G.R. No.

166190

September 20, 2006

HEIRS OF VENANCIO BAJENTING vs. ROMEO F. BA E!, S"O#SES A$FAFARA

Facts: Venancio Bajenting applied for a free patent over a parcel of land, Lot 23 (Sgs. 546 !, avao "adastre, located in Lang#$, avao "it%, &it' an area of ()4,(4) s*#are +eters. ,n t'e +eanti+e, Venancio planted fr#it trees in t'e propert% 3 s#c' as +ango, lan-ones, cocon#t and santol. .e and 'is &ife, Felisa Bajenting, along &it' t'eir c'ildren, also resided in a 'o#se &'ic' stood on t'e propert%.4 /n Fe$r#ar% (014, Venancio died intestate.5 .is application for a free patent &as t'ereafter approved, and a Free 2atent &as iss#ed in 'is favor. /n Fe$r#ar% (016, t'e 3egister of eeds iss#ed /riginal "ertificate of 4itle over t'e propert% in t'e na+e of 5Venancio Bajenting, +arried to Felisa S#ltan.5 6 Selecio Bajenting contin#ed c#ltivating t'e land. 1 4'e Sangguniang Panglunsod approved "it% /rdinance declaring t'e properties in Lang#$ as a lo& densit% residential -one.6 Felisa and t'e ot'er 'eirs of Venancio (.eirs, for $revit%!, 0 e7ec#ted an 87traj#dicial Settle+ent &it' eed of 9$sol#te Sale over Lot 23. 4'e% alleged t'erein t'at &'en Venancio died intestate, t'e% 'ad agreed to adj#dicate #nto t'e+selves as 'eirs of t'e deceased t'e aforesaid propert%, as follo&s: 4/: F8L,S9 S. B9:8;4,;<, /ne 'alf ((=2! s'are of t'e &'ole of /ct. ;o. 2>5611, as 'er conj#gal s'are? and t'e re+aining one>'alf ((=2! of /"4 ;o. 2>5611. 4/: F8L,S9 S. B9:8;4,;<, @93<93,49 B9:8;4,;<, F39;",S"9 B9:8;4,;<, S,LV83,/ B9:8;4,;< ( eceased! represented $% 'is &ife and c'ildren: 4eresita 9pas>Bajenting, 3enato Bajenting, <il$ert Bajenting, "riselda Bejenting, ,+elda Bajenting, Venancio Bajenting and 8li-alde Bajenting? @9A,@9 B9:8;4,;< ( eceased! represented $% 'er '#s$and, Francisco @alda, and c'ildren: Lee B. @alda, 9ngelina B. @alda, @ilagros B. @alda, 8dit'a B. @alda and S#sana B. @alda? B8;8 ,"4,;9 B9:8;4,;<, 93S8;,9 B9:8;4,;<? and "8L8",S/ B9:8;4,;<, in e*#al s'are pro>indiviso. () ,n t'e sa+e deed, a 5),))) s*#are +eter portion of t'e propert% &as sold to t'e spo#ses Sonia L#- 9lfafara? and t'e 54,(4) s*#are +eter portion to 8ngr. 3o+eo F. BaBe-. 4'e s'are of Felisa &as incl#ded in t'e portion sold to 8ngr. BaBe-.(( .o&ever, t'e deed &as not notari-ed? neit'er &as t'e sale approved $% t'e Secretar% of 8nviron+ent and ;at#ral 3eso#rces. ,n t'e 9gree+ent=3eceipt e7ec#ted $% Felisa Bajenting and 3o+eo BaBe-, t'e parties declared t'at t'e price of propert% &as 25)),))).))? 235),))).)) &as paid $% t'e vendees, t'e $alance of 2(5),))).)) to $e d#e and pa%a$le at t'e residence of t'e vendors.(2 4'e o&nerCs d#plicate of title &as t#rned over to t'e vendees. .o&ever, t'e deed &as not filed &it' t'e /ffice of t'e 3egister of eeds. 4'e .eirs, incl#ding Felisa, tried to rep#rc'ase t'e propert% as provided #nder Section ((0 of "9 ;o. (4(, $#t 3o+eo BaBe- and Sonia 9lfafara did not allo& t'e+ to e7ercise t'eir rig't.

/n @a% (005, t'e .eirs, t'ro#g' Venencio Bajenting, filed a "o+plaint for recover% of title against 3o+eo BaBe- and t'e spo#ses 9lfafara in t'e /ffice of t'e Barangay "aptain. D'en no settle+ent &as reac'ed, t'e .eirs filed a co+plaint for E#ieting of 4itle, 3ep#rc'ase of 2ropert%, 3ecover% of 4itle pl#s a+ages &it' t'e 3egional 4rial "o#rt, clai+ing t'at t'e% 'ad tried to rep#rc'ase t'e propert% fro+ t'e defendants and t'at t'e latter 'ad ignored t'e s#++ons fro+ t'e Barangay "aptain for an a+ica$le settle+ent of t'e case. 4'e% pra%ed t'at after d#e proceedings, j#dg+ent $e rendered in t'eir favor: D.838F/38, 238@,S8S "/;S, 838 , it is pra%ed of t'is .onora$le "o#rt t'at after 'earing, j#dg+ent $e rendered in favor of plaintiffs and against 'erein defendants, $% *#ieting and re+oving an% clo#d on t'e /riginal "ertificate of 4itle ;o. 2>5611, Free 2atent ;o. 511244, of t'e 3egistr% of eeds of avao "it%, and t'ereafter ordering t'e defendants to: a! 3et#rn t'e o&nerCs d#plicate cop% of /riginal "ertificate of 4itle ;o. 2>5611, Free 2atent ;o. 511244 to plaintiff fort'&it'? $! Vacate t'e pre+ises incl#ding t'ose &'o are acting for and in t'eir $e'alf? and, IN THE A$TERNATIVE, s'o#ld t'e defendants prove t'eir s#perior rig't over t'e s#$ject propert% (i.e., sale! as against t'e 'erein plaintiffs t'at t'e% $e ordered to resell $acF t'e said propert% to t'e plaintiffs consonant to t'e provision of Sec. ((0, ".9. ;o. (4(. t'e .eirs filed an 9+ended "o+plaint, alleging t'e follo&ing: 5.4'e afore>descri$ed real propert% &as sold to defendants for a consideration of Five .#ndred 4'o#sand (25)),))).))! 2esos and several +ont's t'ereafter, t'e o&nerCs d#plicate cop% /riginal "ertificate of 4itle ;o. 2>5611, Free 2atent ;o. 511244, &as 'anded to t'e+ and, t'ereafter, t'eir representative occ#pied t'e area. 7 7 7 6. efendants paid onl% t'e s#+ of 4.388 .G; 38 F,F4H 4./GS9; (235),))).))! $#t did not pa% t'e re+aining p#rc'ase price in t'e a+o#nt of /;8 .G; 38 F,F4H 4./GS9; (2(5),))).))! 28S/S. 7 7 7 1. 4'e aforedescri$ed propert% sold to defendants, $eing a Free 2atent, can $e rep#rc'ased &it'in five (5! %ears fro+ date of conve%ance ((003! $% t'e applicant, 'is &ido&, or legal 'eirs p#rs#ant to Sec. ((0, "o++on&ealt' 9ct ;o. (4(: 54'at ever% conve%ance of land ac*#ired #nder t'e free patent provisions, &'en proper, s'all $e t'e s#$ject to rep#rc'ase $% t'e applicant, 'is &ido&, or legal 'eirs, &it'in a period of five (5! %ears fro+ t'e date of t'e conve%ance? (Gnderscoring s#pplied!.(4 7777 (3. .erein 2laintiffs 'ave tendered t'e a+o#nt of 4.388 .G; 38 F,F4H 4./GS9; (235),))).))! as rep#rc'ase price &it' t'e /ffice of t'e "lerF of "o#rt. (5 4'e .eirs deposited t'e a+o#nt of 235),))).)) &it' t'e "lerF of "o#rt, and an official receipt &as iss#ed t'erefor.

