VILLONCO REALTY

COMPANY, plaintiff-appellee and

EDITH PEREZ DE
TAGLE, intervenor-appellee,
vs.
BORMAHECO, INC., FRANCISCO N.
CERVANTES and ROSARIO N.
CERVANTES, defendants-
appellants. Meer, Meer & Meer
for plaintiff-appellee.
G.R. No. L-26872 July 25, 1975
 FACTS
He is the president of
BORMAHECO INC, a
dealer and importer
of industrial and
agricultural

Francisco N. Cervantes

Rosario P. Navarra-Cervantes-
machinery
wife

OWNERS
of lots 3, 15 and 16 located at 245 Buendia Avenue,
Makati, Rizal with a total area of three thousand five
hundred square meters (TCT Nos. 43530, 43531 and
43532. The lots were mortgaged to the Development Bank of
the Phil (DBP) on April 21, 1959 as security for a loan of
P441,000. The mortgage debt was fully paid on July 10, 1969.
 Early part of february 1964.

The two entered into a

contract of sale

Romeo Villonco of
Villonco Realty
Company

Through intervention of
Francisco Cervantes
of Bormaheco Inc
Edith Perez De Tagle, a
Real Estate Broker
During the negotiations, Villonco Realty Company assumed that the lots
belonged to Bormaheco, Inc. and that Cervantes was duly authorized to sell
the same. Cervantes did not disclose to the broker and to Villonco Realty
Company that the lots were conjugal properties of himself and his wife and
that they were mortgaged to the DBP.
BORMAHECO, INC.
February 12,1964
Mr. Romeo
Villonco Villonco Building
Buendia Avenue
Makati, Rizal.
Dear Mr. Villonco:
This is with reference to our telephone conversation this noon on the matter of the
sale of our property located at Buendia Avenue, with a total area of 3,500 sq. m.,
under the following conditions:

(1) That we are offering to sell to you the above property at the price of P400.00 per
square meter;
(2) That a deposit of P100,000.00 must be placed as earnest money on the purchase of
the above property which will become part payment of the property in the event
that the sale is consummated;
(3) That this sale is to be consummated only after I shall have also consummated my
purchase of another property located at Sta. Ana, Manila;
(4) That if my negotiations with said property will not be consummated by reason
beyond my control, I will return to you your deposit of P100,000 and the sale of my
property to you will not also be consummated; and
(5) That final negotiations on both properties can be definitely known after 45 days.
If the above terms is (are) acceptable to your Board, please issue out the said earnest
money in favor of Bormaheco, Inc., and deliver the same thru the bearer, Miss Edith
Perez de Tagle.
In reference to the letter of Miss E. Perez de Tagle dated February 12th and 26, 1964 in respect to the terms
and conditions on the purchase of your property located at Buendia Ave., Makati, Rizal, with a total area of
3,500 sq. meters., we hereby revise our offer, as follows:
1. That the price of the property shall be P400.00 per sq. m., including the improvements thereon;
2. That a deposit of P100,000.00 shall be given to you as earnest money which will become as part payment
in the event the sale is consummated;
3. This sale shall be cancelled, only if your deal with another property in Sta. Ana shall not be consummated
and in such case, the P100,000-00 earnest money will be returned to us with a 10% interest p.a. However, if
our deal with you is finalized, said P100,000.00 will become as part payment for the purchase of your
property without interest:
4. The manner of payment shall be as follows:
a. P100,000.00 earnest money and
650,000.00 as part of the down payment, or
P750,000.00 as total down payment
b. The balance is payable as follows:
P100,000.00 after 3 months
125,000.00 -do-
212,500.00 -do-
P650,000.00 Total
As regards to the other conditions which we have discussed during our last conference on February 27,
1964, the same shall be finalized upon preparation of the contract to sell.*
If the above terms and conditions are acceptable to you, kindly sign your conformity hereunder. Enclosed is
our check for ONE HUNDRED THOUSAND (P100,000.00) PESOS, MBTC Check No. 448314, as earnest
money.
 On March 30, 1964. 26 days after SIGNING the
CONTRACT OF SALE..

