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[ GR No. L-6306, May 26, 1954 ]



95 Phil. 78

[ G.R. No. L-6306, May 26, 1954 ]




This is an action brought by plaintiff against the defendants to compel the latter to execute a deed of sale of certain parcels of land described in the complaint, and to recover the sum of P50,000 as damages.

The lower court decided the case in favor of the plaintiff, and the case is now before us because it involves an amount which is beyond the jurisdiction of the Court of Appeals.

The evidence for the plaintiff discloses the following facts:

The six parcels of land subject of the present action were owned pro-indiviso by Maria Lloret and the estate of Francisco A. Gonzales, of which Ricardo Gonzales Lloret is the judicial administrator. On May 8, 1944, the judicial administrator filed a motion in the intestate proceedings praying for authority to sell the said parcels of land for a price of not less than P100,000, to which Maria Lloret and the other heirs of the estate gave their conformity. The court granted the motion as requested. Plaintiff became interested in the purchase of said parcels of land and to this effect he sought the services of Atty. Teofilo Sauco who readily agreed to serve him and took steps to negotiate the sale of said lands in his behalf. Sauco dealt on the matter with Ricardo Gonzales Lloret. After several interviews wherein they discussed the terms of the sale, especially the price, Gonzales Lloret told Sauco that if plaintiff would agree to pay the sum of P200,000 for the lands, he may agree to carry out the transaction. Sauco broached the matter to plaintiff who thereupon agreed to the proposition, and so, on June 17, 1944, Sauco went to see Gonzales Lloret in his office in Manila wherein, according to Sauco, it was agreed between them, among other things, that the lands would be sold to the plaintiff for the sum of P200,000 and that, after the execution of the sale, the plaintiff would in turn resell to Ricardo Gonzalez Lloret one of the parcels of land belonging to the estate for an undisclosed amount. It was also agreed upon that, since the lands subject of the sale were then in litigation between the estate and one Ambrosio Valero, the deed of sale would include a clause to the effect that, if by March, 1945, the vendors would be unable to deliver to the purchaser the possession of the lands peacefully and without encumbrance, said lands would be substituted by others belonging to the estate, of equal area, value, and conditions. It was likewise agreed upon that Sauco would prepare the necessary documents, as in facts he did in the same office of Gonzales Lloret.

After preparing the documents, Sauco gave an account to the plaintiff of the result of his negotiations, and having signified his conformity thereto, plaintiff gave to Sauco two checks, one for the sum of P100,000 drawn against the Philippine National Bank in favor of Maria Lloret (Exhibit B), and another for the same amount drawn against the Philippine Trust Co. in favor of Ricardo Gonzales Lloret. With these checks, Sauco returned on the same date to the office of Gonzales Lloret to consummate the transaction, but as Maria Lloret was not then present, Gonzales Lloretto M. Sauco that he could leave the document with him as he would take care of having them signed by Ids mother Maria, and that he could return the next Monday, June 19, to get them which by then would be signed and ratified before a notary public. Since Sauco was then in a hurry to return to Malolos, and besides he had confidence in Gonzales Lloret, who was his friend, the former agreed and left the two checks with the latter. But before receiving the checks, Gonzales Lloret issued a receipt therefor, which was marked Exhibit A. Of this development, Sauco informed the plaintiff in the afternoon of the same day, emphasizing the fact that he wou'd return to the office of Gonzales Lloret to get the documents on June 19.

Sauco, however, was not able to return as was the understanding because he fell sick, and apprehensive of such failure, plaintiff went on the next day, June 20, to the Philippine National Bank to inquire whether the check he had issued in favor of Maria Lloret had already been collected, and having been informed in the affirmative, he next went to the Philippine Trust Co. to make the same inquiry with regard to the other check he issued against said bank in favor of Ricardo Gonzales Lloret, and when he was informed that the same had not yet been collected, he suspended its payment informing the bank that, should the party concerned execute the deed of sale for which it had been issued, he would reissue the check. The bank accordingly suspended the payment of the check as requested.

On the occasion of a visit which plaintiff paid to Sauco in Malolos, the latter handed over to him the receipt Exhibit A with the request that, in view of his sickness, he take charge of getting the deed of sale from Gonzales Lloret. Plaintiff tried to do so, but when he interviewed Gonzales Lloret, the latter refused to give him the documents on the pretext that he did not deal with him but with Sauco intimating that he wouM just wait until the latter recover from his sickness. When Sauco got well he tried to renew his dealing with Gonzales Lloret in an attempt to get from him the documents duly signed and ratified before a notary public, but the latter at first gave excuses for his inability to do his part as agreed upon until he finally said that he could not carry out the agreement in view of the fact that he had received other better offers for the purchase of the lands among them one for! the sum of P300,000, plus a vehicle called dokar with its corresponding horse. This attitude was taken by the plaintiff as a refusal to sign the deed of sale and so he instituted the present action making as party defendants Maria Lloret and her son Ricardo Gonzales Lloret. .

