Boston Bank of the Philippines v Peral Manalo and Carlos Manalo

8/13/2019 Boston Bank of the Philippines v Peral Manalo and Carlos Manalo

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Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G. R. No. 158149 February 9, 2006

BOSTON BN! OF T"E P"#$#PP#NES, %&or'er(y BN! OF COMMERCE), Petitioner,

vs.

PER$ P. MN$O a*+ CR$OS MN$O, R., Respondents.

D ! I S I O N

C$$EO, SR., J.:

"efore us is a Petition for Revie# on !ertiorari of the Decision$ of the !ourt of %ppeals &!%' in !%(

).R. !V No. *+*- affirin/, on appeal, the Decision0 of the Re/ional Trial !ourt &RT!' of 1ue2on

!it3, "ranch 4-, in !ivil !ase No. 1(-4(546.

The %ntecedents

The 7avierville state, Inc. &7I' #as the o#ner of parcels of land in 1ue2on !it3, 8no#n as the

7avierville state Subdivision, #ith an area of *0 hectares. 7I caused the subdivision of the

propert3 into residential lots, #hich #as then offered for sale to individual lot bu3ers.5

On Septeber -, $49+, 7I, throu/h its )eneral Mana/er, %ntonio Raos, as vendor, and The

Overseas "an8 of Manila &O"M', as vendee, e:ecuted a ;Deed of Sale of Real state; over soe

residential lots in the subdivision, includin/ <ot $, "loc8 0, #ith an area of 46+. s=uare eters, and

<ot 0, "loc8 0, #ith an area of -50.-6 s=uare eters. The transaction #as sub>ect to the approval of

the "oard of Directors of O"M, and #as covered b3 real estate ort/a/es in favor of the PhilippineNational "an8 as securit3 for its account aountin/ to P,$-+,666.66, and the !entral "an8 of the

Philippines as securit3 for advances aountin/ to P00,$-,$45.+*.* Nevertheless, 7I continued

sellin/ the residential lots in the subdivision as a/ent of O"M.

Soetie in $4+0, then 7I president erito Raos, ?r. contracted the services of n/r. !arlos

Manalo, ?r. #ho #as in business of drillin/ deep #ater #ells and installin/ pups under the business

nae @urricane !oercial, Inc. For P5*,--+.99, Manalo, ?r. installed a #ater pup at RaosA

residence at the corner of %urora "oulevard and Batipunan %venue, 1ue2on !it3. Manalo, ?r. then

proposed to 7I, throu/h Raos, to purchase a lot in the 7avierville subdivision, and offered as part

of the do#npa3ent the P5*,--+.99 Raos o#ed hi. 7I, throu/h Raos, a/reed. In a letter

dated Februar3 -, $4+0, Raos re=uested Manalo, ?r. to choose #hich lots he #anted to bu3 so thatthe price of the lots and the ters of pa3ent could be fi:ed and incorporated in the conditional

sale.9 Manalo, ?r. et #ith Raos and infored hi that he and his #ife Perla had chosen <ots $

and 0 of "loc8 0 #ith a total area of $,+*6.5 s=uare eters.

In a letter dated %u/ust 00, $4+0 to Perla Manalo, Raos confired the reservation of the lots. @e

also pe//ed the price of the lots at P066.66 per s=uare eter, or a total of P5*-,696.66, #ith a 06C

do#n pa3ent of the purchase price aountin/ to P94,9$0.66 less the P5*,--+.99 o#in/ fro

http://www.lawphil.net/judjuris/juri2006/feb2006/gr_158149_2006.html#fnt1
















Raos, pa3able on or before Deceber 5$, $4+0 the correspondin/ !ontract of !onditional Sale

#ould then be si/ned on or before the sae date, but if the sellin/ operations of 7I resued after

Deceber 5$, $4+0, the balance of the do#npa3ent #ould fall due then, and the spouses #ould

si/n the aforesaid contract #ithin five &' da3s fro receipt of the notice of resuption of such sellin/

operations. It #as also stated in the letter that, in the eantie, the spouses a3 introduce

iproveents thereon sub>ect to the rules and re/ulations iposed b3 7I in the subdivision. PerlaManalo confored to the letter a/reeent.+

The spouses Manalo too8 possession of the propert3 on Septeber 0, $4+0, constructed a house

thereon, and installed a fence around the perieter of the lots.

In the eantie, an3 of the lot bu3ers refused to pa3 their onthl3 installents until the3 #ere

assured that the3 #ould be issued Torrens titles over the lots the3 had purchased. - The spouses

Manalo #ere notified of the resuption of the sellin/ operations of 7I.4 @o#ever, the3 did not pa3

the balance of the do#npa3ent on the lots because Raos failed to prepare a contract of

conditional sale and transit the sae to Manalo for their si/nature. On %u/ust $*, $4+5, Perla

Manalo #ent to the 7I office and re=uested that the pa3ent of the aount representin/ the

balance of the do#npa3ent be deferred, #hich, ho#ever, 7I re>ected. On %u/ust $6, $4+5, 7Ifurnished her #ith a stateent of their account as of ?ul3 5$, $4+5, sho#in/ that the3 had a balance

of P5*,+0*.5* on the do#npa3ent of the t#o lots after deductin/ the account of Raos,

plus P5,-$4.9-$6 interest thereon fro Septeber $, $4+0 to ?ul3 5$, $4+5, and that the interests on

the unpaid balance of the purchase price ofP0+-,**-.66 fro Septeber $, $4+0 to ?ul3 5$, $4+5

aounted to P56,904.0-.$$ The spouses #ere infored that the3 #ere bein/ billed for said unpaid

interests.$0

On ?anuar3 0, $4+*, the spouses Manalo received another stateent of account fro 7I,

inclusive of interests on the purchase price of the lots.$5 In a letter dated %pril 9, $4+* to 7I,

