Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. 80058 February 13, 1989ERNESTO R. ANG and ROSALINDA ANG,petitioners,vs.THE COURT OF APPEALS and LEE CHUY REALTY CORP.,respondents.Quisumbing, Torres & Evangelista for petitioners.Victor J. Lee for respondents.GANCAYCO,J.:This is a petition for review on certiorari of the decision of the Court of Appeals dated June 22, 19871reversing the decision of the Regional Trial Court dated June 23, 1983 which dismissed the complaint of private respondent and awarded damages to petitioner.2The focus is on the issue of when a breach of contract may warrant its resolution.The antecedents of this case are as follows:Petitioners Ernesto Ang and Rosalinda Ang, brother and sister, are the owners of three (3) parcels of land located at A. Bonifacio St., Balintawak, Quezon City with an aggregate area of 2,096 square meters covered by Transfer Certificates of Title Nos. 258870, 258871 and 258872 which they acquired by purchase from the Cruz family on July 3, 1979 at a price of P680,000.00.3Sometime in November 1979, negotiations were undertaken for the sale of the aforementioned properties between the petitioners as sellers and private respondent Lee Chuy Realty Corporation, through its president Henry Lee Chuy as buyer.On December 4, 1979, private respondent issued in favor of petitioners Manila Banking Corporation Check No. 30022695 in the amount of P50,000.004which it transmitted to petitioners together with a receipt supposedly embodying the terms and conditions of their agreement as follows:RECEIVED from LEE CHUY REALTY CORPORATION the sum of FIFTY THOUSAND PESOS (P50,000.00) ONLY, Philippine Currency, per MBTC (sic) Check No. 30022695, as down payment for the sale to it of three (3) parcels of land located at A. Bonifacio, Balintawak, Quezon City, covered by TCT Nos. 258870, 258871, and 258872 of the Registry of Deeds for Metro Manila District II, at the agreed total price of One Million Six Hundred Thousand Pesos (P1,600,000.00), under the following agreement:1. The sellers hereby undertake to remove and clear the subject property of all occupants and obstruction within this month of December 1979 at their own expenses (sic);2. Upon the subject property being cleared of occupants and obstruction and ready for turn over to the buyer, the sellers shall forthwith execute and deliver a deed of absolute sale in favor of the buyer together with a tax clearance as to payment of capital gain (sic) tax and such other papers as are necessary for the buyer to register the sale and (the) issuance of the corresponding transfer certificate of title in its name, free from any lien and encumbrance; and simultaneously therewith, the buyer shall pay the sellers the additional sum of Seven Hundred Fifty Thousand Pesos (P750,000.00) to complete payment of fifty per centum (50%) of the price in the amount of Eight hundred Thousand Pesos (P800,000.00) shall be payable by the buyer to the sellers within a period of forty-five (45) days thereafter;3. The sale carries the usual seller's warranty of peaceful possession and valid title by the buyer.4. All expenses for the execution and registration of the sale, including lawyer's fees, notarial fees, documentary stamp tax, transfer tax, registration fees, and agent's commission are for the accounts (sic) of the sellers.5The check for P50,000.00 was received and thereafter encashed by petitioners. However, the accompanying receipt was not returned by petitioners and instead another receipt prepared and signed by petitioners was forwarded to private respondent. This receipt thus reads:RECEIVED from LEE CHUY REALTY CORPORATION the sum of FIFTY THOUSAND PESOS (P50,000.00), Philippine Currency, per MBTC (Sic) Check No. 30022695 as deposit to sale of three (3) parcels of land located at A. Bonifacio, Balintawak, Quezon City, covered by TCT Nos. 258870, 258871, and 258872 of the Registry of Deeds for Metro Manila District II, in lieu of the agreed price, under the following agreement:1. The sellers hereby undertake to remove and clear the subject property of all occupants and obstruction within this month of December 1979 at their own expenses (sic);2. Upon the subject property being cleared of occupants and obstruction and ready for turn over to the buver, the sellers shall forthwith execute and deliver a deed of absolute sale in favor of the buyer together with all pertinent papers necessary for the transfer of the certificate of title in its name, free from any lien and encumbrance and simultaneously therewith, the buyer shall pay the seller 50% of the agreed price minus the deposit of FIFTY THOUSAND PESOS (P 50,000.00) in Philippine Currency and the balance of 50% of the agreed price shall be paid within a period of forty five (45) days with a post dated check;3. The sale carries the usual seller's warranty of peaceful possession and valid title by the buyer;4. The agent's commission will be for the account of the sellers;5. All expenses for the execution and registration of the sale, including lawyer's fees, notarial fees, documentary stamp tax, transfer tax and registration fees will be deducted from the agent's commission.6On January 12, 1980, petitioner Rosalinda R. Ang sent private respondent a letter giving the latter up to January 24, 1980 to pay the balance of the purchase price, and informing it that failure to do so will result in the cancellation of their agreement.7In reply thereto, private respondent wrote petitioners on January 25, 1980 expressing surprise over the demand for payment made by petitioners since private respondent had been ready since December 1979 to perform its part of the agreement while petitioners had not yet complied with their undertaking to clear the subject properties of the obstructions thereon.8On March 3, 1980, private respondent, through its counsel, wrote petitioners demanding the refund of the P 50,000.00 down payment made by private respondent on account of the failure of the petitioners to comply with their undertaking and their subsequent withdrawal from the sale.9Upon the failure of the petitioners to return the P50,000.00 down payment, private respondent filed a complaint for the collection of a sum of money with damages before the Court of First Instance (now Regional Trial Court) of Rizal on May 9, 1980.The petitioners sought the dismissal of the complaint. They also filed a counterclaim, praying for actual damages of P20,000.00 a month counted from November 1979 to continue while their deprivation of rental income persists, as well as moral and exemplary damages, plus attorney's fees.After trial where the parties presented only one (1) witness each, the trial court rendered its decision dated June 23, 198310in favor of petitioners and ordered private respondent to pay to petitioners the amounts of P170,000.00 with interest of 12% per annum to commence from the date of the filing of the complaint, P 25,000.00 as exemplary damages and P 20,000.00 as attorney's fees.Both petitioners and private respondent appealed the decision of the trial court.The Court of Appeals held that petitioners were the ones who breached the agreement. In a decision dated June 22, 1987,11the appellate court reversed the decision of the trial court and ordered petitioners to pay private respondent the amount of P50,000.00 with legal interest computed from March 3, 1980 plus P 10,000.00 attorney's fees.The motion for reconsideration filed by petitioners was denied