligation of the DEUDORS to make the buyer of the lots purportedly sold by them to recognize the title of the OWNERS over the property purportedly bought by them. without the knowledge and consent. and "sign. . the respondent Lumanlan in her answer repudiated and assailed the compromise between the Deudors and J. agreed to. What is worse.. Inc. and signing new contracts therefor. Mesa Heights Subdivision. 1963). shall be deducted from the total sum of P1. 30. in consideration of the sum of P1. if and when they do so. sold their possessory rights to various persons. 10) that "Pedro Deudor and his co-owners and the plaintiff herein .063. whenever possible. . Deudor." All that Tuason & Co. prior to the compromise.. waived and quitclaimed all their rights.063. on Appeal.1962 and others). new contracts of purchase for said property at the current paces and terms specified by the OWNERS in their sales of lots in their subdivision known at "Sta. upon their recognizing the title of Tuason & Co. Tuason & Co. . p." In other words. The DEUDORS also advise the OWNERS that.84 (subject to verification by the Court) shall be credited to the buyers and shall be deducted from the sums to be paid to the DEUDORS by the OWNERS. "the sums paid by them to the Deudors . in favor of the plaintiff J.

31. the buyer from the Deudors (or from their transferees) can not. 35 Phil. Jan. Lumanlan must justify her possession on the basis of a pretended superiority of the Deudors' old Spanish informacion posesoria over Tuason's Certificate of Title No. December 29. hence. The Court of First Instance. but demanded that the Deudor buyers should sign new contracts with it at current prices specified for the sales of lots in "Sta. Respondent could have asked that she recover or be credited with the amounts paid by her to the Deudors.. As to Lumanlan's allegation in her counterclaim that she should be deemed a builder in good faith. Tuason & Co. therefore. 1963).. a similar contention has been rejected in Tuason & Co. on the contrary. What is a reasonable price is a question of fact dependent on the circumstances of each particular case. but as no claim to such credit was ever advanced by her in the trial Court. vs. issued under the Registration Act No. Zuzuarregui. Bolaños. did not consider itself bound by the sales made by the Deudors. Macalindong.. appellant is now bound conclusively by appellee's Torrens title (Sec. where we ruled that there being a presumptive knowledge of the Torrens titles issued to Tuason & Co.. 496. The reason given by the Court is that — Had he investigated before buying and before building his house on the questioned lot. However. But. Mesa Heights Subdivision" (ante) the aforequoted Article 1474 can have no bearing on the case. vs. the contract is inefficacious. 1959. Inc. supra. and its predecessors-in-interest since 1914. Lumanlan is by now barred from assailing the decree of registration in favor of Tuason & Co.. as ruled by this Court in previous cases. 1267. Inc. Tuason & Co. 735 of Rizal. she assails it. Since there has been no contract between petitioner Tuason & Co. Tuason & Co.Without the compromise agreement. L-16827. vs. If he failed to make the necessary inquiry. perhaps because such course appeared to her as more advantageous. say now that she believed her vendor had rights of ownership over the lot purchased. M. he would have been informed that the land is registered under the Torrens system in the name of J. 95 Phil. 51. 1962. Lumanlan had chosen to ignore the Torrens title of Tuason & Co. if the thing or any part thereof has been delivered to and appropriated by the buyer. Tuason & Co. L-13429. vs. she has only herself to blame for the consequences now that the Deudors' claim has been abandoned by the Deudors themselves.. PHHC. Lumanlan not being a buyer from Tuason & Co. 107. vs. 622-623. 99 Phil. The Court of Appeals ruled that the price to be paid by Lumanlan to Tuason & Co. traceable back to the original Certificate of Title No. and can not pretend good faith. Jaramillo. or in any other manner. is governed by Article 1474 of the new Civil Code of the Philippines. and respondent Lumanlan for the sale of the lot occupied by the latter. or that the compromise agreement legalized the possession of the respondent. he must pay a reasonable price therefor. Macalindong. ante). 31.. 144) (Tuason & Co. and relied instead upon the Deudors' claim of ownership. Emas vs. Inc. no . vs. Macalindong. Tuason & Co. It is thus apparent that no legal basis exists for the pronouncement in the appealed decision that Tuason & Co. and seek refuge thereunder). in good conscience. and by paragraph 7 of the Compromise Agreement (assuming that respondent-appellee still has the right to invoke the same. Inc. L-15398. Inc. Oct. which provides that: Where the price cannot be determined in accordance with the preceding articles. Santiago. Tuason & Co. Act 496. had committed itself to sell to Lumanlan the lot occupied by her at a reasonable price. since the latter does not rely on the compromise but. did not err in holding that she was not a rightful possessor and sentencing her to vacate.'s predecessors twenty years after its issuance (Tiburcio vs.

is on leave.J. Zaldivar. Dizon.. WHEREFORE. JJ.. concur. Bengzon. Castro and Fernando. Estrella Vda. should be. J. Angeles. or to have the amount offset against the sums she was sentenced to pay.pronouncement can be made thereon in this appeal. C. Makalintal. J. however. Costs against respondent. de Lumanlan. Sanchez. took no part. Equity demands. reserved.. as it is.P. that her right to claim such return. Concepcion.. the decision of the Court of Appeals is reversed and that of the Court of First Instance reinstated. .

.R. F. in turn. 1961.939.848.00 10. REYES.. INC. 1962. plaintiff-appellee. 22. Against the free market letters of credit opened by the Philippine National Bank. on December 26. as follows: L/C Number 613457-FM 614728-FM 615103-FM 615104-FM Date Sept.820. which were granted. on behalf of the Vargas Plow Factory. 1962 Jan. Diaz and G. 1962 Mar. No.580. 30. 1961 Mar.14 6. Evangelista. 1961 Jan. the Philippine National Bank and the Central Bank executed Forward Exchange Contracts No. J.971.880. Jr.00 3.512.820. for defendant-appellant.80 3. 11018. 30. J.81 6.: Appeal from the decision of the Court of First Instance of Manila (in Civil Case No. Inc.B. applied with the Central Bank to purchase the "forward exchange" necessary to cover the above-mentioned letters of credit. Gilberto C. 15. 10593. on December 15.00 The Philippine National Bank. THE CENTRAL BANK OF THE PHILIPPINES. De Santos and Delfino for plaintiff-appellee. 57582) on the legal issue of when the imposable margin levy on foreign exchange purchased from the Central Bank is collectible. on January 19.820. 11. the Vargas Plow Factory. L-25732 February 27. To cover the cost of steel blades. defendant-appellant. 1961. 1962 Face Value $10. S. 1961 Dec. 30. No.. 12576. E. 15. There is no controversy as to the facts of this case. vs. 22. bolts and rivets it was importing from Germany. 1962 Mar. 1962 Apr. the foreign beneficiary (Stahlkontor Hahn Aktiengesellschaft of Dusseldorf Germany) drew the following drafts: L/C Number 613457-FM 614728-FM 615103-FM 615103-FM 615104-FM Date Dec.00 10.19 . 1962 Apr. 1969 VARGAS PLOW FACTORY. 22. Gamo.86 3. The applications having been duly approved. 1962 Face Value $ 566.78 3.G. applied with the Philippine National Bank for free market letters of credit. and No. 11.L.