Manalo, ?r. stated the3 had not 3et received the notice of resuption of <eiAs sellin/ operations, and

that there had been no arran/eent on the pa3ent of interests hence, the3 should not be char/ed#ith interest on the balance of the do#npa3ent on the propert3.$* Further, the3 deanded that a

deed of conditional sale over the t#o lots be transitted to the for their si/natures. @o#ever, 7I

i/nored the deands. !onse=uentl3, the spouses refused to pa3 the balance of the do#npa3ent of

the purchase price.$

Soetie in ?une $4+9, Manalo, ?r. constructed a business si/n in the side#al8 near his house. In a

letter dated ?une $+, $4+9, 7I infored Manalo, ?r. that business si/ns #ere not allo#ed alon/ the

side#al8. It deanded that he reove the sae, on the /round, aon/ others, that the side#al8

#as not part of the land #hich he had purchased on installent basis fro 7I.$9 Manalo, ?r. did not

respond. 7I reiterated its deand on Septeber $, $4++. $+

Subse=uentl3, 7I turned over its sellin/ operations to O"M, includin/ the receivables for lots

alread3 contracted and those 3et to be sold.$- On Deceber -, $4++, O"M #arned Manalo, ?r., that

;puttin/ up of a business si/n is specificall3 prohibited b3 their contract of conditional sale; and that

his failure to copl3 #ith its deand #ould ipel it to avail of the reedies as provided in their

contract of conditional sale.$4

Mean#hile, on Deceber , $4+4, the Re/ister of Deeds issued Transfer !ertificate of Title &T!T'

No. T(09-00 over <ot $, "loc8 0, and T!T No. T(09-05 over <ot 0, "loc8 0, in favor of the































O"M.06 The lien in favor of the !entral "an8 of the Philippines #as annotated at the dorsal portion of

said title, #hich #as later cancelled on %u/ust *, $4-6.0$

Subse=uentl3, the !oercial "an8 of Manila &!"M' ac=uired the 7avierville state fro O"M.

!"M #rote dilberto N/, the president of 7avierville @oeo#ners %ssociation that, as of ?anuar3

5$, $4-5, Manalo, ?r. #as one of the lot bu3ers in the subdivision.00 !"M reiterated in its letter to N/

that, as of ?anuar3 0*, $4-*, Manalo #as a hoeo#ner in the subdivision. 05

In a letter dated %u/ust , $4-9, the !"M re=uested Perla Manalo to stop an3 on(/oin/ construction

on the propert3 since it &!"M' #as the o#ner of the lot and she had no perission for such

construction.0* She a/reed to have a conference eetin/ #ith !"M officers #here she infored

the that her husband had a contract #ith O"M, throu/h 7I, to purchase the propert3. Ehen

as8ed to prove her clai, she proised to send the docuents to !"M. @o#ever, she failed to do

so.0 On Septeber , $4-9, !"M reiterated its deand that it be furnished #ith the docuents

proised,09 but Perla Manalo did not respond.

On ?ul3 0+, $4-+, !"M filed a coplaint0+ for unla#ful detainer a/ainst the spouses #ith the

Metropolitan Trial !ourt of 1ue2on !it3. The case #as doc8eted as !ivil !ase No. $9$-. !"Mclaied that the spouses had been unla#full3 occup3in/ the propert3 #ithout its consent and that

despite its deands, the3 refused to vacate the propert3. The latter alle/ed that the3, as vendors,

and 7I, as vendee, had a contract of sale over the lots #hich had not 3et been rescinded.0-

Ehile the case #as pendin/, the spouses Manalo #rote !"M to offer an aicable settleent,

proisin/ to abide b3 the purchase price of the propert3 &P5$5,$+0.5*', per a/reeent #ith 7I,

throu/h Raos. @o#ever, on ?ul3 0-, $4--, !"M #rote the spouses, throu/h counsel, proposin/

that the price of P$,66.66 per s=uare eter of the propert3 #as a reasonable startin/ point for

ne/otiation of the settleent.04 The spouses re>ected the counter proposal, 56 ephasi2in/ that the3

#ould abide b3 their ori/inal a/reeent #ith 7I. !"M oved to #ithdra# its coplaint 5$ because of

the issues raised.50

In the eantie, the !"M #as renaed the "oston "an8 of the Philippines. %fter !"M filed its

coplaint a/ainst the spouses Manalo, the latter filed a coplaint for specific perforance and

daa/es a/ainst the ban8 before the Re/ional Trial !ourt &RT!' of 1ue2on !it3 on October 5$,

$4-4.

The plaintiffs alle/ed therein that the3 had al#a3s been read3, able and #illin/ to pa3 the

installents on the lots sold to the b3 the defendantAs reote predecessor(in(interest, as i/ht be

or stipulated in the contract of sale, but no contract #as forthcoin/ the3 constructed their house

#orth P0,666,666.66 on the propert3 in /ood faith Manalo, ?r., infored the defendant, throu/h its

counsel, on October $, $4-- that he #ould abide b3 the ters and conditions of his ori/inal

a/reeent #ith the defendantAs predecessor(in(interest durin/ the hearin/ of the e>ectent case onOctober $9, $4--, the3 offered to pa3 P5$5,$+0.5* representin/ the balance on the purchase price

of said lots such tender of pa3ent #as re>ected, so that the sub>ect lots could be sold at

considerabl3 hi/her prices to third parties.