Earnest
returned
money +
interest
Francisco Cervantes 694.24
Romeo Villonco of
of Bormaheco Inc Despite the Villonco Realty
lapse of 45 days Company

from February
12, 1964 there is I refused to
no certainty yet accept the
of the acquisition
letter and
of the Punta
Property checks!

 April 6, 1964 April 7, 1964

forty-five day period

had already expired Romeo Villonco of
and the sale to Villonco Realty
Bormaheco, Inc. of Company
the Punta property
had not been
consummated and
the letter was a returned the two checks to
"manifestation that Bormaheco, Inc., stating that the
we are no longer
interested to sell" condition for the cancellation of the
the Buendia Avenue contract had not arisen and at the
Francisco Cervantes property to Villonco same time announcing that an action
of Bormaheco Inc Realty Company for breach of contract would be filed
against Bormaheco, Inc.
 Bormaheco Inc.
Defense that the the three lots were
perfection of the registered in the names of
contract of sale was the Cervantes spouses and
not in the name of
subject to the Bormaheco, Inc., Villonco
conditions: Realty Company on July 21,
a. that final acceptance 1964 filed an amended
or not shall be made complaint impleading the
after 45 days said spouses as defendants.
b. that Bormaheco, Inc. Bormaheco, Inc. and the
"acquires the Sta. Cervantes spouses filed
separate answers.
Ana property".
Miss Tagle

testified that for her

services Bormaheco, Inc.,
through Cervantes,
obligated itself to pay her a
three percent commission
on the price of P1,400,000
or the amount of forty-two
thousand pesos (14 tsn).
 Trial Court rendered a decision
to convey the to pay the latter, to pay Edith
same lots to as consequential Perez de Tagle
Villonco Realty damages, the the sum of
Company sum of P10,000 P42,000 as
monthly from broker's
March 24, 1964 commission and
up to the pay P20,000 as
consummation of to attorney's fees
the sale
that no contract of sale was perfected because Cervantes made a
supposedly qualified acceptance of the revised offer contained in
Exhibit D, which acceptance amounted to a counter-offer, and
because the condition that Bormaheco, inc. would acquire the
Punta land within the forty-five-day period was not fulfilled and that
Bormaheco, Inc. cannot be compelled to sell the land which
Francisco Cervantes belongs to the Cervantes spouses and that Francisco N.
of Bormaheco Inc Cervantes did not bind the conjugal partnership and his wife when,
as president of Bormaheco, Inc., he entered into negotiations with
Villonco Realty Company regarding the said land.
 ISSUE
Is Bormaheco bound to
perform the contract to
Villonco?
Whether there is a perfected

