Republic of the Philippines Lot 1141 was submitted by Mr.

SUPREME COURT Kho in the amount P104,556.00 and
Manila that since he "stated" that he is the
actual occupant and "going" to equal
THIRD DIVISION the highest bid, he is advised to
deposit with the City Treasurer 5% of
P104,556.00 as earnest money and an
additional 15% as downpayment, after
which the corresponding contract of
G.R. No. 128579 April 29, 1999 sale will be entered into between him
and the City on August 9, 1965 (Exh.
The CITY OF CEBU, petitioner, E.).
HEIRS OF CANDIDO RUBI, namely; MARIA J. A day after the bidding, however, on
RUBI, LINA RUBI BONOAN, HILDA RUBI BORRES, August 6, 1965, a writ of preliminary
SYLVIA RUBI MACACHOR, respondents. injunction was issued in Civil Case 238-
BC filed by the province of Cebu from
GONZAGA-REYES, J selling or otherwise disposing any of
the 210 lots donated by the province
(Lot 1141 included).
This is a petition for review on Certiorari under Rule 45
of the Rules of Court seeking to set aside the Decision of
the Court of Appeals1 dated October 2, 1996 and the On July 15, 1974, on the basis of a
Order denying the Motion for Reconsideration2 dated compromise agreement entered into in
February 7, 1997 in CA-G.R. CV No. 40098 entitled Heirs Civil Case No. 238-BC, Lot No. 1141,
of Candido Rubi, et. al. vs. Mayor Tomas among others, was adjudicated to
R. Osmeña, et. al. defendant City of Cebu. By this time,
Lot 1141 had already been subdivided
into Lots 1141-A, 1141-B, 1141-C and
The following antecedents stated in the decision of the
1141-D, the last the lot subject of the
Court of Appeals are undisputed:
case, containing an area of 11,779
square meters where the house of
Candido Rubi was a lessor (sic) from Candido Rubi stands.
the Province of Cebu of a parcel of land
identified as Lot 1141 of the Banilad
On September 19, 1974, the City
Estate containing an area of THIRTY
Council of Cebu through Resolution
No. 1747, authorized the City Mayor to
EIGHTY EIGHT (33,188) square
advertise the sale of Lots 1141-A and
meters, more or less, covered by
1141-D (Exh. M-1).
Transfer Certificate of Title No. RT-
5513 (Exh. A).
At the public bidding held on October
1, 1974, there was no bidder for Lot
Paragraph 7 of the contract of lease
1141-D (Exh. M-1).
provides that the lessee shall use the
leased premises for residential and
agricultural purposes only and On January 30, 1976, Candido Rubi
pursuant to this stipulation, Candido paid the amount of P4,500.00 under
Rubi introduced various OR No. 9876421 as bidder's cash bond
improvements, among which is a for Lot No. 1141-D (Exh. N).
residential building constructed in
1961 where he and his family resided On February 3, 1976, Candido Rubi
up to the time of his death in 1983. wrote the City Mayor of Cebu stating
that he was one of the bidders of Lots
In 1964, the Province of Cebu 1141-B, 1141-C and 1141-D in a
conveyed by way of donation to the bidding held January 30, 1976 at 10:00
City of Cebu two hundred and ten a.m. at the Office of the City Mayor and
(210) lots among which was Lot 1141 that as lessee of Lot No. 1141-D he is
leased to Candido Rubi. exercising his option of equaling the
highest bid price at P10.00 per square
meter on the area that is on level
On March 4, 1965, the City Council of
ground and P8.00 per square meter on
Cebu enacted Ordinance No. 522 (Exh.
the remaining area (Exh. O).
D) authorizing the City Mayor to sell at
public auction the 210 province-owned
lots donated to defendant City of Cebu, On March 2, 1976, the Committee on
among which was Lot 1141. Award awarded "Lot 1141-D consisting
of 11,934 square meters at P10.00 per
square meter" to Candido Rubi (Exh.
Among the conditions set forth in
Ordinance No. 522 (see par. C.) was
that "if the lot is leased, the lessee. . .
shall be given the right to equal the On March 9, 1976, Mayor Eulogio E.
highest bid on the date of the public Borres furnished Candido Rubi a copy
bidding and if he so equals the highest of the award and instructed him to
bid, he shall be awarded the sale. make the necessary payment for the
land in order that the deed of sale may
be executed in his favor (Exh Q).
