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1.Whether or not the June 4, 1985 letter of the defendant approving/accepting plaintiff's offer topurchase the property is still valid and legally enforceable.

2.Whether or not the plaintiff has waived its right to purchase the property when it failed to conform withthe conditions set forth by the defendant in its letter dated June 4, 1985.

3.Whether or not there is a perfected contract of sale between the parties. 26

While the case was pending, respondent PNB demanded, on September 20, 1989, that petitioner vacate the property

within 15 days from notice, 27but petitioners refused to do so.

On March 18, 1993, petitioner offered to repurchase the property for P3,500,000.00. 28The offer was however rejectedby respondent PNB, in a letter dated April 13, 1993. According to it, the prevailing market value of the property wasapproximately P30,000,000.00, and as a matter of policy, it could not sell the property for less than its marketvalue.29 On June 21, 1993, petitioner offered to purchase the property for P4,250,000.00 in cash. 30The offer was againrejected by respondent PNB on September 13, 1993. 31

On May 31, 1994, the trial court rendered judgment dismissing the amended complaint and respondent PNB'scounterclaim. It ordered respondent PNB to refund the P725,000.00 deposit petitioner had made. 32The trial court ruledthat there was no perfected contract of sale between the parties; hence, petitioner had no cause of action for specificperformance against respondent. The trial court declared that respondent had rejected petitioner's offer to repurchase theproperty. Petitioner, in turn, rejected the terms and conditions contained in the June 4, 1985 letter of the SAMD. While

petitioner had offered to repurchase the property per its letter of July 14, 1988, the amount of P643,422.34 was way belowthe P1,206,389.53 which respondent PNB had demanded. It further declared that the P725,000.00 remitted by petitionerto respondent PNB on June 4, 1985 was a "deposit," and not a downpayment or earnest money. TDCAIS

On appeal to the CA, petitioner made the following allegations:

I

THE LOWER COURT ERRED IN RULING THAT DEFENDANT-APPELLEE'S LETTER DATED 4JUNE 1985 APPROVING/ACCEPTING PLAINTIFF-APPELLANT'S OFFER TO PURCHASE THESUBJECT PROPERTY IS NOT VALID AND ENFORCEABLE.

II

THE LOWER COURT ERRED IN RULING THAT THERE WAS NO PERFECTED CONTRACT OFSALE BETWEEN PLAINTIFF-APPELLANT AND DEFENDANT-APPELLEE.

III

THE LOWER COURT ERRED IN RULING THAT PLAINTIFF-APPELLANT WAIVED ITS RIGHT TOPURCHASE THE SUBJECT PROPERTY WHEN IT FAILED TO CONFORM WITH CONDITIONS SETFORTH BY DEFENDANT-APPELLEE IN ITS LETTER DATED 4 JUNE 1985.

IV

THE LOWER COURT ERRED IN DISREGARDING THE FACT THAT IT WAS THE DEFENDANT-APPELLEE WHICH RENDERED IT DIFFICULT IF NOT IMPOSSIBLE FOR PLAINTIFF-APPELLANTTO COMPLETE THE BALANCE OF THEIR PURCHASE PRICE.

V

THE LOWER COURT ERRED IN DISREGARDING THE FACT THAT THERE WAS NO VALIDRESCISSION OR CANCELLATION OF SUBJECT CONTRACT OF REPURCHASE.

VI

THE LOWER COURT ERRED IN DECLARING THAT PLAINTIFF FAILED AND REFUSED TO

SUBMIT THE AMENDED REPURCHASE OFFER.

VII

THE LOWER COURT ERRED IN DISMISSING THE AMENDED COMPLAINT OF PLAINTIFF-APPELLANT.

VIII

THE LOWER COURT ERRED IN NOT AWARDING PLAINTIFF-APPELLANT ACTUAL, MORAL ANDEXEMPLARY DAMAGES, ATTORNEY'S FEES AND LITIGATION EXPENSES. 33
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Meanwhile, on June 17, 1993, petitioner's Board of Directors approved Resolution No. 3-004, where it waived, assignedand transferred its rights over the property covered by TCT No. 33099 and TCT No. 37025 in favor of Bayani Gabriel, oneof its Directors. 34 Thereafter, Bayani Gabriel executed a Deed of Assignment over 51% of the ownership andmanagement of the property in favor of Reynaldo Tolentino, who later moved for leave to intervene as plaintiff-appellant.On July 14, 1993, the CA issued a resolution granting the motion, 35and likewise granted the motion of ReynaldoTolentino substituting petitioner MMCC, as plaintiff-appellant, and his motion to withdraw as intervenor. 36

The CA rendered judgment on May 11, 2000 affirming the decision of the RTC. 37 It declared that petitioner obviouslynever agreed to the selling price proposed by respondent PNB (P1,931,389.53) since petitioner had kept on insisting that

the selling price should be lowered to P1,574,560.47. Clearly therefore, there was no meeting of the minds between theparties as to the price or consideration of the sale. cSEAHa

The CA ratiocinated that petitioner's original offer to purchase the subject property had not been accepted by respondentPNB. In fact, it made a counter-offer through its June 4, 1985 letter specifically on the selling price; petitioner did not agreeto the counter-offer; and the negotiations did not prosper. Moreover, petitioner did not pay the balance of the purchaseprice within the sixty-day period set in the June 4, 1985 letter of respondent PNB. Consequently, there was no perfectedcontract of sale, and as such, there was no contract to rescind.

According to the appellate court, the claim for damages and the counterclaim were correctly dismissed by the court aquo for no evidence was presented to support it. Respondent PNB's letter dated June 30, 1988 cannot revive the failednegotiations between the parties. Respondent PNB merely asked petitioner to submit an amended offer to repurchase.While petitioner reiterated its request for a lower selling price and that the balance of the repurchase be reduced,

however, respondent rejected the proposal in a letter dated August 1, 1989.

Petitioner filed a motion for reconsideration, which the CA likewise denied.

Thus, petitioner filed the instant petition for review on certiorari, alleging that:

I.THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THERE ISNO PERFECTED CONTRACT OF SALE BETWEEN THE PETITIONER AND RESPONDENT.

II.THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THEAMOUNT OF PHP725,000.00 PAID BY THE PETITIONER IS NOT AN EARNEST MONEY.

III.THE COURT OF APPEALS ERRED ON A QUESTION OF LAW WHEN IT RULED THAT THEFAILURE OF THE PETITIONER-APPELLANT TO SIGNIFY ITS CONFORMITY TO THETERMS CONTAINED IN PNB'S JUNE 4, 1985 LETTER MEANS THAT THERE WAS NOVALID AND LEGALLY ENFORCEABLE CONTRACT OF SALE BETWEEN THE PARTIES.

