compilation of obligations and cotracts cases for prelims

8/22/2019 Compilation of Obligations and cotracts cases for Prelims

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FIRST DIVISION

[G.R. No. 128991. April 12, 2000]

YOLANDA ROSELLO-BENTIR, SAMUEL ORMIDA !"# $%ARITO

ORMIDA,petitioners, vs. %ONORABLE MATEO M. LEANDA, i" &i' (!p!(i)* !'

r+'i#i" #+ o/ RT$, T!(lo!" $i)*, Br!"(& 8, !"# LEYTE GUL TRADERS,

IN$.,respondents.

D E $ I S I O N

AUNAN,J.3

Reformation of an instrument is that remedy in equity by means of which a written instrumentis made or construed so as to express or conform to the real intention of the parties when someerror or mistae has been committed!"#$It is predicated on the equitable maxim that equitytreats as done that which ou%ht to be done! "&$The rationale of the doctrine is that it would beun'ust and unequitable to allow the enforcement of a written instrument which does not reflector disclose the real meetin% of the minds of the parties! "($)owe*er+ an action for reformationmust be brou%ht within the period prescribed by law+ otherwise+ it will be barred by the merelapse of time! The issue in this case is whether or not the complaint for reformation filed byrespondent ,eyte -ulf Traders+ Inc! has prescribed and in the ne%ati*e+ whether or not it is

entitled to the remedy of reformation sou%ht! Oldmiso

On .ay #/+ #00&+ respondent ,eyte -ulf Traders+ Inc! 1herein referred to as respondentcorporation2 filed a complaint for reformation of instrument+ specific performance+ annulmentof conditional sale and dama%es with prayer for writ of in'unction a%ainst petitioners 3olandaRosello45entir and the spouses Samuel and 6harito 7ormida! The case was doceted as 6i*il6ase No! 0&48/499 and raffled to :ud%e 7edro S! ;spina+ RT6+ Tacloban 6ity+ 5ranch

petitioner 5entir for a period of twenty 1&82 years startin% .ay /+ #0=9! >ccordin% torespondent corporation+ the lease was extended for another four 1?2 years or until .ay (#+#00&! On .ay /+ #090+ petitioner 5entir sold the leased premises to petitioner spouses Samuel7ormada and 6harito 7ormada! Respondent corporation questioned the sale alle%in% that it hada ri%ht of first refusal! Rebuffed+ it filed 6i*il 6ase No! 0&48/499 seein% the reformation ofthe expired contract of lease on the %round that its lawyer inad*ertently omitted to incorporate

in the contract of lease executed in #0=9+ the *erbal a%reement or understandin% between theparties that in the e*ent petitioner 5entir leases or sells the lot after the expiration of the lease+respondent corporation has the ri%ht to equal the hi%hest offer! Ncm

In due time+ petitioners filed their answer alle%in% that the inad*ertence of the lawyer whoprepared the lease contract is not a %round for reformation! They further contended thatrespondent corporation is %uilty of laches for not brin%in% the case for reformation of the leasecontract within the prescripti*e period of ten 1#82 years from its execution!

Respondent corporation then filed its reply and on No*ember #9+ #00&+ filed a motion to admitamended complaint! Said motion was %ranted by the lower court! "?$

Thereafter+ petitioners filed a motion to dismiss reiteratin% that the complaint should bedismissed on the %round of prescription!

On December #/+ #00/+ the trial court throu%h :ud%e 7edro S! ;spina issued an orderdismissin% the complaint premised on its findin% that the action for reformation had already

prescribed! The order reads@ Sc'uris

ORD;R

Resol*ed here is the defendantsA .OTION TO DIS.ISS 7,>INTIFFAS complaint on %roundof prescription of action!

It is claimed by plaintiff that he and defendant 5entir entered into a contract of lease of a

parcel of land on .ay /+ #0=9 for a period of &8 years 1and renewed for an additional ? yearsthereafter2 with the *erbal a%reement that in case the lessor decides to sell the property afterthe lease+ she shall %i*e the plaintiff the ri%ht to equal the offers of other prospecti*e buyers! Itwas claimed that the lessor *iolated this ri%ht of first refusal of the plaintiff when shesureptitiously 1sic2 sold the land to co4defendant 7ormida on .ay /+ #090 under a Deed of6onditional Sale! 7laintiffAs ri%ht was further *iolated when after disco*ery of the final sale+

plaintiff ordered to equal the price of co4defendant 7ormida was refused and a%ain defendant5entir surreptitiously executed a final deed of sale in fa*or of co4defendant 7ormida inDecember ##+ #00#!

The defendant 5entir denies that she bound herself to %i*e the plaintiff the ri%ht of first refusalin case she sells the property! 5ut assumin% for the sae of ar%ument that such ri%ht of firstrefusal was made+ it is now contended that plaintiffAs cause of action to reform the contract toreflect such ri%ht of first refusal+ has already prescribed after #8 years+ counted from .ay /+

#099 when the contract of lease incepted! 6ounsel for defendant cited 6onde *s! .ala%a+ ,40?8/ :uly (#+ #0/= and Ramos *s! 6ourt of >ppeals+ #98 S6R> =(/+ where the Supreme6ourt held that the prescripti*e period for reformation of a written contract is ten 1#82 yearsunder >rticle ##?? of the 6i*il 6ode!

This 6ourt sustains the position of the defendants that this action for reformation of contracthas prescribed and hereby orders the dismissal of the case!

SO ORD;R;D!"/$

On December &0+ #00/+ respondent corporation filed a motion for reconsideration of the orderdismissin% the complaint! :uris

On :anuary ##+ #00=+ respondent corporation filed an ur%ent ex-partemotion for issuance ofan order directin% the petitioners+ or their representati*es or a%ents to refrain from tain%

possession of the land in question!

6onsiderin% that :ud%e 7edro S! ;spina+ to whom the case was raffled for resolution+ wasassi%ned to the RT6+ .alolos+ 5ulacan+ 5ranch #0+ :ud%e Roberto >! Na*idad was desi%natedin his place! .anian

On .arch &9+ #00=+ upon motion of herein petitioners+ :ud%e Na*idad inhibited himself fromhearin% the case! 6onsequently+ the case was re4raffled and assi%ned to RT6+ Tacloban 6ity+5ranch 9+ presided by herein respondent 'ud%e .ateo .! ,eanda!

On .ay #8+ #00=+ respondent 'ud%e issued an order re*ersin% the order of dismissal on the%rounds that the action for reformation had not yet prescribed and the dismissal wasBpremature and precipitateB+ denyin% respondent corporation of its ri%ht to procedural due

process! The order reads@ Suprema

O R D ; R
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Stated briefly+ the principal ob'ecti*es of the twin motions submitted by the plaintiffs+ forresolution are@

1#2 for the reconsideration of the Order of #/ December #00/ of the 6ourt 1RT6+ 5r! n%+ entered into a contract of leaseof a parcel of land+ denominated as ,ot No! 9RN;D not to enter+ in the meantime+ the liti%ated premises+ before a final court orderissues %rantin% them dominical as well as possessory ri%ht thereto!

To the motion or petition for contempt+ filed by plaintiff+ thru >tty! 5artolome 6! ,awsin+ the

defendants may+ if they so desire+ file their answer or re'oinder thereto+ before the said petitionwill be set for hearin%! The latter are %i*en ten 1#82 days to do so+ from the date of their receiptof a copy of this Order!

SO ORD;R;D!"=$

On :une #8+ #00=+ respondent 'ud%e issued an order for status quo ante + en'oinin% petitionersto desist from occupyin% the property!"%%rie*ed+ petitioners herein filed a petition for certiorarito the 6ourt of >ppeals seein% theannulment of the order of respondent court with prayer for issuance of a writ of preliminaryin'unction and temporary restrainin% order to restrain respondent 'ud%e from further hearin%the case and to direct respondent corporation to desist from further possessin% the liti%ated

premises and to turn o*er possession to petitioners!

On :anuary #


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a%reement is by court decree made le%ally effecti*e!"##$6onsequently+ the courts+ as thea%encies authoried by law to exercise the power to reform an instrument+ must necessarilyexercise that power sparin%ly and with %reat caution and ealous care! .oreo*er+ the remedy+

bein% an extraordinary one+ must be sub'ect to limitations as may be pro*ided by law! Our lawand 'urisprudence set such limitations+ amon% which is laches! > suit for reformation of aninstrument may be barred by lapse of time! The prescripti*e period for actions based upon awritten contract and for reformation of an instrument is ten 1#82 years under >rticle ##?? ofthe 6i*il 6ode!"#&$7rescription is intended to suppress stale and fraudulent claims arisin% fromtransactions lie the one at bar which facts had become so obscure from the lapse of time or

defecti*e memory!

"#($

In the case at bar+ respondent corporation had ten 1#82 years from #0=9+the time when the contract of lease was executed+ to file an action for reformation! Sadly+ itdid so only on .ay #/+ #00& or twenty4four 1&?2 years after the cause of action accrued+hence+ its cause of action has become stale+ hence+ time4barred! Sdaamiso

In holdin% that the action for reformation has not prescribed+ the 6ourt of >ppeals upheld therulin% of the Re%ional Trial 6ourt that the #84year prescripti*e period should be reconed notfrom the execution of the contract of lease in #0=9+ but from the date of the alle%ed ?4yearextension of the lease contract after it expired in #099! 6onsequently+ when the action forreformation of instrument was filed in #00& it was within ten 1#82 years from the extended

period of the lease! 7ri*ate respondent theoried+ and the 6ourt of >ppeals a%reed+ that theextended period of lease was an Bimplied new leaseB within the contemplation of >rticle #=

prescripti*e period of ten 1#82 years pro*ided for in >rt! ##?? "#=$applies by operation of law+not by the will of the parties! Therefore+ the ri%ht of action for reformation accrued from the

date of execution of the contract of lease in #0=9!