Ricardo Gonzales Lloret denied that a definite understanding had ever been reached between him and the plaintiff or his representative relative to the sale of the lands; in question. He testified that the documents marked Exhibits D and D-l do not represent the agreement which, according to Teofilo Sauco, was concluded between them, intimating that said documents were already prepared when Sauco went to his office to take up with him the matter relative to the sale on June 17, 1944; that Sauco, on that occasion, had already with him the two checks referred to in the receipt Exhibit A, who insisted in leaving them with him because he was in a hurry to return to Malalos, and in so he accepted them by way of deposit and deposited them in his current account with the Philippine National Bank in order that they may not be lost; and that sometime in the morning of the succeeding Monday, June 19, a messenger of the Philippine National Bank came to see him to return the check issued in his favor against the Philippine Trust Co. with the information that the same had not been honored by the bank for the reason that the plaintiff had suspended its payment which act he interpreted as an indication that the plaintiff had decided to call off the negotiation. In other words, according to Gonzales Lloret, when plaintiff suspended the payment of the two checks on June 19, 1944, as in fact one of them had been actually suspended because it had not yet been actually collected from the Philippine Trust Co., the understanding he had with Teofilo Sauco regarding the sale did not pass the stage of mere negotiation, and, as such it did not produce any legal relation by which the defendants could be compelled to carry out the sale as now pretended by plaintiff in his complaint.

After a careful examination of the evidence presented by both parties, both testimonial and documentary, we are persuaded to uphold this contention of the defendants for the following reasons:

  1. According to Teofilo Sauco, representative of the plaintiff, his agreement with defendant Gonzales Lloret was that the price of the lands subject of the sale would be P200,000 so much so that he delivered to said defendant two checks in the amount of P100,000 each issued in favor of each defendant against two banking institutions. On the other hand, in the document Exhibit D, which is claimed to be the one drawn up by Sauco in the very office of defendant Gonzales Lloret and which, according to Sauco, contained the precise terms and conditions that were agreed upon between them, the amount which appears therein as the consideration of the sale is P100,000. This discrepancy, which does not appear sufficiently explained in the record, lends cogency to the claim of Gonzales Lloret that when Sauco went to his office to discuss the transaction he had already with him the document Exhibit D with the expectation that defendants might be prevailed upon to accept the terms therein contained, or with the intention of leaving the document with Gonzales Lloret for his perusal and for such alteration or amendment he may desire to introduce therein in accordance with his interest.

  2. Both plaintiff and the defendants knew well that the properties were subject to judicial administration and that the sale could have no valid effect until it merits the approval of the court, so much so that before the lands were opened for negotiation the judicial administrator, with the conformity of the heirs, secured from the court an authorization to that effect, and yet, as will be stated elsewhere, the terms that were made to appear in the document Exhibit D differ substantially from the conditions prescribed in the authorization given by the court, which indicates that said document cannot have any binding effect upon the parties nor serve as basis for an action for specific performance, as now pretended by the plaintiff, in the absence of such judicial approval.

  3. It is a fact duly established and admitted by the parties that the plaintiff suspended the payment of the two checks of P100,000 each on June 19, 1944 (or June 20 according to plaintiff) in view of the failure of defendants to sign the documents Exhibit D and D-l which were delivered to them by Teofilo Sauco, and in fact plaintiff succeeded in stopping the payment of one of them, or the check issued against the Philippine Trust Co. This attitude of the plaintiff clearly indicates that the understanding between the parties was merely in the stage of negotiation for otherwise the plaintiff could not have with- drawn legally from a transaction which had ripened into a consumated contract. And even if the transaction had reached the stage of perfection, we may say that it became rescinded when plaintiff withdraw from his part in the transaction.

  4. It should be recalled that when Sauco handed over to defendant Gonzales Lloret the two checks referred to above, the latter was made to sign a receipt therefor, which was marked Exhibit A. This receipt was prepared by Sauco himself, and it merely recited the fact of the receipt of the two checks, without mentioning the purpose for which the checks were delivered. If it is true that those checks were delivered as advance payment of the consideration of the sale referred to in the contract Exhibit D, no reason is seen why no mention of that fact was made in the receipt. This ambiguity cannot but argue against the pretense of Sauco who drafted the receipt in view of the rule that an obscure clause in a contract cannot favor the one who has caused the obscurity (Article 1288, Old Civil Code.)