by the Court of Appeals in its resolution dated September 18,1987.12Hence, this petition for review on certiorari wherein petitioners raise several errors which all boil down to the issue of which party, the petitioners or the private respondent, breached the agreement.Outside of the documentary evidence submitted by the parties, the only evidence available are the testimonies of the two witnesses presented during the trial Henry Lee Chuy, president of respondent corporation, for the plaintiff (herein private respondent) and Ang Kilin alias Tan Tian, father of the petitioner, for the defense which testimonies are diametrically opposed to one another.After a careful examination of the records of the case, this Court rules in favor of the private respondent.There is no doubt that there was a perfected contract for the sale of subject properties between petitioners and private respondent as evidenced by the down payment of P50,000.00.13What needs to be resolved is the agreed price for the sale of subject properties. In the receipt prepared by private respondent which was not signed by petitioners, the stated purchase price is P1,600,000.00. However, the receipt signed by petitioners, which substantially reproduced the terms and conditions embodied in the original receipt, did not state the agreed price.Henry Lee Chuy testified that the second receipt did not indicate the agreed price because petitioners wanted to undervalue the price of P1,600,000.00 so that they will not pay a large amount of capital gains tax considering that the prior acquisition price for the property was only P680,000.00.14Initially, he refused to agree but upon the assurance of petitioners' father Ang Kilin that the clearing work in the property will be completed in a week or two, he agreed to keep the receipt.On the other hand, Ang Kilin testified that the real price for the sale is P2,340,000.00 and not P1,600,000.00 as claimed by private respondent so that they (the petitioners) did not sign the receipt prepared by the latter. He claimed that it was Mrs. Lee, the mother of Henry Lee Chuy, who did not want to state the correct price since she wanted to undervalue the property. He adds that they have received offers for the properties in the amount of P2,160,000.00 from Dolora Chua,15and Pl,300.00 per square meter from Eusebio Chang of the Ching Chua Printing Press.16He also testified that inasmuch as the offer of private respondent was made earlier, petitioners were not in a position to negotiate with the other buyers.The respondent Court of Appeals arrived at the conclusion that the petitioner committed a breach of their contract and acted in bad faith in dealing with private respondent.We agree.Petitioners did not offer any plausible explanation as to why Mrs. Lee did not want to state the correct price except that the latter wanted to undervalue the property. The reason why Mrs. Lee wanted to undervalue the property was not clear. On the other hand, Henry Lee Chuy categorically stated that petitioners did not want to state the correct price for purposes of reducing their capital gains tax liability.The Court finds that the latter explanation appears to be the more logical reason why petitioners did not state any specified amount for the agreed price in the receipt they signed. Since petitioners acquired the property for only P680,000.00 and the purchase price of the same was set at P1,600,000.00, they would have been liable to pay quite a large amount of capital gains tax for the profits to be realized from the sale, and even more had the price been set at P2,340,000.00.Moreover, the original receipt prepared by private respondent recites in detail the manner of payment of the balance of the purchase price, to wit: P750,000.00 to be paid after the property is cleared of occupants and obstructions and upon delivery of the deed of absolute sale; and the balance of P800,000.00 to be paid within 45 days thereafter. On the other hand, the receipt prepared and signed by petitioners merely indicates that 50% of the price minus the deposit shall be paid upon delivery of the deed of absolute sale and the other 50% would be paid within 45 days thereafter without stating the price. If the price was really P2,340,000.00 as claimed by petitioners, they could have easily written the amount in the receipt. With or without a lawyer to assist them, petitioners must have been aware of the importance of indicating the correct amount in the receipt since they claim that they did not sign the receipt prepared by private respondent because the price indicated thereon was wrong. Petitioners were the ones who clearly caused the obscurity when they omitted the purchase price in the receipt they prepared and signed. Hence, such obscurity must be construed against them.17The claim of the petitioners, which the trial court believed, is that they could no longer accept the offers they have received from Dolora Chua and the Ching Hua Printing Press because of their previous commitment with private respondent. This pretension is not supported by the evidence. The records show that petitioners had entered into an "Agreement of Purchase or Sale" with Dolora Chua on December 3, 1979,18or one day before the date of the receipt they signed for the P50,000.00 down payment made by private respondent.Petitioners also argue that the appellate court e"ed when it considered the said document as an agreement and not a mere offer. We have carefully examined the said document and We find no cogent basis to view the same as a mere offer. It is clearly stated in the agreement that petitioners received P20,000.00 from Dolora Chua as down payment for the subject properties with the balance of the purchase price of P2,160,000.00 to be paid in full at the time the land shall have been cleared and that petitioners bind themselves to deliver to the buyer a deed of sale and conveyance upon full payment. The terms of the agreement are so. clear as not to leave room for any other interpretation.19The aforementioned agreement further bolsters the conclusion that the price agreed upon by petitioners and private respondent was P1,600,000.00. If the true price was P2,340,000.00, it would be unusual for petitioners to enter into such an agreement with Chua at a lesser purchase price. The only logical conclusion is that petitioners had intentionally omitted the price of P1,600,000.00 in the receipt they signed either to compel private respondent to agree to a price increase or to enable them to back out of their agreement notwithstanding their plan to reduce their capital gains tax liability.Having settled the issue as to the agreed purchase price, We are now faced with the question of who breached the agreement and, as a corollary to this, who has the right to withdraw from the sale.The Court of Appeals found that the petitioners breached the agreement when they failed to undertake fulfillment of the two conditions embodied in the same; (1) that petitioners will undertake to remove and clear the subject property of all occupants and obstructions within the month of December 1979 and (2) that when the subject property is cleared of all occupants and obstructions, the petitioners shall deliver a deed of absolute sale in favor of private respondent with all pertinent papers necessary for the registration and issuance of a certificate of title in the name of private respondent.Said conclusion of the Court of Appeals that petitioners