Plaintiffs further alle/ed that upon pa3ent of the P5$5,$+0.5*, the3 #ere entitled to the e:ecution

and deliver3 of a Deed of %bsolute Sale coverin/ the sub>ect lots, sufficient in for and substance to

































transfer title thereto free and clear of an3 and all liens and encubrances of #hatever 8ind and

nature.55 The plaintiffs pra3ed that, after due hearin/, >ud/ent be rendered in their favor, to #it

E@RFOR, it is respectfull3 pra3ed that after due hearin/

&a' The defendant should be ordered to e:ecute and deliver a Deed of %bsolute Sale over

sub>ect lots in favor of the plaintiffs after pa3ent of the su of P5$5,$+0.5*, sufficient infor and substance to transfer to the titles thereto free and clear of an3 and all liens and

encubrances of #hatever 8ind or nature

&b' The defendant should be held liable for oral and e:eplar3 daa/es in the aounts

of P566,666.66 and P56,666.66, respectivel3, for not proptl3 e:ecutin/ and deliverin/ to

plaintiff the necessar3 !ontract of Sale, not#ithstandin/ repeated deands therefor and for

havin/ been constrained to en/a/e the services of undersi/ned counsel for #hich the3

a/reed to pa3 attorne3As fees in the su of P6,666.66 to enforce their ri/hts in the preises

and appearance fee of P66.66

&c' %nd for such other and further relief as a3 be >ust and e=uitable in the preises.5*

In its %ns#er to the coplaint, the defendant interposed the follo#in/ affirative defenses &a'

plaintiffs had no cause of action a/ainst it because the %u/ust 00, $4+0 letter a/reeent bet#een

7I and the plaintiffs #as not bindin/ on it and &b' ;it had no record of an3 contract to sell e:ecuted

b3 it or its predecessor, or of an3 stateent of accounts fro its predecessors, or records of

pa3ents of the plaintiffs or of an3 docuents #hich entitled the to the possession of the

lots.;5 The defendant, li8e#ise, interposed counterclais for daa/es and attorne3As fees and

pra3ed for the eviction of the plaintiffs fro the propert3.59

Mean#hile, in a letter dated ?anuar3 0, $445, plaintiffs, throu/h counsel, proposed an aicable

settleent of the case b3 pa3in/ P4*0,9*-.+6, representin/ the balance of the purchase price of the

t#o lots based on the current ar8et value. 5+ @o#ever, the defendant re>ected the sae and insistedthat for the saller lot, the3 pa3P*,66,666.66, the current ar8et value of the propert3.5- The

defendant insisted that it o#ned the propert3 since there #as no contract or a/reeent bet#een it

and the plaintiffsA relative thereto.

Durin/ the trial, the plaintiffs adduced in evidence the separate !ontracts of !onditional Sale

e:ecuted bet#een 7I and %lberto Soller54 %lfredo %/uila,*6 and Dra. lena Santos(Ro=ue*$ to prove

that 7I continued sellin/ residential lots in the subdivision as a/ent of O"M after the latter had

ac=uired the said lots.

For its part, defendant presented in evidence the letter dated %u/ust 00, $4+0, #here 7I proposed

to sell the t#o lots sub>ect to t#o suspensive conditions the pa3ent of the balance of the

do#npa3ent of the propert3, and the e:ecution of the correspondin/ contract of conditional sale.

Since plaintiffs failed to pa3, O"M conse=uentl3 refused to e:ecute the correspondin/ contract of

conditional sale and forfeited the P5*,-++.99 do#npa3ent for the t#o lots, but did not notif3 the

of said forfeiture.*0 It alle/ed that O"M considered the lots unsold because the titles thereto bore no

annotation that the3 had been sold under a contract of conditional sale, and the plaintiffs #ere not

notified of 7IAs resuption of its sellin/ operations.




























and the do#npa3ent on the propert3 reained unpaid as of Deceber 5$, $4+0, absent a #ritten

notice of cancellation of the contract to sell fro the ban8 or notarial deand therefor as re=uired b3

Republic %ct No. 90, the spouses had, at the ver3 least, a 96(da3 /race period fro ?anuar3 $,

$4+5 #ithin #hich to pa3 the sae.

"oston "an8 filed a otion for the reconsideration of the decision alle/in/ that there #as no

perfected contract to sell the t#o lots, as there #as no a/reeent bet#een 7I and the respondents

on the anner of pa3ent as #ell as the other ters and conditions of the sale. It further averred

that its clai for recover3 of possession of the aforesaid lots in its Meorandu dated Februar3 0-,

$44* filed before the trial court constituted a >udicial deand for rescission that satisfied the

re=uireents of the Ne# !ivil !ode. @o#ever, the appellate court denied the otion.

"oston "an8, no# petitioner, filed the instant petition for revie# on certiorari assailin/ the !% rulin/s.

It aintains that, as held b3 the !%, the records do not reflect an3 schedule of pa3ent of the -6C

balance of the purchase price, or P0+-,**-.66. Petitioner insists that unless the parties had a/reed

on the anner of pa3ent of the principal aount, includin/ the other ters and conditions of the

contract, there #ould be no e:istin/ contract of sale or contract to sell.*+ Petitioner avers that the

letter a/reeent to respondent spouses dated %u/ust 00, $4+0 erel3 confired their reservationfor the purchase of <ot Nos. $ and 0, consistin/ of $,+*6.5 s=uare eters, ore or less, at the price

of P066.66 per s=uare eter &or P5*-,696.66', the aount of the do#npa3ent thereon and the

application of the P5*,--+.66 due fro Raos as part of such do#npa3ent.