4'e defendants averred, t'at: ((! t'e plaintiffs, &'o did not sign t'e 87traj#dicial Settle+ent and eed of 9$sol#te Sale, &ere not 'eirs of Venancio Bajenting? (2! it &as onl% Venencio Bajenting, :r. &'o &anted to rep#rc'ase t'e propert% for and in $e'alf of a 5spec#lator5 i.e., for t'e sole #se and enjo%+ent of t'e interested $#%er and not for c#ltivation of t'e 'eirs of t'e deceased 'o+esteader? and (3! t'e .eirs 'ave not tendered an% a+o#nt to perfect t'eir rep#rc'ase of t'e propert%. 4'e% alleged, $% &a% of "o+p#lsor% "o#nterclai+, t'at: (3. 4'e parties 'erein 'ave entered into an 87traj#dicial Settle+ent of 8state &it' eed of 9$sol#te Sale to evidence t'eir agree+ent over t'e land in *#estion. .o&ever, s#c' deed 'as not %et $een notari-ed. 2#rs#ant to 9rt. (351 in relation to 9rt. (356 ((! of t'e "ivil "ode, defendants +a% re*#ire plaintiffs to deliver t'e proper doc#+ent in t'e proper for+ to evidence t'e conve%ance of t'e propert% s#$ject of t'is case and s#fficient to effect t'e transfer of title to t'e sa+e in favor of defendants?(1 4'e case &as referred to t'e Barangay "aptain and t'e Lupon Tagapamayapa for a possi$le settle+ent, to no avail.2) 4'e .eirs presented Vicente 3avino, t'e '#s$and of Benedicta Bajenting, one of t'e da#g'ters of Venancio and Felisa. .e testified t'at Felisa 'ad died intestate on :an#ar% (006.2( For a period of t&o %ears, 'e 'ad $een de+anding t'at t'e vendee pa% t'e $alance of t'e p#rc'ase price, 2(5),))).)), $#t t'e latter failed to pa% t'e a+o#nt. 4'e .eirs a#t'ori-ed Venencio Bajenting22 to represent t'e+ for t'e p#rpose of rep#rc'asing t'e propert% fro+ t'e defendants. 4'e defendants add#ced evidence t'at t'e Sangguniang Panglunsod approved /rdinance ;o. 4)42, Series of (006, classif%ing t'e properties in Lang#$ as part of a lo& densit% propert% -one.23 S#c' properties &ere pri+aril% intended for 'o#sing develop+ent &it' at least 2) d&elling #nits per 'ectare densit% and $elo& per 'ectare. 244'e% pointed o#t t'at #nder 2residential ecree (2. .! ;o. 051, t'e lots co#ld $e #sed as first class residential. 4'e "it% 2lanning /ffice and t'e 3egional evelop+ent "o#ncil 'ad, liFe&ise, reco++ended to t'e ;ational 8cono+ic evelop+ent 9#t'orit% t'e plan to esta$lis' an astrodo+e, a govern+ent center to 'o#se govern+ent agencies, as &ell as t'e constr#ction of a circ#+ferential road? 'o&ever, no +one% 'ad %et $een appropriated to i+ple+ent t'e said plans.25 9nne 3e%es, a real estate agent, testified t'at, Venencio Bajenting and @argarita Bajenting> 3e#sora, anot'er 'eir, asFed 'er to 'elp t'e+ sell t'e propert% for 235),))).)). 4o ena$le 'er to offer t'e propert% for sale, t'e Bajentings entr#sted to 'er a cop% of t'e o&nerCs d#plicate of /"4 ;o. 2>5611, 4a7 eclaration, 4a7 "learance and a "ertificate fro+ t'e "it% 9ssessor.26.o&ever, s'e failed to sell t'e propert%. ,n ece+$er (005, @argarita sa& 'er again and asFed 'er to ret#rn t'e said doc#+ents $eca#se s'e (@argarita! &anted to sell t'e propert% for 2(),))),))).)). @argarita told 'er t'at t'e propert% 'ad $een earlier sold for a c'eaper price, $#t s'e &as re*#ested to acco+pan% an% prospective $#%ers &illing to pa% 2(),))),))).)) to Venencio Bajenting &'o 'ad a special po&er of attorne% to sell t'e propert% in $e'alf of t'e .eirs.21 9fter 'er +eeting &it' @argarita, not'ing 'appened. /n cross>e7a+ination, 9nne ad+itted t'at s'e 'ad no &ritten a#t'orit% to sell t'e propert%. 26 ,n ece+$er (005, s'e in*#ired fro+ 8ngr. BaBe- if 'e &as &illing to resell t'e propert% to t'e 'eirs of Venancio Bajenting.20 ,n Fe$r#ar% (006, 8ngr. BaBe-, acco+panied $% 9tt%. S#san "ariaga, sa& 'er (9nne! and asFed if t'e Bajentings &ere indeed going to rep#rc'ase t'e propert%? s'e ans&ered in t'e affir+ative and vol#nteered to testif%.3) 8r+elinda /%co testified t'at d#ring t'e proceedings of t'e case in t'e /ffice of t'e Barangay "aptain, @argarita told 'er and 'er sister t'at t'e Bajentings &ere going to

rep#rc'ase t'e propert% and &o#ld resell t'e sa+e. S'e told @argarita t'at s'e 'ad a prospective $#%er, $#t &it''eld t'e personCs identit%. @argarita told 'er t'at t'e Bajentings &o#ld sell t'e propert% for 2(),))),))).)). Venencio Bajenting confir+ed t'e price and told 'er t'at s'e &o#ld receive a 3I co++ission if s'e s#cceeded in selling t'e propert%. 3( /n cross>e7a+ination, s'e declared t'at s'e &as invited to testif% for 8ngr. BaBe- and t'at s'e agreed $eca#se s'e pitied 'i+. /n re$#ttal, Venencio Bajenting testified and declared t'at 'e did not +eet /%co and 'er +ot'er and t'at t'e% 'ad no interest to sell t'e propert%. 32 Before s'e co#ld testif%, @argarita 3e#sora died on 9#g#st 24, (001. 33 /n @arc' (, 2))2, t'e trial co#rt rendered j#dg+ent in favor of t'e .eirs. 4'e 34" r#led t'at &'ile t'ere is evidence t'at first>class s#$divisions are $eing developed in t'e vicinit%, no $#dget 'ad $een appropriated for t'e plans to constr#ct t'e govern+ent center and t'e sports co+ple7. .o&ever, it declared t'at t'e defendants failed to present an% evidence t'at t'e plaintiffs &ere rep#rc'asing t'e propert% for and in $e'alf of a financier. 4'e defendants +aintained t'at t'e .eirs &ere e7ercising t'eir rig't to rep#rc'ase t'e propert% for co++ercial p#rposes, not for t'e p#rpose of #sing t'e propert% for t'eir fa+il% 'o+e. 4'e% asserted t'at t'e propert% is s#rro#nded $% first>class s#$divisions and is classified as a lo&>densit% residential -one. .ence, t'e instant 2etition for 3evie& on Certiorari, &'ere petitioners allege t'at t'e "9 erred in disregarding t'e findings of t'e trial co#rt $ased on t'e evidence on record in appl%ing t'e Santana case, and in not resolving t'e iss#e of respondentsC fail#re to pa% t'e $alance of t'e p#rc'ase price of t'e propert%. 4'e% insist t'at t'e fact#al $acFdrop in Santana is s#$stantiall% different fro+ t'at in t'is case. 4'e spec#lative p#rpose ascri$ed to t'e+ +a% as &ell appl% to respondents, &'o ref#sed to resell t'e propert% to petitioner, Fno&ing t'at t'e val#e of t'e propert% 'ad considera$l% increased. 9s $et&een t'e petitioners and t'e respondents, t'e la& s'o#ld $e applied in t'eir favor, $eing t'e 'eirs of t'e $eneficiaries #nder "o++on&ealt' 9ct (4(, as a+ended. 4'e petitioners aver t'at respondents failed to prove &it' clear and convincing evidence t'at t'e% &ere e7ercising t'eir rig't to rep#rc'ase t'e propert% onl% for t'e p#rpose of reselling t'e sa+e at a 'ig'er price, t'ere$% rendering n#gator% Section ((0 of "o++on&ealt' 9ct (4(. 4'e collective testi+onies of 3e%es and /%co &ere 'earsa% and inad+issi$le in evidence #nder t'e dead +anCs stat#te, @argarita 3e#sora 'aving died on 9#g#st 24, (001 $efore t'e &itnesses 'ad even testified. Dorse, petitioners aver, t'e "9 ignored t'e fact t'at respondents 'ad not paid t'e+ t'e $alance of t'e p#rc'ase price of t'e propert% &ort' 2(5),))).))? t'#s, t'e% &o#ld 'ave to file a separate s#it to collect t'e a+o#nt. 3espondents aver t'at onl% petitioner Venencio Bajenting signed t'e verification and certification of non>for#+ s'opping in t'e petition. 2etitioners failed to attac' an% po&er of attorne% a#t'ori-ing Venencio Bajenting to sign t'e Verification and "ertification 9gainst For#+ S'opping for and in t'eir $e'alf. 9s fo#nd $% t'e "9, t'e testi+onies of 3e%es and /%co &ere credi$le and deserving of f#ll pro$ative &eig't. ,ndeed, t'eir testi+onies are