failed to comply with their part of the agreement is conclusive upon this Court.20The appellate court discussed in detail its findings on the matter. We have gone through the records of this case and find no cogent reason to disturb such findings.However, such breach of the agreement by petitioner does not warrant a resolution of the contract.21While it is true that in reciprocal obligations, such as the contract of purchase and sale in this case, the power to rescind is implied and any of the contracting parties may, upon non-fulfillment by the other party of his part of the obligation, resolve the contract,22rescission wig not be permitted for a slight or casual breach of the contract. Rescission may be had only for such breaches that are so substantial and fundamental as to defeat the object of the parties in making the agreement.23The two aforementioned conditions that were breached by petitioners are not essential for the fulfillment of the obligations to sen on their part but merely an incidental undertaking. The rescission of the contract may not be allowed on this ground alone.At any rate, private respondent at first did not seek to rescind the contract on the basis of the non-fulfillment of these conditions. Private respondent in fact sought definite advice from petitioners as to when they can comply with the conditions since it was ready to perform its part of the agreement since December 1979. This was after it received the letter of petitioners demanding payment of the balance of the purchase price on or before January 24, 1980 with the threat that failure to do so will lead to the repudiation of the agreement. Of course, petitioners cannot unilaterally repudiate the contract for the slight delay in payment incurred by private respondent which, even if true, cannot also be a ground for rescission since the same amounts to a slight breach.24Indeed, it was the failure of the petitioners to comply with the aforementioned conditions of the agreement that caused the delay in the payment by private respondent. However, when petitioners still failed to comply with their obligation and refused to proceed with the sale unless the purchase price is increased, that was the time private respondent demanded the resolution of the sale by asking for the refund of the downpayment.The Court holds that when petitioners refused to proceed with the sale unless private respondent agreed to pay the higher price of P2,340,000.00, the petitioners thereby committed a serious breach of the agreement. There was a perfected contract of sale between the parties and the purchase price was set at P1,600,000.00. Petitioners cannot increase the purchase price agreed upon without the consent of private respondent. As private respondent was willing to buy the subject property at the price of P1,600,000.00 as agreed upon and petitioners were not willing to sell unless the price is increased to P2,340,000.00,25private respondent had the right to rescind the agreement as petitioners committed a serious breach of the terms of the same.Moreover, as the Court of Appeals correctly observed, since petitioners had already sold the subject properties to Dolora Chua, they can no longer perform what was incumbent upon them under the terms of the agreement, that is, to deliver the subject property to private respondent. This is another breach of their agreement. The appellate court aptly characterized the actuations of petitioners to be "double-dealing."As a consequence of the resolution of the contract of sale, the parties should be restored to their original situation.26Petitioners should, therefore, be liable to refund the P50,000.00 down payment they have received from private respondent with legal interest computed from the date of the extrajudicial demand made on March 3, 1980.27WHEREFORE, the decision of the Court of Appeals dated June 22, 1987 in Case No. CA-GR CV No. 07139 is hereby AFFIRMED. No pronouncement as to costs.SO ORDERED.

Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISIONG.R. No. L-116650 May 23, 1995TOYOTA SHAW, INC.,petitioner,vs.COURT OF APPEALS and LUNA L. SOSA,respondents.DAVIDE, JR.,J.:At the heart of the present controversy is the document marked Exhibit "A"1for the private respondent, which was signed by a sales representative of Toyota Shaw, Inc. named Popong Bernardo. The document reads as follows:AGREEMENTS BETWEEN MR. SOSA& POPONG BERNARDO OF TOYOTASHAW, INC.1. all necessary documents will be submitted to TOYOTA SHAW, INC. (POPONG BERNARDO) a week after, upon arrival of Mr. Sosa from the Province (Marinduque) where the unit will be used on the 19th of June.2. the downpayment of P100,000.00 will be paid by Mr. Sosa on June 15, 1989.3. the TOYOTA SHAW, INC. LITE ACE yellow, will be pick-up [sic] and released by TOYOTA SHAW, INC. on the 17th of June at 10 a.m.Was this document, executed and signed by the petitioner's sales representative, a perfected contract of sale, binding upon the petitioner, breach of which would entitle the private respondent to damages and attorney's fees? The trial court and the Court of Appeals took the affirmative view. The petitioner disagrees. Hence, this petition for review oncertiorari.The antecedents as disclosed in the decisions of both the trial court and the Court of Appeals, as well as in the pleadings of petitioner Toyota Shaw, Inc. (hereinafterToyota) and respondent Luna L. Sosa (hereinafterSosa) are as follows. Sometime in June of 1989, Luna L. Sosa wanted to purchase a Toyota Lite Ace. It was then a seller's market and Sosa had difficulty finding a dealer with an available unit for sale. But upon contacting Toyota Shaw, Inc., he was told that there was an available unit. So on 14 June 1989, Sosa and his son, Gilbert, went to the Toyota office at Shaw Boulevard, Pasig, Metro Manila. There they met Popong Bernardo, a sales representative of Toyota.Sosa emphasized to Bernardo that he needed the Lite Ace not later than 17 June 1989 because he, his family, and abalikbayanguest would use it on 18 June 1989 to go to Marinduque, his home province, where he would celebrate his birthday on the 19th of June. He added that if he does not arrive in his hometown with the new car, he would become a "laughing stock." Bernardo assured Sosa that a unit would be ready for pick up at 10:00 a.m. on 17 June 1989. Bernardo then signed the aforequoted "Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc." It was also agreed upon by the parties that the balance of the purchase price would be paid by credit financing through B.A. Finance, and for this Gilbert, on behalf of his father, signed the documents of Toyota and B.A. Finance pertaining to the application for financing.The next day, 15 June 1989, Sosa and Gilbert went to Toyota to deliver the downpayment of P100,000.00. They met Bernardo who then accomplished a printed Vehicle Sales Proposal (VSP) No. 928,2on which Gilbert signed under the subheading CONFORME. This document shows that the customer's name is "MR. LUNA SOSA" with home address at No. 2316 Guijo Street, United Paraaque II; that the model series of the vehicle is a "Lite Ace 1500" described as "4 Dr minibus"; that payment is by "installment," to be financed by "B.A.,"3with the initial cash outlay of P100,000.00 broken down as follows:a)downpaymentP 53,148.00

b)insuranceP 13,970.00

c)BLT registration feeP 1,067.00

CHMO feeP 2,715.00

service feeP 500.00

accessoriesP 29,000.00

