Limetkai Sons v. CA

9/5/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 255
626 SUPREME COURT REPORTS ANNOTATED

Limketkai Sons Milling, Inc. vs. Court of Appeals
*
G.R. No. 118509. March 29, 1996.
LIMKETKAI SONS MILLING, INC., petitioner, vs. COURT OF

APPEALS, et al., respondents.
Civil Law; Contracts; Sale; Petitioner’s Exhibits “A” to “I” either

scrutinized singly or collectively, do not reveal a perfection of the purported
contract of sale.—The bottomline issue is whether or not a contract of sale
of the subject parcel of land existed between the petitioner and respondent
BPI. A re-evaluation of the attendant facts and the evidence on record,
specifically petitioner’s Exhibits “A” to “I,” yields the negative. x x x These
exhibits, either scrutinized singly or collectively, do not reveal a perfection
of the purported contract of sale.
Same; Same; Same; A definite agreement on the manner of payment of
the price is an essential element in the formation of a binding and
enforceable contract of sale.—The Court in Toyota Shaw, Inc. v. Court of
Appeals had already ruled that a definite agreement on the manner of
payment of the price is an essential element in the formation of a binding
and enforceable contract of sale. Petitioner’s exhibits did not establish any
definitive agreement or meeting of the minds between the concerned parties
as regards the price or term of payment.
Same; Same; Same; Acceptance of an offer must be unqualified and
absolute.—The acceptance of an offer must therefor be unqualified and
absolute. In other words, it must be identical in all respects with that of the
offer so as to produce consent or meeting of the minds. This was not the
case herein considering that petitioner’s acceptance of the offer was
qualified, which amounts to a rejection of the original offer.
MELO, J., Dissenting Opinion:
Civil Law; Contracts; Sale; Appeal; There are well-established

exceptions to the general rule that the factual findings and conclusions
drawn therefrom by the Court of Appeals should be treated as conclusive.—
There are also well-established exceptions to the
_______________
www.central.com.ph/sfsreader/session/0000016d00e514e2f1df82ba003600fb002c009e/t/?o=False 1/33
* THIRD DIVISION.
627
VOL. 255, MARCH 29, 1996 627
general rule that the factual findings and conclusions drawn therefrom by
the Court of Appeals should be treated as conclusive.
Same; Same; Same Same; Exceptional circumstances that would
compel the Supreme Court to review findings of fact of the Court of Appeals.
—In several decisions of recent vintage (Rizal Cement Co., Inc. v. Villareal,
G.R. No. L-30272, February 28, 1985, 135 SCRA 15; Ramos v. Court of
Appeals, G.R. No. L-25463, April 4, 1975, 63 SCRA 331; Garcia v. Court
of Appeals, G.R. No. L-26490, June 30, 1970, 33 SCRA 623; Ramos v.
Pepsi-Cola Bottling Co., G.R. No. L-22533, February 9, 1967, 19 SCRA
289), the Court summarized and enumerated the exceptional circumstances
that would compel the Supreme Court to review findings of fact of the Court
of Appeals, to wit: (1) when the conclusion is a finding grounded entirely on
speculation, surmises or conjectures (Joaquin v. Navarro, 93 Phil. 257
(1953); (2) when the interference made is manifestly absurd, mistaken or
impossible (Luna v. Linatoc, 74 Phil. 15 (1942); (3) when there is grave
abuse of discretion in the appreciation of facts (Buyco v. People, 95 Phil.
253 (1954); (4) when the judgment is premised on a misapprehension of
facts (Dela Cruz v. Sosing, 94 Phil. 26 (1953); Castillo v. Court of Appeals,
G.R. No. L-48290, September 29, 1983, 124 SCRA 808); (5) when the
findings of fact are conflicting (Casica v. Villeseca, 101 Phil. 1205 (1957);
and (6) when the Court of Appeals, in making its findings, went beyond the
issues of the case and the same is contrary to the admissions of both
appellant and appellee (Evangelista v. Alto Surety & Ins. Co., Inc., 103 Phil.
401 (1958).
Same; Same; Same; A sale of land is valid regardless of the form it
may have been entered into.—The contention of respondents that a formal
deed of sale is essential before the contract may be perfected and proved
indicates a misapprehension of the Statute of Frauds. As emphasized in the
decision, a sale of land is valid regardless of the form it may have been
entered into (Claudel vs. Court of Appeals, 199 SCRA 113, 199 [1991]).
The fact that the deed of sale still had to be signed and notarized does not
mean that no contract was perfected. If the law requires a document or
special legal form, the contracting parties may require each other to observe
the formality after the contract is perfected.
Same; Statute of Frauds; The cross-examination on the contract is
deemed a waiver of the defense of the Statute of Frauds.—Even assuming
for purposes of argument that the perfected contract
628
infringes the Statute of Frauds, in Abrenica vs. Gonda (34 Phil. 379 [1916]),
this Court ruled that the questioned contract is ratified when the defense
fails to object or asks questions on cross-examination. As decided in
Abrenica and later cases such as Talosig vs. Vda. de Nieba (43 SCRA 472
[1972]), assuming that parole evidence was initially inadmissible, the same
became competent and admissible because of the cross-examination. The
cross-examination on the contract is deemed a waiver of the defense of the
statute of frauds.
MOTION FOR RECONSIDERATION of a decision of the Supreme

Court, Third Division.
The facts are stated in the resolution of the Court.

Amadeo D. Seno for petitioner.
Alfonso B. Verzosa for BPI.
Manahan, Cornago, De Vera, Aquino & Associates for
National Bookstore, Inc.
RESOLUTION
FRANCISCO, J.:
**
In this motion for reconsideration, the Court is called upon to take
a second hard look on its December 1, 1995 decision reversing and
setting aside respondent Court of Appeals’ judgment of August 12,
1994 that dismissed petitioner Limketkai Sons Milling Inc.’s
complaint for specific performance and damages against private
respondents Bank of Philippine Islands (BPI) and National Book
Store (NBS). Petitioner Limketkai Sons Milling, Inc., opposed the
motion and filed its Consolidated Comment, to which private
respon-
_______________
** The Third Division of this Court was initially composed of Justices Feliciano,
Romero, Melo, Vitug and Panganiban. After the promulgation of the December 1,
1995 decision and in view of Justice Feliciano’s retirement, the different Divisions of
the Court were reorganized. Consequently, the present Third Division is now
composed of Chief Justice Narvasa and Justices Davide, Melo, Francisco and
Panganiban.
629
VOL. 255, MARCH 29, 1996 629

dent NBS filed a Reply. Thereafter, petitioner filed its Manifestation

and Motion for the voluntary inhibition of Chief Justice Andres R.
Narvasa from taking part in any “subsequent deliberations in this
1
case.” The Honorable Chief Justice declined.
The Court is swayed to reconsider.
The bottomline issue is whether or not a contract of sale of the
subject parcel of land existed between the petitioner and respondent
BPI. A re-evaluation of the attendant facts and the evidence on
record, specifically petitioner’s Exhibits “A” to “I,” yields the
negative. To elaborate:
2
Exhibit “A” is a Deed of Trust dated May 14, 1976, entered into
between Philippine Remnants Co., Inc., as grantor, and respondent
BPI, as trustee, stating that subject
3
property covered by TCT 493122
(formerly TCT No. 27324) “has [been] 4
assigned, transferred,
conveyed and set over unto the Trustee” expressly authorizing and
empowering the same “in
_______________
1 In a Memorandum dated March 18, 1996, addressed to the members of the

Court’s Third Division, the Honorable Chief Justice Andres Narvasa noted
petitioner’s baseless motion. Thus:
“2. The information upon which petitioner relies is utterly without foundation in fact and is
nothing but pure speculation or wistful yearning. The Chief Justice wishes to state for the
record that while still in private practice, he never had occasion to represent the “National
Bookstore and/or its principal owner, the Ramos family,” in any case or matter whatsoever; that
he has never had any transaction at all with them and that indeed, he has no recollection of ever
having even purchased anything from said store; and that he does not know, and as far as he
knows he never met, any member of the Ramos family described as principal owners of the
National Bookstore.
“3. There is thus absolutely no reason for the inhibition of the Chief Justice in this case, and
he will continue to take part in all ‘subsequent deliberations in this case.’ ”
2 Records, pp. 10-14.

