Page 1 of 19

BOSTON BANK OF THE PHILIPPINES, (formerly BANK OF the meantime, CBM was renamed the Boston Bank of the
Philippines. Then, the spouses filed a complaint for specific performance
COMMERCE) vs. PERLA P. MANALO and CARLOS MANALO, and damages against the bank before the RTC. The spouses alleged that
JR., they had always been ready and willing to pay the installments on the lots
G. R. No. 158149. February 9, 2006 sold to them but no contract was forthcoming. The spouses further alleged
that upon their partial payment of the downpayment, they were entitled to
CALLEJO, SR., J.: the execution and delivery of a Deed of Absolute Sale covering the subject
lots. During the trial, the spouses adduced in evidence the separate
Contracts of Conditional Sale executed between XEI and 3 other buyers to
Facts: prove that XEI continued selling residential lots in the subdivision as agent
of OBM after the latter had acquired the said lots. The trial court ordered
• The Xavierville Estate, Inc. (XEI) was the owner of parcels of land in Quezon the petitioner to execute a Deed of Absolute Sale in favor of the spouses
upon the payment of the spouses of the balance of the purchase price. It
City, known as the Xavierville Estate Subdivision, with an area of 42 hectares.
ruled that under the August 22, 1972 letter agreement of XEI and the
XEI caused the subdivision of the property into residential lots, which was then
offered for sale to individual lot buyers. spouses, the parties had a "complete contract to sell" over the lots, and
that they had already partially consummated the same. The Court of
Appeals sustained the ruling of the RTC, but declared that the balance of
• XEI, through its General Manager, Antonio Ramos, as vendor, and The the purchase price of the property was payable in fixed amounts on a
Overseas Bank of Manila (OBM), as vendee, executed a "Deed of Sale of Real monthly basis for 120 months, based on the deeds of conditional sale
Estate" over some residential lots in the subdivision. executed by XEI in favor of other lot buyers. Boston Bank filed a Motion
for the Reconsideration of the decision alleging that there was no
• The transaction was subject to the approval of the Board of Directors of OBM, perfected contract to sell the two lots, as there was no agreement between
and was covered by real estate mortgages in favor of the Philippine National XEI and the respondents on the manner of payment as well as the other
Bank as security for its account amounting to ₱5,187,000.00, and the Central terms and conditions of the sale. Boston Bank also asserts that there is no
Bank of the Philippines as security for advances amounting to factual basis for the CA ruling that the terms and conditions relating to the
₱22,185,193.74.Nevertheless, XEI continued selling the residential lots in the payment of the balance of the purchase price of the property (as agreed
subdivision as agent of OBM. upon by XEI and other lot buyers in the same subdivision) were also
applicable to the contract entered into between the petitioner and the
• XEI president Emerito Ramos, Jr. contracted the services of Engr. Carlos respondents. CA denied the MR.
Manalo, Jr. who was in business of drilling deep water wells and installing
pumps under the business name Hurricane Commercial.

Issue:
XEI turned over its selling operations to OBM. Subsequently,
Commercial Bank of Manila (CBM) acquired the Xavierville Estate from Whether or not the CA correctly held that the terms of the deeds of
OBM. CBM requested Perla Manalo to stop any on-going construction on conditional sale executed by XEI in favor of the other lot buyers in the
the property since it (CBM) was the owner of the lot and she had no subdivision, which contained uniform terms of 120 equal monthly installments,
permission for such construction. Perla informed them that her husband constitute evidence that XEI also agreed to give the Manalo spouses the same
had a contract with OBM, through XEI, to purchase the property. She mode and timeline of payment. (Evidence, Disputable Presumptions, Habits
promised to send CBM the documents. However, she failed to do so. Thus, and Customs Rule 130, Section 34)
CBM filed a complaint for unlawful detainer against the spouses. But later
on, CBM moved to withdraw its complaint because of the issues raised. In
 Page 2 of 19

subdivision to pay the balance of the purchase price of said lots in 120
months.
Held:

NO. The bare fact that other lot buyers were allowed to pay the
balance of the purchase price of lots purchased by them in 120 or 180
monthly installments does not constitute evidence that XEI also agreed to
give the respondents the same mode and timeline of payment.

Under Section 34, Rule 130 of the Revised Rules of Court, evidence
that one did a certain thing at one time is not admissible to prove that he
did the same or similar thing at another time, although such evidence may
be received to prove habit, usage, pattern of conduct or the intent of the
parties.

Habit, custom, usage or pattern of conduct must be proved like any

other facts. The offering party must establish the degree of specificity and
frequency of uniform response that ensures more than a mere tendency to
act in a given manner but rather, conduct that is semi-automatic in nature.
The offering party must allege and prove specific, repetitive conduct that
might constitute evidence of habit. The examples offered in evidence to
prove habit, or pattern of evidence must be numerous enough to base on
inference of systematic conduct. Mere similarity of contracts does not
present the kind of sufficiently similar circumstances to outweigh the
danger of prejudice and confusion. In determining whether the examples
are numerous enough, and sufficiently regular, the key criteria are
adequacy of sampling and uniformity of response. It is only when examples
offered to establish pattern of conduct or habit are numerous enough to
lose an inference of systematic conduct that examples are admissible.

Respondents failed to allege and prove that, as a matter of

business usage, habit or pattern of conduct, XEI granted all lot buyers the
right to pay the balance of the purchase price in installments of 120
months of fixed amounts with pre-computed interests, and that XEI and
the respondents had intended to adopt such terms of payment relative to
the sale of the two lots in question. Indeed, respondents adduced in
evidence the three contracts of conditional sale executed by XEI and other
lot buyers merely to prove that XEI continued to sell lots in the subdivision
as sales agent of OBM after it acquired said lots, not to prove usage, habit
or pattern of conduct on the part of XEI to require all lot buyers in the
 Page 3 of 19

G.R. No. 158149. February 9, 2006. * raised in the trial court and the Court of Appeals and is necessary for
BOSTON BANK OF THE PHILIPPINES, (formerly BANK a just and complete resolution of the case. When the trial court decides
OF COMMERCE), petitioner, vs. PERLA P. MANALO and a case in favor of a party on certain grounds, the Court may base its
CARLOS MANALO, JR., respondents. decision upon some other points, which the trial court or appellate
Appeals; Evidence; The findings of facts of the trial court, as court ignored or erroneously decided in favor of a party.
affirmed on appeal by the Court of Appeals, are conclusive on the Contracts; Sales; For a perfected contract of sale or contract to sell
Supreme Court unless the case falls under any of the exceptions.—The to exist in law, there must be an agreement of the parties, not only on
rule is that before this Court, only legal issues may be raised in a the price of the property sold, but also on the manner the price is to be
petition for review on certiorari. The reason is that this Court is not a paid by the vendee.—We agree with petitioner’s contention that, for a
trier of facts, and is not to review and calibrate the evidence on record. perfected contract of sale or contract to sell to exist in law, there must
Moreover, the findings of facts of the trial court, as affirmed on appeal be an agreement of the parties, not only on the price of the property
by the Court of Appeals, are conclusive on this Court unless the case sold, but also on the manner the price is to be paid by the vendee.
falls under any of the following exceptions: (1) when the conclusion is Under Article 1458 of the New Civil Code, in a contract of sale,
a finding grounded entirely on speculations, surmises and whether absolute or conditional, one of the contracting parties obliges
conjectures; (2) when the inference made is manifestly mistaken, himself to transfer the ownership of and deliver a determinate thing,
absurd or impossible; (3) where there is a grave abuse of discretion; and the other to pay therefor a price certain in money or its
(4) when the judgment is based on a misapprehension of facts; (5) equivalent. A contract of sale is perfected at the moment there is a
when the findings of fact are conflicting; (6) when the Court of meeting of the minds upon the thing which is the object of the contract
Appeals, in making its findings went beyond the issues of the case and and the price. From the averment of perfection, the parties are bound,
the same is contrary to the admissions of both appellant and appellee; not only to the fulfillment of what has been expressly stipulated, but
(7) when the findings are contrary to those of the trial court; (8) when also to all the consequences which, according to their nature, may be
the findings of fact are conclusions without citation of specific in keeping with good faith, usage and law. On the other hand, when
evidence on which they are based; (9) when the facts set forth in the the contract of sale or to sell is not perfected, it cannot, as an
petition as well as in the petitioners’ main and reply briefs are not independent source of obligation, serve as a binding juridical relation
disputed by the respondents; and (10) when the findings of fact of the between the parties.
Court of Appeals are premised on the supposed absence of evidence Same; Same; A definite agreement as to the price is an essential
and contradicted by the evidence on record. element of a binding agreement to sell personal or real property
Same; Same; The Supreme Court may consider an issue not because it seriously affects the rights and obligations of the parties;
raised during the trial when there is plain error; Although factual The parties must agree on the manner of payment of the price of the
issue was not resolved in the trial court, such issue may still be property to give rise to a binding and enforceable contract of sale or
considered and resolved by the Supreme Court in the interest of contract to sell.—A definite agreement as to the price is an essential
substantial justice or when the issue is closely related to an issue raised element of a binding agreement to sell personal or real property
in the trial court and Court of Appeals.—It must be stressed that the because it seriously affects the rights and obligations of the parties.
Court may consider an issue not raised during the trial when there is Price is an essential element in the formation of a binding and
plain error. Although a factual issue was not raised in the trial court, enforceable contract of sale. The fixing of the price can never be left to
such issue may still be considered and resolved by the Court in the the decision of one of the contracting parties. But a price fixed by one
interest of substantial justice, if it finds that to do so is necessary to of the contracting parties, if accepted by the other, gives rise to a
arrive at a just decision, or when an issue is closely related to an issue perfected sale. It is not enough for the parties to agree on the price of
 Page 4 of 19