Petitioner asserts that there is no factual basis for the !% rulin/ that the ters and conditions

relatin/ to the pa3ent of the balance of the purchase price of the propert3 &as a/reed upon b3 7I

and other lot bu3ers in the sae subdivision' #ere also applicable to the contract entered into

bet#een the petitioner and the Respondents. It insists that such a rulin/ is contrar3 to la#, as it is

tantaount to copellin/ the parties to a/ree to soethin/ that #as not even discussed, thus,

violatin/ their freedo to contract. "esides, the situation of the respondents cannot be e=uated #ith

those of the other lot bu3ers, as, for one thin/, the respondents ade a partial pa3ent on thedo#npa3ent for the t#o lots even before the e:ecution of an3 contract of conditional sale.

Petitioner posits that, even on the assuption that there #as a perfected contract to sell bet#een the

parties, nevertheless, it cannot be copelled to conve3 the propert3 to the respondents because the

latter failed to pa3 the balance of the do#npa3ent of the propert3, as #ell as the balance of -6C of

the purchase price, thus resultin/ in the e:tinction of its obli/ation to conve3 title to the lots to the

Respondents.

%nother e/re/ious error of the !%, petitioner avers, is the application of Republic %ct No. 90. It

insists that such la# applies onl3 to a perfected a/reeent or perfected contract to sell, not in this

case #here the do#npa3ent on the purchase price of the propert3 #as not copletel3 paid, and no

installent pa3ents #ere ade b3 the bu3ers.

Petitioner also faults the !% for declarin/ that petitioner failed to serve a notice on the respondents

of cancellation or rescission of the contract to sell, or notarial deand therefor. Petitioner insists that

its %u/ust , $4-9 letter re=uirin/ respondents to vacate the propert3 and its coplaint for e>ectent

in !ivil !ase No. $9$- filed in the Metropolitan Trial !ourt aounted to the re=uisite deand for a

rescission of the contract to sell. Moreover, the action of the respondents belo# #as barred b3





laches because despite deands, the3 failed to pa3 the balance of the purchase price of the lots &let

alone the do#npa3ent' for a considerable nuber of 3ears.

For their part, respondents assert that as lon/ as there is a eetin/ of the inds of the parties to a

contract of sale as to the price, the contract is valid despite the partiesA failure to a/ree on the

anner of pa3ent. In such a situation, the balance of the purchase price #ould be pa3able on

deand, conforabl3 to %rticle $$94 of the Ne# !ivil !ode. The3 insist that the la# does not re=uire

a part3 to a/ree on the anner of pa3ent of the purchase price as a prere=uisite to a valid contract

to sell. The respondents cite the rulin/ of this !ourt in "uenaventura v. !ourt of %ppeals*- to support

their subission.

The3 ar/ue that even if the anner and tieline for the pa3ent of the balance of the purchase

price of the propert3 is an essential re=uisite of a contract to sell, nevertheless, as sho#n b3 their

letter a/reeent of %u/ust 00, $4+0 #ith the O"M, throu/h 7I and the other letters to the, an

a/reeent #as reached as to the anner of pa3ent of the balance of the purchase price. The3

point out that such letters referred to the ters of the ters of the deeds of conditional sale e:ecuted

b3 7I in favor of the other lot bu3ers in the subdivision, #hich contained unifor ters of $06 e=ual

onthl3 installents &e:cludin/ the do#npa3ent, but inclusive of pre(coputed interests'. Therespondents assert that 7I #as a real estate bro8er and 8ne# that the contracts involvin/

residential lots in the subdivision contained unifor ters as to the anner and tieline of the

pa3ent of the purchase price of said lots.

Respondents further posit that the ters and conditions to be incorporated in the ;correspondin/

contract of conditional sale; to be e:ecuted b3 the parties #ould be the sae as those contained in

the contracts of conditional sale e:ecuted b3 lot bu3ers in the subdivision. %fter all, the3 aintain,

the contents of the correspondin/ contract of conditional sale referred to in the %u/ust 00, $4+0

letter a/reeent envisa/ed those contained in the contracts of conditional sale that 7I and other lot

bu3ers e:ecuted. Respondents cite the rulin/ of this !ourt in Mitsui "ussan Baisha v. Manila .R.R.

J <. !o.*4

The respondents aver that the issues raised b3 the petitioner are factual, inappropriate in a petition

for revie# on certiorari under Rule * of the Rules of !ourt. The3 assert that petitioner adopted a

theor3 in liti/atin/ the case in the trial court, but chan/ed the sae on appeal before the !%, and

a/ain in this !ourt. The3 ar/ue that the petitioner is estopped fro adoptin/ a ne# theor3 contrar3 to

those it had adopted in the trial and appellate courts. Moreover, the e:istence of a contract of

conditional sale #as aditted in the letters of 7I and O"M. The3 aver that the3 becae o#ners of

the lots upon deliver3 to the b3 7I.

The issues for resolution are the follo#in/ &$' #hether the factual issues raised b3 the petitioner are

proper &0' #hether petitioner or its predecessors(in(interest, the 7I or the O"M, as seller, and the

respondents, as bu3ers, for/ed a perfect contract to sell over the propert3 &5' #hether petitioner is

estopped fro contendin/ that no such contract #as for/ed b3 the parties and &*' #hether

respondents has a cause of action a/ainst the petitioner for specific perforance.