;*en if we were to assume for the sae of ar%ument that the instant action for reformation isnot time4barred+ respondent corporationAs action will still not prosper! nder Section #+ Rule=? of the New Rules of 6ourt+"#


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[G.R. No. 156720. "+ 0, 2006]

$ON$E$ION R. AINA, '')i))+# * &+r l+!l &+ir', DR. NATI:IDAD A.

TULIAO, $ORAON A. ALE$O !"# LILIA A. OLAYON,petitioners, vs. SOUSES

ANTONIO ADUA !"# EUGENIA ADUA, respondents.

D E $ I S I O N

YNARES-SANTIAGO,J.3

This petition for re*iew on certiorariassails the February &?+ &88? decision of the 6ourtof >ppeals in 6>4-!R! 6V No! contract of sale is perfected by mere consent+ upon a meetin% of the minds on the offerand the acceptance thereof based on sub'ect matter+ price and terms of payment!"ND 7;SOS 17#88+888!882 as paymentfor the lot on 9/4> Durian St!+ 7ro'ect &+ Gueon 6ity+ from .rs! 6oncepcion R! >ina+ on>pril+ #09

1S%d!2

.rs!! ;u%enia >! 7adua"9$
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The *erbal contract of sale between ;u%enia and 6oncepcion did not *iolate thepro*isions of the Statute of Frauds that a contract for the sale of real property shall beunenforceable unless the contract or some note or memorandum of the sale is in writin% andsubscribed by the party char%ed or his a%ent! "0$Ehen a *erbal contract has been completed+executed or partially consummated+ as in this case+ its enforceability will not be barred by theStatute of Frauds+ which applies only to an executory a%reement!"#8$Thus+ where one party has

performed his obli%ation+ oral e*idence will be admitted to pro*e the a%reement!"##$

In the instant case+ the oral contract of sale between ;u%enia and 6oncepcion wase*idenced by a receipt si%ned by ;u%enia! >ntonio also stated that his wife admitted to him

that she sold the property to 6oncepcion!

It is undisputed that the sub'ect property was con'u%al and sold by ;u%enia in >pril#09< or prior to the effecti*ity of the Family 6ode on >u%ust (+ #099+ >rticle &/? of whichrepealed Title V+ 5oo I of the 6i*il 6ode pro*isions on the property relations betweenhusband and wife! )owe*er+ >rticle &/= thereof limited its retroacti*e effect only to caseswhere it would not pre'udice or impair *ested or acquired ri%hts in accordance with the 6i*il6ode or other laws! In the case at bar+ *ested ri%hts of 6oncepcion will be impaired or

pre'udiced by the application of the Family 6odeC hence+ the pro*isions of the 6i*il 6odeshould be applied!

Ine!ipe v. "eirs o# $!don, et a!.+"#&$the le%al effect of a sale of con'u%al properties bythe wife without the consent of the husband was clarified+ to wit@

The le%al %round which deser*es attention is the le%al effect of a sale of lands belon%in% to thecon'u%al partnership made by the wife without the consent of the husband!

It is useful at this point to re4state some elementary rules@ The husband is the administrator ofthe con'u%al partnership! 1>rt! #=/+ 6i*il 6ode2 Sub'ect to certain exceptions+ the husbandcannot alienate or encumber any real property of the con'u%al partnership without the wifeAsconsent! 1>rt! #==+%dem!2 >nd the wife cannot bind the con'u%al partnership without thehusbandAs consent+ except in cases pro*ided by law! 1>rt! #ntonio participated or consentedto the sale of the con'u%al property! ;u%enia alone is incapable of %i*in% consent to thecontract! Therefore+ in the absence of >ntonioAs consent+ the disposition made by ;u%enia is*oidable!"#?$

The contract of sale between ;u%enia and 6oncepcion bein% an oral contract+ the actionto annul the same must be commenced within six years from the time the ri%ht of actionaccrued!"#/$;u%enia sold the property in >pril #09< hence >ntonio should ha*e ased thecourts to annul the sale on or before >pril #00(! No action was commenced by >ntonio toannul the sale+ hence his ri%ht to see its annulment was extin%uished by prescription!

;*en assumin% that the ten 1#824year prescripti*e period under >rt! #ntonio is still barred from institutin% an action to annul the sale because since >pril #09


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.anila

T%IRD DI:ISION

AIME ABALOS !"# SOUSES ELIC SALAAR !"#

$ONSUELO SALAAR, GLI$ERIO ABALOS, %EIRS O

AUILINO ABALOS, "!;+l*3 SEGUNDA BAUTISTA,

ROGELIO ABALOS, DOLORES A. ROSARIO, ELI$IDAD

ABALOS, ROBERTO ABALOS, UANITO ABALOS, TITAABALOS, LITA A. DELA $RU AND %EIRS O

AUILINA ABALOS, "!;+l*3 ARTURO BRA:O, URITA

B. MENDOA, LOURDES B. AGANON, $ONSUELO B.

SALAAR, RIMA B. DELOS SANTOS, T%ELMA

AOSTOL !"# GLE$ERIO ABALOS,

7etitioners+

4 versus4

%EIRS O :I$ENTE TORIO, "!;+l*3 UBLIO TORIO,

LIBORIO TORIO, :I$TORINA TORIO, ANGEL TORIO,

LADISLAO TORIO, RIMO TORIO !"# NORBERTO

TORIO,

Respondents!

G.R. No. 16777

r+'+")3

V;,>S6O+:R!+J., Chairperson

7;R>,T>+

>5>D+

.;NDOM>+ and

7;R,>S45;RN>5;+ JJ.

ro;l!)+#3

December #?+ &8##

x44444444444444444444444444444444444444444444444444444444444444444444444444444444444444444x

D E $ I S I O N

ERALTA,J.3

5efore the 6ourt is a petition for re*iew on certiorariseein% to set aside the Decision #dated:une (8+ &88= and Resolution&dated No*ember #(+ &88= by the 6ourt of >ppeals 16>2 in 6>4-!R! S7 No! 0#99

questioned Resolution denied petitioners .otion for Reconsideration!

The factual and procedural antecedents of the case are as follows@

On :uly &?+ #00=+ herein respondents filed a 6omplaint for Reco*ery of 7ossession andDama%es with the .unicipal Trial 6ourt 1.T62 of 5inmaley+ 7an%asinan a%ainst :aime>balos 1:aime2 and the spouses Felix and 6onsuelo Salaar! Respondents contended that@ theyare the children and heirs of one Vicente Torio 1Vicente2 who died intestate on September ##+#0nswer with 6ounterclaim+ denyin% the materialalle%ations in the 6omplaint and assertin% in their Special and >ffirmati*e Defenses that@respondents cause of action is barred by acquisiti*e prescriptionC the court a quohas no

'urisdiction o*er the nature of the action and the persons of the defendantsC the absolute andexclusi*e owners and possessors of the disputed lot are the deceased predecessors ofdefendantsC defendants and their predecessors4in4interest had been in actual+ continuous and

peaceful possession of the sub'ect lot as owners since time immemorialC defendants arefaithfully and reli%iously payin% real property taxes on the disputed lot as e*idenced by Real7roperty Tax ReceiptsC they ha*e continuously introduced impro*ements on the said land+such as houses+ trees and other inds of ornamental plants which are in existence up to thetime of the filin% of their >nswer!/

On the same date as the filin% of defendants >nswer with 6ounterclaim+ herein petitionersfiled their >nswer in Inter*ention with 6ounterclaim! ,ie the defendants+ herein petitionersclaimed that their predecessors4in4interest were the absolute and exclusi*e owners of the landin questionC that petitioners and their predecessors had been in possession of the sub'ect lotsince time immemorial up to the presentC they ha*e paid real property taxes and introducedimpro*ements thereon!=

>fter the issues were 'oined+ trial ensued!

On December #8+ &88(+ the .T6 issued a Decision+ the dispositi*e portion of which reads asfollows@

E);R;FOR;+ in *iew of the fore%oin% consideration"s$+ the 6ourt ad'ud%ed the case in fa*orof the plaintiffs and a%ainst the defendants and defendants4inter*enors are ordered to turn o*erthe land in question to the plaintiffs 1,ot Nos! 9=0 and 9


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>%%rie*ed+ herein respondents filed a petition for re*iew with the 6> assailin% the Decision ofthe RT6!

On :une (8+ &88=+ the 6> promul%ated its questioned Decision+ the dispositi*e portion ofwhich reads+ thus@

E);R;FOR;+ the petition is -R>NT;D! The Decision dated :une #?+ &88/ of the Re%ionalTrial 6ourt+ 5ranch =0+ ,in%ayen+ 7an%asinan is hereby R;V;RS;D and S;T >SID;! In itsstead+ a new one is entered reinstatin% the Decision dated December #8+ &88( of the .unicipal

Trial 6ourt of 5inmaley+ 7an%asinan!

SO ORD;R;D!0

:aime and the Spouses Salaar filed a .otion for Reconsideration+ but the same was denied bythe 6> in its Resolution dated No*ember #(+ &88=!