therefore. arose from the fact that.which drafts were accepted (by the importer) on January 30. vs. in the case of Pacific Oxygen & Acetylene Co. Otherwise stated. 122. Therein. Inc.65. the drafts against said letters of credit were drawn and accepted by the importer when the collection of the margin fee had already been suspended. but later demanded for the refund of. this Court had occasion to re-examine the doctrine of the Belman case and allied adjudications. .642. The importer accordingly paid. 1962. And when it was denied. held that the sales here in question occurred during the period of suspension of the margin levy by the Central Bank. as well as the Central Bank circulars implementing said law. or when the margin levy is still imposable. however (though the court below could not have anticipated it). the aforestated amount of P11. There is here no dispute as to the legality and validity of Central Bank Circular No. suspending the collection of margin fee on foreign exchange. Inc. on January 21. Central Bank. and that. and overruled the same. 122. all or part of the foreign exchange previously sold to the appellant. a sale comes into existence upon its perfection by mutual consent. On November 11. relying on the ruling in Belman Cia. 1962. 877. as ruled by the court below. 3 barring law or stipulation to the contrary. May 25.).642. the local bank did not sell dollars to said party. 104 Phil.642. 1962. therefore. Republic Act 2609). vs. 1965. were issued or executed during the effectivity of Circular No. At the time the decision of the court a quo was rendered (on November 11. 1965). The controversy in this case. or upon payment of the creditor by the correspondent bank. or between executory and executed. no margin fee was payable thereon. the same was in accord with the prevailing jurisprudence. 1962. that in this case. with legal interest thereon from the filing of the complaint until full payment of the obligation. but merely caused the delivery to it of dollars previously sold to the appellee. plus attorney's fees and costs. or its agent banks. 22 SCRA 917. Central Bank. Additionally. July 3. June 4. made no distinction between perfected and consummated. the Central Bank issued its Circular No. 2609. The point at issue. Vargas Plow Factory. The Central Bank thereupon charged and collected from the importer the sum of P11. empowering the Central Bank to collect a margin fee "in respect of all sales of foreign exchange by the Central Bank and its authorized agent banks (section 1. the court rendered judgment sustaining plaintiff's claim and ordering the defendant. the acceptance of the exporter's drafts being in the nature of a recognition of the importer's act of assigning to the exporter. and paid for by the latter. respectively. does not exist. 133. that there was no consummated sale of foreign exchange until payment of the amount in foreign currency to the creditor. 2 even if the subject matter or the consideration has not been delivered. Defendant Central Bank thus interposed the present appeal. 1 imposing 15% margin fee on all sales of foreign exchange purchased to any bank or importer by the Central Bank. sales. The effect is that. as 15% margin levy on the foreign exchange covered by the drafts.65. while the letters of credit in question opened by the Philippine National Bank. on March 1. 1968. this Court reached the conclusion that Republic Act No. the importer raised the question of the validity of the collection of the margin levy on the involved foreign exchange before the Court of First Instance of Manila (Civil Case No. lawphi1. December 6. Central Bank.65. are the ones made to the appellee herein (Vargas Plow Factory. the only sales of foreign exchange by the Central Bank. Subsequently. which issued said drafts. Stahlkontor Hahn Aktiengesellschaft. 1962. 57582). claiming that its collection was not in accordance with law. however. to pay to the former the sum of P11. in honoring the drafts issued by the exporter. Under our Civil and Commercial Codes. 1962. as claimed by appellant Central Bank. L-21881. is whether the imposable margin fee becomes collectible upon the execution of the contract to purchase the foreign exchange.nêt The lower court. 1962 and December 6. as well as the contracts to purchase forward exchange (between the Philippine National Bank and the Central Bank).

No costs. Capistrano. and the complaint ordered dismissed. It follows that the true sale took place when the forward exchange contracts were executed in December. as shown by the documents. before the margin levy was suspended. the decision under appeal is reversed. J. Concepcion. . Sanchez.The foreign exchange having been applied for by the appellee and sold to him by the bank. Makalintal. the opening of a letter of credit in favor of Stahlkontor Hahn Aktiengesellschaft becomes ultimately but the result of a stipulation pour autruithat is in no way incompatible with the original sale of the foreign exchange to appellee herein. Hence the margin fee was properly collected. 1961. Teehankee and Barredo. Fernando.J. Zaldivar.J. Castro. PREMISES CONSIDERED. concur. Dizon. C.

.

and have constructed their own dwellings and made necessary improvements. JEREMIAS DEL ROSARIO. and (3) jointly and severally pay them moral damages plus attorney's fees. petitioners. ISSUE: . subject to the condition that "the vendee shall recognize and respect the rights of the present bonafide tenants listed" in the deed of absolute sale.M. which the poor tenants cannot afford to pay.M. Later. and A. (2) fix the purchase price of each lot in accordance with the schedule rates in paragraph 10 of their complaint (NOTE: The amount they suggested in the said “paragraph 10 of their complaint” is not in the case. Raymundo & Company and convinced his wife to sell the hacienda to the partnership without notifying the tenants of such sale. MAXIMA SY JUECO. Carlos Goco with the understanding of reselling the same to the tenants without profit. RAYMUNDO & COMPANY.G. HONORABLE COURT OF APPEALS. After that. Rizal. Petitioners prayed that judgment be rendered in their favor ordering defendants to: (1) recognize their rights as bonafide tenants to lease the property from the defendants with option to purchase the same. They claim that they have been continuously occupying the lot for more than 30 years. originally belonging to the Archbishop of Manila. L-48436 January 30.M.: Petitioners alleged that they were bonafide tenants of Hacienda de Tulay in Malabon. the Archbishop sold the hacienda to Leonila Siochi. LEONILA SIOCHI. CLARO APOSTOL. No. Carlos Goco organized a partnership under the name of A. TEOFILO NAVARRA. FACTS: CUEVAS. In 1954. J. vs. but the idea is they suggested a price for the lot) or at such reasonable price as the court may deem fit. through the intervention of her husband. respondents. 1986 JOSE MATIAS. They later decided to purchase the lot from the Archbishop and designated Carlos Goco as their official representative for the negotiation regarding the sale. Raymundo & Company giving them top priority to purchase the lots respectively occupied by them and inviting them to visit its office to discuss the price acceptable by all concerned. Petitioners admitted that they ignored the letter of A. CARLOS GOCO.R. FELICIDAD SANTOS. Goco collected money from the tenants (as deposit) as required by the Archbishop during the negotiations. and ROMANA AQUINO. The partnership is now offering to sell the lots to the tenants at exorbitant prices.