the property. The parties must also agree on the manner of payment respondents, as plaintiffs below, failed to adduce a shred of evidence
of the price of the property to give rise to a binding and enforceable to prove that they were obliged to pay the P278,448.00 monthly, semi-
contract of sale or contract to sell. This is so because the agreement annually or annually. The allegation that the payment of the
as to the manner of payment goes into the price, such that a P278,448.00 was to be paid in installments is, thus, vague and
disagreement on the manner of payment is tantamount to a failure to indefinite. Case law is that, for a contract to be enforceable, its terms
agree on the price. must be certain and explicit, not vague or indefinite.
Same; Same; Installments; In a contract to sell property by Same; Same; Courts should not undertake to make a contract for
installments, it is not enough that the parties agree on the price as well the parties, nor can they enforce one, the terms of which are in doubt.—
as the amount of downpayment—they must, likewise, agree on the By its ruling, the CA unilaterally supplied an essential element to the
manner of payment of the balance of the purchase price and on the letter agreement of XEI and the respondents. Courts should not
other terms and conditions relative to the sale.—In a contract to sell undertake to make a contract for the parties, nor can it enforce one,
property by installments, it is not enough that the parties agree on the terms of which are in doubt. Indeed, the Court emphasized
the price as well as the amount of downpayment. The parties must, in Chua v. Court of Appeals that it is not the province of a court to
likewise, agree on the manner of payment of the balance of the alter a contract by construction or to make a new contract for the
purchase price and on the other terms and conditions relative to the parties; its duty is confined to the interpretation of the one which they
sale. Even if the buyer makes a downpayment or portion thereof, such have made for themselves, without regard to its wisdom or folly, as
payment cannot be considered as sufficient proof of the perfection of the court cannot supply material stipulations or read into contract
any purchase and sale between the parties. words which it does not contain.
Same; Same; Jurisprudence is that if a material element of a Evidence; Disputable Presumptions; Habits and Customs; Under
contemplated contract is left for future negotiations, the same is too Section 34, Rule 130 of the Revised Rules of Court, evidence that one
indefinite to be enforceable.—Jurisprudence is that if a material did a certain thing at one time is not admissible to prove that he did
element of a contemplated contract is left for future negotiations, the the same or similar thing at another time, although such evidence may
same is too indefinite to be enforceable. And when an essential be received to prove habit, usage, pattern of conduct or the intent of the
element of a contract is reserved for future agreement of the parties, parties.—Under Section 34, Rule 130 of the Revised Rules of Court,
no legal obligation arises until such future agreement is concluded. So evidence that one did a certain thing at one time is not admissible to
long as an essential element entering into the proposed obligation of prove that he did the same or similar thing at another time, although
either of the parties remains to be determined by an agreement which such evidence may be received to prove habit, usage, pattern of
they are to make, the contract is incomplete and unenforceable. The conduct or the intent of the parties. Similar acts as evidence.—
reason is that such a contract is lacking in the necessary qualities of Evidence that one did or did not do a certain thing at one time is not
definiteness, certainty and mutuality. admissible to prove that he did or did not do the same or a similar
Same; Same; For a contract to be enforceable, its terms must be thing at another time; but it may be received to prove a specific intent
certain and explicit, not vague or indefinite.—We note that, in its or knowledge, identity, plan, system, scheme, habit, custom or usage,
letter to the respondents dated June 17, 1976, or almost three years and the like.
from the execution by the parties of their August 22, 1972 letter Same; Same; Same; Courts must contend with the caveat that,
agreement, XEI stated, in part, that respondents had purchased the before they admit evidence of usage, of habit or pattern of conduct, the
property “on installment basis.” However, in the said letter, XEI failed offering party must establish the degree of specificity and frequency of
to state a specific amount for each installment, and whether such uniform response that ensures more than a mere tendency to act in a
payments were to be made monthly, semi-annually, or annually. Also, given manner but rather, conduct that is semi-automatic in nature; It
 Page 5 of 19

is only when examples offered to establish pattern of conduct or habit Irrefragably, under Article 1469 of the New Civil Code, the price of
are numerous enough to lose an inference of systematic conduct that the property sold may be considered certain if it be so with reference
examples are admissible.—Habit, custom, usage or pattern of conduct to another thing certain. It is sufficient if it can be determined by the
must be proved like any other facts. Courts must contend with the stipulations of the contract made by the parties thereto or by reference
caveat that, before they admit evidence of usage, of habit or pattern to an agreement incorporated in the contract of sale or contract to sell
of conduct, the offering party must establish the degree of specificity or if it is capable of being ascertained with certainty in said contract;
and frequency of uniform response that ensures more than a mere or if the contract contains express or implied provisions by which it
tendency to act in a given manner but rather, conduct that is semi- may be rendered certain; or if it provides some method or criterion by
automatic in nature. The offering party must allege and prove which it can be definitely ascertained. As this Court held in Villaraza
specific, repetitive conduct that might constitute evidence of habit. v. Court of Appeals, the price is considered certain if, by its terms, the
The examples offered in evidence to prove habit, or pattern of evidence contract furnishes a basis or measure for ascertaining the amount
must be numerous enough to base on inference of systematic conduct. agreed upon.
Mere similarity of contracts does not present the kind of sufficiently Same; Same; R.A. 6552 (Maceda Law); R.A. No. 6552 applies
similar circumstances to outweigh the danger of prejudice and only to a perfected contract to sell and not to a contract with no binding
confusion. In determining whether the examples are numerous and enforceable effect.—Respondents and XEI (or OBM for that
enough, and sufficiently regular, the key criteria are adequacy of matter) failed to forge a perfected contract to sell the two lots; hence,
sampling and uniformity of response. After all, habit means a course respondents have no cause of action for specific performance against
of behavior of a person regularly represented in like circumstances. It petitioner. Republic Act No. 6552 applies only to a perfected contract
is only when examples offered to establish pattern of conduct or habit to sell and not to a contract with no binding and enforceable effect.
are numerous enough to lose an inference of systematic conduct that
examples are admissible. The key criteria are adequacy of sampling PETITION for review on certiorari of a decision of the Court of
and uniformity of response or ratio of reaction to situations. Appeals.
Same; Same; Life casts the moulds of conduct, which will
someday become fixed as law—Law preserves the moulds which have The facts are stated in the opinion of the Court.
taken form and shape from life; Usage furnishes a standard for the Herrera, Teehankee, Faylona & Cabrera for petitioner.
measurement of many of the rights and acts of men.—There are cases Carla E. Santamaria-Seña for respondents.
where the course of dealings to be followed is defined by the usage of
a particular trade or market or profession. As expostulated by Justice
Benjamin Cardozo of the United States Supreme Court: “Life casts
the moulds of conduct, which will someday become fixed as law. Law
preserves the moulds which have taken form and shape from life.”
Usage furnishes a standard for the measurement of many of the rights
and acts of men. It is also well-settled that parties who contract on a
subject matter concerning which known usage prevail, incorporate
such usage by implication into their agreement, if nothing is said to
be contrary.
Contracts; Sales; Price; The price of the property sold may be
considered certain if it be so with reference to another thing certain.—
 Page 6 of 19