$#ttressed $% t'e trial co#rtCs /rder dated :an#ar% (0, (006. 4'e% add t'at t'e findings of t'e "9 are $inding on t'is "o#rt, and t'at t'e dead +anCs stat#te does not appl% to t'e testi+onies of 3e%es and /%co, $eing as t'e% &ere, +ere &itnesses not parties to t'e case. I%%&e%' (a! &'et'er or not petitioners co+plied &it' t'e r#le on verification and certification against for#+ s'opping? ($! &'et'er petitioners are entitled to rep#rc'ase t'e propert% fro+ respondents? and (c! &'et'er petitioners are o$liged to e7ec#te a notari-ed deed of a$sol#te sale over t'e propert%. 4'e petition 'as no +erit. /n t'e ()r%t )%%&e, t'e "o#rt notes t'at, of t'e 23 petitioners, onl% petitioner Venencio Bajenting signed t'e Verification and "ertification of ;on>For#+ S'opping. 2etitioners did not append to t'eir petition a special po&er of attorne% a#t'ori-ing petitioner Venencio Bajenting to sign t'e "ertification for and in t'eir $e'alf. 4'e r#le is t'at t'e certification of non>for#+ s'opping +#st $e signed $% all t'e petitioners or plaintiffs and t'e signing $% onl% one of t'e+ is not s#fficient. ,n t'e present case, &e find and so r#le t'at petitioners s#$stantiall% co+plied &it' t'e 3#les of "o#rt. 2etitioners, as 'eirs of t'e spo#ses Venancio and Felisa Bajenting (t'e patentees!, so#g't to e7ercise t'eir rig't #nder Section ((0, 9ct (4( to rep#rc'ase t'e propert% &it'in t'e stat#tor% period t'erefor. 2etitioner Venencio Bajenting &as e+po&ered to act for and in t'eir $e'alf $efore t'e Barangay "aptain and in t'e 34" for t'e enforce+ent of t'eir rig't as s#c' 'eirs. 2etitioners 'ave not filed an% action against respondents in anot'er co#rt or tri$#nal involving t'e sa+e iss#es and propert%. De note t'at t'e Secretar% of 9gric#lt#re and ;at#ral 3eso#rces 'ad not approved t'e sale of t'e propert% ($% t'e 'eirs of t'e patentee! to respondents. ,t $ears stressing t'at Free 2atent ;o. 511244 &'ic' &as granted in favor of Venancio Bajenting on ece+$er (6, (015 is s#$ject to t'e follo&ing conditions t'erein: V8;9;",/ B9:8;4,;<, Filipino, of legal age, +arried to Felisa S#ltan, and residing in Lang#$, @a>a, avao "it% t'e tract of land a$ove>descri$ed. the land hereby acquired shall be inalienable and shall not be subject to encumbrance for a period of five (5 years from the date of this patent! and shall not be liable for the satisfaction of any debt contracted prior to the e"piration of said period# that every conveyance of land acquired under the free patent provisions! $hen proper! shall be subject to repurchase by the applicant! his $ido$! or legal heirs! $ithin a period of five years from the date of the conveyance# that it shall not be encumbered! alienated! or transferred to any person! not qualified to acquire lands of the public domain under said Common$ealth %ct &o' ()(! as amended# /"4 ;o. 2>5611 &as iss#ed to and in t'e na+e of Venancio Bajenting over t'e propert% on Fe$r#ar% 6, (016. 4'e 25>%ear period provided in Section ((6 of t'e la& &as to e7pire on Fe$r#ar% 6, 2))(. .o&ever, in @a% (000, Felisa Bajenting and 'er c'ildren sold t'e propert% to respondents &it'o#t t'e approval of t'e Secretar% of 8nviron+ent and ;at#ral 3eso#rces (for+erl% t'e epart+ent of 9gric#lt#re and ;at#ral 3eso#rces!. 4'ere is no s'o&ing in t'e records t'at t'e Secretar% of 8nviron+ent and ;at#ral 3eso#rces 'ad approved t'e sale. 4'e fail#re of t'e vendors to sec#re t'e approval of t'e Secretar% of t'e 8;3 does not, ipso facto, +aFe t'e sale void. 4'e approval +a% $e sec#red later, prod#cing t'e effect of ratif%ing and adopting t'e transaction as if t'e sale 'ad $een previo#sl% a#t'ori-ed. 4'e

