BOSTON BANK v MANALO

G.R. No.158149/ Feb. 9, 2006 / Callejo, J./Similar Acts or Unaccepted Offer/ELQEscober

NATURE Appeal
PETITIONERS Boston Bank of the Philippines (Formerly Bank of Commerce/CBM)
RESPONDENTS Perla P. Manalo, and Carlos Manalo Jr.

SUMMARY. Manalo sought to buy land in Xavierville subdivision, using the money XEI owed
him as downpayment. The two then entered into a conditional sale; however, Manalo was
unable to pay the balance, arguing that XEI had failed to prepare a contract of conditional
sale. Subsequently, XEI became Boston bank who then filed an unlawful detainer case
against Manalo. The lower courts ruled that there was a valid contract of sale between XEI
and Manalo, deciding that the contract between XEI and Manalo was similar to the contracts
between XEI and Manalos subdivision neighbors, such that any terms missing in XEI and
Manalos contract, if found in the contracts of the neighbors, could be deemed to have been
intended to be included. The Court ruled that the fact that a person did one thing, does not
prove that the person did it similarly in another time. Simply put, just because XEI had
included terms in the contracts of others, does not mean that it will include the same in
Manalos.
DOCTRINE. Evidence that one did a certain thing at one time is not admissible to prove that
he did the same or similar thing at another time, although such evidence may be received to
prove habit, usage, pattern of conduct or the intent of the parties.

FACTS. (kaloka the facts, tried to make it discernable because Callejo writing skills )
Ramos, Xavier Estate, Inc.s president, had engaged Manalo to install a water pump in his house. Manalo then told XEI,
through Ramos, that he wanted to buy a lot in Xavierville subdivision, using the money that Ramos owed him as
downpayment. XEI agreed.
Through a letter, Ramos informed the Manalos that the price was P200/sq. m. Same letter informed them of the
downpayment, deducting the money he owed Manalo from it, the downpayments balance of which was payable on Dec.
31, 1972, when they would sign the Contract of Conditional Sale; but if XEI resumed its selling operations only after said
date, the spouses would be notified of such resumption, and the payment of dp balance and the signing of the contract will
be held on the day of resumption. In the meantime, the spouses could introduce improvements. Manalo confirmed.
After being informed of XEIs resumption of operations, the Manalos refused to pay, not having received any Contract of
Conditional Sale. After beng furnished with a statement of account, Manalo went to the XEIs office, asking to defer
payment. XEI refused After receiving another statement of account, the spouses refused to pay interest as they had yet to
be informed of XEIs resumption of operation nor were there any arrangements on the payment of interests.
XEi then turned over its operations to OBM which then sold the Xavierville Estate to the Commercial Bank of Manila (CBM,
later renamed as Boston Bank of the Philippines). On July 2, 1987, after asking the Manalos to pay or furnish them with
documents to evidence that they bought the lot from OBM/XEI, CBM then filed a case of unlawful detainer against the
Spouses. The Spouses, on the other hand, filed a complaint for specific performance against CBM.
The Manalos offered CBM an amicable settlement, and pay the purchase price it promised XEI. CBM refused and proposed
the current price of the lot. .

RTC (affirmed by the CA)

Manalos argued that they had always been willing to pay, and had even offered to pay CBM, but no contract was ever
delivered to them, and CBM had refused their offers. Manalos also presented other Contracts of Conditional Sale that XEI
had executed with their neighbors to prove that XEI had resumed operations.
CBM argued that it did not have records of the sale to Manalos. All it could show was Ramos letter showing that the sale
was subject to two conditions, and since the Manalos were not able to pay the balance of the downpayment, no contract
was executed.
Manalos tried to reach an amicable settlement once more, by paying P900K+. CBM again refused as the current market
value was now P4.5M.
RTC: the letter showed agreement, thus there was a complete contract to sell, and that the Manalos had partially
consummated it. CA upheld, adding that the balance of the purchase price (no longer the downpayment) was payable in
installments for 120 months, based on the deeds of conditional sale executed by XEI in favor of OTHER lot buyers.(Also dince
no notarial demand, RA 6552 required XEI to give the spouses a 60-day grace period to pay their balance.

ISSUES & RATIO.

1. WON XEI/OBM (thus CBM) and Manalos were able to forge a perfected contract to sell. NO.
 Because the contract between the two did not contain the manner of payment, the contract lacking an essential
element, is not binding.

RTC and CA failed to recognize CBMs issue as to whether there was an agreement to pay the purchase price of the property,
they had simply ruled that there was a contract to sell.