and that the "BALANCE TO BE FINANCED" is "P274,137.00." The spaces provided for "Delivery Terms" were not filled-up. It also contains the following pertinent provisions:CONDITIONS OF SALES1. This sale is subject to availability of unit.2. Stated Price is subject to change without prior notice, Price prevailing and in effect at time of selling will apply. . . .Rodrigo Quirante, the Sales Supervisor of Bernardo, checked and approved the VSP.On 17 June 1989, at around 9:30 a.m., Bernardo called Gilbert to inform him that the vehicle would not be ready for pick up at 10:00 a.m. as previously agreed upon but at 2:00 p.m. that same day. At 2:00 p.m., Sosa and Gilbert met Bernardo at the latter's office. According to Sosa, Bernardo informed them that the Lite Ace was being readied for delivery. After waiting for about an hour, Bernardo told them that the car could not be delivered because "nasulot ang unit ng ibang malakas."Toyota contends, however, that the Lite Ace was not delivered to Sosa because of the disapproval by B.A. Finance of the credit financing application of Sosa. It further alleged that a particular unit had already been reserved and earmarked for Sosa but could not be released due to the uncertainty of payment of the balance of the purchase price. Toyota then gave Sosa the option to purchase the unit by paying the full purchase price in cash but Sosa refused.After it became clear that the Lite Ace would not be delivered to him, Sosa asked that his downpayment be refunded. Toyota did so on the very same day by issuing a Far East Bank check for the full amount of P100,000.00,4the receipt of which was shown by a check voucher of Toyota,5which Sosa signed with the reservation, "without prejudice to our future claims for damages."Thereafter, Sosa sent two letters to Toyota. In the first letter, dated 27 June 1989 and signed by him, he demanded the refund, within five days from receipt, of the downpayment of P100,000.00 plus interest from the time he paid it and the payment of damages with a warning that in case of Toyota's failure to do so he would be constrained to take legal action.6The second, dated 4 November 1989 and signed by M. O. Caballes, Sosa's counsel, demanded one million pesos representing interest and damages, again, with a warning that legal action would be taken if payment was not made within three days.7Toyota's counsel answered through a letter dated 27 November 19898refusing to accede to the demands of Sosa. But even before this answer was made and received by Sosa, the latter filed on 20 November 1989 with Branch 38 of the Regional Trial Court (RTC) of Marinduque a complaint against Toyota for damages under Articles 19 and 21 of the Civil Code in the total amount of P1,230,000.00.9He alleges,inter alia,that:9. As a result of defendant's failure and/or refusal to deliver the vehicle to plaintiff, plaintiff suffered embarrassment, humiliation, ridicule, mental anguish and sleepless nights because: (i) he and his family were constrained to take the public transportation from Manila to Lucena City on their way to Marinduque; (ii) his balikbayan-guest canceled his scheduled first visit to Marinduque in order to avoid the inconvenience of taking public transportation; and (iii) his relatives, friends, neighbors and other provincemates, continuously irked him about "his Brand-New Toyota Lite Ace that never was." Under the circumstances, defendant should be made liable to the plaintiff for moral damages in the amount of One Million Pesos (P1,000,000.00).10In its answer to the complaint, Toyota alleged that no sale was entered into between it and Sosa, that Bernardo had no authority to sign Exhibit "A" for and in its behalf, and that Bernardo signed Exhibit "A" in his personal capacity. As special and affirmative defenses, it alleged that: the VSP did not state date of delivery; Sosa had not completed the documents required by the financing company, and as a matter of policy, the vehicle could not and would not be released prior to full compliance with financing requirements, submission of all documents, and execution of the sales agreement/invoice; the P100,000.00 was returned to and received by Sosa; the venue was improperly laid; and Sosa did not have a sufficient cause of action against it. It also interposed compulsory counterclaims.After trial on the issues agreed upon during the pre-trial session,11the trial court rendered on 18 February 1992 a decision in favor of Sosa.12It ruled that Exhibit "A," the "AGREEMENTS BETWEEN MR. SOSA AND POPONG BERNARDO," was a valid perfected contract of sale between Sosa and Toyota which bound Toyota to deliver the vehicle to Sosa, and further agreed with Sosa that Toyota acted in bad faith in selling to another the unit already reserved for him.As to Toyota's contention that Bernardo had no authority to bind it through Exhibit "A," the trial court held that the extent of Bernardo's authority "was not made known to plaintiff," for as testified to by Quirante, "they do not volunteer any information as to the company's sales policy and guidelines because they are internal matters."13Moreover, "[f]rom the beginning of the transaction up to its consummation when the downpayment was made by the plaintiff, the defendants had made known to the plaintiff the impression that Popong Bernardo is an authorized sales executive as it permitted the latter to do acts within the scope of an apparent authority holding him out to the public as possessing power to do these acts."14Bernardo then "was an agent of the defendant Toyota Shaw, Inc. and hence bound the defendants."15The court further declared that "Luna Sosa proved his social standing in the community and suffered besmirched reputation, wounded feelings and sleepless nights for which he ought to be compensated."16Accordingly, it disposed as follows:WHEREFORE, viewed from the above findings, judgment is hereby rendered in favor of the plaintiff and against the defendant:1. ordering the defendant to pay to the plaintiff the sum of P75,000.00 for moral damages;2. ordering the defendant to pay the plaintiff the sum of P10,000.00 for exemplary damages;3. ordering the defendant to pay the sum of P30,000.00 attorney's fees plus P2,000.00 lawyer's transportation fare per trip in attending to the hearing of this case;4. ordering the defendant to pay the plaintiff the sum of P2,000.00 transportation fare per trip of the plaintiff in attending the hearing of this case; and5. ordering the defendant to pay the cost of suit.SO ORDERED.Dissatisfied with the trial court's judgment, Toyota appealed to the Court of Appeals. The case was docketed as CA-G.R. CV No. 40043. In its decision promulgated on 29 July 1994,17the Court of Appeals affirmedin totothe appealed decision.Toyota now comes before this Court via this petition and raises the core issue stated at the beginning of theponenciaand also the following related issues: (a) whether or not the standard VSP was the true and documented understanding of the parties which would have led to the ultimate contract of sale, (b) whether or not Sosa has any legal and demandable right to the delivery of the vehicle despite the non-payment of the consideration and the non-approval of his credit application by B.A. Finance, (c) whether or not Toyota acted in good faith when it did not release the vehicle to Sosa, and (d) whether or not Toyota may be held liable for damages.We find merit in the petition.Neither logic nor recourse to one's imagination can