Such a condition should not be interpreted to mean that the new owner is under obligation to sell the lots to the tenants at a price dictated by the latter. This is a clear indication that the partnership complied with the conditions attached to the sale. In spite of such failure. which delinquency lasted up to the time of the consummation of the sale of the Hacienda. WHEREFORE. place and manner of acceptance. otherwise. . Petitioners' insistence as to the price of the lot rests on the false assumption that the fixing of the price of the lot they wanted to purchase is one of the rights granted to them by law. To sustain such Idea would run counter to the provision of Article 1321 of the New Civil Code which states that— “The person making the offer may fix the time.W/N the defendants are obliged to sell the lot to the petitioner at the latter’s suggested price HELD: NO. the decision under review is hereby AFFIRMED without pronouncement as to costs. provided however that they religiously pay their rentals. petitioners have already been in arrears in the payment of rentals. it could have right then and there demanded the ejectment of petitioners as delinquent tenants. the new owner of the Hacienda gave them top priority to purchase their respective lots. The tenants under condition number (1) of the Deed of Sale. Instead of discussing with the new owner the terms and conditions they wish to impose on the projected sale. can continue enjoying their leasehold rights even though the Hacienda has been transferred to a new owner and should not be disturbed in the possession of their respective premises. petitioners insist on their claim that the price of the lots are exorbitant. and that their right to purchase the lot at a price fixed in the complaint was disregarded. all of which must be complied with. RATIO: During the early stages of the negotiations.

Gamboa. 1978. Mr. (Otiginal terms: 2M payment upon execution. payment of installment must be in requisite of a note under the statute of frauds. Mr. 1981) FACTS: Petitioners own a property in Tacloban City which they intend to sell for 6. Even though there was an agreement on the terms of payment. there was no absolute acceptance because respondents still insisted on further details. 4. Petitioner sent another telegram informing respondents that their proposal is accepted and a contract will be prepared. arrived bringing a contact with an altered mode of payment which says that the balance payment should be paid withing 30 days instead of the former 90 days. DACUYCUY (May 27. no meeting of the minds. there was no written document to prove that the respondents agreed to pay not in cash but in installment. Respondents replied that they agree to buy the property and they will negotiate for details. HELD: There was no perfected contract of sale yet because both parties are still under negotiation and hence. They gave the respondents the right to purchase the property nut only until July 31. With regard to the alleged violation of terms of payment.YUVIENCO V.Gamboa even went to the respondents to negotiate for the sale. . In sale of real property. Lawyer of defendant.5M after 90 days) ISSUE: WON there was already a perfected contract of sale between the parties.5M.

The decisive point at issue is thus the liability of petitioner for the damage incurred by private respondents. Quezon City. and ALLIED TOBACCO PLANTERS. (CCE).. SOUTHWESTERN SAN QUINTIN TOBACCO PLANTERS.. entitled to respect by this Tribunal only a question of law being properly before it. at Agoo. LA UNION AGRICULTURAL DEVELOPMENT CORP. SAN JUAN TOBACCO PLANTERS.. NORFEX-VILLAVICIOSA. INC. to the trading of Virginia tobacco and to buy locally grown Virginia tobacco. No.R. The lower court... certain quantities of tobacco under particular BIR Guias. hence this suit. INC. INC. overhead and other specified expenses. INC.G. 1978 PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION. The affirmance of the decision... the PVTA entered into a management contract with its co-defendant Central Cooperative Exchange. as a result of which private respondents 1 suffered losses arising from the sale and delivery of tobacco to Central Cooperative Exchange.. as Judge of the Court of First Instance of Rizal. and EASTERN VIGAN VTPA. that the payment of these tobacco shipments was refused by defendants without reason.. hereinafter referred to as the PVTA. INC. FERNANDO. INC. STA. 2 decided the case in favor of private respondents.. petitioner. redry and service Virginia tobacco for the PVTA and to advance the payment of tobacco to the trading entities at the government price support plus transportation. INC. L-33079 December 11. that they were recognized by the defendants as trading entities of the defendant Philippine Virginia Tobacco Administration (PVTA) in connection with the trading and buying of locally grown Virginia tobacco in 1963.. LIDLIDDA VTPA. Branch IV.. BANGUED FACOMA. J: The controversy that gave rise to this petition for review by certiorari from a decision of the then respondent Judge Walfrido de los Angeles of the Court of First Instance of Rizal Branch IV.. is indicated. BANGUED NORFEX BANGUED TOBACCO PROD.. as will be explained more in detail. INC. INC. the plaintiffs delivered to the PVTA through the CCE in the latter's redrying plant at Agoo. the CCE obligated itself to procure. Inc. 2265. supervise and control all functions and operations with respect. La Union.. INC. The decision now sought to be reviewed stated the nature of the case thus: "In their second amended complaint the plaintiffs allege that they are private corporations. INC. INC. Quezon City. UNITED SAN ILDEFONSO VTG ASSOCIATION. It was named defendant in the lower court but is not a party to this appeal. the authorized agent of petitioner.. MONICA TOBACCO PLANTERS ASSN. arose from a fire that destroyed the redrying plant of petitioner Philippine Virginia Tobacco Administration.. to be subsequently referred to as the CCE. that pursuant to Section 4 of Republic Act No. SAN NICOLAS FACOMA. according to the facts as found by respondent Judge. ASINGAN FACOMA. ARINGAY FACOMA. INC. Inc. vs. under which the defendant PVTA has the power and duty to direct. BALAOAN FACOMA. that under this contract.. TAGUDIN FACOMA. INC. LUZON PRODUCERS CORP. WALFRIDO DE LOS ANGELES. BADOC TOBACCO PLANTERS. among other things. BOUNDARY VTPA. HON. FILIPINO AGRICULTURAL PRODUCERS. The plaintiffs pray for the value of their respective shipment plus legal interests computed 48 hours from . ILOCOS SUR TOBACCO INDUSTRIES CORP. that on various dates in 1963.. La Union. CENTRAL RELIANCE TOBACCO FARMERS CORP. ASSN. that the shipments are those enumerated in Annex 'B' of the second amended complaint (some of which however were later dropped upon proper motion). respondents.