IV.THE COURT OF APPEALS ERRED ON A QUESTION OF LAW THAT NON-PAYMENT OF THEPETITIONER-APPELLANT OF THE BALANCE OF THE OFFERED PRICE IN THE LETTEROF PNB DATED JUNE 4, 1985, WITHIN SIXTY (60) DAYS FROM NOTICE OF APPROVALCONSTITUTES NO VALID AND LEGALLY ENFORCEABLE CONTRACT OF SALEBETWEEN THE PARTIES.

V.THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT HELD THAT THE LETTERS OFPETITIONER-APPELLANT DATED MARCH 18, 1993 AND JUNE 21, 1993, OFFERING TO

BUY THE SUBJECT PROPERTY AT DIFFERENT AMOUNT WERE PROOF THAT THERE ISNO PERFECTED CONTRACT OF SALE. 38

The threshold issue is whether or not petitioner and respondent PNB had entered into a perfected contract for petitioner torepurchase the property from respondent.

Petitioner maintains that it had accepted respondent's offer made through the SAMD, to sell the property forP1,574,560.00. When the acceptance was made in its letter dated June 25, 1984; it then deposited P725,000.00 with theSAMD as partial payment, evidenced by Receipt No. 978194 which respondent had issued. Petitioner avers that theSAMD's acceptance of the deposit amounted to an acceptance of its offer to repurchase. Moreover, as gleaned from theletter of SAMD dated June 4, 1985, the PNB Board of Directors had approved petitioner's offer to purchase the property. Itclaims that this was the suspensive condition, the fulfillment of which gave rise to the contract. Respondent could nolonger unilaterally withdraw its offer to sell the property for P1,574,560.47, since the acceptance of the offer resulted in a

perfected contract of sale; it was obliged to remit to respondent the balance of the original purchase price ofP1,574,560.47, while respondent was obliged to transfer ownership and deliver the property to petitioner, conformablywith Article 1159 of the New Civil Code. HcSDIE

Petitioner posits that respondent was proscribed from increasing the interest rate after it had accepted respondent's offerto sell the property for P1,574,560.00. Consequently, respondent could no longer validly make a counter-offer ofP1,931,789.88 for the purchase of the property. It likewise maintains that, although the P725,000.00 was considered as"deposit for the repurchase of the property" in the receipt issued by the SAMD, the amount constitutes earnest money ascontemplated in Article 1482 of the New Civil Code. Petitioner cites the rulings of this Court in Villonco v.Bormaheco39 and Topacio v. Court of Appeals. 40
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Petitioner avers that its failure to append its conformity to the June 4, 1984 letter of respondent and its failure to pay thebalance of the price as fixed by respondent within the 60-day period from notice was to protest respondent's breach of itsobligation to petitioner. It did not amount to a rejection of respondent's offer to sell the property since respondent wasmerely seeking to enforce its right to pay the balance of P1,570,564.47. In any event, respondent had the option either toaccept the balance of the offered price or to cause the rescission of the contract.

Petitioner's letters dated March 18, 1993 and June 21, 1993 to respondent during the pendency of the case in the RTCwere merely to compromise the pending lawsuit, they did not constitute separate offers to repurchase the property. Suchoffer to compromise should not be taken against it, in accordance with Section 27, Rule 130 of the Revised Rules of

Court.

For its part, respondent contends that the parties never graduated from the "negotiation stage" as they could not agree onthe amount of the repurchase price of the property. All that transpired was an exchange of proposals and counter-proposals, nothing more. It insists that a definite agreement on the amount and manner of payment of the price areessential elements in the formation of a binding and enforceable contract of sale. There was no such agreement in thiscase. Primarily, the concept of "suspensive condition" signifies a future and uncertain event upon the fulfillment of whichthe obligation becomes effective. It clearly presupposes the existence of a valid and binding agreement, the effectivity ofwhich is subordinated to its fulfillment. Since there is no perfected contract in the first place, there is no basis for theapplication of the principles governing "suspensive conditions."

According to respondent, the Statement of Account prepared by SAMD as of June 25, 1984 cannot be classified as acounter-offer; it is simply a recital of its total monetary claims against petitioner. Moreover, the amount stated therein could

not likewise be considered as the counter-offer since as admitted by petitioner, it was only recommendation which wassubject to approval of the PNB Board of Directors.

Neither can the receipt by the SAMD of P725,000.00 be regarded as evidence of a perfected sale contract. As gleanedfrom the parties' Stipulation of Facts during the proceedings in the court a quo, the amount is merely an acknowledgmentof the receipt of P725,000.00 as deposit to repurchase the property. The deposit of P725,000.00 was accepted byrespondent on the condition that the purchase price would still be approved by its Board of Directors. Respondentmaintains that its acceptance of the amount was qualified by that condition, thus not absolute. Pending such approval, itcannot be legally claimed that respondent is already bound by any contract of sale with petitioner.

According to respondent, petitioner knew that the SAMD has no capacity to bind respondent and that its authority islimited to administering, managing and preserving the properties and other special assets of PNB. The SAMD does nothave the power to sell, encumber, dispose of, or otherwise alienate the assets, since the power to do so must emanate

from its Board of Directors. The SAMD was not authorized by respondent's Board to enter into contracts of sale with thirdpersons involving corporate assets. There is absolutely nothing on record that respondent authorized the SAMD, or madeit appear to petitioner that it represented itself as having such authority.

Respondent reiterates that SAMD had informed petitioner that its offer to repurchase had been approved by the Boardsubject to the condition, among others, "that the selling price shall be the total bank's claim as of documentation date . . .payable in cash (P725,000.00 already deposited) within 60 days from notice of approval." A new Statement of Accountwas attached therein indicating the total bank's claim to be P1,931,389.53 less deposit of P725,000.00, or P1,206,389.00.Furthermore, while respondent's Board of Directors accepted petitioner's offer to repurchase the property, the acceptancewas qualified, in that it required a higher sale price and subject to specified terms and conditions enumerated therein. Thisqualified acceptance was in effect a counter-offer, necessitating petitioner's acceptance in return. aIAEcD

The Ruling of the Court

The ruling of the appellate court that there was no perfected contract of sale between the parties on June 4, 1985 iscorrect.

A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to givesomething or to render some service. 41Under Article 1318 of the New Civil Code, there is no contract unless thefollowing requisites concur:

(1)Consent of the contracting parties;

(2)Object certain which is the subject matter of the contract;

(3)Cause of the obligation which is established.