lead to the conclusion that Exhibit "A" is aperfected contract of sale.Article 1458 of the Civil Code defines a contract of sale as follows:Art. 1458. By the contract of sale one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.A contract of sale may be absolute or conditional.and Article 1475 specifically provides when it is deemed perfected:Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts.What is clear from Exhibit "A" is not what the trial court and the Court of Appeals appear to see. It is not a contract of sale. No obligation on the part of Toyota to transfer ownership of a determinate thing to Sosa and no correlative obligation on the part of the latter to pay therefor a price certain appears therein. The provision on the downpayment of P100,000.00 made no specific reference to a sale of a vehicle. If it was intended for a contract of sale, it could only refer to a sale on installment basis, as the VSP executed the following day confirmed. But nothing was mentioned about the full purchase price and the manner the installments were to be paid.This Court had already ruled that a definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale.18This is so because the agreement as to the manner of payment goes into the price such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. Definiteness as to the price is an essential element of a binding agreement to sell personal property.19Moreover, Exhibit "A" shows the absence of a meeting of minds between Toyota and Sosa. For one thing, Sosa did not even sign it. For another, Sosa was well aware from its title, written in bold letters,viz.,AGREEMENTS BETWEEN MR. SOSA & POPONG BERNARDO OF TOYOTA SHAW, INC.that he was not dealing with Toyota but with Popong Bernardo and that the latter did not misrepresent that he had the authority to sell any Toyota vehicle. He knew that Bernardo was only asales representativeof Toyota and hence a mere agent of the latter. It was incumbent upon Sosa to act with ordinary prudence and reasonable diligence to know the extent of Bernardo's authority as anagent20in respect of contracts to sell Toyota's vehicles. A person dealing with an agent is put upon inquiry and must discover upon his peril the authority of the agent.21At the most, Exhibit "A" may be considered as part of the initial phase of the generation or negotiation stage of a contract of sale. There are three stages in the contract of sale, namely:(a) preparation, conception, or generation, which is the period of negotiation and bargaining, ending at the moment of agreement of the parties;(b) perfection or birth of the contract, which is the moment when the parties come to agree on the terms of the contract; and(c) consummation or death, which is the fulfillment or performance of the terms agreed upon in the contract.22The second phase of the generation or negotiation stage in this case was the execution of the VSP. It must be emphasized that thereunder, the downpayment of the purchase price was P53,148.00 while the balance to be paid on installment should be financed by B.A. Finance Corporation. It is, of course, to be assumed that B.A. Finance Corp. was acceptable to Toyota, otherwise it should not have mentioned B.A. Finance in the VSP.Financing companies are defined in Section 3(a) of R.A. No. 5980, as amended by P.D. No. 1454 and P.D. No. 1793, as "corporations or partnerships, except those regulated by the Central Bank of the Philippines, the Insurance Commission and the Cooperatives Administration Office, which are primarily organized for the purpose of extending credit facilities to consumers and to industrial, commercial, or agricultural enterprises, either by discounting or factoring commercial papers or accounts receivables, or by buying and selling contracts, leases, chattel mortgages, or other evidence of indebtedness, or by leasing of motor vehicles, heavy equipment and industrial machinery, business and office machines and equipment, appliances and other movable property."23Accordingly, in a sale on installment basis which is financed by a financing company, three parties are thus involved: the buyer who executes a note or notes for the unpaid balance of the price of the thing purchased on installment, the seller who assigns the notes or discounts them with a financing company, and the financing company which is subrogated in the place of the seller, as the creditor of the installment buyer.24Since B.A. Finance did not approve Sosa's application, there was then no meeting of minds on the sale on installment basis.We are inclined to believe Toyota's version that B.A. Finance disapproved Sosa's application for which reason it suggested to Sosa that he pay the full purchase price. When the latter refused, Toyota cancelled the VSP and returned to him his P100,000.00. Sosa's version that the VSP was cancelled because, according to Bernardo, the vehicle was delivered to another who was "mas malakas" does not inspire belief and was obviously a delayed afterthought. It is claimed that Bernardo said, "Pasensiya kayo, nasulot ang unit ng ibang malakas," while the Sosas had already been waiting for an hour for the delivery of the vehicle in the afternoon of 17 June 1989. However, in paragraph 7 of his complaint, Sosa solemnly states:On June 17, 1989 at around 9:30 o'clock in the morning, defendant's sales representative, Mr. Popong Bernardo, called plaintiff's house and informed the plaintiff's son that the vehicle will not be ready for pick-up at 10:00 a.m. of June 17, 1989 but at 2:00 p.m. of that day instead.Plaintiff and his son went to defendant's office on June 17 1989 at 2:00 p.m. in order to pick-up the vehicle but the defendant for reasons known only to its representatives, refused and/or failed to release the vehicle to the plaintiff. Plaintiff demanded for an explanation, but nothing was given; . . . (Emphasis supplied).25The VSP was a mereproposalwhich was aborted in lieu of subsequent events. It follows that the VSP created no demandable right in favor of Sosa for the delivery of the vehicle to him, and its non-delivery did not cause any legally indemnifiable injury.The award then of moral and exemplary damages and attorney's fees and costs of suit is without legal basis. Besides, the only ground upon which Sosa claimed moral damages is that since it was known to his friends, townmates, and relatives that he was buying a Toyota Lite Ace which they expected to see on his birthday, he suffered humiliation, shame, and sleepless nights when the van was not delivered. The van became the subject matter of talks during his celebration that he may not have paid for it, and this created an impression against his business standing and reputation. At the bottom of this claim is nothing but misplaced pride and ego. He should not have announced his plan to buy a Toyota Lite Ace knowing that he might not be able to pay the full purchase price. It was he who brought embarrassment upon himself by bragging about a thing which he did not own yet.Since Sosa is not entitled to moral damages and there being no award for temperate, liquidated, or compensatory damages, he is likewise not entitled to exemplary damages. Under Article 2229 of the Civil Code, exemplary or corrective damages are imposed by way of example or correction for the public good, in addition to moral, temperate, liquidated, or compensatory damages.Also, it is settled that for attorney's fees to be granted, the court must explicitly state in the body of the decision, and not only in the dispositive portion thereof, the legal reason for the award of attorney's fees.26No such explicit determination thereon was made in the body of the decision of the trial court. No reason thus exists for such an award.WHEREFORE, the instant petition is GRANTED. The challenged decision of the Court of Appeals in CA-G.R. CV NO. 40043 as well as that of Branch 38 of the Regional Trial Court of Marinduque in Civil Case No. 89-14 are REVERSED and SET ASIDE and the complaint in Civil Case No. 89-14 is DISMISSED. The counterclaim therein is likewise DISMISSED.No pronouncement as to costs.SO ORDERED

