G.R. No.

134219 June 08, 2005

SPOUSES MARIO AND ELIZABE! OR"UAOR, petitioners,
vs.
SPOUSES REMEGIO AND GLORIA BERNABE #n$ SPOUSES DIOSDADO #n$
LOURDES SAL%ADOR, respondents.
D E C I S I O N
INGA, J.:
In the instant Petition,
1
spouses Mario and Elizabeth Torcuator assail the D E C I S I O N
2
o the
Court o !ppeals in C.!."#.$. C% No. &'(2), *hich air+ed the trial court,s dis+issal o their
co+plaint or speciic peror+ance,
&
and its Resolution
(
*hich denied their +otion or
reconsideration.
The acts as su++arized b- the Court o !ppeals are as ollo*s.
The sub/ect o this action is 0ot 1), 1loc2 3 o the !-ala !laban4 %illa4e, Muntinlupa, Metro"
Manila, *ith an area o 3'5 s6uare +eters and covered b- TCT No. S")5))&. The lo*er court
ound that the above parcel o land *as purchased b- the spouses Diosdado and 0ourdes
Salvador 7Salvadors, or short8 ro+ the developers o !-ala !laban4 sub/ect, a+on4 others, to
the ollo*in4 conditions.""
9It is part o the condition o bu-in4 a lot in !-ala !laban4 %illa4e 7a8 that the lot bu-er shall
deposit *ith !-ala Corporation a cash bond 7about :1),;;;.;; or the Salvadors8 *hich shall be
reunded to hi+ i he builds a residence thereon *ithin t*o 728 -ears o purchase, other*ise the
deposit shall be oreited, 7b8 architectural plans or an- i+prove+ent shall be approved b-
!-ala Corporation, and 7c8 no lot +a- be resold b- the bu-er unless a residential house has been
constructed thereon 7!-ala Corporation 2eeps the Torrens Title in their <sic= possession8.
7p. 3, $TC Decision8
Evidences on record urther reveal that on Dece+ber 1>, 15>;, the Salvadors sold the parcel o
land to the spouses $e+i4io and #loria 1ernabe 71ernabes, or e?pedienc-8. #iven the above
restrictions, the Salvadors conco+itantl- e?ecuted a special po*er o attorne- authorizin4 the
1ernabes to construct a residential house on the lot and to transer the title o the propert- in their
na+es.
The 1ernabes, on the other hand, *ithout +a2in4 an- i+prove+ent, contracted to sell the parcel
o land to the spouses Mario and Elizabeth Torcuator 7Torcuators, or brevit-8 so+eti+e in
Septe+ber o 15>'. Then a4ain, conronted b- the !-ala !laban4 restrictions, the parties a4reed
to cause the sale bet*een the Salvadors and the 1ernabes cancelled 7E?hibit 9D98, in avor o 7a8
a ne* deed o sale ro+ the Salvadors directl- to the Torcuators@ 7b8 a ne* Irrevocable Special
:o*er o !ttorne- 7E?hibit A8 e?ecuted b- the Salvadors to the Torcuators in order or the latter
to build a house on the land in 6uestion@ and 7c8 an Irrevocable Special :o*er o !ttorne-
7E?hibit E8 ro+ the Salvadors to the 1ernabes authorizin4 the latter to sell, transer and conve-,
*ith po*er o substitution, the sub/ect lot.
The Torcuators thereater had the plans o their house prepared and oered to pa- the 1ernabes
or the land upon deliver- o the sale contract. Aor one reason or another, the deed o sale *as
never consu++ated nor *as pa-+ent on the said sale ever eected. Subseu6entl-, the 1ernabes
sold the sub/ect land to 0eonardo !n4eles, a brother"in"la* 7E?h. 9)98. The docu+ent ho*ever
is not notarized. !s a result, the Torcuators co++enced the instant action a4ainst the 1ernabes
and Salvadors or Speciic :eror+ance or $escission *ith Da+a4es.
!ter trial, the court a 6uo rendered its decision, the decretal portion reads.""