3 Complaint, p. 2; Records, p. 2.
4 Deed of Trust, p. 2; Records, p. 11.
630

its own name to 5

sell and dispose of said trust property or any lot or
parcel thereof” and “to facilitate [the] sale of the trust property, the
Trustee may engage the services of real estate broker or brokers,
under such terms and conditions which the Trustee may deem
6
proper, to sell the Trust property or any lot or parcel thereof.”
Exhibit “B” is a Letter of Authority for the petitioner issued by
respondent BPI to Pedro A. Revilla, Jr., a real estate broker, to sell
the property pursuant to the Deed of Trust. The full text of Exhibit
“B” is hereby quoted:
“Trust Account No. 75-09
23 June 1988
ASSETRADE CO.
70 San Francisco St.
Capitol Subdivision
Pasig, Metro Manila
Attention: Mr. Pedro P. Revilla, Jr.

Managing Partner
Gentlemen:
This will serve as your authority to sell on an “as is” “where is” basis the
property located at Pasig Blvd., Bagong Ilog, Pasig, Metro Manila, under
the following details and basic terms and conditions:
TCT No.: 493122 in the name of BPI as trustee

of Philippine Remnants Co., Inc.
Area: 33,056.0 square meters (net of 890
sq. m. sold to the Republic of the
Philippines due to the widening of
Pasig Blvd.)
Price: P1,100.00 per sq. m. or
P36,361,600.00.
Terms: Cash
Broker’s Commission: 2%
_______________
5 Id.
6 Id.
631
VOL. 255, MARCH 29, 1996 631

Others: a) Docuemntary (sic) stamps to be af-

fixed to Deed of Absolute Sale, transfer
tax, registration expenses, and other
titling expenses for account of the Buyer.
b) Capital gains tax, if payable, and
real estate taxes up to 30 June 1988 shall
be for the account of the Seller.
This authority which is good for thirty (30) days only from date hereof is
non-exclusive and on a ”first-come” “first-serve” basis.
Very truly yours,
BANK OF THE PHILIPPINE ISLANDS
as trustee of
Philippine Remnants Co., Inc.
(Sgd.) (Sgd.)
FERNANDO J. SISON, III ALFONSO R. ZAMORA
Assistant Vice-President Vice President”
[Note: Emphasis supplied]
Exhibit “C” is the letter dated July 8, 1988, issued to Pedro Revilla,
Jr., upon his request by respondent BPI addressed to the security
guard on duty at subject property to allow him (Revilla, Jr.) and his
7
companion to conduct an ocular inspection of the premises.
_______________
7 The Full Text of Exhibit “C” is as follows:
Trust Account No. 75-11
08 July 1988
The Security Guard

On Detail
Universal Security &
Investigation Agency
c/o Phil. Remnants Co., Inc.
Pasig Blvd., Bagong-Ilog
Pasig, Metro Manila
Dear Sir:
Please allow Mr. Pedro Revilla, Jr., whose specimen signature appears below, and
company to enter the premises that you are securing located at the above-given
address for the purpose of conducting an ocular inspection and verification survey of
the same.
632

Exhibit “D” is a letter addressed by Pedro Revilla, Jr. to respondent

8
BPI informing the latter that he has procured a prospective buyer.
_______________
Kindly extend to Mr. Revilla your usual courtesies and assistance on this matter.
Thank you.
Very truly yours,
As Trustees For
By:
(Sgd.) (Sgd.)
PEDRO REVILLA, JR. ROLANDO V. AROMIN
Assistant Vice-President
8 Exhibit “D” reads as follows:
July 9, 1988
Bank of the Philippine Islands

Bank of P.I. Building
Ayala Avenue, Makati
Metro Manila
ATTN: Mr. Alfonso R. Zamora

Vice President
and
Mr. Fernando J. Sison III
Asst. Vice President
Gentlemen:
I refer to the authority you gave me on June 23, 1988, in your capacity as Trustee
of the Philippine Remnants Co., Inc., in connection with the sale of one (1) parcel of
land, located along Pasig Boulevard, Bagong Ilog, Pasig, Metro Manila, with an area
of 33,056 square meters and covered by Transfer Certificate of Title No. 493122.
I am pleased to inform you that I have procured a buyer for the above described
property in the name of Limketkai Sons Milling, Inc., with office address at Limketkai
Building, Greenhills, San Juan, Metro Manila and represented by its Executive Vice
President, Mr. Alfonso Lim.
It is understood therefore, that pursuant to my authority, I shall be paid a brokers
fee of 2% of the gross purchase price in the
633
VOL. 255, MARCH 29, 1996 633

Exhibit “E” is the written proposal submitted by Alfonso Y. Lim in

behalf of petitioner Limketkai Sons 9Milling, Inc., offering to buy the
subject property at P1,000.00/sq. m.
_______________
event the sale to the above named buyer is consumated.

Very truly yours,
(Sgd.)
Pedro P. Revilla, Jr.
[Note: Emphasis supplied]
9 Exhibit “E” has these salient portions:
Gentlemen:
This confirms our conversation this morning regarding the purchase of a parcel of
land in Barrio Bagong Ilog, Municipality of Pasig, covered by Transfer Certificate of
Title No. 493122 of the Registry of Deeds of Rizal, (specified therein as having an
area of 33,946 sq. m. minus 890 sq. m. previously sold to the Republic of the
Philippines, or a net area of 33,056 sq. m.), registered in your name as trustee of the
Philippine Remnants Company. Specifically, this confirms your offer to sell the said
property at One Thousand (P1,000.00) Pesos per square meter, and our acceptance in
principle of that offer, subject to the following terms:
a) We are to give an initial amount equivalent to Ten (10%) Percent of the total
purchase price as earnest money;
b) The balance is to be paid by us within ninety (90) days from the execution of
the agreement;
c) If the balance is not paid within the above-stated period, by reason of any
cause other than those mentioned in paragraphs (d), (e) and (f) below,
Twenty (20%) Percent of The Ten (10%) Percent paid under paragraph (a)
shall be forfeited in your favor, the remaining Eighty (80%) is to be refunded
to us; in the event the non-payment of the said balance is caused by non-
performance of any of the stipulations in paragraphs (d), (e) and (f) below,
the entire sum paid as earnest money shall be refunded to us;
d) The Title of the property shall be free from all liens and encumbrances and
the property itself free from all squatters;
e) The BPI as trustee—title holder is to warrant that it has the legal right and
title to transfer ownership to us;
f) Physical possession by us upon the payment of the Ten (10%) Percent
referred to in paragraph (a) above.
634

Exhibit “F” is respondent BPI’s letter addressed to petitioner

pointing out that petitioner’s proposal embodied in its Letter
(Exhibit “E”)
10
has been rejected by the respondent BPI’s Trust
Committee.
_______________
Anticipating your favorable action, we thank you for your prompt attention and
early reply.
Very truly yours,
LIMKETKAI SONS MILLING, INC.
(Sgd.)
ALFONSO U. LIM
Executive Vice President
[Note: Emphasis added]
10 Exhibit “F” states:
Attention: Mr. Alfonso U. Lim