Contracts are perfected by mere consent which is manifested by the meeting of the offer and the acceptance upon thething and the cause which are to constitute the contract. 42Once perfected, they bind other contracting parties and theobligations arising therefrom have the form of law between the parties and should be complied with in good faith. Theparties are bound not only to the fulfillment of what has been expressly stipulated but also to the consequences which,according to their nature, may be in keeping with good faith, usage and law. 43

By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and deliver adeterminate thing, and the other to pay therefor a price certain in money or its equivalent. 44 The absence of any of theessential elements will negate the existence of a perfected contract of sale. As the Court ruled in Boston Bank of thePhilippines v. Manalo: 45
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A definite agreement as to the price is an essential element of a binding agreement to sell personal orreal property because it seriously affects the rights and obligations of the parties. Price is an essentialelement in the formation of a binding and enforceable contract of sale. The fixing of the price can neverbe left to the decision of one of the contracting parties. But a price fixed by one of the contractingparties, if accepted by the other, gives rise to a perfected sale. 46

A contract of sale is consensual in nature and is perfected upon mere meeting of the minds. When there is merely an offerby one party without acceptance of the other, there is no contract. 47When the contract of sale is not perfected, it cannot,as an independent source of obligation, serve as a binding juridical relation between the parties. 48

In San Miguel Properties Philippines, Inc. v. Huang, 49the Court ruled that the stages of a contract of sale are as follows:(1) negotiation, covering the period from the time the prospective contracting parties indicate interest in the contract to thetime the contract is perfected; (2) perfection, which takes place upon the concurrence of the essential elements of the salewhich are the meeting of the minds of the parties as to the object of the contract and upon the price; and(3)consummation, which begins when the parties perform their respective undertakings under the contract of sale,culminating in the extinguishment thereof.

A negotiation is formally initiated by an offer, which, however, must be certain.50 At any time prior to the perfection of thecontract, either negotiating party may stop the negotiation. At this stage, the offer may be withdrawn; the withdrawal iseffective immediately after its manifestation. To convert the offer into a contract, the acceptance must be absolute andmust not qualify the terms of the offer; it must be plain, unequivocal, unconditional and without variance of any sort fromthe proposal. InAdelfa Properties, Inc. v. Court of Appeals,51 the Court ruled that:

. . . The rule is that except where a formal acceptance is so required, although the acceptance must beaffirmatively and clearly made and must be evidenced by some acts or conduct communicated to theofferor, it may be shown by acts, conduct, or words of the accepting party that clearly manifest apresent intention or determination to accept the offer to buy or sell. Thus, acceptance may be shown bythe acts, conduct, or words of a party recognizing the existence of the contract of sale. 52

A qualified acceptance or one that involves a new proposal constitutes a counter-offer and a rejection of the original offer.A counter-offer is considered in law, a rejection of the original offer and an attempt to end the negotiation between theparties on a different basis.53Consequently, when something is desired which is not exactly what is proposed in theoffer, such acceptance is not sufficient to guarantee consent because any modification or variation from the terms of theoffer annuls the offer. 54 The acceptance must be identical in all respects with that of the offer so as to produce consentor meeting of the minds.

In this case, petitioner had until February 17, 1984 within which to redeem the property. However, since it lacked theresources, it requested for more time to redeem/repurchase the property under such terms and conditions agreed upon bythe parties.55The request, which was made through a letter dated August 25, 1983, was referred to the respondent'smain branch for appropriate action. 56Before respondent could act on the request, petitioner again wrote respondent asfollows:

1.Upon approval of our request, we will pay your goodselves ONE HUNDRED & FIFTY THOUSANDPESOS (P150,000.00); aEHIDT

2.Within six months from date of approval of our request, we will pay another FOUR HUNDRED FIFTYTHOUSAND PESOS (P450,000.00); and

3.The remaining balance together with the interest and other expenses that will be incurred will be paidwithin the last six months of the one year grave period requested for. 57

When the petitioner was told that respondent did not allow "partial redemption," 58 it sent a letter to respondent'sPresident reiterating its offer to purchase the property. 59 There was no response to petitioner's letters datedFebruary 10 and 15, 1984.

The statement of account prepared by the SAMD stating that the net claim of respondent as of June 25, 1984 wasP1,574,560.47 cannot be considered an unqualified acceptance to petitioner's offer to purchase the property. Thestatement is but a computation of the amount which petitioner was obliged to pay in case respondent would later agree tosell the property, including interests, advances on insurance premium, advances on realty taxes, publication cost,registration expenses and miscellaneous expenses.

There is no evidence that the SAMD was authorized by respondent's Board of Directors to accept petitioner's offer andsell the property for P1,574,560.47. Any acceptance by the SAMD of petitioner's offer would not bind respondent. As thisCourt ruled in AF Realty Development, Inc. vs. Diesehuan Freight Services, Inc.:60

Section 23 of the Corporation Code expressly provides that the corporate powers of all corporationsshall be exercised by the board of directors. Just as a natural person may authorize another to docertain acts in his behalf, so may the board of directors of a corporation validly delegate some of itsfunctions to individual officers or agents appointed by it. Thus, contracts or acts of a corporation mustbe made either by the board of directors or by a corporate agent duly authorized by the board. Absentsuch valid delegation/authorization, the rule is that the declarations of an individual director relating tothe affairs of the corporation, but not in the course of, or connected with the performance of authorizedduties of such director, are held not binding on the corporation.
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Thus, a corporation can only execute its powers and transact its business through its Board of Directors and through itsofficers and agents when authorized by a board resolution or its by-laws.61

It appears that the SAMD had prepared a recommendation for respondent to accept petitioner's offer to repurchase theproperty even beyond the one-year period; it recommended that petitioner be allowed to redeem the property and payP1,574,560.00 as the purchase price. Respondent later approved the recommendation that the property be sold topetitioner. But instead of the P1,574,560.47 recommended by the SAMD and to which petitioner had previouslyconformed, respondent set the purchase price at P2,660,000.00. In fine, respondent's acceptance of petitioner's offer wasqualified, hence can be at most considered as a counter-offer. If petitioner had accepted this counter-offer, a perfected

contract of sale would have arisen; as it turns out, however, petitioner merely sought to have the counter-offerreconsidered. This request for reconsideration would later be rejected by respondent.

We do not agree with petitioner's contention that the P725,000.00 it had remitted to respondent was "earnest money"which could be considered as proof of the perfection of a contract of sale under Article 1482 of the New Civil Code. Theprovision reads:

ART. 1482.Whenever earnest money is given in a contract of sale, it shall be considered as part of theprice and as proof of the perfection of the contract.

This contention is likewise negated by the stipulation of facts which the parties entered into in the trial court:

8.On June 8, 1984, the Special Assets Management Department (SAMD) of PNB prepared an updated

Statement of Account showing MMCC's total liability to PNB as of June 25, 1984 to be P1,574,560.47and recommended this amount as the repurchase price of the subject property.