.[G.R. No. 126444.December 4, 1998]ALFONSO QUIJADA, CRESENTE QUIJADA, REYNELDA QUIJADA, DEMETRIO QUIJADA, ELIUTERIA QUIJADA, EULALIO QUIJADA, and WARLITO QUIJADA,petitioners,vs.COURT OF APPEALS, REGALADO MONDEJAR, RODULFO GOLORAN, ALBERTO ASIS, SEGUNDINO RAS, ERNESTO GOLORAN, CELSO ABISO, FERNANDO BAUTISTA, ANTONIO MACASERO, and NESTOR MAGUINSAY,respondents.D E C I S I O NMARTINEZ,J.:Petitioners, as heirs of the late Trinidad Quijada, filed a complaint against private respondents for quieting of title, recovery of possession and ownership of parcels of land with claim for attorney's fees and damages.The suit was premised on the following facts found by the Court of Appeals, which is materially the same as that found by the trial court:"Plaintiffs-appellees (petitioners) are the children of the late Trinidad Corvera Vda. de Quijada.Trinidad was one of the heirs of the late Pedro Corvera and inherited from the latter the two-hectare parcel of land subject of the case, situated in the barrio of San Agustin, Talacogon, Agusan del Sur.On April 5, 1956, Trinidad Quijada together with her sisters Leonila Corvera Vda. de Sequea and Paz Corvera Cabiltes and brother Epapiadito Corvera executed a conditional deed of donation (Exh. C) of the two-hectare parcel of land subject of the case in favor of the Municipality of Talacogon, the condition being that the parcel of land shall be used solely and exclusively as part of the campus of the proposed provincial high school in Talacogon.Apparently, Trinidad remained in possession of the parcel of land despite the donation.On July 29, 1962, Trinidad sold one (1) hectare of the subject parcel of land to defendant-appellant Regalado Mondejar (Exh. 1).Subsequently, Trinidad verbally sold the remaining one (1) hectare to defendant-appellant (respondent)Regalado Mondejar without the benefit of a written deed of sale and evidenced solely by receipts of payment.In 1980, the heirs of Trinidad, who at that time was already dead, filed a complaint for forcible entry (Exh. E) against defendant-appellant (respondent) Regalado Mondejar, which complaint was, however, dismissed for failure to prosecute (Exh. F).In 1987, the proposed provincial high school having failed to materialize, the Sangguniang Bayan of the municipality of Talacogon enacted a resolution reverting the two (2) hectares of land donated back to the donors (Exh. D).In the meantime, defendant-appellant (respondent) Regalado Mondejar sold portions of the land to defendants-appellants (respondents) Fernando Bautista (Exh. 5), Rodolfo Goloran (Exh. 6), Efren Guden (Exh. 7) and Ernesto Goloran (Exh. 8)."On July 5, 1988, plaintiffs-appellees (petitioners) filed this action against defendants-appellants (respondents).In the complaint, plaintiffs-appellees (petitioners) alleged that their deceased mother never sold, conveyed, transferred or disposed of the property in question to any person or entity much less to Regalado Mondejar save the donation made to the Municipality of Talacogon in 1956; that at the time of the alleged sale to Regalado Mondejar by Trinidad Quijada, the land still belongs to the Municipality of Talacogon, hence, the supposed sale is null and void."Defendants-appellants (respondents), on the other hand, in their answer claimed that the land in dispute was sold to Regalado Mondejar, the one (1) hectare on July 29, 1962, and the remaining one (1) hectare on installment basis until fully paid.As affirmative and/or special defense, defendants-appellants (respondents) alleged that plaintiffs' action is barred by laches or has prescribed."The courta quorendered judgment in favor of plaintiffs-appellees (petitioners): firstly because 'Trinidad Quijada had no legal title or right to sell the land to defendant Mondejar in 1962, 1966, 1967 and 1968, the same not being hers to dispose of because ownership belongs to the Municipality of Talacogon' (Decision, p. 4;Rollo, p. 39) and, secondly, that the deed of sale executed by Trinidad Quijada in favor of Mondejar did not carry with it the conformity and acquiescence of her children, more so that she was already 63 years old at the time, and a widow (Decision, p. 6;Rollo, p. 41)."[1]The dispositive portion of the trial court's decision reads:"WHEREFORE, viewed from the above perceptions, the scale of justice having tilted in favor of the plaintiffs, judgment is, as it is hereby rendered:1)ordering the Defendants to return and vacate the two (2) hectares of land to Plaintiffs as described in Tax Declaration No. 1209 in the name of Trinidad Quijada;2)ordering any person acting in Defendants' behalf to vacate and restore thepeaceful possession of the land in question to Plaintiffs;3)ordering the cancellation of the Deed of Sale executed by the late Trinidad Quijada in favor of Defendant Regalado Mondejar as well as the Deeds of Sale/Relinquishments executed by Mondejar in favor of the other Defendants;4)ordering Defendants to remove their improvements constructed on the questioned lot;5)ordering the Defendants to pay Plaintiffs, jointly and severally, the amount ofP10,000.00 representing attorney's fees;6)ordering Defendants to pays the amount ofP8,000.00 as expenses of litigation; and7)ordering Defendants to pay the sum ofP30,000.00 representing moral damages.SO ORDERED."[2]On appeal, the Court of Appeals reversed and set aside the judgmenta quo[3]ruling that the sale made by Trinidad Quijada to respondent Mondejar was valid as the4 former retained an inchoate interest on the lots by virtue of the automatic reversion clause in the deed of donation.[4]Thereafter, petitioners filed a motion for reconsideration.When the CA denied their motion,[5]petitioners instituted a petition for review to this Court arguing principally that the sale of the subject property made by Trinidad Quijada to respondent Mondejar is void, considering that at that time, ownership was already transferred to the Municipality of Talacogon.On the contrary, private respondents contend that the sale was valid, that they are buyers in good faith, and that petitioners' case is barred by laches.[6]We affirm the decision of the respondent court.The donation made on April 5, 1956 by Trinidad Quijada and her brother and sisters[7]was subject to the condition that the donated property shall be "used solely and exclusively as a part of the campus of the proposed Provincial High School in Talacogon."[8]The donation further provides that should "the proposed Provincial High School be discontinued or if the same shall be opened but for some reason or another, the same may in the future be closed" the donated property shall automatically revert to the donor.[9]Such condition, not being contrary to law, morals, good customs, public order or public policy was validly imposed in the donation.