Executive Vice President
Gentlemen:
Re: Bo. Bagong Ilog (Pasig) Property
In connection with subject property, we regret to inform you that the Bank’s Trust
Committee did not approve your proposal to purchase said property under the terms
and conditions of your letter to our Mr. Merlin A. Albano dated 11 July 1988. Instead,
the Trust Committee instructed us to consider offers from other interested parties.
In a meeting held on 20 July 1988, Senior Management instructed us to offer the
same property to all interested buyers under the following terms and conditions:
a. 15% downpayment upon notification of acceptance by BPI;

b. balance payable upon signing of the Deed of Sale;
c. price to BPI shall be net of broker’s commission;
d. the party with the best price shall have five (5) days within which to pay the
downpayment, otherwise, the party with the next best price shall be
entertained.
Should you still be interested in subject property, kindly submit to us not later than
12:00 noon of 22 July 1988 your written offer together with the price per square
meter. The Bank shall not entertain proposals received after said cut-off time.
635
VOL. 255, MARCH 29, 1996 635
Exhibit “G” is petitioner’s letter dated July 22, 1988 reiterating its
offer 11
to buy the subject property at P1,000/sq. m. but now on cash
basis.
_______________
It is understood, however, that acceptance of any offer is still subject to the

approval of the Beneficial Owner of the property as well as the Trust Committee of the
Bank.
Very truly yours,
(Sgd.) (Sgd.)
ALFONSO R. ZAMORA FERNANDO J. SISON III
Vice President Asst. Vice President
11 Exhibit “G” quoted in full is as follows:
July 22, 1988
The Chairman
Trust Committee
Bank of the Philippine Islands
Makati, Metro Manila
Dear Sir:
We are in receipt of the letter dated July 20, 1988, signed by Mr. Alfonso Zamora
and Mr. Fernando J. Sison III, copy of which we are hereto attaching.
Please consider our letter of July 21, 1988 addressed to Mr. Xavier P. Loinaz,
Bank President, and copy furnished your committee, as our reply thereto.
We are, therefore, hereby adopting and reiterating our former offer to buy the lot
at P1,000.00 per square meter but on cash basis.
Very truly yours,
LIMKETKAI SONS MILLING, INC.
(Sgd.)
ALFONSO U. LIM
Executive Vice-President
636

Exhibit “H” refers to respondent BPI’s another rejection of

12
petitioner’s offer to buy the property at P1,000/sq. m.
And finally, Exhibit “I” is a letter by petitioner addressed to
respondent BPI claiming the existence of a perfected contract of sale
13
of the subject property between them.
_______________
12 Exhibit “H’s” pertinent portions read as follows:
Attention: Mr. Alfonso U. Lim

Exec. Vice President
Gentlemen:
We reply to your letter dated 29 July 1988 addressed to the Chairman of our Trust
Committee.
We again regret to inform you that your offer to purcxhase the Bo. Bagong Ilog,
Pasig property (TCT 493122) at P1,000.00 per square meter has not been approved,
as previously communicated to you per our letter dated 20 July 1988.
Per the Deed of Trust entered into by and between the Grantor of said property and
ourselves, the Bank as Trustee is duty-bound, in the event of sale of the property, to
select the terms and consideration it deems to be most advantageous to the Grantor.
The 30-day authority given to your broker also presupposed that during said period,
the Bank on its own would also consider other offers. This is why no offer to purchase
was deemed final and accepted until formally approved by the Trust Committee.
x x x x x x x x x
Very truly yours,
(Sgd.) (Sgd.)
NELSON M. BONA FERNANDO J. SISON III
Vice President Asst. Vice President
13 Exhibit “I” pertinently provides:
August 8, 1988
Mr. Nelson M. Bona

Vice-President
and
Mr. Fernando J. Sison III
637
VOL. 255, MARCH 29, 1996 637

These exhibits, either scrutinized singly or collectively, do not reveal

a perfection of the purported contract of sale. Article 1458 of the
Civil Code defines a contract of sale as follows:
_______________
Asst. Vice-President
Manila
Gentlemen:
This refers to your letter of 2 August 1988 regarding our agreement to purchase the
Barrio Bagong Ilog property under TCT No. 493122 at P1,000.00 per square meter.
x x x x x x x x x
Under the afore-quoted provision of the Deed of Trust, your Bank as Trustee, has
the absolute authority to sell and dispose of the property under trust without
consulting the Grantor as to price and terms. Moreover, under said quoted stipulation,
the Bank may engage the services of a real estate broker or brokers under such terms
and conditions which the Trustee may deem proper. Consequently, on 23 June 1988,
you authorized Mr. Pedro P. Revilla, Jr. as broker to sell the property covered by Title
No. 493122 on a “firstcome” “first-serve” basis as per written authority signed by Mr.
Fernando J. Sison III and Mr. Alfonso R. Zamora in behalf of the Bank as Trustee of
We would like to invite your kind attention that we are the “first-come” offeror of
the lot. And, while the price mentioned in the authority granted to Mr. Revilla is
P1,000.00 per square meter, nonetheless, in the negotiations between us and your
responsible bank officials done in the presence of Mr. Revilla, the price per square
meter was finally agreed at P1,000.00.
True, we requested for payment of the price on terms but, should the terms we
requested be not accepted by your bank, we were ready to pay in cash per our
understanding with your Mr. Albano and Mr. Aromin and which we have clearly
made known in our July 22, 1988 letters. As a matter of fact, even before July 21 and
22, 1988 we personally tendered a check for the entire purchase price to Mr. Albano
but he refused to accept the check because, according to him, the authority to transact
the sale was taken away from him. The same proposal to pay in cash was made by us
in a meeting with Mr. Bona, Mr. Sison and other Bank officials, and we were told that
the matter will be resolved by the Bank officials concerned in due time but nothing
positive came about. We are still
638

“ART. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent.
A contract of sale may be absolute or conditional.”
Article 1475 of the same code specifically provides when a contract

of sale is deemed perfected, to wit:
“ART. 1475. The contract of sale is perfected at the moment there is

meeting of minds upon the thing which is the object of the contract and
upon the price.
From that moment, the parties may reciprocally demand performance,
subject to the provisions of the law governing the form of contracts.”
14
The Court in Toyota Shaw, Inc. v. Court of Appeals had already
ruled that a definite agreement on the manner of
_______________
ready to buy the subject property at P1,000.00 per square meter on

cash basis.
x x x x x x x x x
Through this letter we would like to make known to your Bank that we maintain
our position that there has been a perfected contract between your Bank as Trustee
and our Corporation insofar as the sale of the property to us is concerned because in
the written authority granted by you to Mr. Pedro P. Revilla, Jr. signed by no less than
the Assistant Vice-President and Vice-President of the Bank as Trustee, there is no
condition imposed that the sale of the property transacted by him under said authority
is subject to the approval of the Trust Committee.
We hope your Bank will understand our position and we expect that the sale of the
subject lot in our favor be consummated as early as possible.
Very truly yours,
(Sgd.)
ALFONSO U. LIM
Exec. Vice-President/Director
14 244 SCRA 320, 328, citing Velasco v. Court of Appeals, 51 SCRA 439 (1973).
639
VOL. 255, MARCH 29, 1996 639

payment of the price is an essential element in the formation of a

binding and enforceable contract of sale. Petitioner’s exhibits did not
establish any definitive agreement or meeting of the minds between
the concerned parties as regards the price or term of payment.
Instead, what merely appears therefrom is respondent BPI’s repeated
rejection of the petitioner’s proposal to buy the property at
15
P1,000/sq. m. In addition, even on the assumption that Exhibit “E”
reflects that respondent BPI offered to sell the disputed property for
P1,000/sq. m., petitioner’s acceptance of the offer is conditioned
16
upon or qualified by its proposed terms to which respondent BPI
must first agree with.
On the subject of consent as an essential element of contracts,

Article 1319 of the Civil Code has this to say:
“ART. 1319. Consent is manifested by the meeting of the offer and the
acceptance upon the thing and the cause which are to constitute the contract.
The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer.
x x x x x x x x x.”
The acceptance of an offer must therefor be unqualified and

absolute. In other words, it must be identical in all respects with that
of the offer so as to produce consent or meeting of the minds. This
was not the case herein considering that petitioner’s acceptance of
the offer
17
was qualified, which amounts to a rejection of the original
offer. And contrary to petitioner’s assertion that its offer was
accepted by respondent BPI, there was no showing that petitioner
complied with the terms and conditions 18
explicitly laid down by
respondent BPI for prospective buyers. Neither was the petitioner
able to prove that its offer to buy the subject property was formally
approved by the beneficial owner of the property and the
_______________
15 See Exhibits “F” and “H.”