9.On June 25, 1984, MMCC paid P725,000.00 to PNB as deposit to repurchase the property. Thedeposit of P725,000 was accepted by PNB on the condition that the purchase price is stillsubject to the approval of the PNB Board.62

Thus, the P725,000.00 was merely a deposit to be applied as part of the purchase price of the property, in the event thatrespondent would approve the recommendation of SAMD for respondent to accept petitioner's offer to purchase theproperty for P1,574,560.47. Unless and until the respondent accepted the offer on these terms, no perfected contract ofsale would arise. Absent proof of the concurrence of all the essential elements of a contract of sale, the giving of earnestmoney cannot establish the existence of a perfected contract of sale. 63

It appears that, per its letter to petitioner dated June 4, 1985, the respondent had decided to accept the offer to purchasethe property for P1,931,389.53. However, this amounted to an amendment of respondent's qualified acceptance, or anamended counter-offer, because while the respondent lowered the purchase price, it still declared that its acceptance wassubject to the following terms and conditions:

1.That the selling price shall be the total Bank's claim as of documentation date (pls. see attachedstatement of account as of 5-31-85), payable in cash (P725,000.00 already deposited) withinsixty (60) days from notice of approval; ESHAcI

2.The Bank sells only whatever rights, interests and participation it may have in the property and youare charged with full knowledge of the nature and extent of said rights, interests andparticipation and waive your right to warranty against eviction.

3.All taxes and other government imposts due or to become due on the property, as well as expensesincluding costs of documents and science stamps, transfer fees, etc., to be incurred inconnection with the execution and registration of all covering documents shall be borne by you;

4.That you shall undertake at your own expense and account the ejectment of the occupants of theproperty subject of the sale, if there are any;

5.That upon your failure to pay the balance of the purchase price within sixty (60) days from receipt ofadvice accepting your offer, your deposit shall be forfeited and the Bank is thenceforthauthorized to sell the property to other interested parties.

6.That the sale shall be subject to such other terms and conditions that the Legal Department may

impose to protect the interest of the Bank. 64

It appears that although respondent requested petitioner to conform to its amended counter-offer, petitioner refused andinstead requested respondent to reconsider its amended counter-offer. Petitioner's request was ultimately rejected andrespondent offered to refund its P725,000.00 deposit.

In sum, then, there was no perfected contract of sale between petitioner and respondent over the subject property.

IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The assailed decision is AFFIRMED. Costs againstpetitioner Manila Metal Container Corporation.
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Second, plaintiff was the first to react to show his eagerness to push through with the sale by sendingdefendants the letter dated March 25, 1990. (Exh. 'D') and reiterated the same intent to pursue the salein a letter dated April 6, 1990. Third, plaintiff had the balance of the purchase price ready for payment(Exh. 'C'). Defendants' mere allegation that it was plaintiff who did not appear on March 23, 1990is unavailing. Defendants' letters (Exhs. '2' and '5') appear to be mere afterthought.

On appeal, the Court of Appeals, in its assailed Decision of January 29, 1999, affirmed the trial court's judgment.

Forthwith, petitioners filed their motion for reconsideration but it was denied by the appellate court in its

Resolution 8dated July 14, 1999.

Hence, the present recourse.

The basic issue to be resolved is whether the document entitled "Receipt for Partial Payment" signed by both partiesearlier mentioned is a contract to sell or a contract of sale.

Petitioners contend that the Receipt is not a perfected contract of sale as provided for in Article 1458 9 in relation to Article1475 10 of the Civil Code. The delivery to them of P100,000.00 as down payment cannot be considered as proof of theperfection of a contract of sale under Article 148211of the same Code since there was no clear agreement betweenthe parties as to the amount of consideration.

Generally, the findings of fact of the lower courts are entitled to great weight and should not be disturbed except forcogent reasons. Indeed, they should not be changed on appeal in the absence of a clear showing that the trial courtoverlooked, disregarded, or misinterpreted some facts of weight and significance, which if considered wouldhave altered the result of the case.12In the present case, we find that both the trial court and the Court of Appealsinterpreted some significant facts resulting in an erroneous resolution of the issue involved.

In holding that there is a perfected contract of sale, both courts mainly relied on the earnest money given by respondentto petitioners. They invoked Article 1482 of the Civil Code which provides that "Whenever earnest money is given in acontract of sale, it shall be considered as part of the price and as proof of the perfection of the contract."

We are not convinced.

In San Miguel Properties Philippines, Inc. v. Spouses Huang, 13 we held that the stages of a contract of sale are:

(1) negotiation, covering the period from the time the prospective contracting parties indicate interest in the contract to thetime the contract is perfected; (2) perfection, which takes place upon the concurrence of the essential elements of thesale, which is the meeting of the minds of the parties as to the object of the contract and upon the price; and(3) consummation, which begins when the parties perform their respective undertakings under the contract of sale,culminating in the extinguishment thereof. acADIT

With the above postulates as guidelines, we now proceed to determine the real nature of the contract entered into by theparties.

It is a canon in the interpretation of contracts that the words used therein should be given their natural and ordinarymeaning unless a technical meaning was intended.14 Thus, when petitioners declared in the said "Receipt for PartialPayment" that they

RECEIVED FROM MR. GODOFREDO CAGUIAT THE AMOUNT OF ONE HUNDRED THOUSANDPESOS (P100,000.00) AS PARTIAL PAYMENT OF OUR LOT SITUATED IN LAS PIAS, M.M.COVERED BY TCT NO. T-9905 AND WITH AN AREA OF 439 SQUARE METERS.

MR. CAGUIAT PROMISED TO PAY THE BALANCE OF THE PURCHASE PRICE ON OR BEFOREMARCH 23, 1990, AND THAT WE WILL EXECUTE AND SIGN THE FINAL DEED OF SALE ON THISDATE.

there can be no other interpretation than that they agreed to a conditional contract of sale, consummation of which issubject only to the full payment of the purchase price.

A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the vendor's obligation to transfertitle is subordinated to the happening of a future and uncertain event, so that if the suspensive condition does not takeplace, the parties would stand as if the conditional obligation had never existed. The suspensive condition iscommonly full payment of the purchase price. 15

The differences between a contract to sell and a contract of sale are well-settled in jurisprudence. As early as 1951,in Sing Yee v. Santos, 16 we held that:

. . . [a] distinction must be made between a contract of sale in which title passes to the buyer upondelivery of the thing sold and a contract to sell . . . where by agreement the ownership is reserved in theseller and is not to pass until the full payment, of the purchase price is made. In the first case, non-payment of the price is a negative resolutory condition; in the second case, full payment is a positivesuspensive condition. Being contraries, their effect in law cannot be identical. In the first case, the
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vendor has lost and cannot recover the ownership of the land sold until and unless the contract of saleis itself resolved and set aside. In the second case, however, the title remains in the vendor if thevendee does not comply with the condition precedent of making payment at the time specified in thecontract.