FIRST DIVISION Ramos’ residence at the corner of Aurora Boulevard and Katipunan
Avenue, Quezon City. Manalo, Jr. then proposed to XEI, through Ramos, to
G. R. No. 158149 February 9, 2006 purchase a lot in the Xavierville subdivision, and offered as part of the
downpayment the ₱34,887.66 Ramos owed him. XEI, through Ramos,
BOSTON BANK OF THE PHILIPPINES, (formerly BANK OF agreed. In a letter dated February 8, 1972, Ramos requested Manalo, Jr. to
COMMERCE), Petitioner, choose which lots he wanted to buy so that the price of the lots and the
vs. terms of payment could be fixed and incorporated in the conditional
PERLA P. MANALO and CARLOS MANALO, JR., Respondents. sale.6 Manalo, Jr. met with Ramos and informed him that he and his wife
Perla had chosen Lots 1 and 2 of Block 2 with a total area of 1,740.3
square meters.
DECISION
In a letter dated August 22, 1972 to Perla Manalo, Ramos confirmed the
CALLEJO, SR., J.:
reservation of the lots. He also pegged the price of the lots at ₱200.00 per
square meter, or a total of ₱348,060.00, with a 20% down payment of the
Before us is a Petition for Review on Certiorari of the Decision1 of the Court purchase price amounting to ₱69,612.00 less the ₱34,887.66 owing from
of Appeals (CA) in CA-G.R. CV No. 47458 affirming, on appeal, the Ramos, payable on or before December 31, 1972; the corresponding
Decision2 of the Regional Trial Court (RTC) of Quezon City, Branch 98, in Contract of Conditional Sale would then be signed on or before the same
Civil Case No. Q-89-3905. date, but if the selling operations of XEI resumed after December 31, 1972,
the balance of the downpayment would fall due then, and the spouses
The Antecedents would sign the aforesaid contract within five (5) days from receipt of the
notice of resumption of such selling operations. It was also stated in the
The Xavierville Estate, Inc. (XEI) was the owner of parcels of land in letter that, in the meantime, the spouses may introduce improvements
Quezon City, known as the Xavierville Estate Subdivision, with an area of thereon subject to the rules and regulations imposed by XEI in the
42 hectares. XEI caused the subdivision of the property into residential lots, subdivision. Perla Manalo conformed to the letter agreement.7
which was then offered for sale to individual lot buyers.3
The spouses Manalo took possession of the property on September 2,
On September 8, 1967, XEI, through its General Manager, Antonio Ramos, 1972, constructed a house thereon, and installed a fence around the
as vendor, and The Overseas Bank of Manila (OBM), as vendee, executed perimeter of the lots.
a "Deed of Sale of Real Estate" over some residential lots in the
subdivision, including Lot 1, Block 2, with an area of 907.5 square meters, In the meantime, many of the lot buyers refused to pay their monthly
and Lot 2, Block 2, with an area of 832.80 square meters. The transaction installments until they were assured that they would be issued Torrens
was subject to the approval of the Board of Directors of OBM, and was titles over the lots they had purchased.8 The spouses Manalo were notified
covered by real estate mortgages in favor of the Philippine National Bank of the resumption of the selling operations of XEI.9 However, they did not
as security for its account amounting to ₱5,187,000.00, and the Central pay the balance of the downpayment on the lots because Ramos failed to
Bank of the Philippines as security for advances amounting to prepare a contract of conditional sale and transmit the same to Manalo for
₱22,185,193.74.4 Nevertheless, XEI continued selling the residential lots in their signature. On August 14, 1973, Perla Manalo went to the XEI office
the subdivision as agent of OBM.5 and requested that the payment of the amount representing the balance of
the downpayment be deferred, which, however, XEI rejected. On August
Sometime in 1972, then XEI president Emerito Ramos, Jr. contracted the 10, 1973, XEI furnished her with a statement of their account as of July 31,
services of Engr. Carlos Manalo, Jr. who was in business of drilling deep 1973, showing that they had a balance of ₱34,724.34 on the downpayment
water wells and installing pumps under the business name Hurricane of the two lots after deducting the account of Ramos, plus
Commercial, Inc. For ₱34,887.66, Manalo, Jr. installed a water pump at ₱3,819.6810 interest thereon from September 1, 1972 to July 31, 1973, and
 Page 7 of 19

that the interests on the unpaid balance of the purchase price of to Ng that, as of January 24, 1984, Manalo was a homeowner in the
₱278,448.00 from September 1, 1972 to July 31, 1973 amounted to subdivision.23
₱30,629.28.11 The spouses were informed that they were being billed for
said unpaid interests.12 In a letter dated August 5, 1986, the CBM requested Perla Manalo to stop
any on-going construction on the property since it (CBM) was the owner of
On January 25, 1974, the spouses Manalo received another statement of the lot and she had no permission for such construction.24 She agreed to
account from XEI, inclusive of interests on the purchase price of the have a conference meeting with CBM officers where she informed them
lots.13 In a letter dated April 6, 1974 to XEI, Manalo, Jr. stated they had not that her husband had a contract with OBM, through XEI, to purchase the
yet received the notice of resumption of Lei’s selling operations, and that property. When asked to prove her claim, she promised to send the
there had been no arrangement on the payment of interests; hence, they documents to CBM. However, she failed to do so.25 On September 5, 1986,
should not be charged with interest on the balance of the downpayment on CBM reiterated its demand that it be furnished with the documents
the property.14 Further, they demanded that a deed of conditional sale over promised,26 but Perla Manalo did not respond.
the two lots be transmitted to them for their signatures. However, XEI
ignored the demands. Consequently, the spouses refused to pay the On July 27, 1987, CBM filed a complaint27 for unlawful detainer against the
balance of the downpayment of the purchase price.15 spouses with the Metropolitan Trial Court of Quezon City. The case was
docketed as Civil Case No. 51618. CBM claimed that the spouses had
Sometime in June 1976, Manalo, Jr. constructed a business sign in the been unlawfully occupying the property without its consent and that despite
sidewalk near his house. In a letter dated June 17, 1976, XEI informed its demands, they refused to vacate the property. The latter alleged that
Manalo, Jr. that business signs were not allowed along the sidewalk. It they, as vendors, and XEI, as vendee, had a contract of sale over the lots
demanded that he remove the same, on the ground, among others, that the which had not yet been rescinded.28
sidewalk was not part of the land which he had purchased on installment
basis from XEI.16 Manalo, Jr. did not respond. XEI reiterated its demand on While the case was pending, the spouses Manalo wrote CBM to offer an
September 15, 1977.17 amicable settlement, promising to abide by the purchase price of the
property (₱313,172.34), per agreement with XEI, through Ramos.
Subsequently, XEI turned over its selling operations to OBM, including the However, on July 28, 1988, CBM wrote the spouses, through counsel,
receivables for lots already contracted and those yet to be sold.18 On proposing that the price of ₱1,500.00 per square meter of the property was
December 8, 1977, OBM warned Manalo, Jr., that "putting up of a business a reasonable starting point for negotiation of the settlement.29 The spouses
sign is specifically prohibited by their contract of conditional sale" and that rejected the counter proposal,30 emphasizing that they would abide by their
his failure to comply with its demand would impel it to avail of the remedies original agreement with XEI. CBM moved to withdraw its
as provided in their contract of conditional sale.19 complaint31 because of the issues raised.32

Meanwhile, on December 5, 1979, the Register of Deeds issued Transfer In the meantime, the CBM was renamed the Boston Bank of the
Certificate of Title (TCT) No. T-265822 over Lot 1, Block 2, and TCT No. T- Philippines. After CBM filed its complaint against the spouses Manalo, the
265823 over Lot 2, Block 2, in favor of the OBM.20 The lien in favor of the latter filed a complaint for specific performance and damages against the
Central Bank of the Philippines was annotated at the dorsal portion of said bank before the Regional Trial Court (RTC) of Quezon City on October 31,
title, which was later cancelled on August 4, 1980.21 1989.