On August 5, 1965 after the public
bidding held on the same day, the
bidding committee wrote Candido Rubi On April 7, 1976, the City Appraisal
advising him that the highest bid for Committee, acting upon the 1st

On the faith militates against the unilateral same day. pp. 7 of the City Appraisal Committee dated April 7. V. the corresponding authority from the defendant cannot be compelled to Sangguniang Panglunsod to sell Lot execute the necessary documents of 1141-D to Candido Rubi at the price conveyance to the plaintiffs. the transfer to ownership or possession. December 23.00 to the City City Mayor indorsing Candido Rubi's Treasurer of Ceby City (Exh. sell must be plain. the vendee is allowed to pay for the purchase price so long as no demand has been made for rescission judicially or by a On May 17. Mayor Eulogio the plaintiffs under the terms and Borres again wrote Candido Rubi conditions of the award in 1976. 1976 of the amount of P103. appears to be no legal impediment to to pay for the property within the the request of Mr. Rubi there is no perfected has not fully paid the total purchase sale. more or less. and children Lina Rubi Bonoan. dissolve the contract of sale. plaintiffs tendered the extinguishment/rescission claimed by the City of Cebu.423 square meters at P10. bar Rubi. the Court containing an area of 5511 square a quo rendered the appealed decision meters. by itself. the City Attorney replied to on the part of Candid Rubi of the terms the City Administrator's 2nd of the Award. the contract between the parties On May 11. 1989. within 15 days from receipt thereof and so holds. 6. dated unconditional. plaintiffs filed the notarial act. Maria J. 1). however. 1989. AA- No. buyer to pay within a fixed period does not. vs.Indorsment dated April 6.). (Beaumonth price of the hereinmentioned lot" (Exh. and per documents submitted. (Decision. much less Hilda Rubi Borres and Sylvia Machacor. I price was a positive regret to inform you suspensive that I am unable to condition. 1980. the City between the parties never ripened into Mayor must be clothed with the a contract of sale. extension of the time within which to The acceptance of a make the said unilateral promise to payment (Exh. the City Therefore. Since the complete the latter condition was payment for Lot not met. Prieto 41 Phil X). with advice" all pertinent correspondence terms different from relative to the purchaser of Lot 1141-D the offer. U).818. if there is Administrator referred to the City a qualified Attorney "for comment and/or legal acceptance.00 per dismissing the complaint ad "declaring square meter" (Exh. clear and In a 2nd Indorsement. Mr. survived by his wife. 670). the transaction the charter of the City of Cebu. 1976.4 . For and transfer this reason I most ownership of the respectfully request property never that I be given an vested. It ruled 1976 (Exh. furnishing him a copy of Resolution No. T). per period provided. 8-9. circumstances beyond his control. under Article 1592 of the Civil Code. 1981. Rollo. In a 3rd Indorsement. 1976. nor of the condition of Indorsement stating that there the City acting through the City Mayor. The Court added that the fact that the complaint at bench for specific obligation was already substantially performed in good performance (Record. approved by the Committee on Award pp. p. The Court of Appeals reversed the court a quo. stating: 7 of the City of Appraisal Committee and advising him to pay for the lot The Court believes. Such failure of the 1983. at P8. 60-61)3 per Resolution No. that (Exh. there is no by Candido Rubi "considering that as acceptance. Y). O) June 28.00 per square meter and the lower area On January 17. the defendant to have been released of its obligation to sell the property to On April 23. in the sale of an immovable plaintiffs in the case. Consequently. 1141-D containing an area of 1 to AA-4). the seller's 1141-D as required obligation to deliver by your office. AA. 9) and on letter dated February 3. that there was a perfected contract of sale but Candido Rubi was not able to make payments thereunder due to Candido Rubi died on February 17. Candido Rubi wrote was a mere contract the City Mayor a letter reading: to sell on the part of the defendant City By reason of of Cebu in which the circumstances full payment of the beyond my control. Rubi. dated January As there was no absolute acceptance 6. 1976 (Exh. consigned the amount resolved to appraise a portion of Lot with the Clerk of Court (Exhs. 1991.