In other words, in a contract to sell, ownership is retained by the seller and is not to pass to the buyer until full payment ofthe price. 17

In this case, the "Receipt for Partial Payment" shows that the true agreement between the parties is a contract to sell.

First, ownership over the property was retained by petitioners and was not to pass to respondent until full payment of thepurchase price. Thus, petitioners need not push through with the sale should respondent fail to remit the balance of thepurchase price before the deadline on March 23, 1990. In effect, petitioners have the right to rescind unilaterally thecontract the moment respondent fails to pay within the fixed period. 18

Second, the agreement between the parties was not embodied in a deed of sale. The absence of a formal deed ofconveyance is a strong indication that the parties did not intend immediate transfer of ownership, but only a transfer afterfull payment of the purchase price.19

Third, petitioners retained possession of the certificate of title of the lot. This is an additional indication that the agreementdid not transfer to respondent, either by actual or constructive delivery, ownership of the property. 20

It is true that Article 1482 of the Civil Code provides that "Whenever earnest money is given in a contract of sale, it shallbe considered as part of the price and proof of the perfection of the contract." However, this article speaks of earnestmoney given in a contract of sale. In this case, the earnest money was given in a contract to sell. The earnest moneyforms part of the consideration only if the sale is consummated upon full payment of the purchase price. 21Now, sincethe earnest money was given in a contract to sell, Article 1482, which speaks of a contract of sale, does notapply. DcAaSI

As previously discussed, the suspensive condition (payment of the balance by respondent) did not take place. Clearly,respondent cannot compel petitioners to transfer ownership of the property to him.

WHEREFORE, we GRANT the instant Petition for Review. The challenged Decision of the Court of Appeals isREVERSED and respondent's complaint is DISMISSED.SO ORDERED.
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[G.R. No. 128325. September 14, 1999.]

SPOUSES RODOLFO CAOILI and IMELDA CAOILI, petitioners, vs. COURT OF APPEALS and ROSITA VDA.DE SANTIAGO, respondents.

SYNOPSIS

Petitioners were lessees of a parcel of land with an area of 42.90 square meters including a one door apartment locatedat 1752 Tecson de Guia Street, Tondo, Manila, belonging to private respondent Rosita Vda. de Santiago. On March 30,1987, private respondent secured a loan from petitioners in the amount of P30,000.00 with the understanding that thelatter shall not pay their monthly rentals as long as the loan was not paid. On or about July 10, 1990, an agreement wasmade between the parties herein for the sale of the property being occupied by petitioners, although it was not formallywritten. On December 14, 1990, a receipt denominated as an addendum to agreement was signed by private respondentfor the sale of the subject property to petitioners in the amount of P250,000.00. It was stated therein that privaterespondent received from petitioners the sum P140,000.00 in addition to the partial payment of P60,000.00 the balancepayable when the good title in the name of herein vendor is delivered to the spouses. Respondent failed to complyprompting petitioner to send two demand letters demanding the delivery of the title within 15 days or just refund theamount of P430,000.00. Due to this inaction, petitioners filed a complaint for collection of sum of money in the RegionalTrial Court (RTC) of Manila. After trial on the merits, the RTC of Manila rendered judgment in favor of the petitioners andordering the private respondents to pay the amount of P489,520 with legal interest. Respondent interposed an appeal,and on December 9, 1996, the Court of Appeals set aside the appealed judgment and ordered the respondent to pay thepetitioners the amount of P33,600.00. Petitioners filed a motion for reconsideration, but the same was denied. Hence thispresent petition. The main issue to be resolved in this petition is whether or not the Court of Appeals erred in reducing theamount awarded by the court a quo. cCESaH

The Court found the instant petition meritorious. Records show that the receipt marked as Exhibit "B", which was signedby private respondent herself, indubitably shows that the agreement was to convey the subject premises to petitioners forthe sum of P250,000.00 and not as a simple loan as what the private respondent strongly averred. It confirms that therewas meeting of the minds upon the subject property, which is the object of the contract and upon the price, which isP250,000.00. Moreover, the receipt was acknowledged before a notary public on December 28, 1990 and as such isconsidered a public document. Being a public document, it isprima facie evidence of the execution of the instrument ordocument involved. Exhibit B being a notarized document has in its favor the presumption of regularity and to contradictthe same, there must be evidence that is clear, convincing and more than merely preponderant. Otherwise, the documentshould be upheld. There being no proof to the contrary, the parties are therefor bound to comply with the clear andunequivocal terms under Exhibit B and in view of the failure of private respondent to deliver a good title to petitioners, sheis under obligation to pay double the amount which private respondent received from petitioners as acknowledged inExhibit B. Wherefore, the decision of the Court of Appeals was set aside and the decision of the RTC was reinstated.

SYLLABUS

1.REMEDIAL LAW; CIVIL PROCEDURE; SPECIAL CIVIL ACTION; CERTIORARI; LIMITED TO REVIEW OR REVISIONOF ERRORS OF LAW; CASE AT BAR. At the outset, it must be stated that this petition for review on certiorariwasfiled pursuant to Rule 45 of the Revised Rules of Court wherein a review is not a matter of right but of sound judicial

discretion and will be granted only when there are special and important reasons therefor. It is not the function of thisCourt to re-examine the evidence submitted by the parties unless the findings of fact of the Court of Appeals are notsupported by evidence on record or the judgment is based on a misapprehension of facts. This Court is limited to thereview or revision of errors of law and not to analyze or weigh the evidence all over again. CaDEAT

2.ID.; ID.; ID.; ID.; QUESTION OF FACT DISTINGUISHED FROM QUESTION OF LAW. The issue of whether or notthe Court of Appeals erred in reducing the amount awarded by the court a quo raised a question of fact as it involves anexamination of the probative value of the evidence presented by the parties. In the case ofReyes vs. Court of Appeals,we held: "Clearly, the main issue to be resolved is the authenticity of the Deed of Extrajudicial Partition and Settlementwhich is a question of fact rather than of law. In the case ofManila Bay Club Corporation v. Court of Appeals, this Courtheld that for a question to be one of law, it must involve no examination of the probative value of the evidence presentedby the litigants or any of them. To reiterate the distinction between the two types of questions: there is a question of lawina given case when the doubt or difference arises as to what the law is pertaining to certain state of facts, and there is

aquestion of factwhen the doubt arises as to the truth or the falsity of alleged facts."

3.ID.; ID.; ID.; ID.; FINDINGS OF FACT OF LOWER COURT ARE NOT REVIEWABLE ON APPEAL; EXCEPTIONSTHEREOF. However, the rule that findings of fact of the lower court are not reviewable on appeal by this Court issubject to exceptions. Thus: "Settled is the rule that the jurisdiction of this Court in cases brought before it from the Courtof Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter areconclusive, exceptin the following instances: (1) when the findings are grounded entirely on speculations, surmises orconjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is a grave abuseof discretion; (4) when the judgment is based on misapprehension of facts; (5) when the findings of fact are conflicting; (6)when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to theadmissions of both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) when thefindings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the


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petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; and (10) when the findingsof fact are premised on the supposed absence of evidence and contradicted by the evidence on record."