approval of t'e sale s#$se*#ent t'ereto &o#ld 'ave t'e effect of t'e Secretar%Cs ratification and adoption as if t'e sale 'ad $een previo#sl% a#t'ori-ed. 41 4'e Secretar% +a% disapprove t'e sale on legal gro#nds. 4'e %e*o+, )%%&e is fact#al $eca#se it involves t'e deter+ination of petitionersC intention to rep#rc'ase t'e propert% to ena$le t'e+ to a+ass a 'eft% net profit of 20,635,))).)) fro+ its resale to a t'ird part%, and not for t'e p#rpose of preserving t'e sa+e for t'e+selves and t'eir fa+iliesC #se as envisioned in "o+. 9ct ;o. (4(, as a+ended. 4o ens#re t'e attain+ent of said o$jectives, t'e la& gives t'e patentee, 'is &ido& or 'is legal 'eirs t'e rig't to rep#rc'ase t'e propert% &it'in five %ears fro+ date of t'e sale. .o&ever, t'e patentee, 'is &ido& or legal 'eirs s'o#ld not $e allo&ed to taFe advantage of t'e sal#tar% polic% of t'e la& to ena$le t'e+ to recover t'e land onl% to dispose of it again to a+ass a 'eft% profit to t'e+selves. ,n t'is case, $ased on t'e pleadings of t'e parties and t'e evidence on record, petitioners, t'ro#g' Venencio Bajenting and @argarita 3e#sora, so#g't to rep#rc'ase t'e propert% onl% for t'e p#rpose of reselling t'e sa+e for 2(),))),))).)) and in t'e process, a+ass a net profit a+o#nting to20,65),))).)). 4'e lacF of doc#+entar% evidence proving t'at plaintiffs constit#ted 3e%es and /%co as agents for t'e sale of t'e s#$ject propert% +erel% s'o&s t'at 3e%es and /%co &ere not constit#ted as agents in accordance &it' t'e specific for+ prescri$ed $% la&. ,t does not, 'o&ever, render t'eir testi+onies i+pro$a$le nor does it 'ave an% tendenc% to lessen t'e credi$ilit% of t'eir testi+onies respecting t'e fact so#g't to $e proven. D'at is +aterial and s'o#ld 'ave $een considered $% t'e trial co#rt &ere t'e assertions of 3e%es and /%co stating t'at plaintiff +ade negotiations for t'e+ to find a $#%er for t'e s#$ject propert% since it &o#ld prove t'at plaintiffs &ant to rep#rc'ase t'e s#$ject propert% onl% in order to resell it to anot'er at a 'ig'er price. 4'e testi+on% of plaintiff Venencio Bajenting den%ing t'e clai+ of 3e%es and /%co cannot $e given +#c' &eig't and credence. Being one &'o 'as a direct interest in t'e case, Venencio Bajenting necessaril% 'as a +otive for coloring 'is testi+on%. Besides, apart fro+ 'is denials, 'is testi+on% is #ncorro$orated. ,n contrast, t'ere is no evidence t'at 3e%es and /%co &ere act#ated $% an% ill +otive in testif%ing against plaintiffs. ,n fact, t'eir testi+onies even s'o& t'at t'eir +ot'er is a relative of plaintiffs. 4'e profit +otivation $e'ind t'e instant co+plaint for rep#rc'ase is f#rt'er s'o&n $% plaintiffsC declaration in t'eir /pposition to defendantsC +otion for reconsideration, t'at 5t'e 4'ree .#ndred Fift% 4'o#sand (235),))).))! 2esos given for t'e ten> 'ectare land &o#ld $e too s+all for defendant to o&n t'e propert%.5 8videntl%, it is t'e sa+e profit +otivation t'at i+pelled plaintiffs to agree to a settle+ent d#ring t'e earl% stages of t'e proceedings $efore t'e trial co#rt. ,n t'e @anifestation filed $% plaintiffs on Fe$r#ar% 4, (006, plaintiffs e7pressed t'eir agree+ent to a settle+ent $#t onl% if defendants pa% t'e+ an additional p#rc'ase price of Five @illion 2esos (2'25,))),))).))! or if t'e s#$ject propert% &ere to $e sold to an interested $#%er for no less t'an t'e said a+o#nt &it' 6)I of t'e proceeds going to t'e plaintiffs and offering 2)I t'ereof to defendant. De note t'at petitioner Venencio Bajenting is +erel% a +ec'anic. .e 'ad not e7plained to t'e trial co#rt 'o& 'e and 'is co>'eirs &ere a$le to prod#ce 235),))).)) in (006 and deposit t'e sa+e &it' t'e "lerF of "o#rt &'en t'e% filed t'eir a+ended co+plaint. 4'ere is no evidence on record t'at petitioners &ere financiall% capa$le to prod#ce t'e a+o#nt in

(006, considering t'at t'e% 'ad to sell t'e propert% for 25)),))).)) t'ree %ears earlier. 4'e foregoing circ#+stances $#ttress t'e contention of respondents t'at petitioners, t'ro#g' Venencio Bajenting, so#g't to rep#rc'ase t'e propert% for no ot'er p#rpose t'an to generate a 'eft% profit of 20,65),))).)). "ontrar% to t'e allegations of petitioners, t'e collective testi+onies of 3e%es and /%co are ad+issi$le in evidence despite t'e fact t'at &'en t'e% testified, @argarita 3e#sora &as alread% dead. 3e%es and /%co &ere +ere &itnesses for respondents, not parties in t'e co#rt a quo, nor assignors of an% of t'e parties in &'ose $e'alf t'e case &as prosec#ted. 4'eir testi+onies &ere presented onl% to prove t'at t'e petitioners intended to rep#rc'ase t'e propert% for profit, and not for t'e p#rpose of preserving it for t'eir and t'eir fa+iliesC #se and enjo%+ent.56 9s in Santana, t'e propert% in t'is case &as no longer agric#lt#ral $#t residential and co++ercial, in t'e +idst of several 'ig'>class residential s#$divisions. 4'e govern+ent 'ad planned to constr#ct in t'e vicinit% a circ#+ferential road, a govern+ent center and an astrodo+e. 9s in Santana, petitioners, t'ro#g' co#nsel, declared t'eir &illingness to settle t'e case for t'e a+o#nt of 25,))),))).)) and t'e sale of t'e propert% to a t'ird part%. 4'e +one% &'ic' petitioners &ere to #se to rep#rc'ase t'e propert% &as not t'eirs, $#t t'e +one% of petitioner Venencio BajentingCs e+plo%er. First. 4'e decision of t'e trial co#rt ordering petitioner to e7ec#te a deed of sale over t'e propert% in favor of respondent is gro#nded on t'e fact t'at 'is record on appeal of petitioner, as appellant, does not contain s#fficient relevant data s'o&ing t'at t'e appeal &as filed on ti+e? /n t'e t-)r, )%%&e, &e agree &it' respondentsC contention t'at petitioners are o$liged to e7ec#te a notari-ed deed of a$sol#te sale over t'e propert% #pon pa%+ent of t'e 2(5),))).)) $alance of t'e p#rc'ase price of t'e propert%. 9 contract of sale is a consens#al contract. Gpon t'e perfection of t'e contract, t'e parties +a% reciprocall% de+and perfor+ance. 4'e vendee +a% co+pel transfer of o&ners'ip of t'e o$ject of t'e sale, and t'e vendor +a% re*#ire t'e vendee to pa% t'e t'ing sold. ,n t'is case, t'e $alance of t'e p#rc'ase price of t'e propert% &as d#e on or $efore ece+$er 3(, (003. <.3. ;o. (1)410 9; 38 4. 9L@/"839, 284,4,/;83, VS. :/.;;H /;<, 38S2/; 8;4. F.*t%' Plaintiff *ohnny +ng tried to acquire from the defendants a ,to$nhome- described as .nit &o' ) of %trium To$nhomes in Cebu City' %s reflected in a Contract to Sell! the selling price of the unit $as P/!)00!000'00 pesos! for a lot area of eighty1eight (22 square meters $ith a three1storey building' +ut of the purchase price! plaintiff $as able to pay the amount of P(!030!000'00' Prior to the full payment! plaintiff claims that defendants %ndre %lmocera and 4irst Builders fraudulently concealed the fact that before and at the time of the perfection of the contract to sell! the property $as already mortgaged to and encumbered $ith the Land Ban5 of the Philippines (LBP ' 6n addition! the construction of the house has long been delayed and remains unfinished' +n 7arch (/! (888! Lot )1a covered by TCT &o' ()22(2! covering the unit $as advertised in a local tabloid for public auction for foreclosure of mortgage' 6t is the assertion of the plaintiff that had it not for the fraudulent concealment