)ence+ the instant petition based on a sole assi%nment of error+ to wit@

T); 6ORT OF >77;>,S ;RR;D IN NOT >77R;6I>TIN- T)>T T);7;TITION;RS );R;IN >R; NOE T); >5SO,T; >ND ;6,SIV; OEN;RS OFT); ,>ND IN G;STION 53 VIRT; OF >6GISITIV; 7R;S6RI7TION!#8

The main issue raised by petitioners is whether they and their predecessors4in4interestpossessed the disputed lot in the concept of an owner+ or whether their possession is by meretolerance of respondents and their predecessors4in4interest! 6orollarily+ petitioners claim thatthe due execution and authenticity of the deed of sale upon which respondents predecessors4in4interest deri*ed their ownership were not pro*en durin% trial!

The petition lacs merit!

7reliminarily+ the 6ourt a%rees with the obser*ation of respondents that some of the petitionersin the instant petition were the inter*enors ##when the case was filed with the .T6! Recordswould show that they did not appeal the Decision of the .T6! #&The settled rule is that failure

to perfect an appeal renders the 'ud%ment final and executory!#()ence+ insofar as theinter*enors in the .T6 are concerned+ the 'ud%ment of the .T6 had already become final andexecutory!

It also bears to point out that the main issue raised in the instant petition+ which is thecharacter or nature of petitioners possession of the sub'ect parcel of land+ is factual in nature!

Settled is the rule that questions of fact are not re*iewable in petitions for re*iewon certiorariunder Rule ?/ of the Rules of 6ourt! #?Section # of Rule ?/ states that petitionsfor re*iew on certiorari Jshall raise only questions of law which must be distinctly set forth!K

Doubtless+ the issue of whether petitioners possess the sub'ect property as owners+ or whetherthey occupy the same by mere tolerance of respondents+ is a question of fact! Thus+ it is not

re*iewable!

Nonetheless+ the 6ourt has+ at times+ allowed exceptions from the abo*ementioned restriction!>mon% the reco%nied exceptions are the followin%@

1a2 Ehen the findin%s are %rounded entirely on speculation+ surmises+ or con'ecturesC

1&2 Ehen the inference made is manifestly mistaen+ absurd+ or impossibleC

1c2 Ehen there is %ra*e abuse of discretionC

1d2 Ehen the 'ud%ment is based on a misapprehension of factsC

1e2 Ehen the findin%s of facts are conflictin%C

1#2 Ehen in main% its findin%s the 6> went beyond the issues of the case+ or its findin%s arecontrary to the admissions of both the appellant and the appelleeC

1g2 Ehen the 6>As findin%s are contrary to those by the trial courtC

1h2 Ehen the findin%s are conclusions without citation of specific e*idence on which they arebasedC

1i2 Ehen the facts set forth in the petition as well as in the petitionerAs main and reply briefsare not disputed by the respondentC

12 Ehen the findin%s of fact are premised on the supposed absence of e*idence andcontradicted by the e*idence on recordC or

12 Ehen the 6> manifestly o*erlooed certain rele*ant facts not disputed by the parties+which+ if properly considered+ would 'ustify a different conclusion!#/

In the present case+ the findin%s of fact of the .T6 and the 6> are in conflict with those ofthe RT6!

>fter a re*iew of the records+ howe*er+ the 6ourt finds that the petition must fail as it finds noerror in the findin%s of fact and conclusions of law of the 6> and the .T6!

7etitioners claim that they ha*e acquired ownership o*er the disputed lot throu%h ordinaryacquisiti*e prescription!

>cquisiti*e prescription of dominion and other real ri%hts may be ordinary orextraordinary!#=Ordinary acquisiti*e prescription requires possession in %ood faith and with

'ust title for ten 1#82 years!#


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respect+ the 6ourt a%rees with the 6> that petitioners possession of the lot in question was bymere tolerance of respondents and their predecessors4in4interest! >cts of possessory characterexecuted due to license or by mere tolerance of the owner are inadequate for purposes ofacquisiti*e prescription!&&7ossession+ to constitute the foundation of a prescripti*e ri%ht+ must

be en concepto de due*o+ or+ to use the common law equi*alent of the term+ that possessionshould be ad*erse+ if not+ such possessory acts+ no matter how lon%+ do not start the runnin% ofthe period of prescription!&(

.oreo*er+ the 6> correctly held that e*en if the character of petitioners possession of the

sub'ect property had become ad*erse+ as e*idenced by their declaration of the same for taxpurposes under the names of their predecessors4in4interest+ their possession still falls short ofthe required period of thirty 1(82 years in cases of extraordinary acquisiti*e prescription!Records show that the earliest Tax Declaration in the name of petitioners was in #0


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IRST DI:ISION

$ELERINO E. MER$ADO,

7etitioner+

4 *ersus 4

BELENESINO$ILLAAND

ERDINAND ESINO$ILLA,

Respondents!

G.R. No. 187109

7resent@

6ORON>+ C.J.,

Chairperson+

,;ON>RDO4D; 6>STRO+5;RS>.IN+

D;, 6>STI,,O+ and

VI,,>R>.>+ :R!+JJ.

7romul%ated@

February #+ &8#&

F- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - F

DE$ISION

:ILLARAMA, R.,J.3

+he case

7etitioner 6elerino ;! .ercado appeals the Decision[1]dated >pril &9+ &889 andResolution[2]dated :uly &&+ &889 of the 6ourt of >ppeals 16>2 in 6>4-!R! 6V No!9


10/94

+he C$ decision

On appeal+ the 6> re*ersed the RT6 decision and dismissed petitionerAs complaint onthe %round that extraordinary acquisiti*e prescription has already set in in fa*or ofrespondents! The 6> found that DoroteoAs four remainin% children made an oral partition of,ot No! //& after DionisiaAs death in #0?/ and occupied specific portions! The oral partitionterminated the co4ownership of ,ot No! //& in #0?/! Said partition also included DionisiaAsshare because the lot was di*ided into four parts only! >nd since petitionerAs complaint wasfiled only on :uly #(+ &888+ the 6> concluded that prescription has set in! [15] The 6> disposed

the appeal as follows@ E);R;FOR;+ the appeal is -R>NT;D! The assailed .ay #/+ &88= Decision of theRe%ional Trial 6ourt 1RT62 of 5ulan+ Sorso%on is hereby R;V;RS;D and S;T >SID;! The6omplaint of the "petitioner$ is hereby DIS.ISS;D! No costs![1]

+he instant petition

The core issue to be resol*ed is whether petitionerAs action to reco*er the sub'ect portionis barred by prescription!

7etitioner confirms oral partition of ,ot No! //& by Doroteos heirs+ but claims that hisshare increased from ##? sq! m! to #spren+ Isabel2! The relation of trustee and cestui quetrustdoes not in fact exist+ and the holdin% of a constructi*e trust is for the trustee himself+ andtherefore+ at all times ad*erse![21] 7rescription may super*ene e*en if the trustee does notrepudiate the relationship![22]

Then+ too+ respondentsA uninterrupted ad*erse possession for // years of #80 sq! m! of

,ot No! //& was established! .acario occupied DionisiaAs share in #0?/ althou%h his claimthat Dionisia donated it to him in #0?/ was only made in a #0?9 affida*it! Ee also a%ree with

the 6> that .acarioAs possession of DionisiaAs share was public and ad*erse since his otherco4owners+ his three other sisters+ also occupied portions of ,ot No! //&! Indeed+ the #0tiena! It was only in the year &888+ uponreceipt of the summons to answer petitionerAs complaint+ that respondentsA peaceful

possession of the remainin% portion 1#80 sq! m!2 was interrupted! 5y then+ howe*er+extraordinary acquisiti*e prescription has already set in in fa*or of respondents! That the RT6found .acarioAs #0?9 affida*it *oid is of no moment! ;xtraordinary prescription isunconcerned with .acarioAs title or %ood faith! >ccordin%ly+ the RT6 erred in rulin% that.acario cannot acquire by prescription the shares of Sal*acion+ >spren+ and Isabel+ inDionisiaAs ##?4sq! m! share from ,ot No! //&!

.oreo*er+ the 6> correctly dismissed petitionerAs complaint as an action forrecon*eyance based on an implied or constructi*e trust prescribes in #8 years from the timethe ri%ht of action accrues! [27] This is the other ind of prescription under the6i*il 6ode+ calledextincti*e prescription+ where ri%hts and actions are lost by the lapse of time! [26] 7etitionerAsaction for reco*ery of possession ha*in% been filed // years after .acario occupied DionisiaAsshare+ it is also barred by extincti*e prescription! The 6> while condemnin% .acarioAsfraudulent act of depri*in% his three sisters of their shares in DionisiaAs share+ equallyemphasied the fact that .acarioAs sisters wasted their opportunity to question his acts!

4%EREORE+ we DENYthe petition for re*iew on certiorari for lac of meritand AIRMthe assailed Decision dated >pril &9+ &889 and Resolution dated :uly &&+ &889of the 6ourt of >ppeals in 6>4-!R! 6V No! 9


11/94

FIRST DIVISION

-!R! No! #&08#9 No*ember #/+ &88#

6>R.;,IT> ,;>PO+ assisted by her husband -R;-ORIO 6>6)ON+ petitioner+*s!6ORT OF >77;>,S and );R.O-;N;S F;RN>NDO+ respondents!

7>RDO+J!@

The 6ase

The case is a petition for re*iew on certiorari of the decision #of the 6ourt of >ppealsaffirmin% that of the Re%ional Trial 6ourt+ .alolos+ 5ranch < &orderin% petitioner ,eaQo to

pay respondent )ermo%enes Fernando the sum of 7#9(+=9

The Facts

On No*ember #(+ #09/+ )ermo%enes Fernando+ as *endor and 6armelita ,eaQo+ as *endeeexecuted a contract to sell in*ol*in% a piece of land+ ,ot No! 9


12/94

words+ the plaintiff has clearly defaulted in the payment of the amortiations due under thecontract as recited in the statement of account 1;xhibit B&B2 and she should be liable for the

payment of interest and penalties in accordance with the stipulations in the contract pertainin%thereto!B

The trial court disre%arded petitioner ,eaQos claim that she made a downpayment of7#8+888!88+ at the time of the execution of the contract!