4.ID.; ID.; PLEADINGS; ADMISSION OR NON-ADMISSION OF SUPPLEMENTAL PLEADING IS NOT A MATTER OFRIGHT BUT DISCRETIONARY ON THE COURT. There is no question that the parties initially entered into a contractof lease. The notarized "Kasunduan" dated March 30, 1987 evidences the relationship between petitioners, as lessees,and private respondent, as lessor, wherein the latter borrowed from the former the amount of P30,000.00 on condition thatpetitioners will not pay the monthly rentals as long as the said amount is not fully paid by private respondent. Privaterespondent admitted that there was an agreement for the purchase of the subject premises but the same was not made in

writing. The absence of a formal deed of sale does not render the agreement null and void or without any effect. Theprovision of Article 1358 of the Civil Code on the necessity of a public document is only for convenience, not for validity orenforceability. It does not mean that no contract has been perfected so long as the essential requisites of consent of thecontracting parties, object, and cause of the obligation concur.

5.ID.; EVIDENCE; ADMISSIBILITY OF EVIDENCE; RECEIPT ACKNOWLEDGED BEFORE A NOTARY PUBLIC ISCONSIDERED A PUBLIC DOCUMENT; CASE AT BAR. As stated, Exhibit "B", above-quoted, which is denominatedas a "Receipt" and "Addendum to Agreement dated August 8, 1990" bolsters the claim of petitioners that there was indeedan agreement for the sale of the subject property. This "Receipt" was acknowledged before a notary public on December28, 1990 and as such is considered a public document. Being a public document, it is a prima facie evidence of the factstherein stated. It may be presented without further proof, the certificate of acknowledgment beingprima facie evidence ofthe execution of the instrument or document involved. Exhibit "B" being a notarized document has in its favor thepresumption of regularity, and to contradict the same, there must be evidence that is clear, convincing and more thanmerely preponderant. Otherwise the document should be upheld. There being no proof to the contrary, the parties aretherefor bound to comply with the clear and unequivocal terms under Exhibit "B" and in view of the failure of privaterespondent to deliver a good title to petitioners, she is under obligation to pay double the amount which privaterespondent received from petitioners as acknowledge in Exhibit "B".

D E C I S I O N

GONZAGA-REYES, Jp:

Before this Court is a petition for review on certiorariwhich seeks to set aside the Decision dated December 9, 1996 of the

Court of Appeals 1in CA-G.R. CV No. 48363 and prays for the reinstatement of the Decision 2dated January 9, 1995 ofthe Regional Trial Court of Manila, Branch 31 in Civil Case No. 93-65569. llcd

Petitioners spouses Rodolfo and Imelda Caoili were lessees of a parcel of land with an area of 42.90 square metersincluding a one (1) door apartment unit located at 1752 Tecson de Guia St., Tondo, Manila belonging to privaterespondent Rosita Vda. de Santiago. On March 30, 1987, private respondent secured a loan from petitioners in theamount of P30,000.00 with the understanding that the latter shall not pay their monthly rentals as long as the loan is notpaid.3On or about July 10, 1990, an agreement was made between the parties herein for the sale of the property beingoccupied by petitioners, although it was not "formal or written". 4

On December 14, 1990, a "Receipt" denominated as an "Addendum to Agreement dated August 8, 1990" was signed byprivate respondent in the presence of Alicia B. Ay-ay and Benilda Miller and acknowledged before notary public CrispuloB. Ducusin for the sale of the subject property to petitioners in the amount of P250,000.00. It was stated therein thatprivate respondent received from petitioners the sum of P140,000.00, in addition to the partial payment of P60,000.00, the"balance payable when the good title in the name of herein vendor is delivered to the spouses." 5

Petitioners sent two (2) letters 6to private respondent demanding delivery of the title or corresponding transfer certificateof title over the subject property within 15 days or make a refund "double (the) amount you have received as agreed or thetotal amount of Four Hundred Thirty Thousand (P430,000.00) pesos".

Private respondent refused to comply. Hence, a complaint for collection of sum of money was filed with the Regional TrialCourt of Manila, Branch 31 by herein petitioners against private respondent praying, inter alia, that the latter be ordered topay the former the amount of P489,520.00 with interest. The case was docketed as Civil Case No. 93-65569.

Private respondent Rosita Vda. de Santiago filed her Answer alleging, as special and affirmative defenses, that plaintiffswere mere lessees of the apartment and lot in question; that sometime in March 1987, she obtained a loan in the amountof P30,000.00 from plaintiffs, the same to be offset by the monthly rental of P1,300.00 and that said loan in fact had beenoffset by January 1989, or after 23 months; that since plaintiffs have not been paying the monthly rentals even afterJanuary 1989, defendant again obtained from the spouses another loan of P60,000.00 on July 10, 1990, which was totallyset off by the monthly rentals as of October 26, 1993 when she filed her answer to the complaint. On the matter of thereceipt, Exhibit "B", she denied having received the amount of P140,000.00 which was the alleged value of theimprovements introduced by plaintiffs on the leased premises and that it was only upon the assurance of plaintiffs thatthey would give to her the receipts showing the actual amounts spent for the improvements that she signed Exhibit "B"even without the opportunity of first reading it but the receipts for expenses of the improvements were never shown toher. 7
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On January 9, 1995, the Regional Trial Court of Manila, Branch 31 rendered judgment, the dispositive portion 8of whichreads:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and against the defendantordering the latter to pay:

1.The amount of P489,520.00 (P244,760.00 x 2) with legal interest until the full amount is fully paid;

2.Attorney's fees in the amount of P20,000.00 plus P1,000.00 per appearance;

3.That the status quo is maintained until the aforesaid amounts are fully paid by the defendant; and

4.The costs of this suit."

Defendant-appellant interposed an appeal and the Court of Appeals rendered judgment on December 9, 1996, thedispositive portion 9of which decision reads, to wit: LLpr

"WHEREFORE, the appealed decision dated January 9, 1995 is hereby SET ASIDE and judgment ishereby rendered ORDERING defendant-appellant Rosita Vda. de Santiago to PAY plaintiffs-appellees,the spouses Rodolfo Caoili and Imelda Caoili, the amount of P33,600.00, with legal interest until fullypaid. No costs."