A definite agreement as to the price is an essential element of a binding agreement to sell personal or real property because it
seriously affects the rights and obligations of the parties. It is not enough for the parties to agree on the price of the property.
The parties must also agree on the manner of payment of the price of the property to give rise to a binding and enforceable
contract of sale or contract to sell. This is so because the agreement as to the manner of payment goes into the price, such that
a disagreement on the manner of payment is tantamount to a failure to agree on the price.

In a contract to sell property by installments, it is not enough that the parties agree on the price as well as the amount of
downpayment. The parties must, likewise, agree on the manner of payment of the balance of the purchase price and on the
other terms and conditions relative to the sale. Even if the buyer makes a downpayment or portion thereof, such payment
cannot be considered as sufficient proof of the perfection of any purchase and sale between the parties.

There was no showing of the schedule of payment of the balance of the purchase price. There was merely an agreement on
the payment of the downpayment. The letters between XEI and the Manalos showed that determination of the payment of
purchase price had yet to be agreed on. Jurisprudence is that if a material element of a contemplated contract is left for future
negotiations, the same is too indefinite to be enforceable. And when an essential element of a contract is reserved for future
agreement of the parties, no legal obligation arises until such future agreement is concluded.
So long as an essential element into the proposed obligation remains to be determined by an agreement which they are to
make, the contract is incomplete and unenforceable at it is lacking in the necessary qualities of definiteness, certainty and
mutuality.

[OK. RelievedAnt section]

There was no evidence to show that they had agreed on the terms of payment of the balance of purchase price. The Court
rejected the submission that Ramos/XEI and the Manalos had intended to incorporate the terms of payment contained in
the three contracts of conditional sale presented as evidence by the Manalos.
There was no such allegation, and even if there was a mention of payment on installment basis, XEI never stated a
specific amount for each installment.

There is no factual and legal basis for the CA ruling that, based on the terms of payment of the balance of the
purchase price of the lots under the contracts of conditional sale executed by XEI and the other lot buyers,
respondents were likewise obliged to pay in the same manner in 120-month installments. It failed to justify its use of
the terms of payment under the three contracts of conditional sale as basis for such ruling. By its ruling, the CA
unilaterally supplied an essential element to the letter agreement of XEI and the respondents. Courts should not
undertake to make a contract for the parties, nor can it enforce one, the terms of which are in doubt.

The bare fact that other lot buyers were allowed to pay the balance of the purchase price of lots purchased by them
in 120 or 180 monthly installments does not constitute evidence that XEI also agreed to give the respondents the
same mode and timeline of payment.

Under Section 34, Rule 130 of the Revised Rules of Court, evidence that one did a certain thing at one time is
not admissible to prove that he did the same or similar thing at another time, although such evidence may be
received to prove habit, usage, pattern of conduct or the intent of the parties.

Manalos failed to allege and prove that, as a matter of business usage, habit or pattern of conduct, XEI granted all lot
buyers the right to pay the balance of the purchase price in installments of 120 months of fixed amounts with pre-
computed interests, and that XEI and Manalos had intended to adopt such terms of payment. They had also
presented the three contracts of conditional sale merely to prove that XEI continued to sell lots in the subdivision as
sales agent of OBM after it acquired said lots, not to prove usage, habit or pattern of conduct on the part of XEI to
require all lot buyers in the subdivision to pay the balance of the purchase price of said lots in 120 months. It further
failed to prive that the trial court admitted the said deeds as part of the testimony of Manalo.

Habit, custom, usage or pattern of conduct must be proved like any other facts. Courts must contend with the caveat
that, before they admit evidence of usage, of habit or pattern of conduct, the offering party must establish the
 degree of specificity and frequency of uniform response that ensures more than a mere tendency to act in a given
manner but rather, conduct that is semi-automatic in nature. The offering party must allege and prove specific,
repetitive conduct that might constitute evidence of habit. The examples offered in evidence to prove habit, or
pattern of evidence must be numerous enough to base on inference of systematic conduct. Mere similarity of
contracts does not present the kind of sufficiently similar circumstances to outweigh the danger of prejudice and
confusion.

In determining whether the examples are numerous enough, and sufficiently regular, the key criteria are adequacy of
sampling and uniformity of response. After all, habit means a course of behavior of a person regularly represented in
like circumstances.[79] It is only when examples offered to establish pattern of conduct or habit are numerous
enough to lose an inference of systematic conduct that examples are admissible. The key criteria are adequacy of
sampling and uniformity of response or ratio of reaction to situations.[80]

DECISION.
Petition granted. CA and RTC decision reversed. (no perfected contract to sell, no obligation on CBMs part)