The rule is that before this !ourt, onl3 le/al issues a3 be raised in a petition for revie# on

certiorari. The reason is that this !ourt is not a trier of facts, and is not to revie# and calibrate the

evidence on record. Moreover, the findin/s of facts of the trial court, as affired on appeal b3 the







!ourt of %ppeals, are conclusive on this !ourt unless the case falls under an3 of the follo#in/

e:ceptions

&$' #hen the conclusion is a findin/ /rounded entirel3 on speculations, surises and con>ectures &0'

#hen the inference ade is anifestl3 ista8en, absurd or ipossible &5' #here there is a /rave

abuse of discretion &*' #hen the >ud/ent is based on a isapprehension of facts &' #hen the

findin/s of fact are conflictin/ &9' #hen the !ourt of %ppeals, in a8in/ its findin/s #ent be3ond the

issues of the case and the sae is contrar3 to the adissions of both appellant and appellee &+'

#hen the findin/s are contrar3 to those of the trial court &-' #hen the findin/s of fact are conclusions

#ithout citation of specific evidence on #hich the3 are based &4' #hen the facts set forth in the

petition as #ell as in the petitionersA ain and repl3 briefs are not disputed b3 the respondents and

&$6' #hen the findin/s of fact of the !ourt of %ppeals are preised on the supposed absence of

evidence and contradicted b3 the evidence on record.6

Ee have revie#ed the records and #e find that, indeed, the rulin/ of the appellate court disissin/

petitionerAs appeal is contrar3 to la# and is not supported b3 evidence. % careful e:aination of the

factual bac8drop of the case, as #ell as the antecedental proceedin/s constrains us to hold that

petitioner is not barred fro assertin/ that 7I or O"M, on one hand, and the respondents, on theother, failed to for/e a perfected contract to sell the sub>ect lots.

It ust be stressed that the !ourt a3 consider an issue not raised durin/ the trial #hen there is

plain error.$ %lthou/h a factual issue #as not raised in the trial court, such issue a3 still be

considered and resolved b3 the !ourt in the interest of substantial >ustice, if it finds that to do so is

necessar3 to arrive at a >ust decision,0 or #hen an issue is closel3 related to an issue raised in the

trial court and the !ourt of %ppeals and is necessar3 for a >ust and coplete resolution of the

case.5 Ehen the trial court decides a case in favor of a part3 on certain /rounds, the !ourt a3

base its decision upon soe other points, #hich the trial court or appellate court i/nored or

erroneousl3 decided in favor of a part3.*

In this case, the issue of #hether 7I had a/reed to allo# the respondents to pa3 the purchase price

of the propert3 #as raised b3 the parties. The trial court ruled that the parties had perfected a

contract to sell, as a/ainst petitionerAs clai that no such contract e:isted. @o#ever, in resolvin/ the

issue of #hether the petitioner #as obli/ed to sell the propert3 to the respondents, #hile the !%

declared that 7I or O"M and the respondents failed to a/ree on the schedule of pa3ent of the

balance of the purchase price of the propert3, it ruled that 7I and the respondents had for/ed a

contract to sell hence, petitioner is entitled to ventilate the issue before this !ourt.

Ee a/ree #ith petitionerAs contention that, for a perfected contract of sale or contract to sell to e:ist

in la#, there ust be an a/reeent of the parties, not onl3 on the price of the propert3 sold, but also

on the anner the price is to be paid b3 the vendee.

Knder %rticle $*- of the Ne# !ivil !ode, in a contract of sale, #hether absolute or conditional, one

of the contractin/ parties obli/es hiself to transfer the o#nership of and deliver a deterinate thin/,

and the other to pa3 therefor a price certain in one3 or its e=uivalent. % contract of sale is perfected

at the oent there is a eetin/ of the inds upon the thin/ #hich is the ob>ect of the contract and

the price. Fro the averent of perfection, the parties are bound, not onl3 to the fulfillent of #hat

has been e:pressl3 stipulated, but also to all the conse=uences #hich, accordin/ to their nature,

a3 be in 8eepin/ #ith /ood faith, usa/e and la#. On the other hand, #hen the contract of sale or
















to sell is not perfected, it cannot, as an independent source of obli/ation, serve as a bindin/ >uridical

relation bet#een the parties.9

% definite a/reeent as to the price is an essential eleent of a bindin/ a/reeent to sell personal

or real propert3 because it seriousl3 affects the ri/hts and obli/ations of the parties. Price is an

essential eleent in the foration of a bindin/ and enforceable contract of sale. The fi:in/ of the

price can never be left to the decision of one of the contractin/ parties. "ut a price fi:ed b3 one of

the contractin/ parties, if accepted b3 the other, /ives rise to a perfected sale.+

It is not enou/h for the parties to a/ree on the price of the propert3. The parties ust also a/ree on

the anner of pa3ent of the price of the propert3 to /ive rise to a bindin/ and enforceable contract

of sale or contract to sell. This is so because the a/reeent as to the anner of pa3ent /oes into

the price, such that a disa/reeent on the anner of pa3ent is tantaount to a failure to a/ree on

the price.-

In a contract to sell propert3 b3 installents, it is not enou/h that the parties a/ree on the price as

#ell as the aount of do#npa3ent. The parties ust, li8e#ise, a/ree on the anner of pa3ent of

the balance of the purchase price and on the other ters and conditions relative to the sale. ven ifthe bu3er a8es a do#npa3ent or portion thereof, such pa3ent cannot be considered as

sufficient proof of the perfection of an3 purchase and sale bet#een the parties. Indeed, this !ourt

ruled in Velasco v. !ourt of %ppeals4 that

It is not difficult to /lean fro the afore=uoted averents that the petitioners theselves adit that

the3 and the respondent still had to eet and a/ree on ho# and #hen the do#n(pa3ent and the

installent pa3ents #ere to be paid. Such bein/ the situation, it cannot, therefore, be said that a

definite and fir sales a/reeent bet#een the parties had been perfected over the lot in =uestion.