and Committee on Awards awarding Lot 1141-D to Candido Rubi. but simply an event . 11 IV. subject matter. A contract sell. that there was no written contract which makes the contract unenforceable under 3. Exhibit T — the appraisal made by in exercising and enforcing their rights. and sale is a consensual contract. (2) determine a breach. particularly whether the ORDERING RESPONDENTS TO PAY LEGAL INTEREST ON parties have entered into a contract of sale or a contract THE PURCHASE PRICE RECKONED FROM THE DATE OF to sell.e. Exhibit P — the award of the question was made by the respondents. and there is no PETITIONER CITY OF CEBU TO EXECUTE THE documents the terms of which may be interpreted to NECESSARY DEED OF CONVEYANCE WITHOUT determine its legal significance. the parties may reciprocally demand transfer ownership of the property subject of performance subject to the provisions of the law the contract to sell until full payment of the governing the form of contracts. that title to the remained with the highest bid price over Lot No. citing Article 1592 pay for Lot 1141-D at the price of the Civil Code. therefrom without being liable to the other in an action for specific performance. from which it can reasonably be deduced that We agree with the Court of Appeals that there was a the parties intended to enter into a contract to perfected contract of sale between the parties.7 taken together with the documents of record.00 per square meter for the area containing 5. RESPONDENTS' LATE and advising him to pay for the lot within 15 days from PREDECESSOR-IN-INTEREST. THE HONORABLE COURT receipt thereof. respondents could still tender payment of the 5.423 square meter and P8. The acceptance by the city was conveyed II. 1141-D. upon notice of the award III.00 per LOT NO. square meter for the area containing 6. WAS GUILTY obligated itself to transfer the ownership of and deliver OF UNREASONABLE DELAY AND/OR LACHES IN Lot 1141-D and Rubi to pay the price. Candido Rubi wrote the City Mayor ERRED IN CONSIDERING AND DECLARING THAT THERE that he was one of the bidders of Lot 1141-D in a bidding WAS A PERFECTED CONTRACT OF SALE BY AND held on January 30. They argue that a contract of sale can be P8. AWARD IN 1976 UNTIL ITS CONSIGNATION IN 1989. the prospective which is the object of the contract and upon the price. Exhibit O — the letter of Candido payment caused the automatic rescission of the Rubi addressed to the Mayor where he obligation. However. City of Cebu.511 square meters. THAT EVEN CONCEDING GRATIA ARGUMENTI THAT in the letter of Mayor Eulogio Borres informing Rubi of A CONTRACT OF SALE WAS PERFECTED BY MERE the resolution of the Appraisal Committee appraising Lot REASON OF THE AWARD OF SALE GRANTED IN FAVOR 1141-D at P10. THE HONORABLE COURT OF the minds and when that point is reached in the APPEALS GRAVELY ERRED IN DECLARING THAT THERE negotiations between the parties intending to enter into WAS NO AUTOMATIC RECESSION OF THE CONTRACT. and (3) price certain in money or its the petitioner assigns the following errors: equivalent. the purported contract is deemed perfected NOTWITHSTANDING RESPONDENTS' FAILURE TO PAY and none of them may thereafter disengage himself THE PRICE AT THE TIME AGREED UPON.00 per square meter for the area contract entered into by the City and Rubi was a contract containing 6.6 the City Appraisal Committee appraising the value of the lot to be On the other hand. 10 An agreement presupposes a meeting of CONTRACT OF SALE. 1976 and that he was exercising his BETWEEN CANDIDO RUBI AND THE CITY OF CEBU OVER option of equaling the highest bid price of P10. petitioner. 1141-D. Petitioner bases its claim on two grounds: notified the Mayor that he was exercising his option of equaling the 1. i.511 square meters.9 All three elements are present in the transaction between the City of Cebu and Candido Rubi. 1976.423 square meters OF CANDIDO RUBI. EVEN ASSUMING THAT THERE WAS A PERFECTED to the bidder. since the City impliedly granted Rubi an extension of time to pay the purchase price. and since it is a contract of sale. there is nothing in the exchange of The petitioner reiterates its position that the correspondence between the parties namely: contract entered into by the petitioner and Candido Rubi was a contract to sell and the failure of Rubi to make 1. respondents maintain that the P10. THAT IT IS PATENTLY ERRONEOUS FOR THE HONORABLE COURT OF APPEALS TO ORDER HEREIN The deed of sale was never formalized. There was a perfected agreement OF APPEALS NEVERTHELESS SERIOUSLY ERRED IN NOT between the City of Cebu and Rubi whereby the City CONSIDERING THAT SAID CANDIDO RUBI. seller does not as yet agree or consent to From the moment. Exhibit U — the second letter of purchase price because no demand to rescind the Mayor Borres again informing Rubi to contract was made by the petitioner. before the necessary payment of the purchase price of the lot in 2. the failure of which is not considered (1) consent or meeting of the minds. one whereby the prospective seller of sale is a consensual contract and is perfected at the would explicitly reserve the transfer of title to moment there is a meeting of the minds upon the thing the prospective buyer. meaning.In seeking the reversal of the Court of Appeals decision.00 per square meter for the area perfected without a written document since a contract of containing 5. The effect of an COMPLYING WITH THE CONDITIONS OF THE AWARD. 2.5 Eulogio E. Exhibit Q — the latter of Mayor the statute of frauds. I. THE HONORABLE COURT OF APPEALS SERIOUSLY On February 3. Petitioner also avers that even if the contract was indeed a contract of sale. such payment being a positive suspensive contract of sale under Article 1458 of the Civil Code are condition.00 for the area of 6. They also assert that there was no delay appraised by the City Appraisal in the performance of the obligation by the respondents Committee.8 The elements of a valid price.. unqualified acceptance of the offer or proposal of the bidder is to perfect a contract. Borres to Rubi informing him to pay for Lot 1141-D.423 square meters and of sale. a contract. the respondents were guilty of laches 4. casual or serious.