The trial court relied on the statement of account &&and the summary&(prepared by respondentFernando to determine petitioner ,eaQos liability for the payment of interests and penalties!

The trial court held that the consi%nation made by petitioner ,eaQo in the amount of7#9+888!88 did not produce any le%al effect as the same was not done in accordance with>rticles ##On the issue of whether petitioner ,eaQo was in delay in payin% the amortiations+ we rule thatwhile the contract pro*ided that the total purchase price was payable within a ten4year period+the same contract specified that the purchase price shall be paid in monthly installments forwhich the correspondin% penalty shall be imposed in case of default! 7etitioner ,eaQo cannoti%nore the pro*ision on the payment of monthly installments by claimin% that the ten4year

period within which to pay has not elapsed!

>rticle ##=0 of the 6i*il 6ode pro*ides that in reciprocal obli%ations+ neither party incurs indelay if the other does not comply or is not ready to comply in a proper manner with what isincumbent upon him! From the moment one of the parties fulfills his obli%ation+ delay by theother be%ins!/phi.n0t

In the case at bar+ respondent Fernando performed his part of the obli%ation by allowin%petitioner ,eaQo to continue in possession and use of the property! 6learly+ when petitioner,eaQo did not pay the monthly amortiations in accordance with the terms of the contract+ shewas in delay and liable for dama%es!?# )owe*er+ we a%ree with the trial court that the defaultcommitted by petitioner ,eaQo in respect of the obli%ation could be compensated by theinterest and surchar%es imposed upon her under the contract in question!?&

It is a cardinal rule in the interpretation of contracts that if the terms of a contract are clear andlea*e no doubt upon the intention of the contractin% parties+ the literal meanin% of itsstipulation shall control!?(Thus+ as there is no ambi%uity in the lan%ua%e of the contract+ thereis no room for construction+ only compliance!


13/94

The Fallo

IN VI;E E);R;OF+ we D;N3 the petition and >FFIR. the decision of the 6ourt of>ppeals??in toto!

No costs!

SO ORD;R;D!

Davide, Jr., Puno, 1apunan, and Ynares-Santiago, JJ., concur!

S;6OND DIVISION

"-!R! No! #&6S+ namely@ 6,>R> R;S.> 5>6S+ ROG; R! 5>6S+ SR!+S>TRNINO R! 5>6S+ 7RIS6I,> VD>! D; 6>5>N;RO+ 6>R.;,IT> 5! SGI5+5;RN>RDIT> 5! 6>RD;N>S+ R>, R! 5>6S+ .;D>RDO R! 5>6S+ >NS;,.>5! >,5>N+ RI6>RDO R! 5>6S+ F;,I6ISI.> 5! :DI6O+ and DO.INI6I>N> 5!


14/94

T>N->,+petitioners, vs! )ON! 6ORT OF >77;>,S and S7OS;S F>STINODR>3 and VI6TORI>N> DR>3+ respondents!

D ; 6 I S I O N

GIS.5IN-, J!@

This petition assails the decision dated No*ember &0+ #00=+ of the 6ourt of >ppeals in 6>4-!R! 6V No! (u%ust (+ #00#+ of the Re%ional Trial 6ourtof 6ebu 6ity+ 5ranch =+ in 6i*il 6ase No! 6;5490(/!

The facts+ as culled from the records+ are as follows@On :une #+ #09?+ ,uis 5acus leased to pri*ate respondent Faustino Duray a parcel ofa%ricultural land in 5ulacao+ Talisay+ 6ebu! Desi%nated as ,ot No! (==#4>4(454&+ it had anarea of (+88& square meters+ co*ered by Transfer 6ertificate of Title No! ?99==! The leasewas for six years+ endin% .ay (#+ #008! The contract contained an option to buyclause! nder said option+ the lessee had the exclusi*e and irre*ocable ri%ht to buy &+888square meters of the property within fi*e years from a year after the effecti*ity of the contract+at 7&88 per square meter! That rate shall be proportionately ad'usted dependin% on the pesorate a%ainst the S dollar+ which at the time of the execution of the contract was fourteen

pesos!"#$

6lose to the expiration of the contract+ ,uis 5acus died on October #8+ #090! Thereafter+ on.arch #/+ #008+ the Duray spouses informed Roque 5acus+ one of the heirs of ,uis 5acus+that they were willin% and ready to purchase the property under the option to buy clause! Theyrequested Roque 5acus to prepare the necessary documents+ such as a Special 7ower of>ttorney authoriin% him to enter into a contract of sale+ "&$on behalf of his sisters who werethen abroad!

On .arch (8+ #008+ due to the refusal of petitioners to sell the property+ Faustino DurayAsad*erse claim was annotated by the Re%ister of Deeds of 6ebu+ at the bac of T6T No! =(&=0+co*erin% the se%re%ated &+888 square meter portion of ,ot No! (==#4>4(454&4>!"($

Subsequently+ on >pril /+ #008+ Duray filed a complaint for specific performance a%ainst theheirs of ,uis 5acus with the 2upon +agapama3apa o# 4aranga35ulacao+ asin% that he beallowed to purchase the lot specifically referred to in the lease contract with option to buy! >tthe hearin%+ Duray presented a certification "?$from the mana%er of Standard 6hartered 5an+6ebu 6ity+ addressed to ,uis 5acus+ statin% that at the request of .r! ,awrence -lauber+ a

ban client+ arran%ements were bein% made to allow Faustino Duray to borrow funds of

approximately 7u%ust (+ #00#+ the Re%ional Trial 6ourt ruled in fa*or of pri*ate respondents+ thedispositi*e portion of which reads@

7remises considered+ the court finds for the plaintiffs and orders the defendants to specificallyperform their obli%ation in the option to buy and to execute a document of sale o*er theproperty co*ered by Transfer 6ertificate of Title T4=(&=0 upon payment by the plaintiffs tothem in the amount of Six )undred Se*enty4Fi*e Thousand Six )undred Se*enty4Fi*e

17=FFIR.;D!"0$

)ence+ this petition where petitioners a*er that the 6ourt of >ppeals %ra*ely erred and abusedits discretion in@

I! !!!7)O,DIN- T); TRI>, 6ORTAS R,IN- IN T); S7;6IFI6 7;RFOR.>N6;6>S; 53 ORD;RIN- 7;TITION;RS 1D;F;ND>NTS T);R;IN2 TO ;;6T; >DO6.;NT OF S>,; OV;R T); 7RO7;RT3 IN G;STION 1EIT) T6T NO! T4=(&=02 TO T);. IN T); >.ONT OF 7=T; T); D;6ISION 5;6O.;S FIN>,C

II! !!!DISR;->RDIN- ,;->, 7RIN6I7,;S+ S7;6IFI6 7ROVISIONS OF ,>E >ND:RIS7RD;N6; IN 7)O,DIN- T); D;6ISION OF T); TRI>, 6ORT TO T);;FF;6T T)>T 7RIV>T; R;S7OND;NTS )>D ;;R6IS;D T);IR RI-)T OFO7TION TO 53 ON TI.;C T)S T); 7R;S;NT>TION OF T); 6;RTIFI6>TIONOF T); 5>N .>N>-;R OF > 5>N D;7OSIT IN T); N>.; OF >NOT);R7;RSON FOR ,O>N TO R;S7OND;NTS E>S ;GIV>,;NT TO > V>,ID T;ND;ROF 7>3.;NT >ND > SFFI6I;NT 6O.7,>IN6; 1SI62 OF > 6ONDITION FOR T);;;R6IS; OF T); O7TION TO 53C >ND
http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn9http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn8http://sc.judiciary.gov.ph/jurisprudence/2001/dec2001/127695.htm#_edn9


15/94

III U 7)O,DIN- T); TRI>, 6ORTAS R,IN- T)>T T); 7R;S;NT>TION OF >6>S);RAS 1SI62 6);6 53 T); R;S7OND;NTS IN T); >.ONT OF 7=&/+888!88;V;N >FT;R T); T;R.IN>TION OF T); TRI>, ON T); .;RITS EIT) 5OT)7>RTI;S >,R;>D3 )>VIN- R;ST;D T);IR 6>S;+ E>S STI,, V>,ID6O.7,I>N6; OF T); 6ONDITION FOR T); 7RIV>T; R;S7OND;NTSA17,>INTIFFS T);R;IN2 ;;R6IS; OF RI-)T OF O7TION TO 53 >ND )>D >FOR6; OF V>,ID >ND F,, T;ND;R OF 7>3.;NT EIT)IN T); >-R;;D7;RIOD!"#8$

7etitioners insist that they cannot be compelled to sell the disputed property by *irtue of the

nonfulfillment of the obli%ation under the option contract of the pri*ate respondents!7ri*ate respondents first a*er that petitioners are unclear if Rule =/ or Rule ?/ of the Rules of6ourt %o*ern their petition+ and that petitioners only raised questions of facts which this 6ourtcannot properly entertain in a petition for re*iew! They claim that e*en assumin% that theinstant petition is one under Rule ?/+ the same must be denied for the 6ourt of >ppeals hascorrectly determined that they had *alidly exercised their option to buy the leased property

before the contract expired!

In response+ petitioners state that pri*ate respondents erred in initially classifyin% the instantpetition as one under Rule =/ of the Rules of 6ourt! They ar%ue that the petition is one underRule ?/ where errors of the 6ourt of >ppeals+ whether e*identiary or le%al in nature+ may bere*iewed!