Subsequently, the Commercial Bank of Manila (CBM) acquired the The plaintiffs alleged therein that they had always been ready, able and
Xavierville Estate from OBM. CBM wrote Edilberto Ng, the president of willing to pay the installments on the lots sold to them by the defendant’s
Xavierville Homeowners Association that, as of January 31, 1983, Manalo, remote predecessor-in-interest, as might be or stipulated in the contract of
Jr. was one of the lot buyers in the subdivision.22 CBM reiterated in its letter sale, but no contract was forthcoming; they constructed their house worth
 Page 8 of 19

₱2,000,000.00 on the property in good faith; Manalo, Jr., informed the predecessors, or records of payments of the plaintiffs or of any documents
defendant, through its counsel, on October 15, 1988 that he would abide by which entitled them to the possession of the lots."35 The defendant,
the terms and conditions of his original agreement with the defendant’s likewise, interposed counterclaims for damages and attorney’s fees and
predecessor-in-interest; during the hearing of the ejectment case on prayed for the eviction of the plaintiffs from the property.36
October 16, 1988, they offered to pay ₱313,172.34 representing the
balance on the purchase price of said lots; such tender of payment was Meanwhile, in a letter dated January 25, 1993, plaintiffs, through counsel,
rejected, so that the subject lots could be sold at considerably higher prices proposed an amicable settlement of the case by paying ₱942,648.70,
to third parties. representing the balance of the purchase price of the two lots based on the
current market value.37 However, the defendant rejected the same and
Plaintiffs further alleged that upon payment of the ₱313,172.34, they were insisted that for the smaller lot, they pay ₱4,500,000.00, the current market
entitled to the execution and delivery of a Deed of Absolute Sale covering value of the property.38 The defendant insisted that it owned the property
the subject lots, sufficient in form and substance to transfer title thereto free since there was no contract or agreement between it and the plaintiffs’
and clear of any and all liens and encumbrances of whatever kind and relative thereto.
nature.33 The plaintiffs prayed that, after due hearing, judgment be
rendered in their favor, to wit: During the trial, the plaintiffs adduced in evidence the separate Contracts of
Conditional Sale executed between XEI and Alberto Soller;39 Alfredo
WHEREFORE, it is respectfully prayed that after due hearing: Aguila,40 and Dra. Elena Santos-Roque41 to prove that XEI continued selling
residential lots in the subdivision as agent of OBM after the latter had
(a) The defendant should be ordered to execute and deliver a Deed acquired the said lots.
of Absolute Sale over subject lots in favor of the plaintiffs after
payment of the sum of ₱313,172.34, sufficient in form and For its part, defendant presented in evidence the letter dated August 22,
substance to transfer to them titles thereto free and clear of any 1972, where XEI proposed to sell the two lots subject to two suspensive
and all liens and encumbrances of whatever kind or nature; conditions: the payment of the balance of the downpayment of the property,
and the execution of the corresponding contract of conditional sale. Since
(b) The defendant should be held liable for moral and exemplary plaintiffs failed to pay, OBM consequently refused to execute the
damages in the amounts of ₱300,000.00 and ₱30,000.00, corresponding contract of conditional sale and forfeited the ₱34,877.66
respectively, for not promptly executing and delivering to plaintiff downpayment for the two lots, but did not notify them of said forfeiture.42 It
the necessary Contract of Sale, notwithstanding repeated demands alleged that OBM considered the lots unsold because the titles thereto bore
therefor and for having been constrained to engage the services of no annotation that they had been sold under a contract of conditional sale,
undersigned counsel for which they agreed to pay attorney’s fees in and the plaintiffs were not notified of XEI’s resumption of its selling
the sum of ₱50,000.00 to enforce their rights in the premises and operations.
appearance fee of ₱500.00;
On May 2, 1994, the RTC rendered judgment in favor of the plaintiffs and
(c) And for such other and further relief as may be just and against the defendant. The fallo of the decision reads:
equitable in the premises.34
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and
In its Answer to the complaint, the defendant interposed the following against the defendant –
affirmative defenses: (a) plaintiffs had no cause of action against it because
the August 22, 1972 letter agreement between XEI and the plaintiffs was (a) Ordering the latter to execute and deliver a Deed of Absolute
not binding on it; and (b) "it had no record of any contract to sell executed Sale over Lot 1 and 2, Block 2 of the Xavierville Estate Subdivision
by it or its predecessor, or of any statement of accounts from its after payment of the sum of ₱942,978.70 sufficient in form and
 Page 9 of 19

substance to transfer to them titles thereto free from any and all The appellate court sustained the ruling of the RTC that the appellant and
liens and encumbrances of whatever kind and nature. the appellees had executed a Contract to Sell over the two lots but
declared that the balance of the purchase price of the property amounting
(b) Ordering the defendant to pay moral and exemplary damages in to ₱278,448.00 was payable in fixed amounts, inclusive of pre-computed
the amount of ₱150,000.00; and interests, from delivery of the possession of the property to the appellees
on a monthly basis for 120 months, based on the deeds of conditional sale
(c) To pay attorney’s fees in the sum of ₱50,000.00 and to pay the executed by XEI in favor of other lot buyers.46 The CA also declared that,
costs. while XEI must have resumed its selling operations before the end of 1972
and the downpayment on the property remained unpaid as of December
31, 1972, absent a written notice of cancellation of the contract to sell from
SO ORDERED.43
the bank or notarial demand therefor as required by Republic Act No. 6552,
the spouses had, at the very least, a 60-day grace period from January 1,
The trial court ruled that under the August 22, 1972 letter agreement of XEI 1973 within which to pay the same.
and the plaintiffs, the parties had a "complete contract to sell" over the lots,
and that they had already partially consummated the same. It declared that
Boston Bank filed a motion for the reconsideration of the decision alleging
the failure of the defendant to notify the plaintiffs of the resumption of its
that there was no perfected contract to sell the two lots, as there was no
selling operations and to execute a deed of conditional sale did not prevent
agreement between XEI and the respondents on the manner of payment as
the defendant’s obligation to convey titles to the lots from acquiring binding
well as the other terms and conditions of the sale. It further averred that its
effect. Consequently, the plaintiffs had a cause of action to compel the
claim for recovery of possession of the aforesaid lots in its Memorandum
defendant to execute a deed of sale over the lots in their favor.
dated February 28, 1994 filed before the trial court constituted a judicial
demand for rescission that satisfied the requirements of the New Civil
Boston Bank appealed the decision to the CA, alleging that the lower court Code. However, the appellate court denied the motion.
erred in (a) not concluding that the letter of XEI to the spouses Manalo, was
at most a mere contract to sell subject to suspensive conditions, i.e., the
Boston Bank, now petitioner, filed the instant petition for review on certiorari
payment of the balance of the downpayment on the property and the
assailing the CA rulings. It maintains that, as held by the CA, the records
execution of a deed of conditional sale (which were not complied with); and
do not reflect any schedule of payment of the 80% balance of the purchase
(b) in awarding moral and exemplary damages to the spouses Manalo
price, or ₱278,448.00. Petitioner insists that unless the parties had agreed
despite the absence of testimony providing facts to justify such awards.44
on the manner of payment of the principal amount, including the other
terms and conditions of the contract, there would be no existing contract of
On September 30, 2002, the CA rendered a decision affirming that of the sale or contract to sell.47 Petitioner avers that the letter agreement to
RTC with modification. The fallo reads: respondent spouses dated August 22, 1972 merely confirmed their
reservation for the purchase of Lot Nos. 1 and 2, consisting of 1,740.3
WHEREFORE, the appealed decision is AFFIRMED with square meters, more or less, at the price of ₱200.00 per square meter (or
MODIFICATIONS that (a) the figure "₱942,978.70" appearing [in] par. (a) ₱348,060.00), the amount of the downpayment thereon and the application
of the dispositive portion thereof is changed to "₱313,172.34 plus interest of the ₱34,887.00 due from Ramos as part of such downpayment.
thereon at the rate of 12% per annum from September 1, 1972 until fully
paid" and (b) the award of moral and exemplary damages and attorney’s Petitioner asserts that there is no factual basis for the CA ruling that the
fees in favor of plaintiffs-appellees is DELETED. terms and conditions relating to the payment of the balance of the purchase
price of the property (as agreed upon by XEI and other lot buyers in the
SO ORDERED.45 same subdivision) were also applicable to the contract entered into
between the petitioner and the Respondents. It insists that such a ruling is
contrary to law, as it is tantamount to compelling the parties to agree to
 Page 10 of 19