On January 2, 1997, plaintiffs-appellees Caoili filed a Motion for Reconsideration 10of the decision of the Court ofAppeals arguing that they were able to substantiate the causes of action in their complaint; that they were able toestablish material, pertinent and relevant documentary evidences supported by the unrefuted oral testimonies of bothspouses; that the findings of fact of the court a quo were based and founded on unrefuted documents and oral testimoniesof plaintiffs-appellees in contrast with the general denials and oral testimony of defendant-appellant which were self-serving and therefore inadmissible; that defendant-appellant had been in absolute bad faith in dealing with plaintiffs-appellees on the transaction between them; and that since the subject property is still subject to successional rights of thechildren of defendant-appellant, it was highly impossible for defendant-appellant to deliver a good title to plaintiffs-appellees.

On January 27, 1997, plaintiffs-appellees Caoili filed a Supplemental Motion for Reconsideration with Leave of Court. SaidSupplemental Motion for Reconsideration was denied and expunged from the record as it "would, in effect, render

nugatory the mandatory procedural rule that a motion for reconsideration should be filed within a reglementary period of15 days from receipt of the judgment or order sought to be reconsidered."11

The Court of Appeals in a Resolution 12 dated January 18, 1997 denied plaintiffs-appellees' Motion for Reconsideration.

Hence, the present petition interposed by plaintiffs Caoili raising the issue that:

"THE HONORABLE COURT OF APPEALS ERRED IN MODIFYING THE DECISION OF THE COURTA QUO IN REDUCING THE AMOUNT OF THE AWARDED CLAIM FOR P489,520.00 (P244,760.00 x2) WITH INTEREST UNTIL THE FULL AMOUNT IS FULLY PAID TO P33,600.00 WITH LEGALINTEREST UNTIL FULLY PAID NO COST."

In their petition, petitioners Caoili contend that there was no legal justification for the Court of Appeals to reduce theamount awarded to them by the trial court. Petitioner Imelda Caoili allegedly testified and identified how partial paymentswere made to private respondent through Exhibits "C" to "J" in the total amount of P95,700.00 which amount did notinclude the first payment of P30,000.00 and other advances reaching a total of P200,000.00. Petitioners further arguethat private respondent, on cross-examination, admitted having received the amounts of P60,000.00; P49,000.00 andP35,000.00 covered by different checks in the total sum of P144,000.00 and that the amount of P35,000.00 was receivedby private respondent for "effecting or finishing papers contemplated for the house and lot." Petitioners aver that thepurported sale did not materialize because of the death of private respondent's husband Francisco Santiago; thus privaterespondent remained indebted to petitioners in accordance with the terms and conditions of Exhibit "B". Finally, petitionersargue that private respondent was placed under estoppel in denying the terms and conditions of the agreement and thereceipt of payments when she admitted having received the two (2) letters of demand, Exhibits "K" and "L", respectively.

In their Comment/Opposition, private respondent alleged that while petitioners insist that the receipt dated December 9,1990 is an addendum to an alleged agreement made on August 8, 1990, petitioners nonetheless failed to present the

alleged Agreement of August 8, 1990 or any evidence that would prove the sale of the subject property to them. Privaterespondent submits that there was really no sale as the transaction between the parties was a simple loan.

In their Reply, petitioners argue that the absence of a written contract in their initial agreement was cured when the receiptmarked as Exhibit "B" was executed on December 14, 1990 wherein private respondent acknowledged having sold theproperty to petitioners and having received the amount of P140,000.00 from the latter, in addition to partial payments ofP60,000.00, for the agreed total amount of P250,000.00, the balance of the price being payable when good title will bedelivered to petitioners.

The main issue raised by petitioners in their petition is whether or not the Court of Appeals erred in reducing the amountawarded by the court a quo.
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14/61

At the outset, it must be stated that this petition for review on certiorariwas filed pursuant to Rule 45 of the Revised Rulesof Court wherein a review is not a matter of right but of sound judicial discretion and will be granted only when there arespecial and important reasons therefor. 13It is not the function of this Court to re-examine the evidence submitted by theparties unless the findings of fact of the Court of Appeals are not supported by evidence on record or the judgment isbased on a misapprehension of facts. 14This Court is limited to the review or revision of errors of law and not to analyzeor weigh the evidence all over again. 15

The issue of whether or not the Court of Appeals erred in reducing the amount awarded by the court a quo raised aquestion of fact as it involves an examination of the probative value of the evidence presented by the parties. In the case

ofReyes vs. Court of Appeals, 16we held: cdrep

"Clearly, the main issue to be resolved is the authenticity of the Deed of Extrajudicial Partition andSettlement which is a question of fact rather than of law. In the case of Manila Bay Club Corporationv. Court of Appeals, 17this Court held that for a question to be one of law, it must involve noexamination of the probative value of the evidence presented by the litigants or any of them. Toreiterate the distinction between the two types of questions: there is a question of law in a given casewhen the doubt or difference arises as to what the law is pertaining to certain state of facts, and there isa question of fact when the doubt arises as to the truth or the falsity of alleged facts." (underscoringsupplied).

However, the rule that findings of fact of the lower court are not reviewable on appeal by this Court is subject toexceptions. Thus:

"Settled is the rule that the jurisdiction of this Court in cases brought before it from the Court of Appealsvia Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter areconclusive, except in the following instances: (1) when the findings are grounded entirely onspeculations, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd, orimpossible; (3) when there is a grave abuse of discretion; (4) when the judgment is based onmisapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findingsthe Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissionsof both appellant and appellee; (7) when the findings are contrary to those of the trial court; (8) whenthe findings are conclusions without citation of specific evidence on which they are based; (9) when thefacts set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by therespondent; and (10) when the findings of fact are premised on the supposed absence of evidence andcontradicted by the evidence on record."18 (underscoring supplied).

The instant petition is an admitted exception under no. 7 above-quoted.

The trial court considered Exhibit "B" as valid and binding between the parties therein and ruled that the same belies theposture of private respondent herein that she merely obtained a loan from petitioners which is to be offset by the monthlyrentals.19

On the other hand, the Court of Appeals ruled that Exhibit "B", which is the "Addendum to the Agreement dated August 8,1990", is "not a true and faithful documentation of the alleged receipt of P140,000.00 and the alleged sale of the propertyon July 10, 1990." It stated, however, that Exhibit "B" contemplated two (2) separate obligations, namely: (1) the obligationof petitioners to pay the balance upon delivery of the title; and (2) the obligation of private respondent to make a refund indouble the amount agreed upon, if the title to the property is not good and cannot be made good within a reasonabletime.20The Court of Appeals likewise ruled that since petitioners have not complied with their obligation to present the

receipts of expenses for improvements made, then private respondent had been released from the obligation to refunddouble the amount claimed by petitioners.21The ruling seems to be inconsistent because if the said Exhibit "B" is not atrue and faithful documentation of the alleged receipt of P140,000.00 and the alleged sale of the property, as the Court ofAppeals held, then there can be no separate obligations that can be ascribed to the parties therein.