of the mortgage and encumbrance by defendants! he $ould have not entered into the contract to sell' +n the other hand! defendants assert that on 7arch 90! (885! 4irst Builders 7ulti1purpose Coop' 6nc'! borro$ed money in the amount of P500!000'00 from Tommy +ng! plaintiff:s brother' This amount $as used to finance the documentation requirements of the LBP for the funding of the %trium To$n ;omes' This loan $ill be applied in payment of one (( to$n house unit $hich Tommy +ng may eventually purchase from the project' <hen the project $as under $ay! Tommy +ng $anted to buy another to$nhouse for his brother! *ohnny +ng! plaintiff herein! $hich then! the amount of P(50!000'00 $as given as additional partial payment' ;o$ever! the particular unit $as not yet identified' 6t $as only on *anuary (0! (88= that Tommy +ng identified .nit &o' ) plaintiff:s chosen unit and again tendered P/50!000'00 as his third partial payment' <hen the contract to sell for .nit ) $as being drafted! Tommy +ng requested that another contract to sell covering .nit 5 be made so as to give *ohnny +ng another option to choose $hichever unit he might decide to have' <hen the construction $as already in full blast! defendants $ere informed by Tommy +ng that their final choice $as .nit 5' 6t $as only upon 5no$ing that the defendants $ill be selling .nit ) to some other persons for P)million that plaintiff changed his choice from .nit 5 to .nit )'>)? ,n tr%ing to recover t'e a+o#nt 'e paid as do&n pa%+ent for t'e to&n'o#se #nit, respondent :o'nn% /ng filed a co+plaint for a+ages against defendants 9ndre 4. 9l+ocera and FB@" alleging t'at defendants &ere g#ilt% of fra#d#lent conceal+ent and $reac' of contract &'en t'e% sold to 'i+ a to&n'o#se #nit &it'o#t div#lging t'at t'e sa+e, at t'e ti+e of t'e perfection of t'eir contract, &as alread% +ortgaged &it' t'e Land BanF of t'e 2'ilippines (LB2!, &it' t'e latter ca#sing t'e foreclos#re of t'e +ortgage and t'e event#al sale of t'e to&n'o#se #nit to a t'ird person. efendants denied lia$ilit% clai+ing t'at t'e foreclos#re of t'e +ortgage on t'e to&n'o#se #nit &as ca#sed $% t'e fail#re of co+plainant :o'nn% /ng to pa% t'e $alance of t'e price of said to&n'o#se #nit. 4'e trial co#rt r#led against defendants for not acting in good fait' and for not co+pl%ing &it' t'eir o$ligations #nder t'eir contract &it' respondent. ,n t'e "ontract to Sell J6Kinvolving Gnit 4 of t'e 9tri#+ 4o&n'o+es, defendants agreed to sell said to&n'o#se to respondent for 23,4)),))).)). 4'e do&n pa%+ent &as 2(,))),))).)), &'ile t'e $alance of 22,4)),))).)) &as to $e paid in f#ll #pon co+pletion, deliver% and acceptance of t'e to&n'o#se. Gnder t'e contract &'ic' &as signed on () :an#ar% (001, defendants agreed to co+plete and conve% to respondent t'e #nit &it'in si7 +ont's fro+ t'e signing t'ereof. 4'e trial co#rt fo#nd t'at respondent &as a$le to +aFe a do&n pa%+ent or partial pa%+ent of 2(,)6),))).)) and t'at t'e defendants failed to co+plete t'e constr#ction of, as &ell as deliver to respondent, t'e to&n'o#se &it'in si7 +ont's fro+ t'e signing of t'e contract. @oreover, respondent &as not infor+ed $% t'e defendants at t'e ti+e of t'e perfection of t'eir contract t'at t'e s#$ject to&n'o#se &as alread% +ortgaged to LB2. 4'e +ortgage &as foreclosed $% t'e LB2 and t'e to&n'o#se &as event#all% sold at p#$lic a#ction. ,t said t'at defendants &ere g#ilt% of fra#d in t'eir dealing &it' respondent $eca#se t'e +ortgage &as not disclosed to respondent &'en t'e contract &as perfected. 4'ere &as also non> co+pliance &it' t'eir o$ligations #nder t'e contract &'en t'e% failed to co+plete and deliver t'e to&n'o#se #nit at t'e agreed ti+e. /n t'e part of respondent, t'e trial co#rt declared 'e &as j#stified in s#spending f#rt'er pa%+ents to t'e defendants and &as entitled to t'e ret#rn of t'e do&n pa%+ent.

2etitioner is no& $efore #s pleading 'is case via a 2etition for 3evie& on Certiorari #nder 3#le 45 of t'e (001 3#les of "ivil 2roced#re. 4'e petition raises t'e follo&ing iss#es: (' T;@ ;+&+A%BL@ C+.AT +4 %PP@%LS BA%C@LD @AA@E 6& ;+LE6&B T;%T E@4@&E%&T ;%S 6&C.AA@E E@L%D' 9' T;@ ;+&+A%BL@ C+.AT +4 %PP@%LS BA%C@LD @AA@E 6& S.ST%6&6&B A@SP+&E@&T:S A@4.S%L T+ P%D T;@ B%L%&C@ +4 T;@ P.AC;%S@ PA6C@' /' T;@ ;+&+A%BL@ C+.AT +4 %PP@%LS BA%C@LD @AA@E 6& ;+LE6&B T;%T E@4@&E%&T %&EA@ T' %L7+C@A% 6S S+L6E%A6LD L6%BL@ <6T; T;@ E@4@&E%&T C++P@A%T6C@ 4+A E%7%B@S T+ PL%6&T644'>(0? ,t cannot $e disp#ted t'at t'e contract entered into $% t'e parties &as a contract to sell. 4'e contract &as deno+inated as s#c' and it contained t'e provision t'at t'e #nit s'all $e conve%ed $% &a% of an 9$sol#te eed of Sale, toget'er &it' t'e attendant doc#+ents of /&ners'ip LMN t'e 4ransfer "ertificate of 4itle and "ertificate of /cc#panc% LMN and t'at t'e $alance of t'e contract price s'all $e paid #pon t'e co+pletion and deliver% of t'e #nit, as &ell as t'e acceptance t'ereof $% respondent. 9ll t'ese clearl% indicate t'at o&ners'ip of t'e to&n'o#se 'as not passed to respondent. ,n ot'er &ords, in a contract to sell, o&ners'ip is retained $% t'e seller and is not to pass to t'e $#%er #ntil f#ll pa%+ent of t'e price. 4'e "ontract to Sell entered into $% t'e parties contains t'e follo&ing pertinent provisions: )' T@A7S +4 P%D7@&TF)a' +&@ 76LL6+& P@S+S (P(!000!000'00 is hereby ac5no$ledged as Eo$npayment for the above1mentioned Contract Price' )b' The Balance! in the amount of T<+ 76LL6+& 4+.A ;.&EA@E P@S+S (P9!)00!000'00 shall be paid thru financing 6nstitution facilitated by the S@LL@A! preferably Landban5 of the Philippines (LBP ' .pon completion! delivery and acceptance of the B.D@A of the To$nhouse .nit! the B.D@A shall have paid the Contract Price in full to the S@LL@A' """" 3' C+7PL@T6+& E%T@S +4 T;@ T+<&;+.S@ .&6TFThe unit shall be completed and conveyed by $ay of an %bsolute Eeed of Sale together $ith the attendant documents of +$nership in the name of the B.D@A GH, the Transfer Certificate of Title and Certificate of +ccupancy $ithin a period of si" (3 months from the signing of Contract to Sell'>(9? Fro+ t'e foregoing provisions, it is clear t'at petitioner and FB@" 'ad t'e o$ligation to co+plete t'e to&n'o#se #nit &it'in si7 +ont's fro+ t'e signing of t'e contract. Gpon co+pliance t'ere&it', t'e o$ligation of respondent to pa% t'e $alance of 22,4)),))).)) arises. Gpon pa%+ent t'ereof, t'e to&n'o#se s'all $e delivered and conve%ed to respondent #pon t'e e7ec#tion of t'e 9$sol#te eed of Sale and ot'er relevant doc#+ents. 4'e evidence add#ced s'o&s t'at petitioner and FB@" failed to f#lfill t'eir o$ligation O to co+plete and deliver t'e to&n'o#se &it'in t'e si7>+ont' period. Dit' petitioner and FB@"Ps non>f#lfill+ent of t'eir o$ligation, respondent ref#sed to pa% t'e $alance of t'e contract