9Aro+ all the ore4oin4 dis6uisition, especiall- since the plaintis did not suer an- real da+a4e
7b- Banuar-, 15>) the- could have purchased another lot in !-ala !laban4, and the architectural
plans the- co++issioned !rch. Sel4a to prepare could then be used b- the plaintis8, the
co+plaint iled b- the plainti spouses is dis+issed. Since the plainti acted *ith sincerit- and
*ithout dela- in assertin4 *hat the- believed to be their prero4atives, i.e., *ithout an- +alice or
desire to ta2e advanta4e o another, the counter"clai+ interposed b- the 1ernabes a4ainst the
Torcuator spouses is si+ilarl- dis+issed.
Ma2ati, Metro"Manila, !u4ust 2;, 1551.
3
The Court o !ppeals dis+issed the appeal, rulin4 that the sale bet*een the 1ernabes and the
Torcuators *as tainted *ith serious irre4ularities and bad aith. The appellate court a4reed *ith
the trial court,s conclusion that the parties entered into the contract *ith the intention o rene4in4
on the stipulation disallo*in4 the sale or transer o vacant lots in !-ala !laban4 %illa4e.
It also ruled that the parties deprived the 4overn+ent o ta?es *hen the- +ade it appear that the
propert- *as sold directl- b- the Salvadors to the Torcuators. Since there *ere actuall- t*o
sales, i.e., the irst sale bet*een the Salvadors and the 1ernabes and the second bet*een the
1ernabes and Torcuators, ta?es should have been paid or both transers.
'
The Court o !ppeals denied petitioners, +otion or reconsideration in its Resolution
)
dated Bune
13, 155>.
:etitioners then iled the instant petition, averrin4 that the appellate court erred in dis+issin4
their appeal on the stren4th o issues *hich *ere neither pleaded nor proved. The conditions
alle4edl- i+posed b- !-ala Corporation on the sale o lots in !-ala !laban4 %illa4e *ere. 97a8
that the lot"bu-er shall deposit *ith !-ala Corporation a cash bond 7about :1),;;;.;; or the
Salvadors8 *hich shall be reunded to hi+ i he builds a residence thereon *ithin t*o 728 -ears
o purchase, other*ise the deposit shall be oreited@ 7b8 architectural plans or an- i+prove+ent
shall be approved b- !-ala Corporation@ and 7c8 no lot +a- be resold b- the bu-er unless a
residential house has been constructed thereon 7!-ala Corporation 2eeps the Torrens title in their
7sic8 possession.89
>
!ccordin4 to petitioners, the stipulation prohibitin4 the sale o vacant lots in !-ala !laban4
%illa4e, adverted to b- the appellate court in its decision as evidence that the sale bet*een the
1ernabes and the Torcuators *as tainted *ith serious irre4ularities, *as never presented or
oered in evidence b- an- o the parties. Cithout such stipulation havin4 been presented,
+ar2ed and oered in evidence, the trial court and the appellate court should not have
considered the sa+e.
The appellate court alle4edl- also erred in declarin4 that the contract o sale sub/ect o the case is
void, as it *as intended to deprive the 4overn+ent o revenue since the +atter o ta?es *as not
even +entioned in the appealed decision o the trial court.
Aurther, petitioners assert that the contract *as a perected contract o sale not a +ere contract to
sell. The trial court thus erred in declarin4 that the contract *as void due onl- to petitioners,
ailure to deliver the a4reed consideration. 0i2e*ise, the act that the contract calls or the
pa-+ent o the a4reed purchase price in Dnited States Dollars does not result in the contract
bein4 void. The +ost that could be de+anded, in accordance *ith /urisprudence, is to pa- the
obli4ation in :hilippine currenc-.
:etitioners also dispute the trial court,s indin4 that the- did not suer an- real da+a4e as a
result o the transaction. On the contrar-, the- clai+ that respondents, reusal to transer the
propert- caused the+ actual and +oral da+a4es.