However. 23 exchange of written correspondence between the parties. the City is no less guilty of rescission of the contract shall of right neglect and delay in not reiterating its demand take place. the instant complaint for specific performance that parties intended to enter into a contract of sale the city invoked "automatic rescission" and of Lot 1141-D for a cash price of P108. Petitioner's Amended Answer claims that Rubi In the sale of immovable property. as implied extension which it admittedly granted. However.318. 12 A contract to sell is demand for rescission. and also only subsequent action taken by petitioner was the consideration that the City was mindful of to send to the respondents a "Formal Notice" the need to protect the rights of the actual dated March 4. not in staggered payments taken together action for specific performance. as indeed there was no commonly entered into so as to protect the reference to the sale much less a declaration seller against a buyer who intends to buy the that the sale was being rescinded or abrogated property in installments by withholding from the beginning. 1976 "prevented by circumstances beyond his requested Rubi "to pay the lot subject of (your) control" from making payment within fifteen bid. must be for a definite time. 13 In this case." 16. earlier cited. the Court of Appeals that the request for extension was granted by the City of Cebu. 20 This letter did not amount to a any obligatory force. he the offer and acceptance was for a bid price in tendered payment only when he had filed this cash. The petitioner admits in its pleadings 22 that an extension was impliedly given. as long as no demand for rescission has been After the demand. the vendeee may pay. lot until full payment was made leads to no other conclusion that Rubi and the City entered into a contract of sale. 1141-D expressly stated that the "sale shall be for cash" 14 and Rubi's letter exercising the Given that there was no valid demand for lessee's option to equal the equal the bid offered rescission made by the City of Cebu. 1976 such payment of the price despite the long lapse informing Rubi of the award asked Rubi to make of time since the award was a made in his favor? the necessary payment. stating that "This must be made before we have to execute the deed of The Court notes that the vendee Rubi requested sale in your favor and the title to the lot. which suit was with the fact that there was no expressed or filed only after he received notice from the apparent intent to reserve ownership over the petitioner to vacate the premises. Neither did Rubi follow up his request. the court may not made either judicially or by notarial act. The general rule is that agreement for the sale of real property or of an an agreement to extend the time of payment. even contract has been made upon him after the expiration of the period agreed upon. and it grant him a new term. was Rubi a straight bid of P10. but this request was not acted hereof. We hold that the determined.00 per square justified in not making full payment or tendering meter. during which time neither The rescission of a sale immovable property is party took any action to enforce the contract. Is the contract of sale still subsisting after the lapse of several years. 21 It was only when the City ownership over the property until the buyer of Cebu filed its Answer on June 15. even though it may have been as he brought his action for specific stipulated that upon failure to pay the performance full payment of the price only in price at the time agreed upon the 1989. specially governed by Article 1592 of New Civil The City did not demand compliance or Code which reads: rescission and Rubi did not pursue enforcement. The advertisement for bids for Lot contract. constitute sufficient writing to evidence the agreement for purposes We accordingly do not agree with the ruling of of complying with the statute of frauds. 1989 to the effects full payment therefor. either judicially or by a notarial act. 19 was incumbent upon the City to demand rescission.which prevented the obligation from acquiring City of Cebu. long as no demand for rescission of the Article 1592 allows the vendee to pay. as shown by the "complete silence" on the part of The next issue to be addressed is whether the the City of Cebu on Rubi's request for extension.00 in prayed for relief allowing it to rescind the one payment. failure of Rubi to pay the balance of the The fact that the City did not act on the request purchase price within fifteen days as directed as for what amounts to an indefinite extension may directed by the City Mayor is fatal to his right to be construed just as logically as a denial thereof. even for payment within a reasonable period from the after the expiration of the period. The which the was accepted by the City. we are not prepared to rule that an implied extension As stated. and for an extension of time to pay as he was a subsequent letter dated April 23. consisting of the bidder's cash bond judicial or notarial demand for rescission. has . within fifteen days from receipt days from notice. 