price. 3espondent does not asF t'at o&ners'ip of t'e to&n'o#se $e transferred to 'i+, $#t +erel% asFs t'at t'e a+o#nt or do&n pa%+ent 'e 'ad +ade $e ret#rned to 'i+. 9rticle ((60 of t'e "ivil "ode reads: %rt' ((38' Those obliged to deliver or to do something incur in delay from the time the obligee judicially or e"trajudicially demands from them the fulfillment of their obligation' ;o$ever! the demand by the creditor shall not be necessary in order that delay may e"istF (( <hen the obligation or the la$ e"pressly so declares# or (9 <hen from the nature and the circumstances of the obligation it appears that the designation of the time $hen the thing is to be delivered or the service is to be rendered $as a controlling motive for the establishment of the contract# or (/ <hen demand $ould be useless! as $hen the obligor has rendered it beyond his po$er to perform' 6n reciprocal obligations! neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner $ith $hat is incumbent upon him' 4rom the moment one of the parties fulfills his obligation! delay by the other begins' 4'e contract s#$ject of t'is case contains reciprocal o$ligations &'ic' &ere to $e f#lfilled $% t'e parties, i'e., to co+plete and deliver t'e to&n'o#se &it'in si7 +ont's fro+ t'e e7ec#tion of t'e contract to sell on t'e part of petitioner and FB@", and to pa% t'e $alance of t'e contract price #pon co+pletion and deliver% of t'e to&n'o#se on t'e part of t'e respondent. ,n t'e case at $ar, t'e o$ligation of petitioner and FB@" &'ic' is to co+plete and deliver t'e to&n'o#se #nit &it'in t'e prescri$ed period, is deter+inative of t'e respondentPs o$ligation to pa% t'e $alance of t'e contract price. Dit' t'eir fail#re to f#lfill t'eir o$ligation as stip#lated in t'e contract, t'e% inc#rred dela% and are lia$le for da+ages. J(3K 4'e% cannot insist t'at respondent co+pl% &it' 'is o$ligation. D'ere one of t'e parties to a contract did not perfor+ t'e #ndertaFing to &'ic' 'e &as $o#nd $% t'e ter+s of t'e agree+ent to perfor+, 'e is not entitled to insist #pon t'e perfor+ance of t'e ot'er part%. J(4K /n t'e ()r%t .%%)/+e, error, petitioner insists t'ere &as no dela% &'en t'e to&n'o#se #nit &as not co+pleted &it'in si7 +ont's fro+ t'e signing of t'e contract inas+#c' as t'e +ere lapse of t'e stip#lated si7 (6! +ont' period is not $% itself eno#g' to constit#te dela% on 'is part and t'at of FB@", since t'e la& re*#ires t'at t'ere +#st eit'er $e j#dicial or e7traj#dicial de+and to f#lfill an o$ligation so t'at t'e o$ligor +a% $e declared in defa#lt. .e arg#es t'ere &as no evidence introd#ced s'o&ing t'at a prior de+and &as +ade $% respondent $efore t'e original action &as instit#ted in t'e trial co#rt. De do not agree. e+and is not necessar% in t'e instant case. e+and $% t'e respondent &o#ld $e #seless $eca#se t'e i+possi$ilit% of co+pl%ing &it' t'eir (petitioner and FB@"! o$ligation &as d#e to t'eir fa#lt. ,f onl% t'e% paid t'eir loans &it' t'e LB2, t'e +ortgage on t'e s#$ject to&n'o#se &o#ld not 'ave $een foreclosed and t'ereafter sold to a t'ird person.

9nent t'e %e*o+, .%%)/+e, error, petitioner arg#es t'at if t'ere &as an% dela%, t'e sa+e &as inc#rred $% respondent $eca#se 'e ref#sed to pa% t'e $alance of t'e contract price. De find 'is arg#+ent specio#s. 9s a$ove>disc#ssed, t'e o$ligation of respondent to pa% t'e $alance of t'e contract price &as conditioned on petitioner and FB@"Ps perfor+ance of t'eir o$ligation. "onsidering t'at t'e latter did not co+pl% &it' t'eir o$ligation to co+plete and deliver t'e to&n'o#se #nit &it'in t'e period agreed #pon, respondent co#ld not 'ave inc#rred dela%. For fail#re of one part% to ass#+e and perfor+ t'e o$ligation i+posed on 'i+, t'e ot'er part% does not inc#r dela%.J(5K Gnder t'e circ#+stances o$taining in t'is case, &e find t'at respondent is j#stified in ref#sing to pa% t'e $alance of t'e contract price. .e &as never in possession of t'e to&n'o#se #nit and 'e can no longer $e its o&ner since o&ners'ip t'ereof 'as $een transferred to a t'ird person &'o &as not a part% to t'e proceedings $elo&. ,t &o#ld si+pl% $e t'e 'eig't of ine*#it% if &e are to re*#ire respondent to pa% t'e $alance of t'e contract price. 4o allo& t'is &o#ld res#lt in t'e #nj#st enric'+ent of petitioner and FB@". 4'e f#nda+ental doctrine of #nj#st enric'+ent is t'e transfer of val#e &it'o#t j#st ca#se or consideration. 4'e ele+ents of t'is doctrine &'ic' are present in t'is case are: enric'+ent on t'e part of t'e defendant? i+poveris'+ent on t'e part of t'e plaintiff? and lacF of ca#se. 4'e +ain o$jective is to prevent one to enric' 'i+self at t'e e7pense of anot'er. ,t is co++onl% accepted t'at t'is doctrine si+pl% +eans a person s'all not $e allo&ed to profit or enric' 'i+self ine*#ita$l% at anot'erPs e7pense. J(6K .ence, to allo& petitioner and FB@" Feep t'e do&n pa%+ent +ade $% respondent a+o#nting to 2(,)6),))).)) &o#ld res#lt in t'eir #nj#st enric'+ent at t'e e7pense of t'e respondent. D'at is &orse is t'e fact t'at petitioner and FB@" intentionall% failed to infor+ respondent t'at t'e s#$ject to&n'o#se &'ic' 'e &as going to p#rc'ase &as alread% +ortgaged to LB2 at t'e ti+e of t'e perfection of t'eir contract. 4'is deli$erate &it''olding $% petitioner and FB@" of t'e +ortgage constit#tes fra#d and $ad fait'. /n t'e 0.%t .%%)/+e, error, petitioner contends t'at 'e s'o#ld not $e 'eld solidaril% lia$le &it' defendant FB@", $eca#se t'e latter is a separate and distinct entit% &'ic' is t'e seller of t'e s#$ject to&n'o#se. .e clai+s t'at 'e, as "'air+an and "'ief 87ec#tive /fficer of FB@", cannot $e 'eld lia$le $eca#se 'is representing FB@" in its dealings is a corporate act for &'ic' onl% FB@" s'o#ld $e 'eld lia$le. 4'is iss#e of piercing t'e veil of corporate fiction &as never raised $efore t'e trial co#rt. 4'e sa+e &as raised for t'e first ti+e $efore t'e "o#rt of 9ppeals &'ic' r#led t'at it &as too late in t'e da% to raise t'e sa+e. 4'e "o#rt of 9ppeals declared: ,n t'e case $elo&, t'e pleadings and t'e evidence of t'e defendants are one and t'e sa+e and never 'ad it +ade to appear t'at 9l+ocera is a person distinct and separate fro+ t'e ot'er defendant. ,n fine, &e cannot treat t'is error for t'e first ti+e on appeal. De cannot in good conscience, let t'e defendant 9l+ocera raise t'e iss#e of piercing t'e veil of corporate fiction j#st $eca#se of t'e adverse decision against 'i+. 7 7 7. J(6K