Ee a%ree with pri*ate respondents that in a petition for re*iew under Rule ?/+ only questions

of law may be raised! "##$)owe*er+ a close readin% of petitionersA ar%uments re*eal thefollowin% le%al issues which may properly be entertained in the instant petition@

a2 Ehen pri*ate respondents opted to buy the property co*ered by the lease contract withoption to buy+ were they already required to deli*er the money or consi%n it in court before

petitioner executes a deed of transfer

b2 Did pri*ate respondents incur in delay when they did not deli*er the purchase price orconsi%n it in court on or before the expiration of the contract

On the first issue+ petitioners contend that pri*ate respondents failed to comply with theirobli%ation because there was neither actual deli*ery to them nor consi%nation in court or withthe .unicipal+ 6ity or 7ro*incial Treasurer of the purchase price before the contractexpired! 7ri*ate respondentsA ban certificate statin% that arran%ements were bein% made by

the ban to release 7s earlier stated+ the latter was contin%ent upon the former! In5ietes vs.Court o# $ppea!s, ?= S6R> =/? 1#0


16/94

ANTONIO R. $ORTES @i" &i' (!p!(i)* !' A#;i"i')r!)or o/ )&+ +')!)+ o/ $l!ro S.

$or)+',petitioner+*s!%ON. $OURT O AEALS !"# :ILLA ESERANA DE:ELOMENT

$ORORATION,respondents!

D ; 6 I S I O N

YNARES-SANTIAGO,J.3

The instant petition for re*iew sees the re*ersal of the :une #(+ #00= Decision #of the 6ourt

of >ppeals in 6>4-!R! 6V No! ?ntonio 6ortes 16ortes2 and pri*ate respondent Villa ;sperana De*elopment6orporation 16orporation2!

The antecedents show that for the purchase price of 7(++ T6T No! (#0#(4> and T6T No! (&8#(4>+ located at5aclaran+ 7araQaque+ .etro .anila! On *arious dates in #09(+ the 6orporation ad*anced to6ortes the total sum of 7#+(+888!88! Sometime in September #09(+ the parties executed adeed of absolute sale containin% the followin% terms@ (

#! pon execution of this instrument+ the Vendee shall pay unto the Vendor sum of TEO.I,,ION >ND TEO )NDR;D T)OS>ND 17&+&88+888!882 7;SOS+ 7hilippine

6urrency+ less all ad*ances paid by the Vendee to the Vendor in connection with the saleC&! The balance of ON; .I,,ION >ND FIV; )NDR;D T)OS>ND "7#+/88+888!88$7;SOS+ 7hil! 6urrency shall be payable within ON; 1#2 3;>R from date of execution of thisinstrument+ payment of which shall be secured by an irre*ocable standby letter of credit to beissued by any reputable local banin% institution acceptable to the Vendor!

x x x x

?! >ll expense for the re%istration of this document with the Re%ister of Deeds concerned+includin% the transfer tax+ shall be di*ided equally between the Vendor and the Vendee!7ayment of the capital %ains shall be exclusi*ely for the account of the VendorC /commission of .arcosa Sanche to be deducted upon si%nin% of sale! ?

Said Deed was retained by 6ortes for notariation!

On :anuary #?+ #09/+ the 6orporation filed the instant case /for specific performance seein%to compel 6ortes to deli*er the T6Ts and the ori%inal copy of the Deed of >bsolute Sale!>ccordin% to the 6orporation+ despite its readiness and ability to pay the purchase price+6ortes refused deli*ery of the sou%ht documents! It thus prayed for the award of dama%es+attorneys fees and liti%ation expenses arisin% from 6ortes refusal to deli*er the samedocuments!

In his >nswer with counterclaim+=6ortes claimed that the owners duplicate copy of the threeT6Ts were surrendered to the 6orporation and it is the latter which refused to pay in full thea%reed down payment! )e added that portion of the sub'ect property is occupied by his lesseewho a%reed to *acate the premises upon payment of disturbance fee! )owe*er+ due to the6orporations failure to pay in full the sum of 7&+&88+888!88+ he in turn failed to fully pay thedisturbance fee of the lessee who now refused to pay monthly rentals! )e thus prayed that the6orporation be ordered to pay the outstandin% balance plus interest and in the alternati*e+ to

cancel the sale and forfeit the 7#+(+888!88 partial down payment+ with dama%es in eithercase!

On :une &?+ #00(+ the trial court rendered a decision rescindin% the sale and directed 6ortes toreturn to the 6orporation the amount of 7#+(+888!88+ plus interest! It ruled that pursuant tothe contract of the parties+ the 6orporation should ha*e fully paid the amount of 7&+&88+888!88upon the execution of the contract! It stressed that such is the law between the parties becausethe 6orporation failed to present e*idence that there was another a%reement that modified theterms of payment as stated in the contract! >nd+ ha*in% failed to pay in full the amount of7&+&88+888!88 despite 6ortes deli*ery of the Deed of >bsolute Sale and the T6Ts+ rescission

of the contract is proper!In its motion for reconsideration+ the 6orporation contended that the trial court failed toconsider their a%reement that it would pay the balance of the down payment when 6ortesdeli*ers the T6Ts! The motion was+ howe*er+ denied by the trial court holdin% that therescission should stand because the 6orporation did not act on the offer of 6ortes counsel todeli*er the T6Ts upon payment of the balance of the down payment! Thus@

The 6ourt finds no merit in the "6orporations$ .otion for Reconsideration! >s stated in thedecision sou%ht to be reconsidered+ "6ortes$ counsel at the pre4trial of this case+ proposed thatif "the 6orporation$ completes the down payment a%reed upon and mae arran%ement for the

payment of the balances of the purchase price+ "6ortes$ would si%n the Deed of Sale and turno*er the certificate of title to the "6orporation$! "The 6orporation$ did nothin% to comply withits undertain% under the a%reement between the parties!

E);R;FOR;+ in *iew of the fore%oin% considerations+ the .otion for Reconsideration ishereby D;NI;D!

SO ORD;R;D!ppeals re*ersed the decision of the trial court and directed 6ortes toexecute a Deed of >bsolute Sale con*eyin% the properties and to deli*er the same to the6orporation to%ether with the T6Ts+ simultaneous with the 6orporations payment of the

balance of the purchase price of 7&+?9


17/94

6ortes filed the instant petition prayin% that the decision of the trial court rescindin% the salebe reinstated!

There is no doubt that the contract of sale in question %a*e rise to a reciprocal obli%ation of theparties! Reciprocal obli%ations are those which arise from the same cause+ and which eachparty is a debtor and a creditor of the other+ such that the obli%ation of one is dependent uponthe obli%ation of the other! They are to be performed simultaneously+ so that the performanceof one is conditioned upon the simultaneous fulfillment of the other!0

>rticle ##0# of the 6i*il 6ode+ states@

>RT! ##0#! The power to rescind obli%ations is implied in reciprocal ones+ in case one of theobli%ors should not comply with what is incumbent upon him!

x x x x

>s to when said failure or delay in performance arise+ >rticle ##=0 of the same 6ode pro*idesthat L

>RT! ##=0

x x x x

In reciprocal obli%ations+ neither party incurs in delay if the other does not comply or is notready to comply in a proper manner with what is incumbent upon him! ro; )&+ ;o;+") o"+o/ )&+ p!r)i+' /l/ill' &i' oli!)io", #+l!* * )&+ o)&+r +i"'! 1;mphasis supplied2

The issue therefore is whether there is delay in the performance of the parties obli%ation thatwould 'ustify the rescission of the contract of sale! To resol*e this issue+ we must firstdetermine the true a%reement of the parties!

The settled rule is that the decisi*e factor in e*aluatin% an a%reement is the intention of theparties+ as shown not necessarily by the terminolo%y used in the contract but by their conduct+words+ actions and deeds prior to+ durin% and immediately after executin% the a%reement! >ssuch+ therefore+ documentary and parol e*idence may be submitted and admitted to pro*e suchintention!#8

In the case at bar+ the stipulation in the Deed of >bsolute Sale was that the 6orporation shallpay in full the 7&+&88+888!88 down payment upon execution of the contract! )owe*er+ ascorrectly noted by the 6ourt of >ppeals+ the transcript of steno%raphic notes re*eal 6ortesadmission that he a%reed that the 6orporations full payment of the sum of 7&+&88+888!88

would depend upon his deli*ery of the T6Ts of the three lots! In fact+ his main defense in the>nswer is that+ he performed what is incumbent upon him by deli*erin% to the 6orporation theT6Ts and the carbon duplicate of the Deed of >bsolute Sale+ but the latter refused to pay infull the down payment!##7ertinent portion of the transcript+ reads@

"G$ Now+ why did you deli*er these three titles to the plaintiff despite the fact that it has notbeen paid in full the a%reed down payment

> Eell+ the broer told me that the down payment will be %i*en if I surrender the titles!