something that was not even discussed, thus, violating their freedom to They argue that even if the manner and timeline for the payment of the
contract. Besides, the situation of the respondents cannot be equated with balance of the purchase price of the property is an essential requisite of a
those of the other lot buyers, as, for one thing, the respondents made a contract to sell, nevertheless, as shown by their letter agreement of August
partial payment on the downpayment for the two lots even before the 22, 1972 with the OBM, through XEI and the other letters to them, an
execution of any contract of conditional sale. agreement was reached as to the manner of payment of the balance of the
purchase price. They point out that such letters referred to the terms of the
Petitioner posits that, even on the assumption that there was a perfected terms of the deeds of conditional sale executed by XEI in favor of the other
contract to sell between the parties, nevertheless, it cannot be compelled to lot buyers in the subdivision, which contained uniform terms of 120 equal
convey the property to the respondents because the latter failed to pay the monthly installments (excluding the downpayment, but inclusive of pre-
balance of the downpayment of the property, as well as the balance of 80% computed interests). The respondents assert that XEI was a real estate
of the purchase price, thus resulting in the extinction of its obligation to broker and knew that the contracts involving residential lots in the
convey title to the lots to the Respondents. subdivision contained uniform terms as to the manner and timeline of the
payment of the purchase price of said lots.
Another egregious error of the CA, petitioner avers, is the application of
Republic Act No. 6552. It insists that such law applies only to a perfected Respondents further posit that the terms and conditions to be incorporated
agreement or perfected contract to sell, not in this case where the in the "corresponding contract of conditional sale" to be executed by the
downpayment on the purchase price of the property was not completely parties would be the same as those contained in the contracts of
paid, and no installment payments were made by the buyers. conditional sale executed by lot buyers in the subdivision. After all, they
maintain, the contents of the corresponding contract of conditional sale
Petitioner also faults the CA for declaring that petitioner failed to serve a referred to in the August 22, 1972 letter agreement envisaged those
notice on the respondents of cancellation or rescission of the contract to contained in the contracts of conditional sale that XEI and other lot buyers
sell, or notarial demand therefor. Petitioner insists that its August 5, 1986 executed. Respondents cite the ruling of this Court in Mitsui Bussan Kaisha
letter requiring respondents to vacate the property and its complaint for v. Manila E.R.R. & L. Co.49
ejectment in Civil Case No. 51618 filed in the Metropolitan Trial Court
amounted to the requisite demand for a rescission of the contract to sell. The respondents aver that the issues raised by the petitioner are factual,
Moreover, the action of the respondents below was barred by laches inappropriate in a petition for review on certiorari under Rule 45 of the
because despite demands, they failed to pay the balance of the purchase Rules of Court. They assert that petitioner adopted a theory in litigating the
price of the lots (let alone the downpayment) for a considerable number of case in the trial court, but changed the same on appeal before the CA, and
years. again in this Court. They argue that the petitioner is estopped from
adopting a new theory contrary to those it had adopted in the trial and
For their part, respondents assert that as long as there is a meeting of the appellate courts. Moreover, the existence of a contract of conditional sale
minds of the parties to a contract of sale as to the price, the contract is valid was admitted in the letters of XEI and OBM. They aver that they became
despite the parties’ failure to agree on the manner of payment. In such a owners of the lots upon delivery to them by XEI.
situation, the balance of the purchase price would be payable on demand,
conformably to Article 1169 of the New Civil Code. They insist that the law The issues for resolution are the following: (1) whether the factual issues
does not require a party to agree on the manner of payment of the raised by the petitioner are proper; (2) whether petitioner or its
purchase price as a prerequisite to a valid contract to sell. The respondents predecessors-in-interest, the XEI or the OBM, as seller, and the
cite the ruling of this Court in Buenaventura v. Court of Appeals48 to support respondents, as buyers, forged a perfect contract to sell over the property;
their submission. (3) whether petitioner is estopped from contending that no such contract
was forged by the parties; and (4) whether respondents has a cause of
action against the petitioner for specific performance.
 Page 11 of 19

The rule is that before this Court, only legal issues may be raised in a In this case, the issue of whether XEI had agreed to allow the respondents
petition for review on certiorari. The reason is that this Court is not a trier of to pay the purchase price of the property was raised by the parties. The
facts, and is not to review and calibrate the evidence on record. Moreover, trial court ruled that the parties had perfected a contract to sell, as against
the findings of facts of the trial court, as affirmed on appeal by the Court of petitioner’s claim that no such contract existed. However, in resolving the
Appeals, are conclusive on this Court unless the case falls under any of the issue of whether the petitioner was obliged to sell the property to the
following exceptions: respondents, while the CA declared that XEI or OBM and the respondents
failed to agree on the schedule of payment of the balance of the purchase
(1) when the conclusion is a finding grounded entirely on speculations, price of the property, it ruled that XEI and the respondents had forged a
surmises and conjectures; (2) when the inference made is manifestly contract to sell; hence, petitioner is entitled to ventilate the issue before this
mistaken, absurd or impossible; (3) where there is a grave abuse of Court.
discretion; (4) when the judgment is based on a misapprehension of facts;
(5) when the findings of fact are conflicting; (6) when the Court of Appeals, We agree with petitioner’s contention that, for a perfected contract of sale
in making its findings went beyond the issues of the case and the same is or contract to sell to exist in law, there must be an agreement of the parties,
contrary to the admissions of both appellant and appellee; (7) when the not only on the price of the property sold, but also on the manner the price
findings are contrary to those of the trial court; (8) when the findings of fact is to be paid by the vendee.
are conclusions without citation of specific evidence on which they are
based; (9) when the facts set forth in the petition as well as in the Under Article 1458 of the New Civil Code, in a contract of sale, whether
petitioners’ main and reply briefs are not disputed by the respondents; and absolute or conditional, one of the contracting parties obliges himself to
(10) when the findings of fact of the Court of Appeals are premised on the transfer the ownership of and deliver a determinate thing, and the other to
supposed absence of evidence and contradicted by the evidence on pay therefor a price certain in money or its equivalent. A contract of sale is
record.50 perfected at the moment there is a meeting of the minds upon the thing
which is the object of the contract and the price. From the averment of
We have reviewed the records and we find that, indeed, the ruling of the perfection, the parties are bound, not only to the fulfillment of what has
appellate court dismissing petitioner’s appeal is contrary to law and is not been expressly stipulated, but also to all the consequences which,
supported by evidence. A careful examination of the factual backdrop of the according to their nature, may be in keeping with good faith, usage and
case, as well as the antecedental proceedings constrains us to hold that law.55 On the other hand, when the contract of sale or to sell is not
petitioner is not barred from asserting that XEI or OBM, on one hand, and perfected, it cannot, as an independent source of obligation, serve as a
the respondents, on the other, failed to forge a perfected contract to sell the binding juridical relation between the parties.56
subject lots.
A definite agreement as to the price is an essential element of a binding
It must be stressed that the Court may consider an issue not raised during agreement to sell personal or real property because it seriously affects the
the trial when there is plain error.51 Although a factual issue was not raised rights and obligations of the parties. Price is an essential element in the
in the trial court, such issue may still be considered and resolved by the formation of a binding and enforceable contract of sale. The fixing of the
Court in the interest of substantial justice, if it finds that to do so is price can never be left to the decision of one of the contracting parties. But
necessary to arrive at a just decision,52 or when an issue is closely related a price fixed by one of the contracting parties, if accepted by the other,
to an issue raised in the trial court and the Court of Appeals and is gives rise to a perfected sale.57
necessary for a just and complete resolution of the case.53 When the trial
court decides a case in favor of a party on certain grounds, the Court may It is not enough for the parties to agree on the price of the property. The
base its decision upon some other points, which the trial court or appellate parties must also agree on the manner of payment of the price of the
court ignored or erroneously decided in favor of a party.54 property to give rise to a binding and enforceable contract of sale or
contract to sell. This is so because the agreement as to the manner of
 Page 12 of 19