contract of sale?
 RULINGS
The Court held that:
o By the contract of sale one of the contracting parties obligates himself to transfer
The Trial Court the ownership of and to deliver a determining thing, and the other to pay therefor
AFFIRMED the a price certain in money or its equivalent. A contract of sale may be absolute or
judgement, except conditional (Art. 1458, Civil Code).
with respect to o The contract of sale is perfected at the moment there is a meeting of minds upon
damages which the thing which is the object of the contract and upon the price. From that
were not specifically moment, the parties may reciprocally demand performance, subject to the
pleaded and proven provisions of the law governing the form of contracts" (Art. 1475, Ibid.).
were clearly o Contracts are perfected by mere consent, and from that moment the parties are
conjectural and bound not only to the fulfillment of what has been expressly stipulated but also to
speculative. all the consequences which, according to their nature, may be in keeping with
good faith, usage and law (Art. 1315, Civil Code).
o 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
(Art. 1319, Civil Code). "An acceptance may be express or implied" (Art. 1320,
Civil Code).
o Therefore, on that date, the sale was perfected not only that, Bormahecos
ACCEPTANCE of the payment of 100,000.00(earnest money) showed that the
sale was conditionally consummated or partly executed subject to the purchase of
Bormaheco Inc. of the Punta property.
o On February 18, 1964, Bormahecos bid for the Punta Property as already
accepted by Nassco which had authorized its General Manager to sign the
corresponding deed of sale. What was necessary only was the approval of the sale
by the Economic Coordinator and a request for the approval was already pending
in the office of that functionary on March 4, 1964.
o Bormaheco Inc. & Ceervantes spouses contended that the sale was not perfected
because Cervantes allegedly qualified his acceptance of Villonco's revised offer and,
therefore, his acceptance amounted to a counter-offer which Villonco Realty Company
should accept but no such acceptance was ever transmitted to Bormaheco, Inc. which,
therefore, could withdraw its offer and there is no evidence that Villonco Realty
Company did not assent to the supposed changes and that such assent was never
made known to Cervantes.
It is safe to assume that the alleged changes or qualifications made by Cervantes
were approved by Villonco Realty Company and that such approval was duly
communicated to Cervantes or Bormaheco, Inc. by the broker as shown by the fact
that Villonco Realty Company paid, and Bormaheco, Inc. accepted, the sum of
P100,000 as earnest money or down payment. The fact that Villonco Realty
Company allowed its check to be cashed by Bormaheco, Inc. signifies that the
company was in conformity with the changes made by Cervantes and that
Bormaheco, Inc. was aware of that conformity. There was agreement between the
parties on the subject matter, the price and the mode of payment and that part of
the price was paid. "Whenever earnest money is given in a contract of sale, it shall
be considered as part of the price and as proof of the perfection of the contract" (Art.
1482, Civil Code).
o No such specification was made. The term of forty-five days was not a part of the
condition that the Nassco property should be acquired. It is clear that the statement
"that final negotiations on both property can be definitely known after 45 days" does
not and cannot mean that Bormaheco, Inc. should acquire the Nassco
property within forty-five days from February 12, 1964 as pretended by Cervantes. It
is simply a surmise that after forty-five days (in fact when the forty-five day period
should be computed is not clear) it would be known whether Bormaheco, Inc. would
be able to acquire the Nassco property and whether it would be able to sell the
Buendia property. That aforementioned paragraph 5 does not even specify how long
after the forty-five days the outcome of the final negotiations would be known.
o As regards the conjugal property issue, Mrs. Cervantes did not testify at the trial to
fortify that defense which had already been waived for not having been pleaded.
WHEREFORE, the trial court's decision is modified as follows:

1. Within ten (10) days from the date the defendants-appellants receive notice from the clerk of
the lower court that the records of this case have been received from this Court, the spouses
Francisco N. Cervantes and Rosario P. Navarra-Cervantes should execute a deed conveying to
Bormaheco, Inc. their three lots covered by Transfer Certificate of Title Nos. 43530, 43531 and
43532 of the Registry of Deeds of Rizal.

2. Within five (5) days from the execution of such deed of conveyance, Bormaheco, Inc. should
execute in favor of Villonco Realty Company, V. R. C. Building, 219 Buendia Avenue, Makati, Rizal a
registerable deed of sale for the said three lots and all the improvements thereon, free from all
lien and encumbrances, at the price of four hundred pesos per square meter, deducting from the
total purchase price the sum of P100,000 previously paid by Villonco Realty Company to
Bormaheco, Inc.

3. Upon the execution of such deed of sale, Villonco Realty Company is obligated to pay
Bormaheco, Inc. the balance of the price in the sum of one million three hundred thousand pesos
(P1,300,000).

4. Bormaheco, Inc. is ordered (a) to pay Villonco Realty Company twenty thousand pesos (P20,000)
as attorney's fees and (b) to pay Edith Perez de Tagle the sum of forty-two thousand pesos
(P42,000) as commission. Costs against the defendants-appellants.
SO ORDERED.