$espondents iled their Comment/Opposition (To the Petition for Certiorari)
5
dated Nove+ber (,
155> counterin4 that petitioners 2ne* o the condition prohibitin4 the sale o vacant lots in
!-ala !laban4 %illa4e as the sa+e *as annotated on the title o the propert- *hich *as
sub+itted and adopted b- both parties as their evidence. The act that the a4ree+ent re6uired
petitioners to construct a house in the na+e o the Salvadors sho*s that petitioners the+selves
2ne* o the condition and ac2no*led4ed its validit-.
!s re4ards petitioners, contention that the Court o !ppeals should not have ruled on the +atter
o ta?es due the 4overn+ent, respondents assert that the appellate court has the po*er to revie*
the entire case to deter+ine the validit- o the /ud4+ent o the lo*er court. Thus, it +a- revie*
even +atters *hich *ere not raised on appeal.
$espondents reer to the circu+stances surroundin4 the transaction as proo that the parties
entered into a +ere contract to sell and not a contract o sale. !lle4edl-, the +e+orandu+
containin4 the a4ree+ent o the parties +erel- used the ter+ 9oer.9 The pa-+ent o the
purchase price *as ostensibl- a condition sine qua non to the e?ecution o the deed o sale in
avor o petitioners, especiall- since the 1ernabes ca+e to the :hilippines *ith the e?press
purpose o sellin4 the propert- and *ere leavin4 or the Dnited States as soon as the- *ere paid.
Moreover, petitioners *ere re6uired to construct a residential house on the propert- beore it
could be sold to the+ in accordance *ith the condition i+posed b- !-ala Corporation.
Aurther, respondents +aintain that the transaction *as not consu++ated due to the ault o
petitioners *ho ailed not onl- to prepare the necessar- docu+entation but also to pa- the
purchase price or the propert-. The- also ar4ue that the special po*er o attorne- e?ecuted b-
the Salvadors in avor o petitioners +erel- 4ranted the latter the ri4ht to construct a residential
house on the propert- in the na+e o the Salvadors. The ori4inal docu+ent *as not even 4iven to
the Torcuators precisel- because the- have not paid the purchase price.
:etitioners iled a Repl
1;
dated Banuar- 2;, 1555 in reiteration o their ar4u+ents.
In the Resolution
11
dated Aebruar- 1;, 1555, the parties *ere re6uired to ile their respective
+e+oranda. !ccordin4l-, petitioners iled their !emoran"um
12
on !pril 15, 1555. On the other
hand, in vie* o respondents, disappearance *ithout notice, the Court resolved to dispense *ith
their +e+orandu+.
1&
The trial court denied petitioners, co+plaint on three 7&8 4rounds, na+el-. 718 the alle4ed nullit-
o the contract bet*een the parties as it violated !-ala Corporation,s condition that the
construction o a house is a prere6uisite to an- sale o lots in !-ala !laban4 %illa4e@ 728 non"
pa-+ent o the purchase price@ and 7&8 the nullit- o the contract as it called or pa-+ent in
Dnited States Dollars. To these reasons, the Court o !ppeals added a ourth basis or den-in4
petitioners, appeal and that is the alle4ed nullit- o the a4ree+ent because it deprived the
4overn+ent o ta?es.
!n anal-sis o the acts obtainin4 in this case leads us to air+ the assailed decisions althou4h
ro+ a sli4htl- dierent but related thrust.
0et us be4in b- characterizin4 the a4ree+ent entered into b- the parties, i.e., *hether the
a4ree+ent is a contract to sell as the trial court ruled, or a contract o sale as petitioners insist.
The dierences bet*een a contract to sell and a contract o sale are *ell"settled in /urisprudence.
!s earl- as 1531, *e held that in a contract o sale, title passes to the bu-er upon deliver- o the
thin4 sold, *hile in a contract to sell, o*nership is reserved in the seller and is not to pass until
the ull pa-+ent o the purchase price is +ade. In the irst case, non"pa-+ent o the price is a
ne4ative resolutor- condition@ in the second case, ull pa-+ent is a positive suspensive condition.