G.R. No. 126012

J&03 12, 2006

ANTONIO R. CORTES 4)+ -)% *.p.*)t3 .% A,m)+)%tr.tor o( t-e e%t.te o( C0.ro S. Corte%5, petitioner, vs. HON. CO#RT OF A""EA$S .+, VI$$A ES"ERAN!A 6EVE$O"MENT COR"ORATION, respondents. F.*t%' For t'e p#rc'ase price of 23,1)),))).)), t'e "orporation as $#%er, and "ortes as seller, entered into a contract of sale over t'e lots covered $% 4ransfer "ertificate of 4itle (4"4! ;o. 3(((3>9, 4"4 ;o. 3(0(3>9 and 4"4 ;o. 32)(3>9, located at Baclaran, 2araBa*#e, @etro @anila. /n vario#s dates in (063, t'e "orporation advanced to "ortes t'e total s#+ of 2(,2(3,))).)). So+eti+e in Septe+$er (063, t'e parties e7ec#ted a deed of a$sol#te sale containing t'e follo&ing ter+s:3 (. Gpon e7ec#tion of t'is instr#+ent, t'e Vendee s'all pa% #nto t'e Vendor s#+ of 4D/ @,LL,/; 9; 4D/ .G; 38 4./GS9; (22,2)),))).))! less all advances paid $% t'e Vendee to t'e Vendor in connection &it' t'e sale? 2. 4'e $alance of /;8 @,LL,/; 9; F,V8 .G; 38 4./GS9; J2(,5)),))).))K 28S/S, s'all $e pa%a$le &it'in /;8 ((! H893 fro+ date of e7ec#tion of t'is instr#+ent, pa%+ent of &'ic' s'all $e sec#red $% an irrevoca$le stand$% letter of credit to $e iss#ed $% an% rep#ta$le local $anFing instit#tion accepta$le to t'e Vendor. 7777 4. 9ll e7pense for t'e registration of t'is doc#+ent &it' t'e 3egister of eeds concerned, incl#ding t'e transfer ta7, s'all $e divided e*#all% $et&een t'e Vendor and t'e Vendee. 2a%+ent of t'e capital gains s'all $e e7cl#sivel% for t'e acco#nt of t'e Vendor? 5I co++ission of @arcosa Sanc'e- to $e ded#cted #pon signing of sale.4 Said eed &as retained $% "ortes for notari-ation.

/n :an#ar% (4, (065, t'e "orporation filed t'e instant case 5 for specific perfor+ance seeFing to co+pel "ortes to deliver t'e 4"4s and t'e original cop% of t'e eed of 9$sol#te Sale. 9ccording to t'e "orporation, despite its readiness and a$ilit% to pa% t'e p#rc'ase price, "ortes ref#sed deliver% of t'e so#g't doc#+ents. "ortes clai+ed t'at t'e o&nerCs d#plicate cop% of t'e t'ree 4"4s &ere s#rrendered to t'e "orporation and it is t'e latter &'ic' ref#sed to pa% in f#ll t'e agreed do&n pa%+ent. .e added t'at portion of t'e s#$ject propert% is occ#pied $% 'is lessee &'o agreed to vacate t'e pre+ises #pon pa%+ent of dist#r$ance fee. .o&ever, d#e to t'e "orporationCs fail#re to pa% in f#ll t'e s#+ of 22,2)),))).)), 'e in t#rn failed to f#ll% pa% t'e dist#r$ance fee of t'e lessee &'o no& ref#sed to pa% +ont'l% rentals. .e t'#s pra%ed t'at t'e "orporation $e ordered to pa% t'e o#tstanding $alance pl#s interest and in t'e alternative, to cancel t'e sale and forfeit t'e 2(,2(3,))).)) partial do&n pa%+ent, &it' da+ages in eit'er case. 4'e trial co#rt rendered a decision rescinding t'e sale and directed "ortes to ret#rn to t'e "orporation t'e a+o#nt of 2(,2(3,))).)), pl#s interest. ,t r#led t'at p#rs#ant to t'e contract of t'e parties, t'e "orporation s'o#ld 'ave f#ll% paid t'e a+o#nt of 22,2)),))).)) #pon t'e e7ec#tion of t'e contract. ,t stressed t'at s#c' is t'e la& $et&een t'e parties

$eca#se t'e "orporation failed to present evidence t'at t'ere &as anot'er agree+ent t'at +odified t'e ter+s of pa%+ent as stated in t'e contract. 9nd, 'aving failed to pa% in f#ll t'e a+o#nt of 22,2)),))).)) despite "ortesC deliver% of t'e eed of 9$sol#te Sale and t'e 4"4s, rescission of t'e contract is proper. ,n its +otion for reconsideration, t'e "orporation contended t'at t'e trial co#rt failed to consider t'eir agree+ent t'at it &o#ld pa% t'e $alance of t'e do&n pa%+ent &'en "ortes delivers t'e 4"4s. 4'e +otion &as, 'o&ever, denied $% t'e trial co#rt 'olding t'at t'e rescission s'o#ld stand $eca#se t'e "orporation did not act on t'e offer of "ortesC co#nsel to deliver t'e 4"4s #pon pa%+ent of t'e $alance of t'e do&n pa%+ent. /n appeal, t'e "o#rt of 9ppeals reversed t'e decision of t'e trial co#rt and directed "ortes to e7ec#te a eed of 9$sol#te Sale conve%ing t'e properties and to deliver t'e sa+e to t'e "orporation toget'er &it' t'e 4"4s, si+#ltaneo#s &it' t'e "orporationCs pa%+ent of t'e $alance of t'e p#rc'ase price of 22,461,))).)). ,t fo#nd t'at t'e parties agreed t'at t'e "orporation &ill f#ll% pa% t'e $alance of t'e do&n pa%+ent #pon "ortesC deliver% of t'e t'ree 4"4s to t'e "orporation. 4'e records s'o& t'at no s#c' deliver% &as +ade, 'ence, t'e "orporation &as not re+iss in t'e perfor+ance of its o$ligation and t'erefore j#stified in not pa%ing t'e $alance. I%%&e' D'et'er t'ere is dela% in t'e perfor+ance of t'e partiesC o$ligation t'at &o#ld j#stif% t'e rescission of t'e contract of sale. 4o resolve t'is iss#e, &e +#st first deter+ine t'e tr#e agree+ent of t'e parties. ,n t'e case at $ar, t'e stip#lation in t'e eed of 9$sol#te Sale &as t'at t'e "orporation s'all pa% in f#ll t'e 22,2)),))).)) do&n pa%+ent #pon e7ec#tion of t'e contract. .o&ever, as correctl% noted $% t'e "o#rt of 9ppeals, t'e transcript of stenograp'ic notes reveal "ortesC ad+ission t'at 'e agreed t'at t'e "orporationCs f#ll pa%+ent of t'e s#+ of 22,2)),))).)) &o#ld depend #pon 'is deliver% of t'e 4"4s of t'e t'ree lots. ,n fact, 'is +ain defense in t'e 9ns&er is t'at, 'e perfor+ed &'at is inc#+$ent #pon 'i+ $% delivering to t'e "orporation t'e 4"4s and t'e car$on d#plicate of t'e eed of 9$sol#te Sale, $#t t'e latter ref#sed to pa% in f#ll t'e do&n pa%+ent.(( 2ertinent portion of t'e transcript, reads: JEK ;o&, &'% did %o# deliver t'ese t'ree titles to t'e plaintiff despite t'e fact t'at it 'as not $een paid in f#ll t'e agreed do&n pa%+entQ 9 Dell, t'e $roFer told +e t'at t'e do&n pa%+ent &ill $e given if , s#rrender t'e titles. E o %o# +ean to sa% t'at t'e plaintiff agreed to pa% in f#ll t'e do&n pa%+ent of 22,2)),))).)) provided %o# s#rrender or entr#st to t'e plaintiff t'e titlesQ 9 Hes, sir.(2 D'at f#rt'er confir+ed t'e agree+ent to deliver t'e 4"4s is t'e testi+on% of "ortes t'at t'e title of t'e lots &ill $e transferred in t'e na+e of t'e "orporation #pon f#ll pa%+ent of t'e 22,2)),))).)) do&n pa%+ent. 4'#s R 944H. 9;4939; E /f co#rse, %o# 'ave it transferred in t'e na+e of t'e plaintiff, t'e titleQ 9 Gpon f#ll pa%+ent.