Indeed, this !ourt has alread3 ruled before that a definite a/reeent on the anner of pa3ent of

the purchase price is an essential eleent in the foration of a bindin/ and enforceable contract of

sale. The fact, therefore, that the petitioners delivered to the respondent the su ofP$6,666.66 as

part of the do#npa3ent that the3 had to pa3 cannot be considered as sufficient proof of the

perfection of an3 purchase and sale a/reeent bet#een the parties herein under article $*-0 of the

Ne# !ivil !ode, as the petitioners theselves adit that soe essential atter G the ters of

pa3ent G still had to be utuall3 covenanted.96

Ee a/ree #ith the contention of the petitioner that, as held b3 the !%, there is no sho#in/, in the

records, of the schedule of pa3ent of the balance of the purchase price on the propert3 aountin/

to P0+-,**-.66. Ee have eticulousl3 revie#ed the records, includin/ RaosA Februar3 -, $4+0

and %u/ust 00, $4+0 letters to respondents,9$ and find that said parties confined theselves to

a/reein/ on the price of the propert3 &P5*-,696.66', the 06C do#npa3ent of the purchase price

&P94,9$0.66', and credited respondents for theP5*,--+.66 o#in/ fro Raos as part of the 06C

do#npa3ent. The tieline for the pa3ent of the balance of the do#npa3ent &P5*,+0*.5*' #as

also a/reed upon, that is, on or before 7I resued its sellin/ operations, on or before Deceber

5$, $4+0, or #ithin five &' da3s fro #ritten notice of such resuption of sellin/ operations. The

parties had also a/reed to incorporate all the ters and conditions relatin/ to the sale, inclusive of

the ters of pa3ent of the balance of the purchase price and the other substantial ters and

conditions in the ;correspondin/ contract of conditional sale,; to be later si/ned b3 the parties,

siultaneousl3 #ith respondentsA settleent of the balance of the do#npa3ent.

















Than8 3ou.

Ver3 trul3 3ours,

7%VIRVI<< ST%T, IN!. !ONFORM

"3

&Si/ned'

EMER#TO B. RMOS, R.

&Si/ned'

PER$ P. MN$O

President "u3er 95

"ased on these t#o letters, the deterination of the ters of pa3ent of the P0+-,**-.66 had 3et to

be a/reed upon on or before Deceber 5$, $4+0, or even after#ards, #hen the parties si/n the

correspondin/ contract of conditional sale.

?urisprudence is that if a aterial eleent of a conteplated contract is left for future ne/otiations,

the sae is too indefinite to be enforceable.

9*

%nd #hen an essential eleent of a contract isreserved for future a/reeent of the parties, no le/al obli/ation arises until such future a/reeent is

concluded.9

So lon/ as an essential eleent enterin/ into the proposed obli/ation of either of the parties reains

to be deterined b3 an a/reeent #hich the3 are to a8e, the contract is incoplete and

unenforceable.99 The reason is that such a contract is lac8in/ in the necessar3 =ualities of

definiteness, certaint3 and utualit3.9+

There is no evidence on record to prove that 7I or O"M and the respondents had a/reed, after

Deceber 5$, $4+0, on the ters of pa3ent of the balance of the purchase price of the propert3

and the other substantial ters and conditions relative to the sale. Indeed, the parties are in

a/reeent that there had been no contract of conditional sale ever e:ecuted b3 7I, O"M orpetitioner, as vendor, and the respondents, as vendees. 9-

The rulin/ of this !ourt in "uenaventura v. !ourt of %ppeals has no bearin/ in this case because the

issue of the anner of pa3ent of the purchase price of the propert3 #as not raised therein.

Ee re>ect the subission of respondents that the3 and Raos had intended to incorporate the ters

of pa3ent contained in the three contracts of conditional sale e:ecuted b3 7I and other lot bu3ers

in the ;correspondin/ contract of conditional sale,; #hich #ould later be si/ned b3 the. 94 Ee have

eticulousl3 revie#ed the respondentsA coplaint and find no such alle/ation therein.+6 Indeed,

respondents erel3 alle/ed in their coplaint that the3 #ere bound to pa3 the balance of the

purchase price of the propert3 ;in installents.; Ehen respondent Manalo, ?r. testified, he #as never

as8ed, on direct e:aination or even on cross(e:aination, #hether the ters of pa3ent of the

balance of the purchase price of the lots under the contracts of conditional sale e:ecuted b3 7I and

other lot bu3ers #ould for part of the ;correspondin/ contract of conditional sale; to be si/ned b3

the siultaneousl3 #ith the pa3ent of the balance of the do#npa3ent on the purchase price.

Ee note that, in its letter to the respondents dated ?une $+, $4+9, or alost three 3ears fro the

e:ecution b3 the parties of their %u/ust 00, $4+0 letter a/reeent, 7I stated, in part, that

respondents had purchased the propert3 ;on installent basis.;+$ @o#ever, in the said letter, 7I






















failed to state a specific aount for each installent, and #hether such pa3ents #ere to be ade

onthl3, sei(annuall3, or annuall3. %lso, respondents, as plaintiffs belo#, failed to adduce a shred

of evidence to prove that the3 #ere obli/ed to pa3 the P0+-,**-.66 onthl3, sei(annuall3 or

annuall3. The alle/ation that the pa3ent of the P0+-,**-.66 #as to be paid in installents is, thus,

va/ue and indefinite. !ase la# is that, for a contract to be enforceable, its ters ust be certain and

e:plicit, not va/ue or indefinite.