1ein4 contraries, their eect in la* cannot be identical. In the irst case, the vendor has lost and
cannot recover the o*nership o the land sold until and unless the contract o sale is itsel
resolved and set aside. In the second case, ho*ever, the title re+ains in the vendor i the vendee
does not co+pl- *ith the condition precedent o +a2in4 pa-+ent at the ti+e speciied in the
contract.
1(
In other *ords, in a contract to sell, o*nership is retained b- the seller and is not to pass to the
bu-er until ull pa-+ent o the price or the ulill+ent o so+e other conditions either o *hich is
a uture and uncertain event the non"happenin4 o *hich is not a breach, casual or serious, but
si+pl- an event that prevents the obli4ation o the vendor to conve- title ro+ ac6uirin4 bindin4
orce.
13
Ce have careull- e?a+ined the a4ree+ent bet*een the parties and are ar ro+ persuaded that it
*as a contract o sale.
Airstl-, the a4ree+ent i+posed upon petitioners the obli4ation to ull- pa- the a4reed purchase
price or the propert-. That o*nership shall not pass to petitioners until the- have ull- paid the
price is i+plicit in the a4ree+ent. Notabl-, respondent $e+i4io 1ernabe testiied, *ithout
ob/ection on the part o petitioners, that he speciicall- inor+ed petitioners that the transaction
should be co+pleted, i.e., that he should receive the ull pa-+ent or the propert-, beore he let
or the Dnited States on October 1(, 15>'.
1'
Moreover, the deed o sale *ould have been issued onl- upon ull pa-+ent o the purchase price,
a+on4 other thin4s. :etitioner Mario Torcuator ac2no*led4ed this act *hen he testiied that the
deed o sale and ori4inal special po*er o attorne- *ere onl- to be delivered upon ull pa-+ent
o the purchase price.
1)
!s correctl- observed b- the trial court, the Salvadors did not e?ecute a deed o sale in avor o
petitioners, and instead e?ecuted a special po*er o attorne- authorizin4 the 1ernabes to sell the
propert- on their behal, in order to aord the latter a +easure o protection that *ould 4uarantee
ull pa-+ent o the purchase price beore an- deed o sale in avor o petitioners *as e?ecuted.
$e+ar2abl-, the records are beret o an- indication that petitioners ever atte+pted to tender
pa-+ent or consi4n the purchase price as re6uired b- la*. The Complaint
1>
iled b- petitioners
+a2es no +ention at all o a tender o pa-+ent or consi4nation havin4 been +ade, +uch less
that petitioners are *illin4 and read- to pa- the purchase price. :etitioners, aver+ents to the
eect that the- have suicient unds to pa- or the propert- and have even applied or a
tele4raphic transer ro+ their ban2 account to the 1ernabes, ban2 account, uncoupled *ith
actual tender and consi4nation, are utterl- sel" servin4.
The trial court correctl- noted that petitioners should have consi4ned the a+ount due in court
instead o +erel- sendin4 respondents a letter e?pressin4 interest to push throu4h *ith the
transaction. Mere sendin4 o a letter b- the vendee e?pressin4 the intention to pa- *ithout the
acco+pan-in4 pa-+ent is not considered a valid tender o pa-+ent. Consi4nation o the a+ount
due in court is essential in order to e?tin4uish the obli4ation to pa- and obli4e the vendor to
conve- title.
15
On this score, even assu+in4 that the a4ree+ent *as a contract o sale, respondents +a- not be
co+pelled to deliver the propert- and e?ecute the deed o absolute sale. In cases such as the one
beore us, *hich involve the peror+ance o an obli4ation and not +erel- the e?ercise o a
privile4e or ri4ht, pa-+ent +a- be eected not b- +ere tender alone but b- both tender and
consi4nation. The rule is dierent in cases *hich involve an e?ercise o a ri4ht or privile4e, such
as in an option contract, le4al rede+ption or sale *ith ri4ht to repurchase, *herein +ere tender
o pa-+ent *ould be suicient to preserve the ri4ht or privile4e.
2;
Eence, absent a valid tender
o pa-+ent and consi4nation, petitioners are dee+ed to have ailed to dischar4e their obli4ation
to pa-.