16 See Exhibit “E.”
17 See Logan v. Phil. Acetylene Co., 33 Phil. 177; Beaumont v. Prieto, 41 Phil.
670; Zayco v. Serra, 44 Phil. 326.
18 See Exhibit F.
640

Trust Committee of the Bank, an essential requirement for the

acceptance of the offer which was clearly specified in Exhibits F and
H. Even more telling is petitioner’s unexplained failure to reduce in
writing the alleged acceptance of its offer to buy the property at
P1,000/sq. m.
The Court also finds as unconvincing petitioner’s representation
under Exhibits “E,” “G,” and “I” that its proposal to buy the subject
property for P1,000/sq. m. has been accepted by respondent BPI,
considering that none of the said Exhibits contained the signature of
any responsible official of respondent bank.
It is therefore evident from the foregoing that petitioner’s
documentary evidence floundered in establishing its claim of a
perfected contract of sale.
Moreover, petitioner’s case failed to hurdle the strict

requirements of the Statute of Frauds. Article 1403 of the Civil Code
states:
“ART. 1403.—The following contracts are unenforceable, unless they are

ratified:
(1) x x x
(2) Those that do not comply with the Statute of Frauds as set forth in
this number. In the following cases an agreement hereafter made shall be
unenforceable by action, unless the same, or some note or memorandum,
thereof, be in writing, and subscribed by the party charged, or by his agent;
evidence, therefore, of the agreement cannot be received without the
writing, or a secondary evidence of its contents:
x x x x x x x x x
(e) An agreement for the leasing for a long period than one year, or for
the sale of real property or of an interest therein.
x x x x x x x x x.”
In this case there is a patent absence of any deed of sale

categorically conveying the subject property from respondent BPI to
petitioner. Exhibits “E,” “G,” “I” which petitioner claims as proof of
perfected contract of sale between it and respondent BPI were not
subscribed by the party charged, i.e.,
641
VOL. 255, MARCH 29, 1996 641

BPI, and did not constitute the memoranda or notes that the law
19
speaks of. To consider them sufficient compliance with the Statute
of Frauds is to betray the avowed purpose of the law to prevent
fraud and perjury in the enforcement of obligations. We share, in this
connection, respondent Court of Appeals’ observation when it said:
“x x x. The requirement that the notes or memoranda be subscribed by BPI

or its agents, as the party charged, is very vital for the strict compliance with
the avowed purpose of the Statute of Frauds which is to prevent fraud and
perjury in the enforcement of obligations depending for their evidence on
the unassisted memory of witnesses by requiring certain enumerated
contracts and transactions to be evidenced by a writing signed by the party
to be charged (Asia Production Co., Inc. vs. Paño, 205 SCRA 458). It
cannot be gainsaid that a shrewd person could easily concoct a story in his
letters addressed to the other party and present the letters to the court as
notes to prove the existence of a perfected oral contract of sale when in truth
there is none.
“In adherence to the provisions of the Statute of Frauds, the examination
and evaluation of the notes or memoranda adduced by the appellee was
confined and limited to within the four corners of the documents. To go
beyond what appears on the face of the documents constituting the notes or
memoranda, stretching their import beyond what is written in black and
white, would certainly be uncalled for, if not violative of the Statute of
Frauds and opening the doors to fraud, the very evil sought to be avoided by
the statute. In fine, considering that the documents adduced by the appellee
do not embody the essentials of the contract of sale aside from not having
been subscribed by the party charged or its agent, the transaction involved
20
definitely falls within the ambit of the Statute of Frauds.”
Corollarily, as the petitioner’s exhibits failed to establish the

perfection of the contract of sale, oral testimony cannot take their
21
place without violating the parol evidence rule. It
_______________
19 See Paredes v. Espino, 22 SCRA 1000.

20 CA Decision, pp. 11-12; Rollo, pp. 54-55.
21 Rule 130, Section 9, Rules of Court.
642

was therefore irregular for the trial court to have admitted in

evidence testimony to prove the existence of a contract of sale of a
real property between the parties despite the persistent objection
made by private respondents’ counsels as early as the first scheduled
hearing. While said counsels crossexamined the witnesses, this, to
our view, did not constitute a waiver of the parol evidence rule. The
22 23
Talosig v. Vda. de Nieba, and Abrenica v. Gonda and de Gracia
cases cited by the Court in its initial decision, which ruled to the
effect that an objection against the admission of any evidence must
be made at the proper time, i.e., “x x x at the time question is
24
asked,” and that if not so made it will be understood to have been
25
waived, do not apply as these two cases involved facts different
from the case at bench. More importantly, here, the direct
testimonies of the witnesses were presented in “affidavit-form”
where prompt objection to inadmissible evidence is hardly possible,
whereas the direct testimonies in these cited cases were delivered
orally in open court. The best that counsels could have done, and
which they did, under the circumstances was to preface the cross-
examination with objection. Thus:
“ATTY. VARGAS:
Before I proceed with the cross-examination of the witness,
your Honor, may we object to the particular portion of the
affidavit which attempt to prove the existence of averbal

contract to sell more specifically the answers contained in page
3. Par. 1, the whole of the answer.
_______________
22 43 SCRA 473.
23 34 Phil. 739.
24 Abrenica, (supra) at p. 746, citing Kreigh v. Sherman, 105 Ill., 49; 46 Am. Dig.,
Century Ed., 932.
25 In Talosig v. Vda. de Nieba, for instance, a deed of sale executed between the
parties was undisputed, as well as the existence of receipts evidencing payment; while
in Abrenica v. Gonda and De Gracia, counsel for the defendant never raised any
objection to the examination of the witnesses which elicited testimony tending to
prove the contract. Only after the examination was terminated did counsel move to
strike out all the given testimony.
643
VOL. 255, MARCH 29, 1996 643

“x x x x x x x x x

“COURT:
Objection overruled.
“ATTY. VARGAS:
Your Honor, what has been denied by the Court was the motion
for preliminary hearing on affirmative defenses. The statement
made by the witness to prove that there was a verbal contract to
sell is inadmissible in evidence in this case because an
agreement must be in writing.
“COURT:
Go ahead, that has been already overruled.
“ATTY. VARGAS:
So may we reiterate our objection with regards to all other
portions of the affidavit which deal on the verbal contract.
26
(TSN, Feb. 28, 1989, pp. 3-5. Italics supplied.)”
“x x x x x x x x x
“ATTY. CORNAGO:
Before we proceed, we would like to make of record our
continuing objection in so far as questions and answers
propounded to Pedro Revilla dated February 27, 1989, in so far
as questions would illicit (sic) answers which would be
violative of the best evidence rule in relation to Art. 1403. I
refer to questions Nos. 8, 13, 16 and 19 of the affidavit of this

witness which is considered as his direct testimony.” (T.S.N.,
June 29, 1990, p. 2)
“ATTY. CORNAGO:
May we make of record our continued objection on the
testimony which is violative of the best evidence rule in
relation to Art. 1403 as contained in the affidavit particularly
questions Nos. 12, 14, 19 and 20 of the affidavit of Alfonso
Lim executed on February 24, 1989. x x x.”
(T.S.N., June 28, 1990, p. 8).”27
Counsels should not be blamed and, worst, penalized for taking the
path of prudence by choosing to cross-examine the witnesses instead
of keeping mum and letting the inadmissible testimony in “affidavit
form” pass without challenge. We
_______________
26 CA Decision, pp. 13-14; Rollo, pp. 56-57; Pedro Revilla, Jr., TSN, February 28,
1989, pp. 3-5.
27 Memorandum For Respondent Bank of the Phil. Islands, April 24, 1995, p. 16;
Rollo, p. 229.
644

thus quote with approval the observation of public respondent Court

of Appeals on this point:
“As a logical consequence of the above findings, it follows that the court a
quo erred in allowing the appellee to introduce parol evidence to prove the
existence of a perfected contract of sale over and above the objection of the
counsel for the defendant-appellant. The records show that the court a quo
allowed the direct testimony of the witnesses to be in affidavit form subject
to cross-examination by the opposing counsel. If the purpose thereof was to
prevent the opposing counsel from objecting timely to the direct testimony,
the scheme failed for as early as the first hearing of the case on February 28,
1989 during the presentation of the testimony in affidavit form of Pedro
Revilla, Jr., plaintiff-appellee’s first witness, the presentation of such
28
testimony was already objected to as inadmissible.”
[Emphasis supplied.]
WHEREFORE, in view of the foregoing premises, the Court hereby

GRANTS the motion for reconsideration, and SETS ASIDE its
December 1, 1995 decision. Accordingly, the petition is DENIED
and the Court of Appeals’ decision dated August 12, 1994, appealed
from is AFFIRMED in toto.
SO ORDERED.
Narvasa (C.J., Chairman) and Davide, Jr., J., concur.