payment goes into the price, such that a disagreement on the manner of purchase price and the other substantial terms and conditions in the
payment is tantamount to a failure to agree on the price.58 "corresponding contract of conditional sale," to be later signed by the
parties, simultaneously with respondents’ settlement of the balance of the
In a contract to sell property by installments, it is not enough that the downpayment.
parties agree on the price as well as the amount of downpayment. The
parties must, likewise, agree on the manner of payment of the balance of The February 8, 1972 letter of XEI reads:
the purchase price and on the other terms and conditions relative to the
sale. Even if the buyer makes a downpayment or portion thereof, such Mr. Carlos T. Manalo, Jr.
payment cannot be considered as sufficient proof of the perfection of any Hurricane Rotary Well Drilling
purchase and sale between the parties. Indeed, this Court ruled in Velasco Rizal Avenue Ext.,Caloocan City
v. Court of Appeals59 that:
Dear Mr. Manalo:
It is not difficult to glean from the aforequoted averments that the
petitioners themselves admit that they and the respondent still had to meet We agree with your verbal offer to exchange the proceeds of your contract
and agree on how and when the down-payment and the installment with us to form as a down payment for a lot in our Xavierville Estate
payments were to be paid. Such being the situation, it cannot, therefore, be Subdivision.
said that a definite and firm sales agreement between the parties had been
perfected over the lot in question. Indeed, this Court has already ruled
Please let us know your choice lot so that we can fix the price and terms of
before that a definite agreement on the manner of payment of the purchase
payment in our conditional sale.
price is an essential element in the formation of a binding and enforceable
contract of sale. The fact, therefore, that the petitioners delivered to the
respondent the sum of ₱10,000.00 as part of the downpayment that they Sincerely yours,
had to pay cannot be considered as sufficient proof of the perfection of any
purchase and sale agreement between the parties herein under article XAVIERVILLE ESTATE, INC.
1482 of the New Civil Code, as the petitioners themselves admit that some
essential matter – the terms of payment – still had to be mutually (Signed)
covenanted.60 EMERITO B. RAMOS, JR.
President
We agree with the contention of the petitioner that, as held by the CA, there
is no showing, in the records, of the schedule of payment of the balance of CONFORME:
the purchase price on the property amounting to ₱278,448.00. We have
meticulously reviewed the records, including Ramos’ February 8, 1972 and (Signed)
August 22, 1972 letters to respondents,61 and find that said parties confined CARLOS T. MANALO, JR.
themselves to agreeing on the price of the property (₱348,060.00), the 20% Hurricane Rotary Well Drilling62
downpayment of the purchase price (₱69,612.00), and credited
respondents for the ₱34,887.00 owing from Ramos as part of the 20% The August 22, 1972 letter agreement of XEI and the respondents reads:
downpayment. The timeline for the payment of the balance of the
downpayment (₱34,724.34) was also agreed upon, that is, on or before XEI
Mrs. Perla P. Manalo
resumed its selling operations, on or before December 31, 1972, or within
1548 Rizal Avenue Extensionbr>Caloocan City
five (5) days from written notice of such resumption of selling operations.
The parties had also agreed to incorporate all the terms and conditions
relating to the sale, inclusive of the terms of payment of the balance of the Dear Mrs. Manalo:
 Page 13 of 19

This is to confirm your reservation of Lot Nos. 1 and 2; Block 2 of our the parties, no legal obligation arises until such future agreement is
consolidation-subdivision plan as amended, consisting of 1,740.3 square concluded.65
meters more or less, at the price of ₱200.00 per square meter or a total
price of ₱348,060.00. So long as an essential element entering into the proposed obligation of
either of the parties remains to be determined by an agreement which they
It is agreed that as soon as we resume selling operations, you must pay a are to make, the contract is incomplete and unenforceable.66 The reason is
down payment of 20% of the purchase price of the said lots and sign the that such a contract is lacking in the necessary qualities of definiteness,
corresponding Contract of Conditional Sale, on or before December 31, certainty and mutuality.67
1972, provided, however, that if we resume selling after December 31,
1972, then you must pay the aforementioned down payment and sign the There is no evidence on record to prove that XEI or OBM and the
aforesaid contract within five (5) days from your receipt of our notice of respondents had agreed, after December 31, 1972, on the terms of
resumption of selling operations. payment of the balance of the purchase price of the property and the other
substantial terms and conditions relative to the sale. Indeed, the parties are
In the meanwhile, you may introduce such improvements on the said lots in agreement that there had been no contract of conditional sale ever
as you may desire, subject to the rules and regulations of the subdivision. executed by XEI, OBM or petitioner, as vendor, and the respondents, as
vendees.68
If the above terms and conditions are acceptable to you, please signify your
conformity by signing on the space herein below provided. The ruling of this Court in Buenaventura v. Court of Appeals has no bearing
in this case because the issue of the manner of payment of the purchase
Thank you. price of the property was not raised therein.

Very truly yours, We reject the submission of respondents that they and Ramos had
intended to incorporate the terms of payment contained in the three
XAVIERVILLE ESTATE, INC. CONFORME: contracts of conditional sale executed by XEI and other lot buyers in the
"corresponding contract of conditional sale," which would later be signed by
them.69 We have meticulously reviewed the respondents’ complaint and
By:
find no such allegation therein.70 Indeed, respondents merely alleged in
their complaint that they were bound to pay the balance of the purchase
(Signed) (Signed) price of the property "in installments." When respondent Manalo, Jr.
EMERITO B. RAMOS, JR. PERLA P. MANALO testified, he was never asked, on direct examination or even on cross-
examination, whether the terms of payment of the balance of the purchase
President Buyer63 price of the lots under the contracts of conditional sale executed by XEI and
other lot buyers would form part of the "corresponding contract of
Based on these two letters, the determination of the terms of payment of conditional sale" to be signed by them simultaneously with the payment of
the ₱278,448.00 had yet to be agreed upon on or before December 31, the balance of the downpayment on the purchase price.
1972, or even afterwards, when the parties sign the corresponding contract
of conditional sale. We note that, in its letter to the respondents dated June 17, 1976, or almost
three years from the execution by the parties of their August 22, 1972 letter
Jurisprudence is that if a material element of a contemplated contract is left agreement, XEI stated, in part, that respondents had purchased the
for future negotiations, the same is too indefinite to be enforceable.64 And property "on installment basis."71 However, in the said letter, XEI failed to
when an essential element of a contract is reserved for future agreement of state a specific amount for each installment, and whether such payments
 Page 14 of 19