Secondl-, the parties clearl- intended the construction o a residential house on the propert- as
another suspensive condition *hich had to be ulilled. !-ala Corporation retained title to the
propert- and the Salvador spouses *ere precluded ro+ sellin4 it unless a residence had been
constructed thereon. The !-ala stipulation *as a pervasive, albeit un*ritten, condition in li4ht o
*hich the transaction in this case *as ne4otiated. The parties undoubtedl- understood that the-
had to contend *ith the !-ala stipulation *hich is *h- the- resorted to the e?ecution o a special
po*er o attorne- authorizin4 petitioners to construct a residential buildin4 on the propert- in the
na+e o the Salvadors. Ead the a4ree+ent been a contract o sale as petitioners *ould i+press
upon the Court, the special po*er o attorne- *ould have been entirel- unnecessar- as
petitioners *ould have had the ri4ht to co+pel the Salvadors to transer o*nership to the+.
21
Thirdl-, there *as neither actual nor constructive deliver- o the propert- to petitioners. !part
ro+ the act that no public docu+ent evidencin4 the sale *as e?ecuted, *hich *ould have been
considered e6uivalent to deliver-, petitioners did not ta2e actual, ph-sical possession o the
propert-. The special po*er o attorne-, *hich petitioners count on as evidence that the- too2
possession o the propert-, can b- no +eans be interpreted as deliver- or conve-ance o
o*nership over the propert-. Ta2en b- itsel, in act, the special po*er o attorne- can be
interpreted as tied up *ith an- nu+ber o propert- arran4e+ents, such as a contract o lease or a
/oint venture. That is *h- respondents, especiall- the Salvadors, never intended to deliver the
title to petitioners and conor+abl- *ith that the- e?ecuted onl- a special po*er o attorne-.
Indeed, continuousl- loo+in4 lar4e as an essentialit- in their /ud4+ent to dispose o their
valuable propert- is the prior or conte+poraneous receipt o the co++ensurate price thereor.
This brin4s us to the application o the Statute o Arauds. !rticle 1(;& o the Civil Code
provides.
!rt. 1(;&. The ollo*in4 contracts are unenorceable unless the- are ratiied.
F
728 Those that do not co+pl- *ith the Statute o Arauds as set orth in this nu+ber. In the
ollo*in4 cases an a4ree+ent hereater +ade shall be unenorceable b- action, unless the sa+e,
or so+e note or +e+orandu+ thereo, be in *ritin4, and subscribed b- the part- char4ed, or b-
his a4ent@ evidence, thereore, o the a4ree+ent cannot be received *ithout the *ritin4, or a
secondar- evidence o its contents.
F
7e8 !n a4ree+ent or the leasin4 or a lon4er period than one -ear, or or the sale o real propert-
or an interest therein@
. . . .
The ter+ 9Statute o Arauds9 is descriptive o statutes *hich re6uire certain classes o contracts,
such as a4ree+ents or the sale o real propert-, to be in *ritin4. It does not deprive the parties
the ri4ht to contract *ith respect to the +atters therein involved, but +erel- re4ulates the
or+alities o the contract necessar- to render it enorceable. The purpose o the statute is to
prevent raud and per/ur- in the enorce+ent o obli4ations dependin4 or their evidence on the
unassisted +e+or- o *itnesses b- re6uirin4 certain enu+erated contracts and transactions to be
evidenced b- a *ritin4 si4ned b- the part- to be char4ed.
22
The *ritten note or +e+orandu+, as
conte+plated b- !rticle 1(;& o the Civil Code, should e+bod- the essentials o the contract.
2&
In the instant case, petitioners present as *ritten evidence o the a4ree+ent the special po*er o
attorne- e?ecuted in their avor b- the Salvadors and the su++ar- o a4ree+ent
2(
alle4edl-
initialed b- respondent $e+i4io 1ernabe. These docu+ents do not suice as notes or
+e+oranda as conte+plated b- !rticle 1(;& o the Civil Code.