+0

There is no factual and le/al basis for the !% rulin/ that, based on the ters of pa3ent of the

balance of the purchase price of the lots under the contracts of conditional sale e:ecuted b3 7I and

the other lot bu3ers, respondents #ere obli/ed to pa3 the P0+-,**-.66 #ith pre(coputed interest of

$0C per annu in $06(onth installents. %s /leaned fro the rulin/ of the appellate court, it failed

to >ustif3 its use of the ters of pa3ent under the three ;contracts of conditional sale; as basis for

such rulin/, to #it

On the other hand, the records do not disclose the schedule of pa3ent of the purchase price, net of

the do#npa3ent. !onsiderin/, ho#ever, the !ontracts of !onditional Sale &:hs. ;N,; ;O; and ;P;'

entered into b3 7I #ith other lot bu3ers, it #ould appear that the subdivision lots sold b3 7I, under

contracts to sell, #ere pa3able in $06 e=ual onthl3 installents &e:clusive of the do#npa3ent butincludin/ pre(coputed interests' coencin/ on deliver3 of the lot to the bu3er.+5

"3 its rulin/, the !% unilaterall3 supplied an essential eleent to the letter a/reeent of 7I and the

Respondents. !ourts should not underta8e to a8e a contract for the parties, nor can it enforce one,

the ters of #hich are in doubt.+* Indeed, the !ourt ephasi2ed in !hua v. !ourt of %ppeals+ that it

is not the province of a court to alter a contract b3 construction or to a8e a ne# contract for the

parties its dut3 is confined to the interpretation of the one #hich the3 have ade for theselves,

#ithout re/ard to its #isdo or foll3, as the court cannot suppl3 aterial stipulations or read into

contract #ords #hich it does not contain.

Respondents, as plaintiffs belo#, failed to alle/e in their coplaint that the ters of pa3ent of

the P0+-,**-.66 to be incorporated in the ;correspondin/ contract of conditional sale; #ere those

contained in the contracts of conditional sale e:ecuted b3 7I and Soller, %/uila and Ro=ue.+9 The3

li8e#ise failed to prove such alle/ation in this !ourt.

The bare fact that other lot bu3ers #ere allo#ed to pa3 the balance of the purchase price of lots

purchased b3 the in $06 or $-6 onthl3 installents does not constitute evidence that 7I also

a/reed to /ive the respondents the sae ode and tieline of pa3ent of the P0+-,**-.66.

Knder Section 5*, Rule $56 of the Revised Rules of !ourt, evidence that one did a certain thin/ at

one tie is not adissible to prove that he did the sae or siilar thin/ at another tie, althou/h

such evidence a3 be received to prove habit, usa/e, pattern of conduct or the intent of the parties.

Siilar acts as evidence. G vidence that one did or did not do a certain thin/ at one tie is not

adissible to prove that he did or did not do the sae or a siilar thin/ at another tie but it a3

be received to prove a specific intent or 8no#led/e, identit3, plan, s3ste, schee, habit, custo or

usa/e, and the li8e.

@o#ever, respondents failed to alle/e and prove, in the trial court, that, as a atter of business

usa/e, habit or pattern of conduct, 7I /ranted all lot bu3ers the ri/ht to pa3 the balance of the















purchase price in installents of $06 onths of fi:ed aounts #ith pre(coputed interests, and that

7I and the respondents had intended to adopt such ters of pa3ent relative to the sale of the t#o

lots in =uestion. Indeed, respondents adduced in evidence the three contracts of conditional sale

e:ecuted b3 7I and other lot bu3ers erel3 to prove that 7I continued to sell lots in the

subdivision as sales a/ent of O"M after it ac=uired said lots, not to prove usa/e, habit or pattern of

conduct on the part of 7I to re=uire all lot bu3ers in the subdivision to pa3 the balance of thepurchase price of said lots in $06 onths. It further failed to prive that the trial court aditted the

said deeds++ as part of the testion3 of respondent Manalo, ?r.+-

@abit, custo, usa/e or pattern of conduct ust be proved li8e an3 other facts. !ourts ust contend

#ith the caveat that, before the3 adit evidence of usa/e, of habit or pattern of conduct, the offerin/

part3 ust establish the de/ree of specificit3 and fre=uenc3 of unifor response that ensures ore

than a ere tendenc3 to act in a /iven anner but rather, conduct that is sei(autoatic in nature.

The offerin/ part3 ust alle/e and prove specific, repetitive conduct that i/ht constitute evidence

of habit. The e:aples offered in evidence to prove habit, or pattern of evidence ust be nuerous

enou/h to base on inference of s3steatic conduct. Mere siilarit3 of contracts does not present the

8ind of sufficientl3 siilar circustances to out#ei/h the dan/er of pre>udice and confusion.