"testified that after the fire and even in the next following years.38 of their merchandizing loans from the PVTA. attorney's fees. As already stated. they admitted that the plaintiffs were recognized in 1963 as trading entities of the PVTA. They also admitted their management contract in 1963 for procuring. redrying and servicing. these facts were . Inc. It also filed a cross-claim against the CCE to the effect that the latter should be held liable to pay whatever amount the PVTA may pay to the plaintiffs. besides being the manager of plaintiff Tagudin Facoma. The plaintiffs presented Bernardo Navarrette. they also admitted that the 1963 tobacco trading started in April 1963. Inc. and San Juan Planters. and he headed delegations to the defendants and notably to PVTA Chairman Balmaceda and PVTA General Manager Bananal but that the latter gave all sorts of excuses such as the need of further study of the matter and the lack of money. 1963. store and service for the PVTA. now petitioners.683. filed their answer containing specific denials and special defenses. who were headed by the PVTA provincial tobacco agents. a fire occurred in the redrying plant of the CCE. was President of the National Federation of Facoma's. Somera advised his colleagues that they go to court. Jorge Peneras. redry. and that the same were unloaded and awaiting inspection and grading when they were burned on July 24. these agents were Jose Singson. defendant CCE alleged the special defense that it only acted as agent of the PVTA in the transactions subject matter of the case. through their officers.date of acceptance thereof. destroying tobacco shipments therein of various trading entities and that this fact was reported to the PVTA. the head of the Field Services Department of the PVTA. On its part. Manuel Festejo and Alfredo Cajigal. it went on thus: "In its answer the defendant PVTA alleged that the shipments were not accepted by it and the CCE. brought about by the carelessness and negligence of the said defendant CCE. and that on July 24. 1963. that if they were accepted. among them Circulars 2 and 4. and a member of the Board of Directors of defendant CCE.47 and P 2. He testified that in about five occasions." 6 As for the facts found by the lower court. So after many attempts proved futile. officers of all the plaintiffs went to him for assistance in the collection of their claims. Angel Torrijos. and in their answers to plaintiffs' request for admission. the following was set forth in such decision: "This Court is convinced that there is satisfactory proof that the plaintiffs delivered the tobacco shipments in question to the defendants at the CCE redrying plant in 1963. It assigned men to the provinces to supervise these operations and enforce observance of these rules and regulations. During the trading in 1963. the CCE was given by the PVTA an allocation of a million kilos of Virginia tobacco to procure. now respondents.' It alleged a counterclaim against plaintiffs Allied Tobacco Planters. 1963. but from the evidence in this case it appears that actually the payments were made by the PVTA itself evidently in order to control disbursements more effectively." 5 Plaintiffs in the lower court. The CCE was supposed to advance payment of the shipments 48 hours from acceptance. Under the aforesaid management contract." 4 The matter in issue was further clarified in the decision in this manner: "The juridical personality of the plaintiffs are admitted in the answers of the defendants. Antonio Florendo." 3 After noting that the defendants. and the costs. The PVTA had rules and regulations. and damages. the PVTA had men in the field to implement its rules and regulations. and he Identified the signatures and initials of the said PVTA provincial tobacco agents in the shipping documents exhibited in this case. they were not properly accounted for by the CCE and 'were in fact reported burned in the fire that razed down the plant on or about July 24. for the balances in the respective amounts of P14.162. Vice-President of the Ilocos Sur Federation of Facoma's. they made demands for the payment of their shipments but these demands were ignored. to govern the tobacco trading operations. Mention should be made of the testimony of Constante Somera who in 1963. As a matter of fact.

17 and 22. They saw to it that the tobacco was properly graded and in fact. He also confirmed the fact. Upon arrival of the shipment at the redrying plant designated by the PVTA. A shipment could not be . the clearance given by the PVTA provincial tobacco agent was an indication that the required shipping documents were complete and in order and that the shipment. pursuant to its powers and duties under Republic Act No. As admitted by the witnesses of the PVTA. the PVTA issued rules and regulations. whose duty it was to exercise general supervision over the receiving and storage of Virginia tobacco in the CCE redrying plant in accordance with the PVTA regulations and procedures. 1963. such as the pre-sales invoices showing names of the farmer sellers. According to the defendant's answers to plaintiffs' request for admission. and a priority slip stating the time it would be unloaded and graded in the plant. and assigned men to its recognized trading entities among them the plaintiffs. The shipment was then given by the PVTA a gate pass. The presence of the shipment is actually verified by the PVTA Plant Manager." 7 There were "separate certifications [from Bello] to the effect that according to the records of the redrying plant. An this indicates the extensive intervention of the PVTA in the buying and shipping activities at the level of the trading entities. the commercial waybill and other documents pertaining to shipments. Once made. and he Identified the last lists. those dated July. in effect confirmed this when he said that there were several inventories made after he assumed the position on July 12. 2265. the plaintiffs had specified quantities of tobacco under specified Guias ready for inspection and grading at the receiving ramps before July 24.testified to by no less than the CCE Trading Officer at the plant. the PVTA tobacco inspector saw to it that the tobacco was classified according to the standards provided by the PVTA. signed the documents covering tobacco. They saw to it also that the shipping documents were complete and in order. weighing. the progressive stock and shipment control form showing the status of stocks after each shipment to the PVTA. PVTA Tobacco Plant Manager in the CCE who testified for the PVTA. addressed to the PVTA Provincial Tobacco Agent. Benjamin Bello. ' an unloading permit. and other activities in the buying station of the trading entities to which they were assigned. These PVTA men. as testified to by Bello. he declared that he prepared periodic lists of shipments scheduled or unloaded for inspection in order for the CCE plant to know the expected volume of tobacco to be redried and serviced. The entities even had to apply with the PVTA and were screened before PVTA accepted them as its trading entities. baling of tobacco. These certifications are exhibits in this case. It was he alone who could decide to what redrying plant the shipment should be sent. Identified by Ballesil as PVTA Field Inspectors. Among the shipping documents may be mentioned PVTA Form 30. the quantity and grade of tobacco received from these farmers. which indeed include the shipments in question Romeo Ballesil.in respect to its tobacco trading operations. Among other things. They also saw to it that the tobacco was properly weighed and baled. the abstracts of tobacco purchased. 1963. that there were many shipments in the CCE receiving ramps and bays which were authorized to be unloaded and awaiting inspection when the plant was destroyed by fire on July 24. it appears that. 1963. to see that these rules and regulations were observed. was strictly in accordance with the PVTA regulations. the shipping documents were delivered to the PVTA traffic officer thereat and were processed. entitled Request for Tobacco Clearance. 1963. there were in fact piles of tobacco up almost to the ceiling in some places. These obviously are not the usual acts of an ordinary buyer of a commodity. notably Ballesil and Millan these PVTA men supervised the grading. and loaded on trucks for transhipment duly sealed. and there were piles even in the corridors of the receiving ramps." 8 Then came a detailed appraisal of the evidence by the lower court: "From the evidence. it was the function of this PVTA agent to process the said request and the supporting documents before giving him clearances to the shipment and recommending its acceptance.