The special po*er o attorne- does not contain the essential ele+ents o the purported contract
and, +ore tellin4l-, does not even reer to an- a4ree+ent or the sale o the propert-. In an- case,
it *as rendered virtuall- inoperable as a conse6uence o the Salvadors, ada+ant reusal to part
*ith their title to the propert-.
The su++ar- o a4ree+ent, on the other hand, is atall- deicient in the unda+entals and
a+bi4uous in the rest o its ter+s. Aor one, it does not +ention *hen the alle4ed consideration
should be paid and transer o o*nership eected. The docu+ent does not even reer to a
particular propert- as the ob/ect thereo. Aor another, it is unclear *hether the supposed purchase
price is :';;.;;, :35;.;; or :3);.;;Gs6uare +eter. The other conditions, such as pa-+ent o
docu+entar- sta+p ta?es, capital 4ains ta? and other re4istration e?penses, are li2e*ise
uncertain.
Conor+abl- *ith !rticle 1(;3
23
o the Civil Code, ho*ever, respondents, acceptance o the
a4ree+ent oisted b- petitioners on the+ is dee+ed to have arisen ro+ their ailure to ob/ect to
the testi+on- o petitioner Mario Torcuator on the +atter
2'
and their cross"e?a+ination o said
petitioner thereon.
2)
1e that as it +a-, considerin4 our rulin4 that the a4ree+ent *as a contract to sell, respondents
*ere not obli4ed to conve- title to the propert- beore the happenin4 o t*o 728 suspensive
conditions, na+el-. ull pa-+ent o the purchase price and construction o a residence on the
propert-. The- *ere actin4 perectl- *ithin their ri4ht *hen the- considered the a4ree+ent
cancelled ater unsuccessull- de+andin4 pa-+ent ro+ petitioners.
That said, the 6uestion o *hether the transaction violated the Dnior+ Currenc- !ct, $epublic
!ct No. 325, is alread- +oot. The contract havin4 been cancelled, an- resolution re4ardin4 the
validit- o the stipulation re6uirin4 pa-+ent o the purchase price in orei4n currenc- *ould not
serve an- urther purpose.
:etitioners ne?t insist that the condition re6uirin4 the construction o a house on an- residential
lot located in !-ala !laban4 %illa4e beore it can be sold *as never sub+itted in evidence and
*as never testiied to b- an- o the *itnesses presented durin4 the trial. Eence, the trial court
and the Court o !ppeals should not have used this as basis or its denial o petitioners, cause.
This assertion, ho*ever, is co+pletel- untrue. Chile the #ormal Offer of E$i"ence
2>
o
petitioners, respondents, Offer of E%hi&its,
25
and the #ormal Offer of E$i"ence (On Re&uttal)
&;
o
petitioners +a2e no +ention o an- stipulation prohibitin4 the sale o vacant lots in !-ala
!laban4 %illa4e, respondents +aintain that petitioners are ull- a*are o the prohibition as the
conditions i+posed b- !-ala Corporation on the sale o !-ala !laban4 lots are inscribed on the
title o the propert- *hich *as sub+itted in evidence b- both parties.
Despite petitioners, re+onstration that the inscriptions on the title are 9hardl- le4ible,9
&1
*e are
inclined to 4ive credence to respondents, account. It is 6uite i+plausible that a la*-er such as
petitioner Mario Torcuator *ould not ta2e the precaution o chec2in4 the ori4inal title o the
propert- *ith the $e4istr- o Deeds to ascertain *hether there are annotations therein that *ould
pre/udice his position.
More i+portantl-, petitioner Mario Torcuator hi+sel testiied on the e?istence o the condition
prohibitin4 the sale o vacant lots in !-ala !laban4 %illa4e, $i'.
!TTH. B. DE DIOS, B$.
I "Mr. *itness aside ro+ this su++ar- o a4ree+ent *hich has been +ar2ed as E?hibit 9B9 do
-ou still have a docu+ent relatin4 to his transaction bet*een -ou and the deendantJ
! "Hes, sir, as I indicated in +- earlier testi+on- there *as supposed to be a letter addressed to
!-ala Corporation *hich deendant Salvador should si4n in order to re6uest !-ala to deliver to
+e the TCT coverin4 the lot sub/ect o the transaction.