Melo, J., Please see dissent.
Panganiban, J., I join Mr. Justice Melo’s dissent.
DISSENTING OPINION
MELO, J.:
I beg to dissent from the new majority’s action granting private

respondents’ motions for reconsideration.
_______________
28 CA Decision, pp. 12-13; Rollo, pp. 55-56.
645
VOL. 255, MARCH 29, 1996 645

On December 26, 1995, respondents Bank of the Philippine Islands

(BPI) and National Book Store, Inc. (NBS) filed separate and
extended motions (18 pages and 44 pages, respectively) urging the
reconsideration of the Court’s December 1, 1995 decision which was
a unanimous action of the then 5 members of the Third Division. On
January 12, 1996 petitioner Limketkai Sons Milling, Inc.
(Limketkai), in turn, filed its 41-page consolidated comment in
opposition to the two motions. NBS thereafter filed a reply to
Limketkai’s comment.
A careful consideration of the two motions and the comment
thereon, as well as the reply thereto, readily shows that while
lengthy and at times emotional, the motions are simply reiterations
of earlier pleadings found in the records, with each party repeating
the same arguments and insisting that its witnesses are telling the
truth, its evidence is superior, and the witnesses for the other side are
lying.
The arguments raised in the two motions for reconsideration and
refuted in the comment revolve around the core issue of whether or
not there was a perfected contract of sale between BPI and
Limketkai. The other issue is whether or not respondent NBS is an
innocent buyer for value which acted in good faith.
The other questions posed in the 8 grounds of BPI and the 4

grounds of NBS to support their respective motions are related to
these two issues. All of these questions, I believe, have already been
fully considered and passed upon in detail in the Court’s decision.
Most of the relevant facts are shared in common by the parties. It
is in the interpretation of these facts and the need to include certain
details overlooked by respondent Court where they differ.
Invocation by Mr. Justice Davide of the general rule that in
petitions for review of decision of the Court of Appeals only
questions of law may be raised to the Supreme Court is, with all due
respect, not all that too significant nor is the principle really being
ignored. The different conclusions and interpretations arising from
the same facts bring about questions of law. In the same way that
respondent court did not
646

consider itself bound by the conclusions of the regional trial court,

we should have no reluctance to discard the factual interpretations
of respondent court and reiterate those of the trial court.
There are also well-established exceptions to the general rule that
the factual findings and conclusions drawn therefrom by the Court of
Appeals should be treated as conclusive.
In Gaw vs. Intermediate Appellate Court (220 SCRA 405, 413-
414 [1993], this Court, through Mdm. Justice Romero, stated:
As a rule, the jurisdiction of this Court in cases brought to it from the Court
of Appeals or the then Intermediate Appellate Court is limited to the review
and revision of errors of law allegedly committed by the appellate court, as
its findings of fact are deemed conclusive. As such, this Court is not duty-
bound to analyze and weigh all over again the evidence already considered
in the proceedings below. This rule, however, is not without exceptions. One
of these exceptions is when there is a conflict between the factual findings of
the Court of Appeals and the trial court which necessitates a review of such
factual findings. This case falls within the exception.
(at pp. 413-414.)
Summing up or collating the instances when findings of fact of the

Court of Appeals may be examined, we had occasion to re-echo
Remalante vs. Tibe (158 SCRA 138 [1985]) in Morales vs. Court of
Appeals (197 SCRA 391 [1991]), thusly:
In several decisions of recent vintage (Rizal Cement Co., Inc. v. Villareal,

G.R. No. L-30272, February 28, 1985, 135 SCRA 15; Ramos v. Court of
Appeals, G.R. No. L-25463, April 4, 1975, 63 SCRA 331; Garcia v. Court
of Appeals, G.R. No. L-26490, June 30, 1970, 33 SCRA 623; Ramos v.
Pepsi-Cola Bottling Co., G.R. No. L-22533, February 9, 1967, 19 SCRA

289), the Court summarized and enumerated the exceptional circumstances
that would compel the Supreme Court to review findings of fact of the Court
of Appeals, to wit:
(1) when the conclusion is a finding grounded entirely on

speculation, surmises or conjectures (Joaquin v. Navarro,
647
VOL. 255, MARCH 29, 1996 647

93 Phil. 257 (1953);

(2) when the interference made is manifestly absurd, mistaken
or impossible (Luna v. Linatoc, 74 Phil. 15 (1942);
(3) when there is grave abuse of discretion in the appreciation
of facts (Buyco v. People, 95 Phil. 253 (1954);
(4) when the judgment is premised on a misapprehension of
facts (Dela Cruz v. Sosing, 94 Phil. 26 (1953); Castillo v.
Court of Appeals, G.R. No. L-48290, September 29, 1983,
124 SCRA 808);
(5) when the findings of fact are conflicting (Casica v.
Villeseca, 101 Phil. 1205 (1957); and
(6) when the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the
admissions of both appellant and appellee (Evangelista v.
Alto Surety & Ins. Co., Inc., 103 Phil. 401 (1958). (at p.
401.)
Items 1, 2, and 4 of the above citation are applicable to this case.

The majority opinions of Justices Davide and Francisco are based
on interpretations of petitioner’s first nine exhibits. There is no
dispute over Exhibit “A,” except that it may be pointed out that BPI
was authorized by the owner of the lot to engage brokers to sell the
property. Exhibit “B” implements Exhibit “A.”
The first disputed issue refers to the authority of the broker and
the Assistant Vice-President and Trust Officer, Rolando V. Aromin,
of BPI to sell the lot. It was the broker, Pedro Revilla, who offered
his services to sell the lot at P1,000.00 per square meter. Kenneth
Richard Awad of Philippine Remnants Co., Inc., owner of the lot,
gave his written conformity (Exh. “P”) on June 14, 1988 to the sale
at P1,000.00 per square meter for cash with a 2% commission for
the broker.
The records show that Assistant Vice-President Rolando V.
Aromin was in charge of the administration and management of
various real estate property held in trust by the bank. This explains
why the owner of the lot, the broker, and the buyer all dealt with
Aromin. He was the one held out by BPI as
648

authorized to sell trust property. On December 3, 1990, long after

the disputed sale had been consummated, Aromin defined his duties
in his testimony as follows:
ATTY. VERZOSA (On Cross)—

Q. You mentioned that one of your duties is the administration and
management of the real estate properties endorsed by your
clients to the bank?
A. Yes, sir.
Q. One of these duties include the disposition of real estate
properties?
A. Yes, sir.
Q. Are we to understand that you do not have to get approval of
anybody before disposition of the properties entrusted to your
bank?
A. In this particular case we have received instruction regarding
instruction (sic) from the owner directly, sir.
ATTY. SENO:
At this instance, may I request that this witness be required to
produce this afternoon the written instruction from Mr. Awad
and if he has copy of the written offer of Technoland, the
disapproved authority to sell to Technoland if he has copy.
COURT:
So ordered.
ATTY. VERZOSA:
Q. With that answer, are we to understand that most properties
could be disposed without the approval of the Trust Committee
based on your previous answer?
A. Yes, sir.
(tsn, Dec. 3, 1990 [A.M.], pp. 34-35).
Only after Aromin’s testimony as a hostile witness displeased BPI

were his authority and responsibility withdrawn by the bank.
Since Aromin was not going to sell the lot himself, for this power
was delegated to a broker, authority from the BPI Trust Committee
was sought and given. Revilla was authorized to sell the property at
P1,000.00 per square meter. When the authority was forwarded to