" 11 Judgment was. the plaintiffs' shipments had long been in the CCE ramps waiting to be inspected when they were burned. therefore. This Court believes that the PVTA already had the legal control and custody of said shipments and that it should be considered as having accepted them as of the fire and therefore should bear the loss. should prevail: "In the light of the foregoing. Guia No. there was no inspection or acceptance of tobacco shipments. and he claimed as the reason the alleged lack of space in the transit area where inspected tobacco would be stored to await redrying. It has virtual control of the shipments even at the plaintiffs' stations and specially after they had been cleared and sent to the CCE plant and unloaded for inspection at the CCE ramps. incidentally.' and the PVTA accuses these officials and employees with being 'grossly and inexcusably careless and negligent in not preventing and arresting the spread of the fire. PVTA Tobacco Plant Manager assigned to the CCE.how to enable them to cope with the situation. in the implementation of its contract with the CCE. According to Ballesil. But they were not inspected early enough. did not delegate to the latter any of its powers and duties under the law to buy Virginia tobacco. directed and supervised the CCE in the performance by the latter of all activities in the tobacco trading operations in 1963. was careless and negligent in causing the fire and in not Preventing and arresting the spread of the fire. The value of the tobacco is. it would be the height of injustice to deny the plaintiffs' claims. Obviously. indicating that they had had enough experience and know. which may be considered as an admission against interest vis-a-vis the claims of the plaintiffs. to the effect that its own agent and contractor.'" 10 From the above recital. This Court wonders whether the causes of the delays and suspensions could have been avoided Or ed by the defendants considering that the trading operations started as early as April 1963. and this evidently because of delays and suspension of operations in the CCE plant." 9 Further on this point: "As above stated. and once inside the plant.68. plaintiffs. considering these suspensions. In fact Bello testified that PVTA controlled. the PVTA kept on authorizing the unloading of shipments which were not being inspected fast enough.936. as a result of delays and suspensions of operations. But there is no explanation why. It is reasonable to say that these shipments. there was only redrying of tobacco from July 13 until the fire occurred. Eastern Vigan VTPA Inc. should have been inspected before July 24. there arose a backlog of shipments waiting to be inspected at the CCE ramps. San Nicolas . now private respondents. 38-P26. whereas the plaintiffs themselves had done everything that was required of them by the PVTA regulations in order to have their tobacco inspected and paid for. it is easy to understand why. there is the allegation of the PVTA. as decided by the lower court. stated in the shipping documents. 1963 since they were shipped to the CCE as early as May and June 23. It is also significant that the PVTA states in its answer that the CCE redrying plant and facilities 'caught fire and burned down due and owing to its (CCE) carelessness or negligence or its officials and employees. Inspection of shipments was suspended.brought inside the plant and unloaded at the receiving ramps without prior authority of the PVTA. When an the fault clearly lies with the defendants... It is thus clear that the PVTA had virtual control over the shipments after they had left the hands of the trading entities. Moreover. pursuant to the scheduling and priorities established by the defendants themselves.. as shown in the shipping documents. the denial of liability on the part of the defendant PVTA cannot be sustained. It is also clear that the PVTA. Their shipments which had long been in the ramps for inspection were not inspected in due time and the delay is traceable to the fault of the defendants. it could no longer be withdrawn without proper application by the entity concerned addressed to the PVTA general manager. the CCE. rendered by the lower court ordering PVTA to pay to the plaintiffs the amount of their respective claims. 1963. as follows: .

Guia No.. Inc. Vice-President of the Ilocos Federation of Facoma's. Asingan Facoma.725. Guia No. 24-P28.494. Guia No. and he headed delegations to the defendants and notably to PVTA Chairman Balmaceda and PVTA General Manager Bananal. Inc. 653-P22.966. Guia No. Inc. they made demands for the payment of their shipments but these demands were ignored. besides being the manager of plantiff Tagudin Facoma.79. 20P28.150. 17-P29. He testified that in about five occasions. Inc. that plaintiffs brought the tobacco shipments in question to the CCE redrying plant at Agoo. is ordered to pay to the PVTA the sum of P14. Tagudin Facoma. Inc.. thru CCE. San Juan Tobacco Planters. Allied Tobacco Planters. to be sold to the PVTA. Lidlidda VTPA Inc.743.494.. were under its control. The plaintiff Allied Tobacco Planters. Boundary VTPA Guia No.000.64..978.851. "the aforesaid officers also testified that after the fire and even in the next following years.. Monica Tobacco Planters Assn. Monica Tobacco Planters Assn.Villaviciosa. Tagudin Facoma. Lidlidda VTPA Inc. Clearly Proof of such character was lacking in this case. Norfex-Villaviciosa. Guia No.174. Boundary VTPA Guia No. Tagudin Facoma..44.. once received from the trading entities... Inc. 21-P23.08. and that the same were unloaded and awaiting inspection.10. 109-P15.980.00 with legal interest thereon from August 1. Inc. Inc. Mention should be made of the testimony of Constants Somera who in 1963.Facoma. the Solicitor General made the following admission: "It may be conceded. Sta. 18-P22. Guia No. 8-P31. Sta." 13 2.00.31. 25-P33. Inc. 40-P33.P43. the CCE.. Allied Tobacco Planters. 18-P30. Guia No. but that the latter gave all sorts of excuses such as the need of further study of the matter and . 1963 until fully paid.00. At the most. Guia No. 2-P18. for purposes of this appeal. 438. Guia No.998. 36P30..165. The procedure was so carefully designed that the supervision by it could be rendered most effective.300.00. Norfex. 30-P28.P27. 439-P23. Guia No. Guia No. La Union. Guia No.677..19. Filipino Agricultural Producers Inc. as with some debtors. Boundary VTPA Guia No. 10.59. La Union Agri.622. 42-P21. plus the sum equivalent to 10% of the total amount based on the principal obligation as and by way of attorneys fees. 1963. Inc. 12P12. Guia No.47 with legal interest thereon from August 1.. Guia No. Allied Tobacco Planters. grading and weighing.351.. Guia No. and that the tobacco. the appealed decision is entitled to affirmance.56..00. Luzon Producers Corporation.adverse to its pretension.73. 1963.074. Inc.. It was also found by it that the PVTA directed supervised and controlled the CCE in receiving shipments of tobacco and in the performance of its activities.669.00. As put by the trial court. Hence the way the decision turned. Thus any attempt to exculpate itself thereafter on alleged deficiencies could succeed only if the evidence offered by petitioner were of such a nature as to justify evasion of what is required by law no less than by morality. when they were burned on July 24.51. Inc. in the brief of petitioner.. 38-P30.590.74. and a member of the Board of Directors of defendant CCE. Ilocos Sur Tobacco Industries Corp.444.00.17.. 661-P19. 76-P21. 1.00 United San Ildefonso VTG Assn. It bears repeating that the trial court was satisfied as to the fact of delivery of the tobacco in question at the redrying plant of petitioner agent. It had to be. not subject to withdrawal without its authority. It is likewise worth mentioning That for sometime after the conflagration there was no question raised as to its liability. Guia No. in 1963. Inc. Guia No. Guia No.475. and the costs of suit. Guia No.22.. officers of all the plaintiffs went to him for assistance in the collection of their claims.. The cross-claim of the PVTA against the CCE is hereby dismissed." 12 As noted at the outset. Inc.00. 183-P36.284.750. Central Reliance Tobacco Farmers Corp. 450-P27. Guia No. 13.. Development Corp. As a matter of fact.84. Guia No.922. Tagudin Facoma. 445-P27. Guia No. was President of the National Federation of Facoma's.162. the delay in payment was sought to be justified for the need for further study or the lack of money.