G Do you mean to say that the plaintiff a%reed to pay in full the down payment of7&+&88+888!88 pro*ided you surrender or entrust to the plaintiff the titles

> 3es+ sir!#&

Ehat further confirmed the a%reement to deli*er the T6Ts is the testimony of 6ortes that thetitle of the lots will be transferred in the name of the 6orporation upon full payment of the7&+&88+888!88 down payment! Thus L

>TT3! >NT>R>N

G Of course+ you ha*e it transferred in the name of the plaintiff+ the title

> pon full payment!

x x x x

>TT3! S>RT;

G Ehen you said upon full payment+ are you referrin% to the a%reed down payment of7&+&88+888!88

> 3es+ sir!#(

5y a%reein% to transfer title upon full payment of 7&+&88+888!88+ 6ortes impliedly a%reed todeli*er the T6Ts to the 6orporation in order to effect said transfer! )ence+ the phraseBexecution of this instrumentB#?as appearin% in the Deed of >bsolute Sale+ and which e*entwould %i*e rise to the 6orporations obli%ation to pay in full the amount of 7&+&88+888!88+ cannot be construed as referrin% solely to the si%nin% of the deed! The meanin% of BexecutionB inthe instant case is not limited to the si%nin% of a contract but includes as well the performanceor implementation or accomplishment of the parties a%reement!#/Eith the transfer of titles asthe correspondin% reciprocal obli%ation of payment+ 6ortes obli%ation is not only to affix hissi%nature in the Deed+ but to set into motion the process that would facilitate the transfer oftitle of the lots+ i.e!+ to ha*e the Deed notaried and to surrender the ori%inal copy thereof tothe 6orporation to%ether with the T6Ts!

)a*in% established the true a%reement of the parties+ the 6ourt must now determine whether6ortes deli*ered the T6Ts and the ori%inal Deed to the 6orporation! The 6ourt of >ppealsfound that 6ortes ne*er surrendered said documents to the 6orporation! 6ortes testified that hedeli*ered the same to .anny Sanche+ the son of the broer+ and that .anny told him that hermother+ .arcosa Sanche+ deli*ered the same to the 6orporation!

G Do you ha*e any proof to show that you ha*e indeed surrendered these titles to theplaintiff

> 3es+ sir!

G I am showin% to you a receipt dated October &0+ #09(+ what relation has this receipt withthat receipt that you ha*e mentioned

> That is the receipt of the real estate broer when she recei*ed the titles!

G On top of the printed name is .anny Sanche+ there is a si%nature+ do you now who is that.anny Sanche

> That is the son of the broer!

x x x x

G .ay we now the full name of the real estate broer

> .arcosa Sanche

x x x x
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18/94

G Do you now if the broer or .arcosa Sanche indeed deli*ered the titles to the plaintiff

> That is what "s$he told me! She %a*e them to the plaintiff!

x x x x!#=

>TT3! >NT>R>N

G >re you really sure that the title is in the hands of the plaintiff

x x x x

G It is in the hands of the broer but there is no showin% that it is in the hands of the plaintiff> 3es+ sir!

6ORT

G )ow do you now that it was deli*ered to the plaintiff by the son of the broer

> The broer told me that she deli*ered the title to the plaintiff!

>TT3! >NT>R>N

G Did she not show you any receipt that she deli*ered to ".r!$ Dra%on # I ha*e not seen any receipt!

G So+ therefore+ you are not sure whether the title has been deli*ered to the plaintiff or not! Itis only upon the alle%ation of the broer

> 3es+ sir!#9

)owe*er+ .arcosa Sanches unrebutted testimony is that+ she did not recei*e the T6Ts! Shealso denied nowled%e of deli*ery thereof to her son+ .anny+ thus@

G The defendant+ >ntonio 6ortes testified durin% the hearin% on .arch ##+ #09= that healle%edly %a*e you the title to the property in question+ is it true

> I did not recei*e the title!

G )e liewise said that the title was deli*ered to your son+ do you now about that

> I do not now anythin% about that!#0

Ehat further stren%thened the findin%s of the 6ourt of >ppeals that 6ortes did not surrenderthe sub'ect documents was the offer of 6ortes counsel at the pre4trial to deli*er the T6Ts andthe Deed of >bsolute Sale if the 6orporation will pay the balance of the down payment!Indeed+ if the said documents were already in the hands of the 6orporation+ there was no needfor 6ortes counsel to mae such offer!

Since 6ortes did not perform his obli%ation to ha*e the Deed notaried and to surrender thesame to%ether with the T6Ts+ the trial court erred in concludin% that he performed his part inthe contract of sale and that it is the 6orporation alone that was remiss in the performance ofits obli%ation! >ctually+ both parties were in delay! 6onsiderin% that their obli%ation wasreciprocal+ performance thereof must be simultaneous! The mutual inaction of 6ortes and the6orporation therefore %a*e rise to a compensation moraeor default on the part of both parties

because neither has completed their part in their reciprocal obli%ation!&86ortes is yet to deli*er

the ori%inal copy of the notaried Deed and the T6Ts+ while the 6orporation is yet to pay in

full the a%reed down payment of 7&+&88+888!88! This mutual delay of the parties cancels outthe effects of default+such that it is as if no one is %uilty of delay! &&

Ee find no merit in 6ortes contention that the failure of the 6orporation to act on theproposed settlement at the pre4trial must be construed a%ainst the latter! 6ortes ar%ued thatwith his counsels offer to surrender the ori%inal Deed and the T6Ts+ the 6orporation shouldha*e consi%ned the balance of the down payment! This ar%ument would ha*e been correct if6ortes actually surrendered the Deed and the T6Ts to the 6orporation! Eith such deli*ery+ the6orporation would ha*e been placed in default if it chose not to pay in full the required down

payment! nder >rticle ##=0 of the 6i*il 6ode+ from the moment one of the parties fulfills his

obli%ation+ delay by the other be%ins! Since 6ortes did not perform his part+ the pro*ision ofthe contract requirin% the 6orporation to pay in full the down payment ne*er acquiredobli%atory force! .oreo*er+ the 6orporation could not be faulted for not automatically heedin%to the offer of 6ortes! For one+ its complaint has a prayer for dama%es which it may not wantto wai*e by a%reein% to the offer of 6ortes counsel! For another+ the pre*ious representationof 6ortes that the T6Ts were already deli*ered to the 6orporation when no such deli*ery wasin fact made+ is enou%h reason for the 6orporation to be more cautious in dealin% with him!

The 6ourt of >ppeals therefore correctly ordered the parties to perform their respecti*eobli%ation in the contract of sale+ i.e.,for 6ortes to+ amon% others+ deli*er the necessarydocuments to the 6orporation and for the latter to pay in full+ not only the down payment+ butthe entire purchase price! >nd since the 6orporation did not question the 6ourt of >ppealsdecision and e*en prayed for its affirmance+ its payment should ri%htfully consist not only ofthe amount of 709


19/94

Republic of the 7hilippinesSUREME $OURT

.anila

G.R. No. 181205 O()o+r 9, 2009

MEGA4ORLD GLOBUS ASIA, IN$.,7etitioner+*s!MILA S. TANSE$O,Respondent!

D ; 6 I S I O N

$ARIO MORALES,J.:

On :uly sia+ Inc! 1.e%aworld2 and respondent .ila S!Tanseco 1Tanseco2 entered into a 6ontract to 5uy and Sell #a &&? square4meter 1more or less2condominium unit at a pre4sellin% pro'ect+ BThe Salcedo 7ar+B located alon% Senator -il7uyat >*enue+ .aati 6ity!

The purchase price was 7#=+98&+8(

1&2 70+&?#+#&8!/8 throu%h (8 equal monthly installments of 7(89+8(u%ust #?+#00/ to :anuary #?+ #009C and 1(2 the balance of 7&+/&8+(8/!=( onOctober (#+ #009+ thestipulated deli*ery date of the unit C pro*ided that if the construction is completed earlier+Tanseco would pay the balance within se*en days from receipt of a notice of turno*er!

Section ? of the 6ontract to 5uy and Sell pro*ided for the construction schedule as follows@

?! $ONSTRU$TION S$%EDULE The construction of the 7ro'ect and the unitHs hereinpurchased shall be completed and deli*ered not later than October (#+ #009 with additional%race period of six 1=2 months within which to complete the 7ro'ect and the unitHs+ barrin%delays due to fire+ earthquaes+ the elements+ acts of -od+ war+ ci*il disturbances+ stries orother labor disturbances+ %o*ernment and economic controls main% it+ amon% others+

impossible or difficult to obtain the necessary materials+ acts of third person+ or any othercause or conditions beyond the control of the S;,,;R! In this e*ent+ the completion anddeli*ery of the unit are deemed extended accordin%ly without liability on the part of theS;,,;R! The fore%oin% notwithstandin%+ the S;,,;R reser*es the ri%ht to withdraw fromthis transaction and refund to the 53;R without interest the amounts recei*ed from himunder this contract if for any reason not attributable to S;,,;R+ such as but not limited tofire+ storms+ floods+ earthquaes+ rebellion+ insurrection+ wars+ coup de etat+ ci*il disturbancesor for other reasons beyond its control+ the 7ro'ect may not be completed or it can only becompleted at a financial loss to the S;,,;R! In any e*ent+ all construction on or of the 7ro'ectshall remain the property of the S;,,;R! 1nderscorin% supplied2

Tanseco paid all installments due up to :anuary+ #009+ lea*in% unpaid the balance

of 7&+/&8+(8/!=( pendin% deli*ery of the unit!&.e%aworld+ howe*er+ failed to deli*er the unit

within the stipulated period on October (#+ #009 or >pril (8+ #000+ the last day of the six4month %race period!

> few days shy of three years later+ .e%aworld+ by notice dated >pril &(+ &88& 1notice ofturno*er2+ informed Tanseco that the unit was ready for inspection preparatory todeli*ery!(Tanseco replied throu%h counsel+ by letter of .ay =+ &88&+ that in *iew of.e%aworldAs failure to deli*er the unit on time+ she was demandin% the returnof7#?+&9#+nswer+ .e%aworld attributed the delay to the #00< >sian financial crisis which wasbeyond its controlC and ar%ued that default had not set in+ Tanseco not ha*in% made any'udicial or extra'udicial demand for deli*ery before receipt of the notice of turno*er!=

5y Decision of .ay &9+ &88(+rbiter dismissed TansecoAs complaint for lac ofcause of action+ findin% that .e%aworld had effected deli*ery by the notice of turno*er before

Tanseco made a demand! Tanseco was thereupon ordered to pay .e%aworld the balance of thepurchase price+ plus 7&/+888 as moral dama%es+7&/+888 as exemplary dama%es+ and 7&/+888as attorneyAs fees!