7777 944H. S9348 E D'en %o# said #pon f#ll pa%+ent, are %o# referring to t'e agreed do&n pa%+ent of 22,2)),))).))Q 9 Hes, sir.(3 B% agreeing to transfer title #pon f#ll pa%+ent of 22,2)),))).)), "ortesC i+pliedl% agreed to deliver t'e 4"4s to t'e "orporation in order to effect said transfer. .ence, t'e p'rase 5e7ec#tion of t'is instr#+ent5 (4 as appearing in t'e eed of 9$sol#te Sale, and &'ic' event &o#ld give rise to t'e "orporationCs o$ligation to pa% in f#ll t'e a+o#nt of 22,2)),))).)), can not $e constr#ed as referring solel% to t'e signing of t'e deed. 4'e +eaning of 5e7ec#tion5 in t'e instant case is not li+ited to t'e signing of a contract $#t incl#des as &ell t'e perfor+ance or i+ple+entation or acco+plis'+ent of t'e partiesC agree+ent. (5 Dit' t'e transfer of titles as t'e corresponding reciprocal o$ligation of pa%+ent, "ortesC o$ligation is not onl% to affi7 'is signat#re in t'e eed, $#t to set into +otion t'e process t'at &o#ld facilitate t'e transfer of title of t'e lots, i'e., to 'ave t'e eed notari-ed and to s#rrender t'e original cop% t'ereof to t'e "orporation toget'er &it' t'e 4"4s. .aving esta$lis'ed t'e tr#e agree+ent of t'e parties, t'e "o#rt +#st no& deter+ine &'et'er "ortes delivered t'e 4"4s and t'e original eed to t'e "orporation. 4'e "o#rt of 9ppeals fo#nd t'at "ortes never s#rrendered said doc#+ents to t'e "orporation. "ortes testified t'at 'e delivered t'e sa+e to @ann% Sanc'e-, t'e son of t'e $roFer, and t'at @ann% told 'i+ t'at 'er +ot'er, @arcosa Sanc'e-, delivered t'e sa+e to t'e "orporation. E o %o# 'ave an% proof to s'o& t'at %o# 'ave indeed s#rrendered t'ese titles to t'e plaintiffQ 9 Hes, sir. E , a+ s'o&ing to %o# a receipt dated /cto$er 20, (063, &'at relation 'as t'is receipt &it' t'at receipt t'at %o# 'ave +entionedQ 9 4'at is t'e receipt of t'e real estate $roFer &'en s'e received t'e titles. E /n top of t'e printed na+e is @ann% Sanc'e-, t'ere is a signat#re, do %o# Fno& &'o is t'at @ann% Sanc'e-Q 9 4'at is t'e son of t'e $roFer. 7777 E @a% &e Fno& t'e f#ll na+e of t'e real estate $roFerQ 9 @arcosa Sanc'e7777 E o %o# Fno& if t'e $roFer or @arcosa Sanc'e- indeed delivered t'e titles to t'e plaintiffQ

9 4'at is &'at JsK'e told +e. S'e gave t'e+ to t'e plaintiff. 7 7 7 7.(6 944H. 9;4939; E 9re %o# reall% s#re t'at t'e title is in t'e 'ands of t'e plaintiffQ 7777 E ,t is in t'e 'ands of t'e $roFer $#t t'ere is no s'o&ing t'at it is in t'e 'ands of t'e plaintiffQ 9 Hes, sir. "/G34 E .o& do %o# Fno& t'at it &as delivered to t'e plaintiff $% t'e son of t'e $roFerQ 9 4'e $roFer told +e t'at s'e delivered t'e title to t'e plaintiff. 944H. 9;4939; E id s'e not s'o& %o# an% receipt t'at s'e delivered to J@r.K &it'o#t an% receiptQ 9 , 'ave not seen an% receipt. E So, t'erefore, %o# are not s#re &'et'er t'e title 'as $een delivered to t'e plaintiff or not. ,t is onl% #pon t'e allegation of t'e $roFerQ 9 Hes, sir.(6 .o&ever, @arcosa Sanc'e-Cs #nre$#tted testi+on% is t'at, s'e did not receive t'e 4"4s. S'e also denied Fno&ledge of deliver% t'ereof to 'er son, @ann%, t'#s: E 4'e defendant, 9ntonio "ortes testified d#ring t'e 'earing on @arc' ((, (066 t'at 'e allegedl% gave %o# t'e title to t'e propert% in *#estion, is it tr#eQ 9 , did not receive t'e title. E .e liFe&ise said t'at t'e title &as delivered to %o#r son, do %o# Fno& a$o#t t'atQ 9 , do not Fno& an%t'ing a$o#t t'at.(0 D'at f#rt'er strengt'ened t'e findings of t'e "o#rt of 9ppeals t'at "ortes did not s#rrender t'e s#$ject doc#+ents &as t'e offer of "ortesC co#nsel at t'e pre>trial to deliver t'e 4"4s and t'e eed of 9$sol#te Sale if t'e "orporation &ill pa% t'e $alance of t'e do&n pa%+ent. ,ndeed, if t'e said doc#+ents &ere alread% in t'e 'ands of t'e "orporation, t'ere &as no need for "ortesC co#nsel to +aFe s#c' offer. ragon (1 t'e title

Since "ortes did not perfor+ 'is o$ligation to 'ave t'e eed notari-ed and to s#rrender t'e sa+e toget'er &it' t'e 4"4s, t'e trial co#rt erred in concl#ding t'at 'e perfor+ed 'is part in t'e contract of sale and t'at it is t'e "orporation alone t'at &as re+iss in t'e perfor+ance of its o$ligation. 9ct#all%, $ot' parties &ere in dela%. "onsidering t'at t'eir o$ligation &as reciprocal, perfor+ance t'ereof +#st $e si+#ltaneo#s. 4'e +#t#al inaction of "ortes and t'e "orporation t'erefore gave rise to a compensation morae or defa#lt on t'e part of $ot' parties $eca#se neit'er 'as co+pleted t'eir part in t'eir reciprocal o$ligation.2) "ortes is %et to deliver t'e original cop% of t'e notari-ed eed and t'e 4"4s, &'ile t'e "orporation is %et to pa% in f#ll t'e agreed do&n pa%+ent of 22,2)),))).)). 4'is +#t#al dela% of t'e parties cancels o#t t'e effects of defa#lt, 2( s#c' t'at it is as if no one is g#ilt% of dela%.22 De find no +erit in "ortesC contention t'at t'e fail#re of t'e "orporation to act on t'e proposed settle+ent at t'e pre>trial +#st $e constr#ed against t'e latter. "ortes arg#ed t'at &it' 'is co#nselCs offer to s#rrender t'e original eed and t'e 4"4s, t'e "orporation s'o#ld 'ave consigned t'e $alance of t'e do&n pa%+ent. 4'is arg#+ent &o#ld 'ave $een correct if "ortes act#all% s#rrendered t'e eed and t'e 4"4s to t'e "orporation. Dit' s#c' deliver%, t'e "orporation &o#ld 'ave $een placed in defa#lt if it c'ose not to pa% in f#ll t'e re*#ired do&n pa%+ent. Gnder 9rticle ((60 of t'e "ivil "ode, fro+ t'e +o+ent one of t'e parties f#lfills 'is o$ligation, dela% $% t'e ot'er $egins. Since "ortes did not perfor+ 'is part, t'e provision of t'e contract re*#iring t'e "orporation to pa% in f#ll t'e do&n pa%+ent never ac*#ired o$ligator% force. @oreover, t'e "orporation co#ld not $e fa#lted for not a#to+aticall% 'eeding to t'e offer of "ortes.