As it was in those cases. 18 4. the municipal building was totally razed by a fire. It would thus appear that the merit of the case for private respondents is impressed with merit. So the lower court decided. Jimenez. In that case. so it should be now." 14 3. the ruling on which. Somera advised his colleagues that they go to court. graded and weighed. 23 where this Court. 19 decided in 1963. as could be expected. the PVTA requirements having been met. on the face of the facts as found. was adverse to petitioners. the decision of the Auditor General is hereby reversed . Tarlac. would appear to be clearly untenable. The grading was done according to the standards on samples provided by petitioner. baled and loaded on trucks duly sealed for transportation to its redrying plant. there was a delivery by petitioner of a typewriter upon requisition of the Municipality of Paniqui. For its own fieldmen had the responsibility of such tobacco being graded. So it was provided by Article 1450 of the Civil Code of Spain of 1889 then in force. This was what happened in this case. In this petition for review. stated that even on the assumption then that not all the terms of the contract as to inspection were fully complied with." 15 Such a contention certainly cannot suffice to overturn the decision. the PVTA would assail the judgment reached on the allegation that the contract of sale was not perfected. It was only then that clearance was given." 20 He stressed both "the law and equity of the case [in holding that] the municipality of Paniqui is legally bound to pay for the price of the typewriter involved herein and. All that was required was that there be an agreement on the thing which is the subject of the contract and upon the price. but ten days thereafter. v." 17 It remains to be noted that the Tambunting doctrine was followed in subsequent cases." 21 In La Fuerza. . The futility of the effort to deny the perfection of the contract of sale is thus rather apparent. it was sought to lend it plausibility in the eight-page brief of petitioner by the argument that the shipments of the tobacco in question "were still to be inspected. respondent Auditor disapproved the claim on the ground that the article in question was never presented for inspection and verification. Tambunting. Such an assertion. weighed. held that there could be a valid and binding agreement providing for sale of property yet to be adjudicated by the court. after noting that there was indeed such delivery. comes to mind. we believe that injustice would be done the petitioner if we apply said principle to the present claim . Lichauco. Inc. Smith Bell and Company v. with Justice Zaldivar as ponente. 16 a 1902 decision. The liberality with which this Court views the stage of perfection in a contract of sale is likewise manifest in Republic v. It suffices to recall the relevant facts as found by the trial court to render unmistakable how lacking in persuasiveness is the contention that the contract was not perfected because of an alleged technical defect.the lack of money. The shipping documents were in order. "yet upon the facts obtaining in this case. through the then Chief Justice Concepcion. stressed the doctrine that the decisive factor is the delivery of the thing sold. The weight and grades of such tobacco were certified by such fieldmen and thereafter processed by its provincial tobacco agent. That responsibility was fulfilled as found by the trial court. So that it is placed in the control and possession of the vendee. therefore. For one thing. So after many attempts proved futile. So it has been from Irureta v. Notwithstanding the fact that the Municipal Treasurer. it raised an issue of fact. Justice Barrera. as well as the Provincial Treasurer of Tarlac recommended payment. Nonetheless. speaking for the Court. Court of Appeals. Only thus may the law be infused with the highest concept of equity and fair dealing. 22 this Court. There is difference in phraseology but not in meaning under the present-Civil Code: "The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.

1963. 1970 is affirmed. In that light. took no part.036. At the time the tobacco was burned.J. plus legal rate of interest from August 1. Castro. Teehankee. the appeal from the lower court decision cannot be viewed unfavorably. dissenting: The trial court erred in ordering the Philippine Virginia Tobacco Administration (PVTA) to pay the sixteen respondent corporations (plaintiffs below) the total sum of P1. graded and weighed. The tobacco was lost when the redrying plant of the Central Cooperative Exchange (CCE) at Agoo. was burned on July 24. Jr. Nonetheless.. CERTIFICATION There being an insufficient number of votes to reverse the judgment a quo (seven votes for affirmance and three votes to reverse). La Union. the payments could have been made after its investigation. where the tobacco was delivered. J. . J. J. concurs in the dissenting opinion of Mr.. Concepcion. Makasiar. Even as agent. concur. FRED RUIZ CASTRO Chief Justice Separate Opinions AQUINO. concurs. I believe private respondents had already done what was incumbent upon then when the loss by fire occured. It is understandable for petitioner as custodian of public lands to see to it that only valid and legitimate claims should be honored. JJ. Fernandez and Guerrero. when it is remembered that the adverse effects of the failure to pay for the tobacco would be a number of small planters. J.. It was not consummated because there was no tradition or delivery of the tobacco to the PVTA.5.09. Justice Aquino. had not yet been properly inspected. there being the required delivery and there being no question yet as to the fire having been the cause of loss. concurs in the dissent of Justice Aquino... No costs. C. There was no acceptance of delivery because the tobacco.. the decision of the lower court of December 28. Only thus. it had not yet accepted delivery of the tobacco before it was lost during the fire. at the time it was lost. Antonio. there is warrant for the view that no failure in the performance of public duty could be imputed to any official if on the tacts as found. Barredo. I hereby certify that the judgment a quo is affirmed. to follow the Smith Bell decision. the ownership thereof had not yet passed to the PVTA. would there be an avoidance of injustice and conformity with "the law and equity of the case. Santos. The tobacco was still owned by the sixteen plaintiffs or sellers. The CCE was merely an agent of the PVTA. J. 1963 and 10% of the principal obligation as attorney's fees..717. That judgment is erroneous because the sale of plaintiffs' tobacco to defendant (now petitioner) PVTA was not consummated.." WHEREFORE.