Aromin, he changed the quoted selling price to P1,000.00 per square
meter. This was
649
VOL. 255, MARCH 29, 1996 649

done because another broker, Technoland Properties, had offered to

sell the lot at that price. Aromin, however, was later informed (Exh.
“S”) that Technoland Properties was not in the list of brokers
approved by the BPI Investment and Trust Committees to sell trust
property held by the bank.
The authority (Exh. “B”) given to broker Revilla, clearly
authorized him “to sell” the property, not merely to look for a buyer.
Revilla contacted petitioner through its Executive Vice-President
Alfonso Lim who agreed to buy the lot.
It is significant to note that, all this while, it was Assistant Vice-
President Aromin with whom all the parties in this transaction were
dealing. He was the BPI official who gave written authority (Exh.
“C”) for the buyer to inspect what it was purchasing.
On July 9, 1988 Revilla wrote BPI (Exh. “D”) that he had a
buyer. Again, the letter was received by Aromin. On July 11, 1988
the top officials of petitioner, Alfonso Lim and Albino Limketkai,
went to the bank to confirm the sale. Significantly, they went to the
office of Merlin Albano and Rolando Aromin of the Real Property
Management Unit and not to any other officer, much less the Trust
Committee.
Justice Davide asks why negotiations over the price were made
with Aromin and Albano, not other officials. The records show that
Alfonso Lim trusted Revilla who brought him to the office in charge
of and managing trust property of the bank. BPI is a big place. When
Revilla brought Alfonso Lim to Merlin Albano and Rolando Aromin
and introduced them to Lim as Vice-President and Assistant Vice-
President, respectively, there was no reason for Lim not to assume
and presuppose their authority to dispose of the property. The visit to
BPI does not in any way reduce or lessen the authority of Revilla to
sell the lot. It shows that petitioner’s officials were cautious buyers
and wanted to be sure about the details and the documentation of the
transaction, considering the amount involved. They decided to deal
not only with the broker but also with the bank officials themselves.
When the Limketkai brothers met with Albano and Aromin, they
tried to bring down the price to P900.00 per
650

square meter. Albano said it should be P1,100.00. Finally, the parties

both agreed that the lot would be sold at P1,000.00 per square meter
to Limketkai, payable in cash.
At that very moment, the contract of sale was perfected. There
was a meeting of the minds upon the subject matter and the
P1,000.00 per square meter price.
On the attempts of private respondents to denigrate the authority
of Aromin to close the deal, it may be noted that Alfonso Lim, in all
his dealings with BPI, conducted business with Aromin. There is
nothing in the records to show that Aromin, at this point, had already
been stripped of his authority. When he testified two years after the
sale, he was still BPI’s Assistant Vice-President.
In Areola vs. Court of Appeals, et al., (236 SCRA 643 [1994]),
this court held:
Accordingly, a banking corporation is liable to innocent third persons where

the representation is made in the course of its business by an agent acting
within the general scope of his authority even though, in the particular case,
the agent is secretly abusing his authority and attempting to perpetrate a
fraud upon his principal or some other person, for his own ultimate benefit.
(at pp. 652-653; emphasis supplied).
Petitioner stresses that Aromin was not in any way abusing his
authority nor attempting any fraud. A corporation acts through its
officers and employees whose acts, if within the scope of their
authority, bind the corporation. The public transacted business with
Vice-President and Trust Officer Aromin. He was regularly acting
within the scope of his duties and responsibilities. Since Assistant
Vice-President and Trust Officer Aromin himself testified that he
closed the deal for BPI, there should be no question about there
being a perfected contract of sale.
The testimony of Aromin is significant at this juncture:
Q. What transpired after the two (2) gentlemen (the Lim’s) were
introduced to you?
A. After the usual courtesies, Mr. Revilla informed us that
651
VOL. 255, MARCH 29, 1996 651

the purpose of their visit is to discuss the possibility of his

client, Limketkai Sons Milling, of buying the Bagong Ilog
property. Mr. Lim offered to buy the property at P900.00 per sq.
m. while Mr. Albano counter-offered to sell at P1,100.00/sq. m.
but after the usual haggling, we finally agreed to sell the

property at the price of P1,000.00/sq. m. because this was the
price the benef icial owner of the property instructed the bank to
quote to prospective buyers as borne by the fact that we are
holding the covering letter of instruction to sell the property at
P1,000.00 per square meter.
Q. Are you telling the Court that there was meeting of the minds
between the buyer and the bank in respect to the price of
P1,000.00/sq. m.
A. Yes, sir, as far as my evaluation, there was a meeting of the
minds as far as the price is concerned, sir.
Q. After you were able to agree on the price of P1,000.00/sq. m.
since the letter of authority says the payment must be in cash
basis, what transpired later on?
A. After we have agreed on the price, the Lim brothers inquired on
how to go about submitting the covering proposal if they will be
allowed to pay on terms. They requested us to give them a guide
on how to prepare the corresponding letter of proposal. I recall
that upon the request of Mr. Albino Limketkai, we dictated a
guide on how to word a written firm offer that was to be
submitted by Mr. Lim to the bank setting out the terms of
payment but with the mutual agreement that if the proposed
payment on terms will not be approved by our Trust Committee,
Limketkai should pay the price in cash.
Q. And did the buyer Limketkai agree to pay in cash in case the
offer of terms will be cash (disapproved).
A. Yes, sir.
Q. At the start did they show their willingness to pay in cash?
A. Yes, sir.
Q. So the amount was no longer subject to the approval or
disapproval of the Committee, it is only on the terms?
A. Yes, sir.
(tsn, Dec. 3, 1990 [A.M.], pp. 16-19; emphasis and parent
hesized word, supplied).
652

The testimony of the bank official dovetails with those of Limketkai

officials involved in the transactions. Revilla was the accredited BPI
broker for the real estate which BPI wanted to sell. Aromin was the
BPI Assistant Vice-President and Trust Officer charged with the
handling of real estate transactions and incidents. Together with the
statements of Limketkai officials, the logical and convincing

testimony of disinterested witness Revilla and hostile witness
Aromin categorically shows there was a perfected contract of sale.
NBS states that Aromin merely pretended to testify reluctantly but
was, in truth, biased in favor of Limketkai. As one of the assistant
vice-presidents of BPI when he testified, there was every reason for
Aromin to be genuinely reluctant even when stating the truth as it
was against his employer. Aromin and Revilla were privy to the
contract. The BPI officials who testified for respondents spoke of
negative restrictions in general but not on the contract itself. They
were not present during the negotiations and during the perfection of
the contract. Respondents denigrate Aromin for what they call his
prodigious memory for details, but this just shows that he was well-
versed in his line of work due to his long years of handling BPI real
estate matters and that he was properly attentive to every aspect of
his job.
Respondents’ arguments on the usual limitations on the powers
of real estate brokers in general cannot prevail over the specific and
exact wording of Revilla’s written authority. Revilla was authorized
“to sell” the lot but there is nothing unusual about a fully authorized
agent bringing the buyer to his principal, not only to strengthen the
validity of his representations but also for easier documentation of
the sale. The fact that broker Revilla dealt with Aromin and brought
the buyers directly and introduced them shows not only the authority
of Aromin but also that BPI represented Aromin to the public as its
official handling such matters.
BPI’s contention that it had discretion to sell the lot without
having to get permission from the corporation of the Awad family is
correct. However, the fact that Kenneth Richard Awad confirmed in
writing (Exh. “P”) their conformity to the
653
VOL. 255, MARCH 29, 1996 653

sale of the lot at P1,000.00 per square meter inspite of BPI’s

discretionary authority over the lot held in trust, merely indicated
how careful and businesslike the owner and the bank officials were
in disposing of the lot. The letter does not in any way prove the
opposite.
The real and principal bone of contention refers to events which
immediately followed the perfection of the agreement.
Exhibit “E,” the request of Alfonso Lim to pay on terms, cannot
be treated in isolation of the events that caused it to be written. As
earlier stated, Limketkai and the BPI officials agreed that the
disputed lot shall be sold to Limketkai at P1,000.00 per square meter
payable in full and in cash. The record shows that on July 11, 1988
this agreement was finalized and tender of full payment was made
on July 18, 1988.
On July 11, however, Alfonso Lim asked if it was possible to pay
on terms. This appears to be a rational query. It was answered in a
perfectly logical manner. Vice-Presidents Albano and Aromin
answered Lim that there was no harm in asking to pay in terms since
this mode of payment had been allowed in past cash sales.
Limketkai and the bank officials, nonetheless agreed that should
term payments not be acceptable, full cash payment as agreed upon
would be effected. This explains the background of Exhibit “E.”
The ruling in Villonco Realty Co. vs. Bormaheco (65 SCRA 352
[1995]), cited in our unanimous December 1, 1995 decision bears
repeating:
“The contract of sale is perfected at the moment there is a meeting of minds

upon the thing which is the object of the contract and upon the price. From
that moment, the parties may reciprocally demand performance, subject to
the provisions of the law governing the form of contract.” (Article 1475,
ibid.)
xxx
xxx
xxx
“Consent is manifested by the meeting of the offer and the acceptance
upon the thing and the cause which are to constitute the
654

contract. The offer must be certain and the acceptance absolute. A qualified
acceptance constitutes a counter-offer” (Art. 1319, Civil Code). “An
acceptance may be express or implied” (Art. 1320, Civil Code).
xxx
xxx
xxx
“It is true that an acceptance may contain a request for certain changes in
the terms of the offer and yet be a binding acceptance. ‘So long as it is clear
that the meaning of the acceptance is positively and unequivocally to accept
the offer, whether such request is granted or not, a contract is formed.”
(Stuart vs. Franklin Life Ins. Co., 105 Fed. 2nd 965, citing Sec. 79,
Williston on Contracts).
xxx
xxx
xxx
. . . the vendor’s change in a phrase of the offer to purchase, which
change does not essentially change the terms of the offer, does not amount
to a rejection of the offer and the tender or a counteroffer.” (Stuart vs.