I "This letter that -ou are reerrin4 to do -ou still have a cop- o that letterJ
! "Hes, sir.
I "I a+ sho*in4 to -ou a ?ero? cop- o a letter addressed to !-ala Corporation and si4ned b-
Diosdado and 0ourdes Salvador, can -ou please e?plain to this Court *hat is the relation o this
docu+ent *ith *hat -ou are reerrin4 to e?ecuted b- the deendant Diosdado Salvador and
0ourdes Salvador addressed to !-ala CorporationJ
! "This is the letter o Mr. Salvador, sir, si4ned in +- presence.
I "Can -ou tell the Court *here is the ori4inal o this docu+entJ
! "!ll o the ori4inal copies o that letter are *ith the deendant 1ernabe, sir.
I "Can -ou tell the Court ho* did -ou co+e to have a ?ero? cop- o this docu+entJ
! "Hes, because as soon as the copies o the docu+ents or the transaction *ere si4ned b- Mrs.
Salvador *ho *as then in Ne* Hor2, the- *ere sent b- the spouses to the dau4hter o Mr.
Salvador *ho in turn told +e that all the ori4inals are supposed to be delivered to Mr. 1ernabe
and I *as 4iven a ?ero? cop- o the sa+e.
!TTH. B. DE DIOS, B$.
" !nd *hich or purpose o identiication, -our Eonor, +a- *e re6uest that this letter addressed
to !-ala Corporation and si4ned b- Diosdado Salvador and 0ourdes Salvador be +ar2ed as
E?hibit 9K9 or the plainti, -our Eonor.
COD$T
" Mar2 it.
. . .
!TTH. B. DE DIOS, B$.
" Mr. Citness, this letter appears to be, does it contain an- dateJ Can -ou tell this Court *h- this
docu+ent does not contain the dateJ
!TTH. !. M!#NO
" Inco+petent, -our Eonor, because he *as not the one *ho +ade that docu+ent.
COD$T
" 0et hi+ e?plain.
!TTH. M!#NO
" Hes, -our Eonor.
!TTH. B. DE DIOS, B$.
" 1ecause, -our Eonor, &'e(e )* # (e+u)(e,en& -. A.#/# "o(0o(#&)on &'#& no /o& o( 0(o0e(&.
,#. -e &(#n*1e((e$ un&)/ &'e(e )* # 2o,0/e&e -u)/$)n3 o( *&(u2&u(e -u)/& on &'e /o& #n$ *o
4'#& I 4#* *u00o*e$ &o 3e& on/. 1(o, M(. S#/5#$o(, #*)$e 1(o, &'e $ee$ o1 #-*o/u&e *#/e, )*
,e(e/. # *0e2)#/ 0o4e( o1 #&&o(ne. &o #u&'o()6e ,e &o 2on*&(u2& ,. 'ou*e )n &'e /o& #n$
u0on 2o,0/e&)on o1 &'e 'ou*e &'#& )* &'e &),e &'#& I 4ou/$ -e #//o4e$ -. A.#/#
"o(0o(#&)on &o &(#n*1e( &'e 0(o0e(&. )n ,. n#,e. Thereore, the letter re6uestin4 !-ala
Corporation to release the title in the na+e o Mr. Salvador to *as deliberatel- undated because
it *ould be onl- dated *hen I co+pleted the house.
&2
<E+phasis supplied=
The act that petitioners a4reed to construct a residential house on the propert- in the na+e o the
Salvadors urther proves that the- 2ne* that a direct sale to the+ o a vacant lot *ould
contravene the condition i+posed b- !-ala Corporation on the ori4inal bu-ers o lots in !-ala
!laban4 %illa4e. Eence, the- a4reed on the elaborate plan *hereb- the Salvador spouses, in
*hose na+es the propert- *as re4istered, *ould e?ecute a special po*er o attorne- in avor o
petitioners authorizin4 the latter to construct a residential house on the propert- in the na+e o
the Salvadors. The records even indicate that the docu+ents to eectuate this plan *ere prepared
b- petitioner Mario Torcuator hi+sel.