In resolving the issue of whether or not the Court of Appeals erred in reducing the amount awarded to petitioners, weshould first determine whether there was a contract for the sale of the subject property, as petitioners claim, or merely aloan, as asserted by private respondent.

There is no question that the parties initially entered into a contract of lease. The notarized "Kasunduan" dated March 30,1987 22evidences the relationship between petitioners, as lessees, and private respondent, as lessor, wherein the latterborrowed from the former the amount of P30,000.00 on condition that petitioners will not pay the monthly rentals as longas the said amount is not fully paid by private respondent. Private respondent admitted that there was an agreement for

the purchase of the subject premises but the same was not made in writing. 23 The absence of a formal deed of saledoes not render the agreement null and void or without any effect. The provision of Article 1358 of the Civil Code 24 onthe necessity of a public document is only for convenience, not for validity or enforceability.25 It does not mean that nocontract has been perfected26 so long as the essential requisites of consent of the contracting parties, object, and causeof the obligation concur. 27

There is the "Receipt" marked as Exhibit "B", reproduced hereunder, which states:

"RECEIPT

Addendum to Agreement dated August 8, 1990.
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15/61

Received from the Spouses RODOLFO CAOILI and IMELDA CAOILI, both Filipino, both of legal ages,the sum of ONE HUNDRED FORTY (P140,000.00) THOUSAND PESOS, Philippine Currency, inaddition to the partial payment of Six (sic) Thousand (P60,000.00) pesos for the purchase of a parcel ofland together with its improvement situated at 1752 Tecson de Guia St., Tondo, Manila, containing anarea of more or less 42.90 square meters which I have sold on July 10, 1990 and agreed to convey tosaid spouses for the sum of P250,000.00, balance payable when the good title in the name of hereinvendor is delivered to the spouses. A reasonable time, after delivery of title, is to be allowed forexamination thereof. It is agreed that, if the title to said premises is not good and cannot be made goodwithin a reasonable time then this agreement shall be null and void and the above amount in double theamount shall be refunded and paid to the vendee.Manila, December 14, 1990. LLjur

(SIGNED)ROSITA ROBLES VDA. DE SANTIAGOVendor

SIGNED IN THE PRESENCE OF:

(signed) Alicia B. Ay-ay

(signed) Benilda Miller" 28

Exhibit "B", which was signed by private respondent herself29indubitably shows that the agreement was to convey thesubject premises to petitioners for the sum of P250,000.00. It confirms that there was a meeting of the minds upon the

subject property, which is the object of the contract and upon the price, which is P250,000.00.30 The agreement issubject to the condition that the balance is "payable when the good title in the name of herein vendor is delivered to thespouses" and a "reasonable time, after delivery of title, is to be allowed for examination thereof." The obligation to delivertitle is likewise subject to a penal clause that "if the title to said premises is not good and cannot be made good within areasonable time then this agreement shall be null and void" and a sum double the "above amount" shall be refunded andpaid to the vendee." The said document clearly acknowledges that petitioners have paid the amount of P140,000.00 "inaddition to the partial payment of P60,000.00" and the balance is payable "when the good title in the name of the vendoris delivered to the spouses." Verily, under the agreement, private respondent was obligated to deliver a good title topetitioners and this condition is the operative act which would give rise to the corresponding obligation of petitioners topay the balance of the purchase price. 31Since it is not disputed that private respondent has not delivered a good title,petitioners have by law the right to either refuse to proceed with the agreement or to waive that condition pursuantto Article 1545 of the Civil Code. 32

Furthermore, subsequent developments show that the parties indeed agreed on a contract for the sale of the subjectpremises. Private respondent herself admitted33having received advances and payments from petitioners afterDecember 14, 1990 (the date of execution of Exhibit "B") as shown by receipts marked as Exhibits "C" to "J", to wit:

1.Exhibit "C" 34 is a Far East Bank check dated January 4, 1991 payable to the order of privaterespondent signed by petitioner Imelda Caoili in the amount P49,000.00;

2.Exhibit "D" 35is a receipt dated May 30, 1991 signed by private respondent for the sum ofP15,000.00 as "partial payment House & Lot";

3.Exhibit "E" 36is a receipt dated September 3, 1992 signed by private respondent in the amount ofP12,000.00 also as "partial payment";

4.Exhibit "F" 37is a receipt dated September 3, 1991 signed by private respondent in the amount ofP5,000.00 as "Partial payment re papers transfer";

5.Exhibit "G" 38is a receipt dated November 11, 1992 signed by private respondent in the amount ofP3,500.00 as "advance payment";

6.Exhibit "H" 39is a receipt dated November 27, 1992 signed by private respondent in the amount ofP2,000.00 as "advance payment";

7.Exhibit "I" 40is a receipt dated July 23, 1992 signed by private respondent in the amount ofP5,000.00 as "additional payment"; and

8.Exhibit "J" 41is a check dated July 23, 1992 payable to the order of private respondent signed bypetitioner Imelda Caoili in the amount of P4,200.00.

It is to be observed that Exhibit "D", for instance, is a receipt in the amount of P15,000.00 expressly denominated aspartial payment for "House & Lot",42while Exhibit "F" is a receipt in the amount of P5,000.00 as "partial payment repapers transfer."43These receipts corroborate the fact that there was an agreement for the sale of the subjectproperty. llcd

The evidence shows that private respondent received payments from petitioners in the following amounts: a total ofP95,700.00 as shown in Exhibits "C" to "J"; P200,000.00 as shown in Exhibit "B"; and P30,000.00 as shown in Exhibit "A".However, the amount of P30,000.00 (Exhibit "A") was clearly a loan by private respondent with the understanding thatpetitioners will not pay the rentals until the amount of loan is not paid ("hanggang hindi ko nababayaran ang nasabing
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halaga"). The receipt evidencing payment of P30,000.00 was made in 1987, several years before the agreement for thesale of the subject property was made.

Private respondent claims that the amount of P60,000.00 mentioned in Exhibit "B" as partial payment was a loan whichshe incurred and which was offset by the monthly rentals. However, aside from private respondent's bare allegation, 44noproof to that effect was presented.

As regards the amount of P140,000.00 also mentioned in Exhibit "B", petitioners claim that it "represents the loan ofP30,000.00 plus the deposits I made in the house plus the repairs of the faucets" 45while private respondent averred that

it was spent for "renovation and building of an additional room of the house". 46Whatever the amount represented, what isconfirmed is that it was acknowledged as part of the purchase price in the document signed by private respondent herself.

As stated, Exhibit "B", above-quoted, which is denominated as a "Receipt" and "Addendum to Agreement dated August 8,1990" bolsters the claim of petitioners that there was indeed an agreement for the sale of the subject property. This"Receipt" was acknowledged before a notary public on December 28, 1990 47and as such is

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