Franklin Life Ins. Co., supra).
(pp. 362-363; 365-366; pp. 12-18, Decision.)
The record shows that the two bank officials were the ones who
dictated the terms of payment, as Albino Limketkai told them that he
did not know how to go about drafting the request to pay on terms. It
bears emphasizing that Exhibit “E,” the letter asking for term
payments, was made in the afternoon of July 11, 1988 or after the
parties already had a meeting of the minds on the contract.
Respondents ask why did Limketkai, if there was already a
perfected contract to pay at P1,000.00 per square meter in cash,
allow itself to supposedly yield to the BPI officials blandishments on
term payments, knowing that it would endanger its position?
The answer is that Limketkai did not know. The record shows
that the buyer was dealing in good faith and at armslength with BPI.
It is a natural behavior of the buyer to trust the word of BPI officials
who represent the bank, as the bank
655
VOL. 255, MARCH 29, 1996 655

is a symbol of trust and credibility. Limketkai had no knowledge or

reason to suspect that an influential person would enter the picture
and inveigle the top officials of the bank to rescind the perfected
contract and to sell the lot to him. Petitioner Limketkai acted without
suspicion as it saw no imminent danger to the agreement.
Around July 14, 1988, Limketkai learned that BPI was freezing
action on its July 11 request. So it tendered full payment on July 18,
1988 before the BPI Trust Committee could act either way on the
request to pay on terms and also before the expiry date of the
authority letter of broker Revilla, that is July 23, 1988. The tender of
payment was, therefore, a withdrawal or abrogation of Limketkai’s
July 11 request before it would either be granted or withdrawn,
before BPI could act on the request for a change of terms.
On July 20, 1988, BPI’s senior management officials held a
meeting and decided to disapprove Limketkai’s request (Exh. “F”).
But this was two days after Limketkai had already tendered full
payment and when the request was technically moot.
On July 22, 1988, or four days after tender of payment was not
accepted, Limketkai wrote another letter (Exh. “G”) in reply to
BPI’s letter (Exh. “F”). The letter of Limketkai dated July 22, 1988
merely asked for compliance with the agreement with Messrs.
Albano and Aromin on the original offer at P1,000.00 per square
meter.
On July 22, 1988, BPI repeated its July 20, 1988 disapproval of
the request to pay on terms (Exh. “H”). Since BPI stated at that point
that no offer to purchase was deemed final and accepted until
formally approved by the Trust Committee, Limketkai wrote BPI on
August 8, 1988 (Exh. “I”) explaining why the acts of BPI are a
repudiation of the contract perfected as early as July 11, 1988.
In said August 8, 1988 letter of Limketkai to Vice-President
Nelson M. Bona and Assistant Vice-President Fernando J. Sison III,
Alfonso Lim stated in part:
656

We would like to invite your kind attention that we are the “First-come”
offeror of the lot. And, while the price mentioned in the authority granted to
Mr. Revilla is P1,100.00 per square meter, nonetheless, in the negotiations
between us and your responsible bank officials done in the presence of Mr.
Revilla, the price per square meter was finally agreed at P1,000.00.
True, we requested for payment of the price on terms but, should the
terms be not accepted by your bank, we were ready to pay in cash per our
understanding with your Mr. Albano and Mr. Aromin and which we have
clearly made known in our July 21, and July 22, 1988 letters. As a matter of
fact, even before July 21 and 22, 1988 we personally tendered a check for
the entire purchase price to Mr. Albano but he refused to accept the check
because, according to him, the authority to transact the sale was taken away
from him. The same proposal to pay in cash was made by us in a meeting
with Mr. Bona, Mr. Sison and other Bank officials, and we were told that the
matter will be resolved by the Bank officials concerned in due time but
nothing positive came about. We are still ready to buy the subject property
at P1,000.00 per square meter on cash basis.
BPI’s Assistant Vice-President Aromin confirmed the tender of

payment on July 18, 1988 as follows:
Q. Since no action was taken on the terms that you agreed upon
with Limketkai, as according to you the authority was taken
away from you by higher authorities as relayed to you by Mr.
Albano, did you meet Mr. Lim again on July 18, 1988?
A. Yes, sir, we met him again few days after they submit the letter
of proposal. It was on that day that Mr. Alfonso Lim, together
with Mr. Revilla met us in the office of Mr. Albano on our side
and Mr. Bobby de Leon who was manager or the account officer
handling the account of Limketkai in the bank when Mr.
Alfonso Lim tendered a check in the amount of P33,056,000.00
representing payment on the basis of P1,000.00/sq. m. for the
property, sir.
Q. Did you accept the check?

A. It was Mr. Albano who is responsible for that and he did not
accept the check for the same reason we are no longer
authorized to handle the transaction and he also said to present
the check to the officer who is now
657
VOL. 255, MARCH 29, 1996 657

authorized to handle the transaction, sir.

(tsn, Dec. 3, 1990 [A.M.], pp. 28-29.)
Private respondents’ case primarily depends upon Exhibits “E,” “F,”

“G,” “H,” and “I.” The separate opinions of Justices Davide and
Francisco gave credence to respondents’ position. It can be seen
above that far from supporting the movants’ arguments, Exhibits
“E,” “F,” “G,” “H,” and “I” prove exactly the opposite of what the
respondents allege.
Regarding the tender of P33,056,000.00 in full payment of the
lot, respondents did not question the fact of tender nor the
authenticity of the check tendered by Limketkai, through Alfonso
Lim, to BPI. Instead, respondents tried to show that the check was
not fully funded by assailing the non-categorical answers of the
Solidbank official who refused to answer the questions of
respondents’ lawyers due to the prohibition under the Secrecy of
Bank Deposits Law against a bank revealing the extent of its client’s
deposits. Alfonso Lim testified that in tendering the check, he was
accompanied by a certain Bobby de Leon, a high-ranking officer of
the BPI, and he approached several other bank executives among
whom was the Vice-President, Nelson Bona, in the presence of
Sison, de Leon, Mike Mendoza, and Ruth Bandera. The record
shows that tender of payment was also made on BPI’s Fernando
Sison III, Merlin Albano, and Nelson Bona, all high-ranking BPI
officials. Inexplicably, respondents did not present any of these
officials to rebut the testimony of Alfonso Lim of his having
tendered a check for the amount of the purchase price. At any rate,
all the BPI officials to whom the check was tendered did not
question, at the time, its authenticity nor its funding. They gave only
one reason for non-acceptance of tender—either they had no
authority or their authority to accept payment from Limketkai had
been withdrawn. If they did not possess authority earlier, there
would have been nothing to withdraw.
Whether the Statute of Frauds is applicable or not was discussed
at length before the trial court and the Court of Appeals and in our
December 1, 1995 decision.
658