were to be made monthly, semi-annually, or annually. Also, respondents, The bare fact that other lot buyers were allowed to pay the balance of the
as plaintiffs below, failed to adduce a shred of evidence to prove that they purchase price of lots purchased by them in 120 or 180 monthly
were obliged to pay the ₱278,448.00 monthly, semi-annually or annually. installments does not constitute evidence that XEI also agreed to give the
The allegation that the payment of the ₱278,448.00 was to be paid in respondents the same mode and timeline of payment of the ₱278,448.00.
installments is, thus, vague and indefinite. Case law is that, for a contract to
be enforceable, its terms must be certain and explicit, not vague or Under Section 34, Rule 130 of the Revised Rules of Court, evidence that
indefinite.72 one did a certain thing at one time is not admissible to prove that he did the
same or similar thing at another time, although such evidence may be
There is no factual and legal basis for the CA ruling that, based on the received to prove habit, usage, pattern of conduct or the intent of the
terms of payment of the balance of the purchase price of the lots under the parties.
contracts of conditional sale executed by XEI and the other lot buyers,
respondents were obliged to pay the ₱278,448.00 with pre-computed Similar acts as evidence. – Evidence that one did or did not do a certain
interest of 12% per annum in 120-month installments. As gleaned from the thing at one time is not admissible to prove that he did or did not do the
ruling of the appellate court, it failed to justify its use of the terms of same or a similar thing at another time; but it may be received to prove a
payment under the three "contracts of conditional sale" as basis for such specific intent or knowledge, identity, plan, system, scheme, habit, custom
ruling, to wit: or usage, and the like.

On the other hand, the records do not disclose the schedule of payment of However, respondents failed to allege and prove, in the trial court, that, as
the purchase price, net of the downpayment. Considering, however, the a matter of business usage, habit or pattern of conduct, XEI granted all lot
Contracts of Conditional Sale (Exhs. "N," "O" and "P") entered into by XEI buyers the right to pay the balance of the purchase price in installments of
with other lot buyers, it would appear that the subdivision lots sold by XEI, 120 months of fixed amounts with pre-computed interests, and that XEI and
under contracts to sell, were payable in 120 equal monthly installments the respondents had intended to adopt such terms of payment relative to
(exclusive of the downpayment but including pre-computed interests) the sale of the two lots in question. Indeed, respondents adduced in
commencing on delivery of the lot to the buyer.73 evidence the three contracts of conditional sale executed by XEI and other
lot buyers merely to prove that XEI continued to sell lots in the subdivision
By its ruling, the CA unilaterally supplied an essential element to the letter as sales agent of OBM after it acquired said lots, not to prove usage, habit
agreement of XEI and the Respondents. Courts should not undertake to or pattern of conduct on the part of XEI to require all lot buyers in the
make a contract for the parties, nor can it enforce one, the terms of which subdivision to pay the balance of the purchase price of said lots in 120
are in doubt.74 Indeed, the Court emphasized in Chua v. Court of months. It further failed to prive that the trial court admitted the said
Appeals75 that it is not the province of a court to alter a contract by deeds77 as part of the testimony of respondent Manalo, Jr.78
construction or to make a new contract for the parties; its duty is confined
to the interpretation of the one which they have made for themselves, Habit, custom, usage or pattern of conduct must be proved like any other
without regard to its wisdom or folly, as the court cannot supply material facts. Courts must contend with the caveat that, before they admit evidence
stipulations or read into contract words which it does not contain. of usage, of habit or pattern of conduct, the offering party must establish
the degree of specificity and frequency of uniform response that ensures
Respondents, as plaintiffs below, failed to allege in their complaint that the more than a mere tendency to act in a given manner but rather, conduct
terms of payment of the ₱278,448.00 to be incorporated in the that is semi-automatic in nature. The offering party must allege and prove
"corresponding contract of conditional sale" were those contained in the specific, repetitive conduct that might constitute evidence of habit. The
contracts of conditional sale executed by XEI and Soller, Aguila and examples offered in evidence to prove habit, or pattern of evidence must be
Roque.76 They likewise failed to prove such allegation in this Court. numerous enough to base on inference of systematic conduct. Mere
 Page 15 of 19

similarity of contracts does not present the kind of sufficiently similar contract made by the parties thereto85 or by reference to an agreement
circumstances to outweigh the danger of prejudice and confusion. incorporated in the contract of sale or contract to sell or if it is capable of
being ascertained with certainty in said contract;86 or if the contract contains
In determining whether the examples are numerous enough, and express or implied provisions by which it may be rendered certain;87 or if it
sufficiently regular, the key criteria are adequacy of sampling and uniformity provides some method or criterion by which it can be definitely
of response. After all, habit means a course of behavior of a person ascertained.88 As this Court held in Villaraza v. Court of Appeals,89 the price
regularly represented in like circumstances.79 It is only when examples is considered certain if, by its terms, the contract furnishes a basis or
offered to establish pattern of conduct or habit are numerous enough to measure for ascertaining the amount agreed upon.
lose an inference of systematic conduct that examples are admissible. The
key criteria are adequacy of sampling and uniformity of response or ratio of We have carefully reviewed the August 22, 1972 letter agreement of the
reaction to situations.80 parties and find no direct or implied reference to the manner and schedule
of payment of the balance of the purchase price of the lots covered by the
There are cases where the course of dealings to be followed is defined by deeds of conditional sale executed by XEI and that of the other lot
the usage of a particular trade or market or profession. As expostulated by buyers90 as basis for or mode of determination of the schedule of the
Justice Benjamin Cardozo of the United States Supreme Court: "Life casts payment by the respondents of the ₱278,448.00.
the moulds of conduct, which will someday become fixed as law. Law
preserves the moulds which have taken form and shape from life."81 Usage The ruling of this Court in Mitsui Bussan Kaisha v. Manila Electric Railroad
furnishes a standard for the measurement of many of the rights and acts of and Light Company91 is not applicable in this case because the basic price
men.82 It is also well-settled that parties who contract on a subject matter fixed in the contract was ₱9.45 per long ton, but it was stipulated that the
concerning which known usage prevail, incorporate such usage by price was subject to modification "in proportion to variations in calories and
implication into their agreement, if nothing is said to be contrary.83 ash content, and not otherwise." In this case, the parties did not fix in their
letters-agreement, any method or mode of determining the terms of
However, the respondents inexplicably failed to adduce sufficient payment of the balance of the purchase price of the property amounting to
competent evidence to prove usage, habit or pattern of conduct of XEI to ₱278,448.00.
justify the use of the terms of payment in the contracts of the other lot
buyers, and thus grant respondents the right to pay the ₱278,448.00 in 120 It bears stressing that the respondents failed and refused to pay the
months, presumably because of respondents’ belief that the manner of balance of the downpayment and of the purchase price of the property
payment of the said amount is not an essential element of a contract to sell. amounting to ₱278,448.00 despite notice to them of the resumption by XEI
There is no evidence that XEI or OBM and all the lot buyers in the of its selling operations. The respondents enjoyed possession of the
subdivision, including lot buyers who pay part of the downpayment of the property without paying a centavo. On the other hand, XEI and OBM failed
property purchased by them in the form of service, had executed contracts and refused to transmit a contract of conditional sale to the Respondents.
of conditional sale containing uniform terms and conditions. Moreover, The respondents could have at least consigned the balance of the
under the terms of the contracts of conditional sale executed by XEI and downpayment after notice of the resumption of the selling operations of XEI
three lot buyers in the subdivision, XEI agreed to grant 120 months within and filed an action to compel XEI or OBM to transmit to them the said
which to pay the balance of the purchase price to two of them, but granted contract; however, they failed to do so.
one 180 months to do so.84 There is no evidence on record that XEI
granted the same right to buyers of two or more lots. As a consequence, respondents and XEI (or OBM for that matter) failed to
forge a perfected contract to sell the two lots; hence, respondents have no
Irrefragably, under Article 1469 of the New Civil Code, the price of the cause of action for specific performance against petitioner. Republic Act
property sold may be considered certain if it be so with reference to another No. 6552 applies only to a perfected contract to sell and not to a contract
thing certain. It is sufficient if it can be determined by the stipulations of the with no binding and enforceable effect.
 Page 16 of 19

IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The 1

Penned by Associate Justice Edgardo P. Cruz, with Associate
Decision of the Court of Appeals in CA-G.R. CV No. 47458 is REVERSED Justices Oswaldo D. Agcaoili (retired) and Amelita G. Tolentino,
and SET ASIDE. The Regional Trial Court of Quezon City, Branch 98 is concurring; rollo, pp. 9-19.
ordered to dismiss the complaint. Costs against the Respondents.
2
Penned by Judge Justo M. Sultan; records, pp. 295-304.
SO ORDERED.
3
Exhibits "N," "O" and "P," folder of exhibits, pp. 37-57.
ROMEO J. CALLEJO, SR.
Associate Justice 4
Exhibit "L," id. at 19.