and that inspection or acceptance of tobacco shipments was suspended (P. On December 28. Those requirements had not yet been satisfied at the time the tobacco was lost in the CCE's redrying plant. Yu Tek & Co. 1970. as agent of the PVTA. Gonzalez. La Union. 1963 for procuring. 1970. none was submitted and on the part of petitioner Assistant Government Corporate Counsel Romualdo Valera wrote in his own handwriting and under his sole signature. therefore. Under the contract between the PVTA and the CCE. No such advances were made by the CCE a circumstance which may signify that the sale was not consummated. as indeed. vs. However. the lower court notified the parties of the filing of the Commissioner's Report and granted them a period of ten (10) days therefrom within which to file their comment thereon. received and accepted from the trading entities and the same has been properly graded and weighed. 22). 384). before the fire that gutted the premises of the CCE redrying plant at Agoo. the PVTA was not obligated to pay for the tobacco (Roman vs. and that the PVTA should bear the loss when the tobaccos were burned before its inspection. that the tobacco shipments of twentyfour trading entities were not entered in the CCE lists or ledgers because they had not yet been inspected nor were their values computed before they were burned. and. 96. not by the PVTA. the loss should be borne by them. executed between the PVTA and the CCE. Inasmuch as the PVTA did not become the owner of the lost tobacco and as the sixteen trading entities were still the owners thereof. 6 Phil. La Union. Res perit domino. Plaintiffs' cause of action was really against the CCE They did not appeal from the lower court's judgment absolving the CCE. Decision. redrying and servicing of Virginia tobacco. 1963". the latter was supposed to advance to the trading entities the payment for the tobacco delivered to the CCE (par.Paragraph 9 of the contract February 22. provides that the CCE's responsibility. begins from the moment the tobacco has been delivered. without waiting for the respondents tobacco trading entities' comments. 2). Hence. PVTA is liable to pay for the value of the said tobaccos shipped to the CCE redrying plant at Agoo. The following excerpts from the brief of the Solicitor General for the PVTA reinforce the view that the trial court's judgment should be reversed: At the hearing (the reception of evidence was delegated to a commissioner named by the court) the documentary and testimonial evidence adduced by plaintiffs failed to show that the shipments of tobacco were duly accepted. weighed and graded by the PVTA or its authorized representative. The PVTA would then reimburse the CCE for its advances (par. Appendix of petitioner's brief). at the reverse side of the order that he had no objection to the Commissioner's Report. but on December 29. grading and weighing. 18. xxx xxx xxx . The trial court found that the tobacco shipments delivered to the CCE "were unloaded and awaiting inspection and grading when they were burned on July 24. even though said counsel had absolutely nothing to do with this case as he was not the one assigned to handle the case. Grimalt. 29 Phil. even though they had riot been weighed and graded. the lower court rendered decision ruling that the tobaccos in question were deemed delivered to petitioner PVTA.

that: 9. In other words. redrying. for sale to the PVTA. 1497. the PVTA cannot be liable to pay for the burned tobaccos never legally deemed delivered to its trading arm. and servicing between the PVTA and the CCE. were the tobaccos legally delivered to and accepted by the PVTA? It is well to ponder that the transaction involved herein is one of oral sale of locally grown Virginia leaf tobacco by plaintiffs-herein respondents-to the PVTA. in legal contemplation. the contract of procuring. that plaintiffs brought the tobacco shipments in question to the CCE redrying plant at Agoo. under which the tobaccos in question were to be procured for the PVTA provided among others. the CCE. Civil Code). La Union. graded. Annex B. The CORPORATION's responsibility begins from the moment the tobacco has been delivered. the last of which was the grading and weighing at the ramps after the tobaccos were 'delivered' (brought would be the more appropriate word) thereat for redrying at the CCE redrying plant. The tobacco trading process is peculiar to this industry. there was meeting of the mind to perfect the sale even before the tobaccos were inspected. is inescapable that the tobacco shipments brought to the redrying plant to be inspected. and weighed. and weighed to determine the class and compensation therefor. when they were burned on July 24. Accordingly. graded. the sales process was to undergo several stages. the ownership of the things sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in articles 1497 to 1501. Thus. in 1963. The thing sold shall be understood as delivered when it is placed in the control and possession of the vendee (Art. Civil Code). for purposes of this appeal. Civil Code). 1475. 9. the CCE never became obligated to the plaintiff trading entities because the tobaccos in question were burned before the same were graded and weighed. and weighed to determine the price to be paid therefor. 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. (par. 1963. are considered not delivered and sold. The question that arises is whether the PVTA is liable to pay therefor and bear the loss considering that the said tobacco shipments were still to be inspected. graded. thru the CCE and that the same were unloaded and awaiting inspection. and upon the price (Art. Thus. Viewed thus.It may be conceded. received and accepted from the trading entities and the same has been properly graded andweighed. grading and weighing. the question is whether at the moment the tobacco shipments in question were brought to the CCE redrying plant at Agoo. Annex A of second amended complaint. the conclusion. 1496. Petition). to be sold to the PVTA. or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee (Art. As involved herein. until after grading and weighing where the 'meeting of minds' takes place because the price or . much less considered sold to the PVTA. thru the CCE. Consequently. In the law of sale. La Union.

. 96. 31 SCRA 528). vs. not by the PVTA.consideration is determined by the grade and weight thereof. And without agreement as to price. evidence of delivery is sorely wanting (Santiago PVTA. 1970. Hence. received and accepted from the trading entities and the same has been properly graded and weighed. respondents shall bear the loss which occurred prior to the grading and weighing of the tobaccos. The tobacco was still owned by the sixteen plaintiffs or sellers. provides that the CCE's responsibility. February 18. vs.036. At the time the tobacco was burned. dissenting: The trial court erred in ordering the Philippine Virginia Tobacco Administration (PVTA) to pay the sixteen respondent corporations (plaintiffs below) the total sum of P1. 1963 for procuring. they remained properties of the respondent trading entities. Yu Tek & Co. the loss should be borne by them. Inasmuch as the PVTA did not become the owner of the lost tobacco and as the sixteen trading entities were still the owners thereof. as agent of the PVTA. 1963 and 10% of the principal obligation as attorney's fees. PVTA. it had not yet accepted delivery of the tobacco before it was lost during the fire. was burned on July 24. That judgment is erroneous because the sale of plaintiffs' tobacco to defendant (now petitioner) PVTA was not consummated. I vote for the reversal of the lower court's judgment and the dismissal of the complaint as to the PVTA. et al. Even as agent. Those requirements had not yet been satisfied at the time the tobacco was lost in the CCE's redrying plant. where the tobacco was delivered. It is worth emphasizing that before the tobacco shipments were graded and weighed.09. J. graded and weighed. Paragraph 9 of the contract February 22.717. Separate Opinions AQUINO. Plaintiffs' cause of action was really against the CCE They did not appeal from the lower court's judgment absolving the CCE. executed between the PVTA and the CCE. the sale is not perfected. Res perit domino. Thus. as indeed. the ownership thereof had not yet passed to the PVTA. La Union. consequently. begins from the moment the tobacco has been delivered. the PVTA was not obligated to pay for the tobacco (Roman vs. 6 Phil. The tobacco was lost when the redrying plant of the Central Cooperative Exchange (CCE) at Agoo. and at their risk. redrying and servicing of Virginia tobacco. 1963. Grimalt. It was not consummated because there was no tradition or delivery of the tobacco to the PVTA. at the time it was lost. There was no acceptance of delivery because the tobacco. The CCE was merely an agent of the PVTA. it is inescapable conclusion that respondents should bear the loss of the tobacco shipments in question which were burned before actual or constructive delivery and acceptance thereof by petitioner. had not yet been properly inspected. 384). Gonzalez. subject to their control and possession. plus legal rate of interest from August 1. . 29 Phil. L-26292.