The contention of respondents that a formal deed of sale is essential

before the contract may be perfected and proved indicates a
misapprehension of the Statute of Frauds. As emphasized in the
decision, a sale of land is valid regardless of the form it may have
been entered into (Claudel vs. Court of Appeals, 199 SCRA 113,
199 [1991]). The fact that the deed of sale still had to be signed and
notarized does not mean that no contract was perfected. If the law
requires a document or special legal form, the contracting parties
may require each other to observe the formality after the contract is
perfected.
If there had been a formal deed of sale in this case, there is no
need to even discuss the Statute of Frauds. Precisely because Article
1403 of the Civil Code requires a “note or memorandum thereof”
and mentions “secondary evidence of its contents,” the Statute of
Frauds becomes material. Taking all of the documents in this case
together, there can be no doubt that the requirement of a note or
memorandum of the sale is more than met. This issue is more fully
discussed in pages 14 to 17 of our December 1, 1995 decision.
Equally significant is the fact that Limketkai’s witnesses were
cross-examined at length by respondents’ counsels on the perfection
of the contract, the purchase price, the tender of full cash payment,
and other facts which respondents-movants now claim must be
stricken out unless fully documented in writing. Even assuming for
purposes of argument that the perfected contract infringes the Statute
of Frauds, in Abrenica vs. Gonda (34 Phil. 379 [1916], this Court
ruled that the questioned contract is ratified when the defense fails to
object or asks questions on cross-examination. As decided in
Abrenica and later cases such Talosig vs. Vda. de Nieba (43 SCRA
472 [1972]), assuming that parole evidence was initially
inadmissible, the same became competent and admissible because of
the cross-examination. The cross-examination on the contract is
deemed a waiver of the defense of the statute of frauds (Vitug,
Compendium of Civil Law and Jurisprudence, 1993 Revised
Edition, p. 563).
There is no reason to doubt the aptness of the documents and the
reliable nature of the testimony, especially the
659
VOL. 255, MARCH 29, 1996 659

answers during cross-examination, showing a meeting of the minds

of buyer and seller as to the subject matter of the contract and the
cause of the obligation.
Regarding the buyer-in-good-faith arguments of NBS, perhaps all
that needs to be said is that it is readily seen that any person who
buys property under litigation which is covered by a notice of lis
pendens subjects himself to the outcome of the litigation.
Respondents try to explain the allegedly true nature of the
petitioner’s so-called badges of fraud—BPI dealing directly through
top executives with an influential buyer when the lot was supposed
to be sold through brokers; there were personal, family, and business
relationships between BPI Senior Vice-President Edmundo Barcelon
and NBS President Alfredo Ramos; NBS offered Limketkai a big
amount through broker George Feliciano to drop the case and to lift
the notice of lis pendens; the vendor did not guarantee its title to the
land and the right of the buyer to proceed against the seller if the
latter sold property no longer owned by it and instead had the buyer
guaranteeing its own purchase; and NBS’s construction on the
property was characterized by easy portability. The explanations are
far from convincing. The confluence of all these factors shows that
there was indeed collusion between a top BPI executive and the
NBS president whose relationship was such that BPI was willing to
renege on its obligations and rescind a perfected contract with an
earlier buyer. Of course, seller BPI was protected because buyer
NBS assumed all risks.
NBS refutes the arguments of Limketkai on the temporary nature
and easy portability of its construction on valuable real estate. It
states that the building was destroyed by fire. Whether or not the
temporary nature of the building may still be proved, the record
shows that NBS was acting in bad faith in trying to buy property
which was earlier sold to another buyer and buying it inspite of
notice of lis pendens. BPI Vice-President Barcelon and NBS
President Ramos also gave conflicting testimony on similar points.
Ramos strongly denied friendship or even acquaintanceship with
Barcelon. He denied even discussing with Barcelon his desire to buy
the
660

property. Barcelon, in turn, admitted his friendship with Ramos, a

valued BPI client, and their taking lunch together at which time the
sale to NBS was discussed. There was no reason for Ramos to deny
the friendship or their discussion of the sale even as Barcelon was
innocently contradicting him, unless the witness wanted to hide his
bad faith from the trial court.
The chain or circumstances in this case shows that the

participants acted in the natural order of things and that the sale to
Limketkai was not only perfected but appears regular and
aboveboard.
The resolution of the instant motions for reconsideration hinges
on the credibility of witnesses and the weight to be given to the
documentary and other pieces of evidence. The observations and
conclusions of the trial judge who directly heard the witnesses and
who personally presided over the presentation and offer of other
evidence, especially as to the credibility of witnesses for both sides,
is significant in this regard.
I find respondents’ criticisms of the trial court and their
skepticism of this Court’s statements not only totally unfounded but
also tastelessly disdainful. A losing litigant in a case where both the
evidence and the law are clearly against its position cannot, after a
decision has been rendered, get a reversal through such tactics. The
motions must be resolved on their merits.
I, therefore, vote to deny the two motions for reconsideration.
Motion for reconsideration granted. Judgment of December 1,
1995 set aside, that of the Court of Appeals affirmed in toto.
Note.—A contract of sale being consensual, it is perfected by the

mere consent of the parties. (Aspi vs. Court of Appeals, 236 SCRA
94 [1994])
——o0o——
661
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9/5/2019 SUPREME COURT REPORTS ANNOTATED VOLUME 255

626 SUPREME COURT REPORTS ANNOTATED

LIMKETKAI SONS MILLING, INC., petitioner, vs. COURT OF

Civil Law; Contracts; Sale; Petitioner’s Exhibits “A” to “I” either

MELO, J., Dissenting Opinion:

Civil Law; Contracts; Sale; Appeal; There are well-established

VOL. 255, MARCH 29, 1996 627

Limketkai Sons Milling, Inc. vs. Court of Appeals

628 SUPREME COURT REPORTS ANNOTATED

Limketkai Sons Milling, Inc. vs. Court of Appeals

MOTION FOR RECONSIDERATION of a decision of the Supreme

The facts are stated in the resolution of the Court.

VOL. 255, MARCH 29, 1996 629

dent NBS ﬁled a Reply. Thereafter, petitioner ﬁled its Manifestation

1 In a Memorandum dated March 18, 1996, addressed to the members of the

2 Records, pp. 10-14.

630 SUPREME COURT REPORTS ANNOTATED

its own name to 5

“Trust Account No. 75-09

Attention: Mr. Pedro P. Revilla, Jr.

TCT No.: 493122 in the name of BPI as trustee

VOL. 255, MARCH 29, 1996 631

Others: a) Docuemntary (sic) stamps to be af-

7 The Full Text of Exhibit “C” is as follows:

Trust Account No. 75-11

The Security Guard

632 SUPREME COURT REPORTS ANNOTATED

Exhibit “D” is a letter addressed by Pedro Revilla, Jr. to respondent

8 Exhibit “D” reads as follows:

Bank of the Philippine Islands

ATTN: Mr. Alfonso R. Zamora

VOL. 255, MARCH 29, 1996 633

Exhibit “E” is the written proposal submitted by Alfonso Y. Lim in

event the sale to the above named buyer is consumated.

[Note: Emphasis supplied]

9 Exhibit “E” has these salient portions:

634 SUPREME COURT REPORTS ANNOTATED

Exhibit “F” is respondent BPI’s letter addressed to petitioner

[Note: Emphasis added]

10 Exhibit “F” states:

Attention: Mr. Alfonso U. Lim

Re: Bo. Bagong Ilog (Pasig) Property

a. 15% downpayment upon notiﬁcation of acceptance by BPI;

VOL. 255, MARCH 29, 1996 635

Limketkai Sons Milling, Inc. vs. Court of Appeals

It is understood, however, that acceptance of any offer is still subject to the

Very truly yours,

[Note: Emphasis added]

11 Exhibit “G” quoted in full is as follows:

July 22, 1988

[Note: Emphasis added]

636 SUPREME COURT REPORTS ANNOTATED

Exhibit “H” refers to respondent BPI’s another rejection of

12 Exhibit “H’s” pertinent portions read as follows:

Attention: Mr. Alfonso U. Lim

13 Exhibit “I” pertinently provides:

Mr. Nelson M. Bona

VOL. 255, MARCH 29, 1996 637

These exhibits, either scrutinized singly or collectively, do not reveal

Civil Code deﬁnes a contract of sale as follows:

638 SUPREME COURT REPORTS ANNOTATED

Article 1475 of the same code speciﬁcally provides when a contract

“ART. 1475. The contract of sale is perfected at the moment there is

ready to buy the subject property at P1,000.00 per square meter on