1989 ordering the latter to lessees to the lands formerly comprising the vacate the premises within fifteen days from Friar Lands Estate having granted said lessees receipt of notice for the reason that the the right to match the offer of the highest bidder occupancy of lot 1141-D is presumed t be illegal in the public auction. This conclusion also takes into It is not disputed that the City of Cebu did not account the fact that Rubi had made a partial give notice of rescission much less make a payment. 15 Mayor Borres' letter of March 9. the same or some note or memorandum thereof although it seems that no precise date be fixed. in interest thereon shall be unenforceable "unless order to be valid. was guilty of unreasonable delay and/or laches. no deed of sale was ever formalized of time to pay the purchase price was granted but there was compliance with the requirements when the City of Cebu did not act on Rubi's of the statute of frauds. 18 an request for extension. enforce the agreement and ask the City of Cebu to execute the deed of sale in his favor." 17 The assumption of both parties that upon. Under this law. Rubi has been a as the lot is still registered in the name of the lessee/occupant of the property since 1957. be in writing" and subscribed by the party it being sufficient that the time readily be charged or his agent.

Jr. . 1981. the issue of interest was never second time in 1976. Rubi has not slept on his rights.1âwphi1. respondents aver that: petitioner did not raise the issue of interest in the Lower Court. Candido Rubi repeatedly arguments not adequately brought to inquired from the Sangguniang the attention of the lower court need Panglunsod of Cebu City the reason for not be. and fruit trees 24 and has and justice" in seeking payment of interest. 238-BC and the injunction issued therein) and the . . a residential allegation in its Brief. With respect to the petitioner's claim that the Court of Appeals erred in not ordering respondents to pay interest due from the time of the award in 1976 until the time of the consignation of the balance of the purchase price in 1989. but twice. . 25 He was awarded Lot 1141-D not only once. rendered an opinion In view of the foregoing. Basic considerations of due of the City Attorney for legal opinion. considered by a reviewing court as they cannot be raised for the first time The matter was endorsed to the Office on appeal. . 26 Verily.nêt notwithstanding the non-payment of the full consideration of the sale (Exh.500. below cannot be pleaded for the first time on appeal. 27 again Rubi would not conform to law nor equity taking into account the factual milieu of this case. issues and approved. (which did not materialize occasion to rule that: because of the filing of Civil Case No. Neither was the issue raised in their "Appeal Brief" when the case was elevated to the Court of Appeals. In 1981. and ordinarily will not be. The respondents alleged raised before and cannot be raised for in the Comment and this is not controverted in the first time on appeal. 29 (Emphasis supplied) After an unreasonable lapse of time without the resolution having been Points of law. the petition is denied to the effect that the agreement due course. payment of the bid price. petitioner is deemed to have After Candido Rubi paid the City the waived such right for his failure to raise sum of P4. "Y"). found that all the legal requirements relative to the purchase of Lot 1141-D (Exh. the first We find the plea unavailing. water pipes. This Court has had time was in 1965. Issues not raised Committee on Awards. he was In petitions under Rule 45. as advised that the balance will be distinguished from an ordinary appeal payable as soon as the Sangguniang of criminal cases where the whole case Panglunsod approves a resolution is opened for review. the Committee on Laws of the Sangguniang Panglunsod to which the manner was referred. "BB") was complied with the recommended the approval of a resolution authorizing the City Mayor to sign the deed of sale in favor of Candido Rubi (Exhibit "Z").00 representing partial its violation before the trail court . . process impel this rule. which is an equitable doctrine and the application of which is controlled by equitable considerations. 30 On January 6.introduced considerable improvements thereon Neither did petitioner refute the above consisting of a90-meter road. . It was only in the "Motion for Reconsideration of the Decision of the Court of Appeals" that the issue of legal interest was raised for the first time as an alternative remedy. Rather it invokes "fairness house. and the Decision of the Court of between the City of Cebu and the late Appeals appealed from is hereby Candido Rubi was valid and binding AFFIRMED. the appeals is authorizing the City Mayor to sell Lot generally limited to the errors assigned 1141-D at the price approved by the by the petitioner. A finding of laches. SO ORDERED. . the delay. that: . lived in the lot since 1961. City Attorney Vicente Varela. 28 petitioner's reply. theories.