WE CONCUR: 5
Exhibits "N," "O" and "P," id. at 37-57.

ARTEMIO V. PANGANIBAN 6
Exhibit "A," id. at 1.
Chief Justice
Chairperson 7
Exhibit "B," id. at 2.

CONSUELO YNARES-SANTIAGO, MA. ALICIA AUSTRIA-MARTINEZ 8

Exhibit "Q-1," id. at 60.
Associate Justice Associate Justice
9
TSN, May 21, 1990, p. 11.
MINITA V. CHICO-NAZARIO
10
Exhibit "E-1," id. at 6.
Associate Justice
11
Id.
CERTIFICATION
12
Exhibit "E," id. at 5.
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified
that the conclusions in the above decision were reached in consultation 13
Exhibit "F," id. at 7.
before the case was assigned to the writer of the opinion of the Court’s
Division. 14
Id.
ARTEMIO V. PANGANIBAN 15
TSN, 20 January 1992, p. 5.
Chief Justice 16
Exhibit "G," folder of exhibits, p. 8.

17
Exhibit "H," id. at 9.

18
TSN, July 17, 1992, pp. 14-18.
Footnotes
19
Exhibit "H," folder of exhibits, p. 9.
 Page 17 of 19
20
Exhibits "1" and "2," id. at 79-84. 40
Exhibit "O," id. at 44.

21
Id. 41
Exhibit "P," id. at 51.

22
Exhibit "I-1," id. at 11. 42
TSN, 17 July 1992, pp. 7-25.

23
Exhibit "J-1," id. at 13. 43
Records, p. 304.

24
Exhibit "6," id. at 91. 44
CA rollo, p. 32.

25
Exhibit "7," id. at 92. 45
Rollo, p. 85.

26
Id. 46
Exhibits "N," "O" and "P," folder of exhibits, p. 82.

27
Exhibit "S," id. at 68. 47
Rollo, pp. 46-47.

28
Exhibit "T," id. at 71. 48
G.R. No. 126376, November 20, 2003, 416 SCRA 263 (2003).

29
Exhibit "R," id. at 65. 49
39 Phil. 624 (1919).

30
Exhibit "R-1," id. at 67. 50
Siasat v. Court of Appeals, 425 Phil. 139,145 (2002)

31
Exhibit "U," id. at 74. Del Rosario v. Bonga, G.R. No. 136308, January 23, 2001, 350
51

SCRA 101, 110.

32
Id.
52
Abra Valley College, Inc. v. Aquino, G.R. No. L-39086, June 15,
33
Records, pp. 3-6. 1988, 162 SCRA 106, 116, citing Perez v. Court of Appeals, 127
SCRA 645 (1984).
34
Id. at 6-7.
F.F. Mañacop Construction Co., Inc. v. Court of Appeals, 334
53

35
Id. at 35-36. Phil. 208, 212 (1997), citing Garrido v. CA, 236 SCRA 450 (1994).

36
Id. at 36-38.
54
See Relativo v. Castro, 76 Phil. 563 (1946).

37
Exhibit "V," folder of exhibits, p. 77.
55
GSIS v. Province of Tarlac, G.R. No. 157860, December 1, 2003,
417 SCRA 60.
38
TSN, December 17, 1993, pp. 1-5. 56
Jovan Land, Inc. v. Court of Appeals, 335 Phil. 626, 629 (1997).
39
Exhibit "N," folder of exhibits, p. 17.
 Page 18 of 19
57
Article 1473, New Civil Code. 74
Id.

58
Montecillo v. Reynes, 434 Phil. 456 (2002); San Miguel Proprietor 75
361 Phil. 308, 317 (1999), citing Bacolod – Murcia Milling Co.,
Philippines, Inc. v. Huang, 391 Phil. 636 (2000); Co v. Court of Inc., v. Bana Nacional Filipino, 74 Phil. 675, 680 (1944).
Appeals, 349 Phil. 749 (1998); Uraca v. Court of Appeals,344 Phil.
253 (1997); Toyota Car, Inc. v. Court of Appeals,314 Phil. 201 76
Supra, at note 66.
(1995.
77
EXHIBIT "N" – Conditional Contract of Sale executed by
59
151-A Phil. 868 (1973). Xavierville Estate, Inc. in favor of Alberto Soller dated December 8,
1969, to prove that after Xavierville Estate sold its lots, it continued
60
Id. at 887. to execute sales contracts over same in its name; EXHIBIT "O" –
Xerox copy of Deed of Absolute Sale executed by Xavierville
61
Infra. Estate, Inc. in favor of Alfredo Aguila dated May 20, 1970, to prove
that although the lots in said subdivision were already sold by virtue
62
Exhibit "A," folder of exhibits, p. 1 (Underscoring supplied) of EXHIBIT "L," Commercial Bank of Manila (COMBANK) the
VENDEE still allowed Xavierville Estate to sign contracts in its
name; EXHIBIT "P" – Xerox copy of Deed of Absolute Sale
63
Exhibit "B," id. at 2.
executed by Xavierville Estate, Inc. in favor of Elena Roque Santos
dated June 29, 1970, to prove that although lots in Xavierville
Ansorge v. Kane, 155 N.E. 683 (1927); A.M. Webb & Co. v.
64
Estate were already sold to Combank, the latter still allowed
Robert P. Miller Co., 157 F.2d 865 (1946). Xavierville Estate to sign contracts in its name;
65
Boatright v. Steinite Radio Corporation, 46 F. 2d 385 (1931). 78
Records, p. 128.
66
Williston on Contracts, Volume I, Section 45, 149 (3rd ed. 1957). 79
Wilson v. Volkswagen of America, Inc., 561 F.2d 494 (1977).
67
Weigham v. Kilifer, 215 F. 168. 80
Loughan v. Firestone Tire & Rubber Co., 749 F.2d. 1519 (1985).
68
TSN, May 21, 1990, pp. 17-18; TSN, July 17, 1992, p. 25. The Nature of The Judicial Process (The Storrs Lectures
81

Delivered At Yale University), 64 (1963).

69
Exhibits "N," "O" & "P," folder of exhibits, pp. 37-57.
82
Tong v. Borstad, 231 N.W. 2d. 795 (1975).
70
Supra, at note 22.
83
Robinson v. United States, 82 U.S. 363; 20 L.ed 653 (1871).
71
Exhibit "G," folder of exhibits, p. 8
84
Name of the purchasers
72
Potter v. Leitenberger Mach. Co., 166 Pa. Super 31, 70 A. 2d 390
(1950). 85
Majarabas v. Leonardo, 11 Phil. 272 (1908).
73
Rollo, p. 82. 86
Kelley v. Creston Buick Sales Co., 34 N.W. 2d. 598 (1948).
 Page 19 of 19
87
Hoskins v. Mclaughlin, 161 S.W.2d 395 (1942).

88
Packard Fort Work, Inc. v. Van Zandt, 224 S.W.2d 896 (1949).

89
334 Phil. 750,760 (1997), citing Mararabas v. Leonardo, supra.

90
See note 66.

91
39 Phil. 624 (1919).