On appeal by Tanseco+ the ),R5 5oard of 6ommissioners+ by Decision of No*ember &9+&88(+9sustained the ),R5 >rbiterAs Decision on the %round of laches for failure to demandrescission when the ri%ht thereto accrued! It deleted the award of dama%es+ howe*er!TansecoAs .otion for Reconsideration ha*in% been denied+ 0she appealed to the Office of the7resident which dismissed the appeal by Decision of >pril &9+ &88= #8for failure to show thatthe findin%s of the ),R5 were tainted with %ra*e abuse of discretion! )er .otion forReconsideration ha*in% been denied by Resolution dated >u%ust (8+ &88=+##Tanseco filed a7etition for Re*iew under Rule ?( with the 6ourt of >ppeals!#&

5y Decision of September &9+ &8848(8pril &9+&88= Decision and >u%ust (8+ &88= Resolution of the Office of the 7resident in O!7! 6ase No!8/4I4(#9+ are hereby RE:ERSED and SET ASIDE and a new one entered@1#2 RES$INDING+ as prayed for by T>NS;6O+ the a%%rie*ed party+ the contract to buy andsellC 1&2 DIRE$TING .;->EOR,D TO AY T>NS;6O the amount she had paidtotalin% 7#?+&9#+NS;6O 7&88+888!88 by way of
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20/94

exemplary dama%esC 1?2 ORDERING .;->EOR,D TO AY T>NS;6O 7&88+888!88 asattorneyAs feesC and 1/2 ORDERING.;->EOR,D TO AY T>NS;6O the cost of suit !1;mphasis in the ori%inalC underscorin% supplied2

The appellate court held that under >rticle ##=0 of the 6i*il 6ode+ no 'udicial or extra'udicialdemand is needed to put the obli%or in default if the contract+ as in the herein partiesA contract+states the date when the obli%ation should be performedC that time was of the essence becauseTanseco relied on .e%aworldAs promise of timely deli*ery when she a%reed to part with hermoneyC that the delay should be reconed from October (#+ #009+ there bein% no force

ma'eure to warrant the application of the >pril (8+ #000 alternati*e dateC and that specificperformance could not be ordered in lieu of rescission as the ri%ht to choose the remedybelon%s to the a%%rie*ed party!

The appellate court awarded Tanseco exemplary dama%es on a findin% of bad faith on the partof .e%aworld in forcin% her to accept its lon%4delayed deli*eryC and attorneyAs fees+ sheha*in% been compelled to sue to protect her ri%hts!

Its .otion for Reconsideration ha*in% been denied by Resolution of :anuary 9+&889+#?.e%aworld filed the present 7etition for Re*iew on 6ertiorari+ echoin% its position

before the ),R5+ addin% that Tanseco had not shown any basis for the award of dama%esand attorneyAs fees!#/

Tanseco+ on the other hand+ maintained her position too+ and citin% .e%aworldAs bad faithwhich became e*ident when it insisted on main% the deli*ery despite the lon%delay+#=insisted that she deser*ed the award of dama%es and attorneyAs fees!

>rticle ##=0 of the 6i*il 6ode pro*ides@

>rt! ##=0! Those obli%ed to deli*er or to do somethin% incur in delay from the time the obli%ee'udicially or extra'udicially demands from them the fulfillment of their obli%ation!

)owe*er+ the demand by the creditor shall not be necessary in order that delay may exist@

1#2 Ehen the obli%ation or the law expressly so declaresC or

1&2 Ehen from the nature and the circumstances of the obli%ation it appears that thedesi%nation of the time when the thin% is to be deli*ered or the ser*ice is to be rendered was acontrollin% moti*e for the establishment of the contractC or

1(2 Ehen demand would be useless+ as when the obli%or has rendered it beyond his power toperform!

In reciprocal obli%ations+ neither party incurs in delay if the other does not comply or is notready to comply in a proper manner with what is incumbent upon him! From the moment oneof the parties fulfills his obli%ation+ delay by the other be%ins! 1nderscorin% supplied2

The 6ontract to 5uy and Sell of the parties contains reciprocal obli%ations+ i!e!+ to completeand deli*er the condominium unit on October (#+ #009 or six months thereafter on the part of.e%aworld+ and to pay the balance of the purchase price at or about the time of deli*ery onthe part of Tanseco! 6ompliance by .e%aworld with its obli%ation is determinati*e ofcompliance by Tanseco with her obli%ation to pay the balance of the purchase price!.e%aworld ha*in% failed to comply with its obli%ation under the contract+ it is liabletherefor!#rticle ##


21/94

Ehile the appellate court correctly awarded 7#?+&9#+rticle ##0#&/of the 6i*il 6ode does not apply to a contract to buy and sell+ thesuspensi*e condition of full payment of the purchase price not ha*in% occurred to tri%%er theobli%ation to con*ey title+cancellation+ not rescission+ of the contract is thus the correct remedy

in the premises!&=

E);R;FOR;+ the challen%ed Decision of the 6ourt of >ppeals is+ in li%ht of the fore%oin%+>FFIR.;D with .ODIFI6>TION!

>s modified+ the dispositi*e portion of the Decision reads@

The :uly sia+ Inc!+ is directed to pay respondent+ .ila S! Tanseco+ the amountof 7#?+&9#+


22/94

Republic of the 7hilippinesS7R;.; 6ORT.anilaT)IRD DIVISIONGENERAL MILLING $ORORATION,

7etitioner+

4 *ersus 4

SS. LIBRADO RAMOS !"# REMEDIOS RAMOS,

Respondents!

G.R. No. 1927resent@

6>R7IO+J!+WV;,>S6O+ :R!+ 6hairperson+,;ON>RDO4D; 6>STRO+WW

>5>D+ and.;NDOM>+JJ!7romul%ated@:uly &8+ &8##

x44444444444444444444444444444444444444444444444444444444444444444444444444444444444444444x

D E $ I S I O N

:ELAS$O, R.,J.3T&+ $!'+

This is a petition for re*iew of the >pril #/+ &8#8 Decision of the 6ourt of >ppeals

16>2 in 6>4-!R! 6R4)!6! No! 9/?88 entitled Spouses 2i&rado 7amos 8 7emedios 7amos v.9enera! 6i!!ing Corporation, et a!.+which affirmed the .ay (#+ &88/ Decision of theRe%ional Trial 6ourt 1RT62+ 5ranch #& in ,ipa 6ity+ in 6i*il 6ase No! 8848#&0 for>nnulment andHor Declaration of Nullity of ;xtra'udicial Foreclosure Sale with Dama%es!

T&+ !()'

On >u%ust &?+ #090+ -eneral .illin% 6orporation 1-.62 entered into a -rowers6ontract with spouses ,ibrado and Remedios Ramos 1Spouses Ramos2! nder the contract+-.6 was to supply broiler chicens for the spouses to raise on their landin4aranga35anaybanay+ ,ipa 6ity+ 5atan%as!"#$To %uarantee full compliance+ the -rowers6ontract was accompanied by a Deed of Real ;state .ort%a%e o*er a piece of real propertyupon which their con'u%al home was built! The spouses further a%reed to put up a surety bondat the rate of 7h7 &8+888 per #+888 chics deli*ered by -.6! The Deed of Real ;state.ort%a%e extended to Spouses Ramos a maximum credit line of 7h7 /+888 payable withinan indefinite period with an interest of twel*e percent 1#&2 per annum! "&$

The Deed of Real ;state .ort%a%e contained the followin% pro*ision@

E);R;>S+ the .ORT->-ORHS hasHha*e a%reed to %uarantee and secure the full and

faithful compliance of ".ORT->-ORSA$obli%ationHs with the .ORT->-;; by a First Real;state .ort%a%e in fa*or of the .ORT->-;;+ o*er a # parcel of land and the impro*ements

existin% thereon+ situated in the 5arrioHs of 5anaybanay+ .unicipality of ,ipa 6ity+ 7ro*inceof 5atan%as+ 7hilippines+ hisHherHtheir titleHs thereto bein% e*idenced by Transfer 6ertificateHs

No!Hs T40? of the Re%istry of Deeds for the 7ro*ince of 5atan%as in the amount of TEO)NDR;D FIFT;;N T)OS>ND 17 /+888!882+ 7hilippine 6urrency+ which themaximum credit line payable within a x x x day term and to secure the payment of the same

plus interest of twel*e percent 1#&2 per annum!