[10]When the Municipality's acceptance of the donation was made known to the donor, the former became the new owner of the donated property -- donation being a mode of acquiring and transmitting ownership[11]- notwithstanding the condition imposed by the donee.The donation is perfected once the acceptance by the donee is made known to the donor.[12]Accordingly, ownership is immediately transferred to the latter and that ownership will only revert to the donor if the resolutory condition is not fulfilled.In this case, that resolutory condition is the construction of the school.It has been ruled that when a person donates land to another on the condition that the latter would build upon the land a school, the condition imposed is not a condition precedent or a suspensive condition but a resolutory one.[13]Thus, at the time of the sales made in 1962 towards 1968, the alleged seller (Trinidad) could not have sold the lots since she had earlier transferred ownership thereof by virtue of the deed of donation.So long as the resolutory condition subsists and is capable of fulfillment, the donation remains effective and the donee continues to be the owner subject only to the rights of the donor or his successors-in-interest under the deed of donation.Since no period was imposed by the donor on when must the donee comply with the condition, the latter remains the owner so long as he has tried to comply with the condition within a reasonable period.Such period, however, became irrelevant herein when the donee-Municipality manifested through a resolution that it cannot comply with the condition of building a school and the same was made known to the donor.Only then - when the non-fulfillment of the resolutory condition was brought to the donor's knowledge - that ownership of the donated property reverted to the donor as provided in the automatic reversion clause of the deed of donation.The donor may have an inchoate interest in the donated property during the time that ownership of the land has not reverted to her.Such inchoate interest may be the subject of contracts including a contract of sale.In this case, however, what the donor sold was the land itself which she no longer owns.It would have been different if the donor-seller sold her interests over the property under the deed of donation which is subject to the possibility of reversion of ownership arising from the non-fulfillment of the resolutory condition.As to laches, petitioners' action is not yet barred thereby.Laches presupposes failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier;[14]"it is negligence or omission to assert a right within a reasonable time, thus, giving rise to a presumption that the party entitled to assert it either has abandoned or declined to assert it."[15]Its essential elements of:a)Conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation complained of;b)Delay in asserting complainant's right after he had knowledge of the defendant's conduct and after he has an opportunity to sue;c)Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and,d)Injury or prejudice to the defendant in the event relief is accorded to the complainant."[16]are absent in this case.Petitioners' cause of action to quiet title commenced only when the property reverted to the donor and/or his successors-in-interest in 1987.Certainly, when the suit was initiated the following year, it cannot be said that petitioners had slept on their rights for a long time.The 1960's sales made by Trinidad Quijada cannot be the reckoning point as to when petitioners' cause of action arose.They had no interest over the property at that time except under the deed of donation to which private respondents were not privy.Moreover, petitioners had previously filed an ejectment suit against private respondents only that it did not prosper on a technicality.Be that at it may, there is one thing which militates against the claim of petitioners.Sale, being a consensual contract, is perfected by mere consent, which is manifested the moment there is a meeting of the minds[17]as to the offer and acceptance thereof on three (3) elements: subject matter, price and terms of payment of the price.[18]ownership by the seller on the thing sold at the time of the perfection of the contract of sale is not an element for its perfection.What the law requires is that the seller has the right to transfer ownership at the time the thing sold is delivered.[19]Perfectionper sedoes not transfer ownership which occurs upon the actual or constructive delivery of the thing sold.[20]A perfected contract of sale cannot be challenged on the ground of non-ownership on the part of the seller at the time of its perfection; hence, the sale is still valid.The consummation, however, of the perfected contract is another matter.It occurs upon the constructive or actual delivery of the subject matter to the buyer when the seller or her successors-in-interest subsequently acquires ownership thereof.Such circumstance happened in this case when petitioners -- who are Trinidad Quijada's heirs and successors-in-interest -- became the owners of the subject property upon the reversion of the ownership of the land to them.Consequently, ownership is transferred to respondent Mondejar ands those who claim their right from him.Article 1434 of the New Civil Code supports the ruling that the seller's "title passes by operation of law to the buyer."[21]This rule applies not only when the subject matter of the contract of sale is goods,[22]but also to other kinds of property, including real property.[23]There is also no merit in petitioners' contention that since the lots were owned by the municipality at the time of the sale, they were outside the commerce of men under Article 1409 (4) of the NCC;[24]thus, the contract involving the same is inexistent and void from the beginning.However, nowhere in Article 1409 (4) is it provided that the properties of a municipality, whether it be those for public use or its patrimonial property[25]are outside the commerce of men.Besides, the lots in this case were conditionally owned by the municipality.To rule that the donated properties are outside the commerce of men would render nugatory the unchallenged reasonableness and justness of the condition which the donor has the right to impose as owner thereof.Moreover, the objects referred to as outsides the commerce of man are those which cannot be appropriated, such as the open seas and the heavenly bodies.With respect to the trial courts award of attorneys fees, litigation expenses and moral damages, there is neither factual nor legal basis thereof.Attorneys fees and expenses of litigation cannot, following the general rule in Article 2208 of the New Civil Code, be recovered in this case, there being no stipulation to that effect and the case does not fall under any of the exceptions.[26]It cannot be said that private respondents had compelled petitioners to litigate with third persons.Neither can it be ruled that the former acted in gross and evident bad faith in refusing to satisfy the latters claims considering that private respondents were under an honest belief that they have a legal right over the property by virtue of the deed of sale.Moral damages cannot likewise be justified as none of the circumstances enumerated under Articles 2219[27]and 2220[28]of the New Civil Code concur in this case.WHEREFORE, by virtue of the foregoing, the assailed decision of the Court of Appeals is AFFIRMED.SO ORDERED.