In deterinin/ #hether the e:aples are nuerous enou/h, and sufficientl3 re/ular, the 8e3 criteria

are ade=uac3 of saplin/ and uniforit3 of response. %fter all, habit eans a course of behavior of

a person re/ularl3 represented in li8e circustances.+4 It is onl3 #hen e:aples offered to establish

pattern of conduct or habit are nuerous enou/h to lose an inference of s3steatic conduct that

e:aples are adissible. The 8e3 criteria are ade=uac3 of saplin/ and uniforit3 of response or

ratio of reaction to situations.-6

There are cases #here the course of dealin/s to be follo#ed is defined b3 the usa/e of a particular

trade or ar8et or profession. %s e:postulated b3 ?ustice "en>ain !ardo2o of the Knited States

Supree !ourt ;<ife casts the oulds of conduct, #hich #ill soeda3 becoe fi:ed as la#. <a#

preserves the oulds #hich have ta8en for and shape fro life.;-$

Ksa/e furnishes a standard forthe easureent of an3 of the ri/hts and acts of en.-0 It is also #ell(settled that parties #ho

contract on a sub>ect atter concernin/ #hich 8no#n usa/e prevail, incorporate such usa/e b3

iplication into their a/reeent, if nothin/ is said to be contrar3.-5

@o#ever, the respondents ine:plicabl3 failed to adduce sufficient copetent evidence to prove

usa/e, habit or pattern of conduct of 7I to >ustif3 the use of the ters of pa3ent in the contracts of

the other lot bu3ers, and thus /rant respondents the ri/ht to pa3 the P0+-,**-.66 in $06 onths,

presuabl3 because of respondentsA belief that the anner of pa3ent of the said aount is not an

essential eleent of a contract to sell. There is no evidence that 7I or O"M and all the lot bu3ers in

the subdivision, includin/ lot bu3ers #ho pa3 part of the do#npa3ent of the propert3 purchased b3

the in the for of service, had e:ecuted contracts of conditional sale containin/ unifor ters and

conditions. Moreover, under the ters of the contracts of conditional sale e:ecuted b3 7I and three

lot bu3ers in the subdivision, 7I a/reed to /rant $06 onths #ithin #hich to pa3 the balance of the

purchase price to t#o of the, but /ranted one $-6 onths to do so. -* There is no evidence on

record that 7I /ranted the sae ri/ht to bu3ers of t#o or ore lots.

Irrefra/abl3, under %rticle $*94 of the Ne# !ivil !ode, the price of the propert3 sold a3 be

considered certain if it be so #ith reference to another thin/ certain. It is sufficient if it can be

deterined b3 the stipulations of the contract ade b3 the parties thereto- or b3 reference to an






















a/reeent incorporated in the contract of sale or contract to sell or if it is capable of bein/

ascertained #ith certaint3 in said contract-9 or if the contract contains e:press or iplied provisions

b3 #hich it a3 be rendered certain-+ or if it provides soe ethod or criterion b3 #hich it can be

definitel3 ascertained.-- %s this !ourt held in Villara2a v. !ourt of %ppeals,-4 the price is considered

certain if, b3 its ters, the contract furnishes a basis or easure for ascertainin/ the aount a/reed

upon.

Ee have carefull3 revie#ed the %u/ust 00, $4+0 letter a/reeent of the parties and find no direct or

iplied reference to the anner and schedule of pa3ent of the balance of the purchase price of the

lots covered b3 the deeds of conditional sale e:ecuted b3 7I and that of the other lot bu3ers46 as

basis for or ode of deterination of the schedule of the pa3ent b3 the respondents of

the P0+-,**-.66.

The rulin/ of this !ourt in Mitsui "ussan Baisha v. Manila lectric Railroad and <i/ht !opan34$ is

not applicable in this case because the basic price fi:ed in the contract #as P4.* per lon/ ton, but it

#as stipulated that the price #as sub>ect to odification ;in proportion to variations in calories and

ash content, and not other#ise.; In this case, the parties did not fi: in their letters(a/reeent, an3

ethod or ode of deterinin/ the ters of pa3ent of the balance of the purchase price of thepropert3 aountin/ to P0+-,**-.66.

It bears stressin/ that the respondents failed and refused to pa3 the balance of the do#npa3ent

and of the purchase price of the propert3 aountin/ to P0+-,**-.66 despite notice to the of the

resuption b3 7I of its sellin/ operations. The respondents en>o3ed possession of the propert3

#ithout pa3in/ a centavo. On the other hand, 7I and O"M failed and refused to transit a contract

of conditional sale to the Respondents. The respondents could have at least consi/ned the balance

of the do#npa3ent after notice of the resuption of the sellin/ operations of 7I and filed an action

to copel 7I or O"M to transit to the the said contract ho#ever, the3 failed to do so.

%s a conse=uence, respondents and 7I &or O"M for that atter' failed to for/e a perfected contract

to sell the t#o lots hence, respondents have no cause of action for specific perforance a/ainst

petitioner. Republic %ct No. 90 applies onl3 to a perfected contract to sell and not to a contract

#ith no bindin/ and enforceable effect.

IN <I)@T OF %<< T@ FOR)OIN), the petition is )R%NTD. The Decision of the !ourt of

%ppeals in !%().R. !V No. *+*- is RVRSD and ST %SID. The Re/ional Trial !ourt of

1ue2on !it3, "ranch 4- is ordered to disiss the coplaint. !osts a/ainst the Respondents.

SO ORDRD.

ROMEO . C$$EO, SR.

%ssociate ?ustice

E !ON!KR

RTEM#O -. PNGN#BN

!hief ?ustice

!hairperson



















CONSUE$O NRES/SNT#GO, M. $#C# USTR#/MRT#NE

%ssociate ?ustice %ssociate ?ustice

M#N#T -. C"#CO/NR#O

%ssociate ?ustice

! R T I F I ! % T I O N

Pursuant to Section $5, %rticle VIII of the !onstitution, it is hereb3 certified that the conclusions in

the above decision #ere reached in consultation before the case #as assi/ned to the #riter of the

opinion of the !ourtAs Division.

RTEM#O -. PNGN#BN

!hief ?ustice

Republic of the Philippines

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Boston Bank of the Philippines v Peral Manalo and Carlos Manalo

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