in 1963. 22). for purposes of this appeal. grading and weighing. graded. 1970. when they were burned on July 24. that plaintiffs brought the tobacco shipments in question to the CCE redrying plant at Agoo. 2). but on December 29. none was submitted and on the part of petitioner Assistant Government Corporate Counsel Romualdo Valera wrote in his own handwriting and under his sole signature. Appendix of petitioner's brief). even though they had riot been weighed and graded. grading and weighing. at the reverse side of the order that he had no objection to the Commissioner's Report. The PVTA would then reimburse the CCE for its advances (par. therefore. In the law of sale. 1970. 1963". weighed and graded by the PVTA or its authorized representative. and that inspection or acceptance of tobacco shipments was suspended (P. without waiting for the respondents tobacco trading entities' comments. The following excerpts from the brief of the Solicitor General for the PVTA reinforce the view that the trial court's judgment should be reversed: At the hearing (the reception of evidence was delegated to a commissioner named by the court) the documentary and testimonial evidence adduced by plaintiffs failed to show that the shipments of tobacco were duly accepted. The trial court found that the tobacco shipments delivered to the CCE "were unloaded and awaiting inspection and grading when they were burned on July 24. In other words. La Union. the ownership of the things sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in articles 1497 to 1501. the latter was supposed to advance to the trading entities the payment for the tobacco delivered to the CCE (par. before the fire that gutted the premises of the CCE redrying plant at Agoo. or in any other manner signifying . 18. The question that arises is whether the PVTA is liable to pay therefor and bear the loss considering that the said tobacco shipments were still to be inspected. and weighed to determine the class and compensation therefor. thru the CCE and that the same were unloaded and awaiting inspection. and that the PVTA should bear the loss when the tobaccos were burned before its inspection. However. as indeed. that the tobacco shipments of twentyfour trading entities were not entered in the CCE lists or ledgers because they had not yet been inspected nor were their values computed before they were burned. No such advances were made by the CCE a circumstance which may signify that the sale was not consummated. La Union. to be sold to the PVTA. xxx xxx xxx It may be conceded. thru the CCE. the lower court notified the parties of the filing of the Commissioner's Report and granted them a period of ten (10) days therefrom within which to file their comment thereon. On December 28. Decision. even though said counsel had absolutely nothing to do with this case as he was not the one assigned to handle the case.Under the contract between the PVTA and the CCE. 1963. and. La Union. PVTA is liable to pay for the value of the said tobaccos shipped to the CCE redrying plant at Agoo. were the tobaccos legally delivered to and accepted by the PVTA? It is well to ponder that the transaction involved herein is one of oral sale of locally grown Virginia leaf tobacco by plaintiffs-herein respondents-to the PVTA. the lower court rendered decision ruling that the tobaccos in question were deemed delivered to petitioner PVTA.

1496. they remained properties of the respondent trading entities. evidence of delivery is sorely wanting (Santiago PVTA. As involved herein. the CCE. and weighed to determine the price to be paid therefor. respondents shall bear the loss which occurred prior to the grading and weighing of the tobaccos. The CORPORATION's responsibility begins from the moment the tobacco has been delivered. And without agreement as to price. and at their risk. the PVTA cannot be liable to pay for the burned tobaccos never legally deemed delivered to its trading arm. and servicing between the PVTA and the CCE. Civil Code). Thus. I vote for the reversal of the lower court's judgment and the dismissal of the complaint as to the PVTA. and weighed. is inescapable that the tobacco shipments brought to the redrying plant to be inspected. the conclusion. Thus. PVTA. Consequently. that: 9. graded. and upon the price (Art. in legal contemplation. the contract of procuring. 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. there was meeting of the mind to perfect the sale even before the tobaccos were inspected. et al. received and accepted from the trading entities and the same has been properly graded andweighed. Viewed thus. the sales process was to undergo several stages. graded. subject to their control and possession. Civil Code). the last of which was the grading and weighing at the ramps after the tobaccos were 'delivered' (brought would be the more appropriate word) thereat for redrying at the CCE redrying plant. (par. 1475. redrying. . the sale is not perfected. Civil Code). vs. L-26292. 31 SCRA 528). the question is whether at the moment the tobacco shipments in question were brought to the CCE redrying plant at Agoo. it is inescapable conclusion that respondents should bear the loss of the tobacco shipments in question which were burned before actual or constructive delivery and acceptance thereof by petitioner. The thing sold shall be understood as delivered when it is placed in the control and possession of the vendee (Art. February 18. Petition). until after grading and weighing where the 'meeting of minds' takes place because the price or consideration is determined by the grade and weight thereof. Annex A of second amended complaint. 9. under which the tobaccos in question were to be procured for the PVTA provided among others. La Union. much less considered sold to the PVTA. as indeed.an agreement that the possession is transferred from the vendor to the vendee (Art. Annex B. consequently. 1970. It is worth emphasizing that before the tobacco shipments were graded and weighed. the CCE never became obligated to the plaintiff trading entities because the tobaccos in question were burned before the same were graded and weighed. are considered not delivered and sold. Thus. Accordingly. The tobacco trading process is peculiar to this industry. 1497. for sale to the PVTA.

M consigned the steel mattings which were included in the salvaged properties to F. there was one by agreement (tradition longa manu) as provided by article1499: the delivery of movable property may likewise be made by mere consent or agreement of contracting parties. Held: Yes. 1960 Reyes. L. J.Article 1499Board of Liquidators vs.L. M filed a petition for voluntary insolvency attaching inventory of properties which includes the steel mattings. F sold the steel mattings to L.: Facts: M entered into agreement with B for salvage of surplus properties.. B claimed that the steel mattings should be excluded from the inventory because M did not acquire ownership of the steel mattings. J. While there was no physical tradition.15155December 29. Issue: Whether or not the ownership of the steel mattings was transferred to M.B. or from which it may clearly be inferred that delivery was not intended. Exequiel Floro. Et. Al Gr No. . There is nothing in the contract which may be deemed a reservation of title. if thing sold cannot be transferred to the possession of vendee at the time of the sale. M was not able to pay F. M borrowed money from F.