  5. One of the documents turned over by Sauco to defend- ant Gonzales Lloret is Exhibit D-1 which represents the resale by the plaintiff to the latter of one of the parcels of land originally included in the sale contained in the document Exhibit D, and, according to Sauco, said document Exhibit D-1 was delivered to defendant Gonzales Lloret for ratification before a notary public. An examination of said document Exhibit D-l will reveal that it contains many blank spaces intended to be filled out later on, and the same does not bear the signature of the plaintiff. This indicates that said document Exhibit D-1 was but a mere draft and corroborates the statement of Gonzales Lloret that it was given to him, together with the document Exhibit D, merely for his perusal and possible amendment or alteration. And

  6. It should be noted that the lands subject of negotiation were owned pro-indiviso by Maria Lloret and the estate of Francisco A. Gonzales, and in that negotiation defendant Gonzales Lloret was merely acting in his capacity as judicial administrator. Being a co-owner of the lands, the consent of Maria Lloret to the terms of the sale is evidently indispensable, and yet there is nothing in the evidence to show that she has ever been contacted in connection with the sale, nor is there any proof that Gonzales Lloret had been authorized to conduct negotiations in her behalf. What the record shows was that Gonzales Lloret would take up the matter with Maria Lloret on the date subsequent to that when the two documents were delivered by Sauco to him (June 17, 1944), but this never materialized because of the unexpected sickness of Teofilo Sauco.

Let us now examine the terms of the authorization given by the court relative to the sale of the lands in question, and see if the same had been observed in the preparation of the deed of sale Exhibit D. Let us note, at the outset, that the authorization of the court refers to the sale of certain parcels of land of an area of 20 hectares situated in the barrio of Sabang, municipality of Baliuag, Province of Bulacan, for a price of not less than P100,000 with the express condition that the encumbrance affecting those lands would first be paid. Analyzing now the terms appearing in the document Exhibit D, we find that among the lands included in the sale are lands situated in the barrio of San Roque. This is a variation of the terms of the judicial authorization. The document Exhibit D also stipulates that the sale would be free from any encumbrance, with the exception of the sum of P30,000 which is indebted to Ambrosio Valero, but said document likewise stipulates that the possession of the lands sold should be delivered to the purchaser sometime in March of the next year and that if this could not be done the lands would be substituted by others of the same area and value, belonging to the estate of Francisco A. Gonzales. This is an onerous condition which does not appear in the authorization of the court. Of course, this is an eventuality which the plaintiff wanted to forestall in view of the fact that the lands subject of the sale were pending litigation between the estate and Ambrosio Valero, but this is no justification for departing from the precise terms contained in the authorization of the court. And we find, finally, that the authorization calls for the sale of six parcels of land belonging to the estate, but in the document as drawn up by Sauco it appears that only five parcels would be sold to the plaintiff, and the other parcel to Ricardo Gonzales Lloret. Undoubtedly, this cannot legally be done for, as we know, the law prohibits that a land subject of administration be sold to its judicial administrator.

The foregoing discrepancies between the conditions appearing in the document Exhibit D and the terms contained in the authorization of the court, plus the incongruencies and unexplained circumstances we have pointed out above, clearly give an idea that all that had taken place between Sauco and defendant Gonzales Lloret was but mere planning or negotiation to be threshed out between them in the conference they expected to have on June 19, 1944, but which unfortunately was not carried out in view of the illness of Teofilo Sauco. Such being the case, it logically follows that the action of the plaintiff has no legal basis.

Before closing, one circumstance which should be mentioned here is that which refers to the delivery by Sauco to Gonzales Lloret of the check in the amount of P100,000 drawn against the Philippine National Bank which Lloret deposited in his current account with that institution. According to the evidence, when the transaction was called off because of the failure of Sauco to appear on the date set for his last conference with Lloret, the latter attempted to return the said amount to Sauco on August 2, 1944 who declined to accept it on the pretext that he had another buyer who was willing to purchase the lands for the sum of P300,000 and that if that sale were carried out Lloret could just deduct that amount from the purchase price: That offer to return, in our opinion, cannot have the effect of relieving Lloret from liability. His duty was to consign it in court as required by law. His failure to do so makes him answerable therefor to the plaintiff which he is now in duty bound to pay subject to adjustment under the Ballentyne Scale of Values.

Wherefore the decision appealed from is reversed, with; out pronouncement as to costs. Defendant Ricardo Gonzales Lloret is ordered to pay to the plaintiff the sum of P100,000 which should be adjusted in accordance with the Ballentyne Scale of Values.

Paras, C. J., Pablo, Bengzon, Montemayor, Reyes, A., Jugo, Labrador, and Concepcion, JJ., concur.