In his testi+on-, or instance, petitioner Mario Torcuator stated that. 9<1=ased on our discussion,
-our Eonor, ro+ the :';; per s6uare +eter price, *e a4reed upon, the- a4reed to 4ive +e a
rebate o 3L in the or+ o discount because there *as a proble+ in the docu+entation *hich I
tried to solve *hich are the papers in avor o 1ernabe +issin4. I su44ested to Mr. 1ernabe that
*e prepare a ne* set o docu+ent *hich *ill be si4ned b- Mr. Salvador as the previous o*ner
and because o that I *ill be 4ettin4 in eect a 3L discount as +- co++ission.9
&&
This *as conir+ed b- respondent $e+i4io 1ernabe.
I " No*, *here there an- docu+ents presented to -ou durin4 that
occasionJ
! " Hes, sir.
I " 1- *ho+J
! " Mr. Torcuator prepared so+e docu+ents or +e to si4n.
I " !nd do -ou recall *hat *as that docu+entsJ
! " Hes, sir. Mr. Torcuator prepared a docu+ents or cancellation
o the deed o sale o Mr. Salvador to $e+i4io 1ernabe, and cancellation also o the irrevocable
po*er o attorne- o Salvador to 1ernabe, and po*er o attorne- o Salvador authorizin4
$e+i4io 1ernabe to sell the propert- and po*er o attorne- o Salvador 4iven to Mr. Torcuator.
&(
:etitioners thereore cannot ei4n i4norance o the condition i+posed b- !-ala Corporation.
Ce do not a4ree, ho*ever, *ith the trial court and appellate court,s rulin4 that the transaction
bet*een the parties *as void or bein4 contrar- to 4ood custo+s and +orals.
&3
In order to declare the a4ree+ent void or bein4 contrar- to 4ood custo+s and +orals, it +ust
irst be sho*n that the ob/ect, cause or purpose thereo contravenes the 4enerall- accepted
principles o +oralit- *hich have received so+e 2ind o social and practical conir+ation.
&'
Ce are not inclined to rule that the transaction in this case oended 4ood custo+s and +orals. It
should be e+phasized that the proscription i+posed b- !-ala Corporation *as on the resale o
the propert- *ithout a residential house havin4 been constructed thereon. The condition did not
re6uire that the ori4inal lot bu-er should hi+sel construct a residential house on the propert-,
onl- that the ori4inal bu-er +a- not resell a vacant lot. In vie* o our indin4 that the a4ree+ent
bet*een the parties *as a +ere contract to sell, no violation o the condition +a- be inerred
ro+ the transaction as no transer o o*nership *as +ade. In act, the a4ree+ent in this case
that petitioners *ill construct a residential house on the propert- in the na+e o the Salvadors
7*ho retained o*nership o the propert- until the ulill+ent o the t*in conditions o pa-+ent
and construction o a residence8 *as actuall- in co+pliance *ith or obeisance to the condition.
Ainall-, the issue o *hether the a4ree+ent violated the la* as it deprived the 4overn+ent o
capital 4ains ta? is *holl- irrelevant. Capital 4ains ta?es, ater all, are onl- i+posed on 4ains
presu+ed to have been realized ro+ sales, e?chan4es or dispositions o propert-. Eavin4
declared that the contract to sell in this case *as aborted b- petitioners, ailure to co+pl- *ith
the t*in suspensive conditions o ull pa-+ent and construction o a residence, the obli4ation to
pa- ta?es never arose. Eence, an- error the appellate court +a- have co++itted *hen it passed
upon the issue o ta?es despite the act that no evidence on the +atter *as pleaded, adduced or
proved is rather innocuous and does not *arrant reversal o the decisions under revie*.
7!ERE8ORE, the instant petition is DENIED. Costs a4ainst petitioners.
SO O$DE$ED.
!ustria"Martinez, 7!ctin4 Chair+an8, Calle/o, Sr., and Chico"Nazario, BB., concur.
:uno, 7Chair+an8, on oicial leave.