Spouses Ramos e*entually were unable to settle their account with -.6! They alle%ed thatthey suffered business losses because of the ne%li%ence of -.6 and its *iolation of the

-rowers 6ontract!"($

On .arch (#+ #00ct No! (#(/+ asamended+ or$n $ct to 7egu!ate the Sa!e o# Propert3 under Specia! Po/ers %nserted in or

$nnexed to 7ea! :state 6ortgages! They liewise claimed that there was no sheriffAs affida*itto pro*e compliance with the requirements on postin% and publication of notices! It wasfurther alle%ed that the Deed of Real ;state .ort%a%e had no fixed term! > prayer for moraland exemplary dama%es and attorneyAs fees was also included in the complaint! "9$ ,ibradoRamos alle%ed that+ when the property was foreclosed+ -.6 did not notify him at all of theforeclosure!"0$

Durin% the trial+ the parties a%reed to limit the issues to the followin%@ 1#2 the *alidity of

the Deed of Real ;state .ort%a%eC 1&2 the *alidity of the extra'udicial foreclosureC and 1(2 theparty liable for dama%es!"#8$

In its >nswer+ -.6 ar%ued that it repeatedly reminded Spouses Ramos of their

liabilities under the -rowers 6ontract! It ar%ued that it was compelled to foreclose themort%a%e because of Spouses RamosA failure to pay their obli%ation! -.6 insisted that it hadobser*ed all the requirements of postin% and publication of notices under >ct No! (#(/!"##$

T&+ Rli" o/ )&+ Tri!l $or)

)oldin% in fa*or of Spouses Ramos+ the trial court ruled that the Deed of Real ;state

.ort%a%e was *alid e*en if its term was not fixed! Since the duration of the term was made to

depend exclusi*ely upon the will of the debtors4spouses+ the trial court cited 'urisprudence andsaid that Jthe obli%ation is not due and payable until an action is commenced by the mort%a%ee
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a%ainst the mort%a%or for the purpose of ha*in% the court fix the date on and after which theinstrument is payable and the date of maturity is fixed in pursuance thereto!K"#&$

The trial court held that the action of -.6 in mo*in% for the foreclosure of the spousesA

properties was premature+ because the latterAs obli%ation under their contract was not yet due!

The trial court awarded attorneyAs fees because of the premature action taen by -.6in filin% extra'udicial foreclosure proceedin%s before the obli%ation of the spouses becamedue!

The RT6 ruled+ thus@

E);R;FOR;+ premises considered+ 'ud%ment is rendered as follows@#! The ;xtra4:udicial Foreclosure 7roceedin%s under docet no! 8#8

>! E);T);R "T); 6>$ .>3 6ONSID;R ISS;S NOT >,,;-;D >ND

DIS6SS;D IN T); ,OE;R 6ORT >ND ,I;EIS; NOT R>IS;D 53 T);7>RTI;S ON >77;>,+ T);R;FOR; )>D D;6ID;D T); 6>S; NOT IN >66ORDEIT) ,>E >ND >77,I6>5,; D;6ISIONS OF T); S7R;.; 6ORT!5! E);T);R "T); 6>$ ;RR;D IN R,IN- T)>T 7;TITION;R -.6 .>D; NOD;.>ND TO R;S7OND;NT S7OS;S FOR T); F,, 7>3.;NT OF T);IRO5,I->TION 6ONSID;RIN- T)>T T); ,;TT;R D>T;D .>R6) (#+ #00< OF7;TITION;R -.6 TO R;S7OND;NT S7OS;S IS T>NT>.ONT TO > FIN>,D;.>ND TO 7>3+ T);R;FOR; IT D;7>RT;D FRO. T); >66;7T;D >ND S>,6ORS; OF :DI6I>, 7RO6;;DIN-S!"#

-.6 asserts that since the issue on the existence of the demand letter was not raised in

the trial court+ the 6>+ by considerin% such issue+ *iolated the basic requirements of fair play+'ustice+ and due process!"#9$

In their 6omment+"#0$ respondents4spouses a*er that the 6> has ample authority to rule

on matters not assi%ned as errors on appeal if these are indispensable or necessary to the 'ustresolution of the pleaded issues!

InDiamonon v. Department o# 2a&or and :mp!o3ment+"&8$Ee explained that anappellate court has a broad discretionary power in wai*in% the lac of assi%nment of errors inthe followin% instances@
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1a2 -rounds not assi%ned as errors but affectin% the 'urisdiction of the court o*er the sub'ectmatterC1b2 .atters not assi%ned as errors on appeal but are e*idently plain or clerical errors withincontemplation of lawC1c2 .atters not assi%ned as errors on appeal but consideration of which is necessary in arri*in%at a 'ust decision and complete resolution of the case or to ser*e the interests of a 'ustice or toa*oid dispensin% piecemeal 'usticeC

1d2 .atters not specifically assi%ned as errors on appeal but raised in the trial court and arematters of record ha*in% some bearin% on the issue submitted which the parties failed to raiseor which the lower court i%noredC1e2 .atters not assi%ned as errors on appeal but closely related to an error assi%nedC1f2 .atters not assi%ned as errors on appeal but upon which the determination of a question

properly assi%ned+ is dependent!

7ara%raph 1c2 abo*e applies to the instant case+ for there would be a 'ust and completeresolution of the appeal if there is a rulin% on whether the Spouses Ramos were actually indefault of their obli%ation to -.6!

4!' )&+r+ '//i(i+") #+;!"#>

Ee now %o to the second issue raised by -.6! -.6 asserts error on the part of the6> in findin% that no demand was made on Spouses Ramos to pay their obli%ation! On thecontrary+ it claims that its .arch (#+ #00< letter is ain to a demand!

Ee disa%ree!

There are three requisites necessary for a findin% of default! irst+ the obli%ation isdemandable and liquidatedCsecond+ the debtor delays performanceC and third+ the creditor

'udicially or extra'udicially requires the debtorAs performance!"$

>ccordin% to the 6>+ -.6 did not mae a demand on Spouses Ramos but merely

requested them to %o to -.6As office to discuss the settlement of their account! In spite of thelac of demand made on the spouses+ howe*er+ -.6 proceeded with the foreclosure

proceedin%s! Neither was there any pro*ision in the Deed of Real ;state .ort%a%e allowin%-.6 to extra'udicially foreclose the mort%a%e without need of demand!

Indeed+ >rticle ##=0 of the 6i*il 6ode on delay requires the followin%@

Those obli%ed to deli*er or to do somethin% incur in delay from the time the obli%ee'udicially or extra'udicially demands from them the fulfilment of their obli%ation! )owe*er+ the demand by the creditor shall not be necessary in order that delay mayexist@

1#2 Ehen the obli%ation or the law expressly so declaresC x x x

>s the contract in the instant case carries no such pro*ision on demand not bein%necessary for delay to exist+ Ee a%ree with the appellate court that -.6 should ha*e firstmade a demand on the spouses before proceedin% to foreclose the real estate mort%a%e!

Deve!opment 4an o# the Phi!ippines v. 2icuananfinds application to the instant case@The issue of whether demand was made before the foreclosure was effected is essential! Ifdemand was made and duly recei*ed by the respondents and the latter still did not pay+ thenthey were already in default and foreclosure was proper! )owe*er+ if demand was not made+

then the loans had not yet become due and demandable! This meant that respondents had notdefaulted in their payments and the foreclosure by petitioner was premature! or+(lo'r+ i'

In turn+ whether or not demand was made is a question of fact! "&($This petition filed

under Rule ?/ of the Rules of 6ourt shall raise only questions of law! For a question to be oneof law+ it must not in*ol*e an examination of the probati*e *alue of the e*idence presented bythe liti%ants or any of them! The resolution of the issue must rest solely on what the law

pro*ides on the %i*en set of circumstances! Once it is clear that the issue in*ites a re*iew ofthe e*idence presented+ the question posed is one of fact! "&?$ It need not be reiterated that this6ourt is not a trier of facts! "&/$Ee will defer to the factual findin%s of the trial court+ because

petitioner -.6 has not shown any circumstances main% this case an exception to the rule!

4%EREORE+ the petition is DENIED! The 6> Decision in 6>4-!R! 6R4)!6! No! 9/?88is AIRMED!

SO ORDERED.

$RU


25/94

S;6OND DIVISION

[G.R. No. 12665. M!r(& 15, 2000]

RUDENTIAL BAN,petitioner, vs. $OURT O AEALS !"# LETI$IA TUASI-

:ALENUELA Hoi"+# * &'!"# r!"(i'(o :!l+"+l!, respondents. E#-p;-i'

D E $ I S I O N

UISUMBING,J.3

This appeal by certiorariunder Rule ?/ of the Rules of 6ourt sees to annul and set aside theDecision dated :anuary (#+ #00=+ and the Resolution dated :uly &+ #00ppeals in 6> -!R! 6V No! (//(&+ which re*ersed the 'ud%ment of the Re%ional Trial 6ourtof Valenuela+ .etro .anila+ 5ranch #ccount No! /


26/94

IN T); >5S;N6; OF ;VID;N6; >S FOND 53 T); TRI>, 6ORT+ >E>RD;D7/8+888!88 53 E>3 OF ;;.7,>R3 D>.>-;S! 6o4urt

IV! E);T);R OR NOT T); R;S7OND;NT 6ORT OF >77;>,S >6T;D EIT)-R>V; >5S; OF DIS6R;TION E);R; ;V;N IN T); >5S;N6; OF ;VID;N6;+>E>RD;D >TTORN;3S F;;S!

Simply stated+ the issue is whether the respondent court erred and %ra*ely abused its discretionin awardin% moral and exemplary dama%es and attorneys fees to be paid by petitioner to

pri*ate respondent!

7etitioner claims that %enerally the factual findin%s of the lower courts are final and bindin%upon this 6ourt! )owe*er+ there are exceptions to this rule! One is where the trial court and the6ourt of >ppeals had arri*ed at di*erse factual findin%s! "?$7etitioner faults the respondentcourt from de*iatin% from the basic rule that findin% of facts by the trial court is entitled to%reat wei%ht+ because the trial court had the opportunity to obser*e the deportment of witnessand the e*aluation of e*idence presented durin% the trial! 7etitioner contends that the appellatecourt %ra*ely abused its discretion when it awarded dama%es to the plaintiff+ e*en in the fac

compilation of obligations and cotracts cases for prelims

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