SECOND DIVISION[G.R. No. 134718.August 20, 2001]HEIRS OF ROMANA INGJUG-TIRO: BEDESA, PEDRO, RITA all surnamed TIRO, and BARBARA TIRO (deceased) represented by NORMA SARAMOSING;HEIRS OF FRANCISCO INGJUG: LEONARDO, LILIA, FERNANDA,ZENAIDA, PACITA and ANTONIO, all surnamed INGJUG;and HEIRS OF FRANCISCA INGJUG-FUENTES: ULDARICO and GUILLERMA, all surnamed FUENTES, and PAULINA INGJUG-FUENTES (deceased) represented by VICTOR, ELENA, SERGIA and DESIDERIO, all surnamed MUEZ,petitioners,vs. SPOUSES LEON V. CASALS and LILIA C. CASALS, SPOUSES CARLOS L. CLIMACO and LYDIA R. CLIMACO, SPOUSES JOSE L. CLIMACO, JR. and BLANQUITA C. CLIMACO, and CONSUELO L. CLIMACO,respondents.D E C I S I O NBELLOSILLO,J.:A 5,354-square meter parcel of land is at the epicentrum of the controversy.Originally titled in thenameofMamertoIngjug,the property is located in the former Municipality of Opon, Province of Cebu (now Marigondon, Lapu-Lapu City).The claimants are the descendants of Mamerto Ingjug on one hand who allege that they have been deprived of their successional rights through fraud and misrepresentation, and a group of vendees on the other hand claiming to have acquired the property for value and in good faith.The case filed by the descendants of Mamerto Ingjug was dismissed by the trial court on the ground of prescription andlaches.The dismissal was affirmed by the Court of Appeals.The affirmance by the appellate court is now assailed in this petition for review.During the Second World War, or some sixty (60) years ago, Mamerto Ingjug died leaving behind the subject parcel of land covered by Original Certificate of Title No. RO-0376 in his name as owner in fee simple.Upon his death title thereto devolved upon his five (5) children, namely, Romana, Francisco, Francisca, Luisa and Maria, all surnamed Ingjug.On 9 July 1965, or more than two (2) decades later, Luisa, Maria, one Eufemio Ingjug, and Guillerma Ingjug Fuentes-Pagubo, daughter of Francisca, sold the disputed land to herein respondents, the spouses Leon V. Casals and Lilia C. Casals, the spouses Carlos L. Climaco and Lydia R. Climaco, the spouses Jose L. Climaco, Jr. and Blanquita C. Climaco, and Consuelo L. Climaco.The vendors allegedly represented to the vendees that the property was inherited by them from the late Mamerto Ingjug, and that they were his only surviving heirs.The sale was evidenced by aDeed of Sale of Unregistered Land[1]and anExtrajudicial Settlement and Confirmation of Sale[2]executed by the vendors in favor of the vendees.On 10 August 1992, herein petitioners as heirs of Romana Ingjug, namely, Bedesa, Pedro, Rita and Barbara; heirs of Francisco Ingjug, namely, Leonardo, Lilia, Fernanda, Zenaida, Pacita and Antonio; and, heirs of Francisca, namely, Uldarico, and Paulina, challenged respondents' ownership of the property by filing a complaint forPartition,Recovery of Ownership and Possession,Declaration of Nullity: Deed of Sale of Unregistered Land; Extrajudicial Settlement and Confirmation of Sale,[3]against herein respondents.Petitioners alleged that they only discovered in 1990 that the property had already been sold and titled to respondents, and that respondents refused, despite repeated demands, to deliver and return to them their shares in the property.Petitioners also prayed that theDeed of Sale of Unregistered Landas well as theExtrajudicial Settlement and Confirmation of Saleexecuted by Luisa, Maria, Eufemio and Guillerma be nullified to the extent of petitioners' shares in the property.Respondents - the spouses Leon Casals and Lilia Casals, and Consuelo L. Climaco - failed to answer within the reglementary period, hence, on motion of petitioners' counsel, they were declared in default.[4]On the other hand, respondents - the spouses Carlos L. Climaco and Lydia R. Climaco, and the spouses Jose L. Climaco, Jr. and Blanquita C. Climaco - filed a motion to dismiss, instead of an answer, arguing that the complaint failed to state a cause of action and was barred by prescription andlaches.They further averred that the original certificate of title in the name of Mamerto Ingjug was lost during the war, and that they bought the property from the heirs of Mamerto Ingjug pending the reconstitution of the title; that they acquired the property in good faith believing that the vendors were indeed the only surviving heirs of Mamerto Ingjug; that upon the issuance of the reconstituted title the vendors executed the questionedDeed of Extrajudicial Settlement and Confirmation of Salein their favor; and that, on the basis of the deed, the original certificate of title in the name of Mamerto Ingjug was cancelled and Transfer Certificate of Title No. T-1150 was issued in their names.[5]On 24 February 1993 the trial court in dismissing the complaint held[6]-From February 9, 1965 to October 10, 1992 when the instant action was filed in court is 27 years and from February 2, 1967, the time the title was transferred to defendants to October 10, 1992 when plaintiffs initiated the instant case is 25 years. The possession of the property is admitted by the plaintiffs to be with the defendants. If this is so, then the conclusion is inevitable that the property has already been acquired by the defendants by prescription, and the action to recover the same has already been lost x x x xCo-ownership of the lot in question was already repudiated as early as 1965 when Luisa, Maria and Guillerma sold the land claiming they are the only heirs of Mamerto Ingjug, and when the other compulsory heir, Francisco Ingjug confirmed said sale in 1967. From that date, plaintiffs had only 10 years to initiate an action for reconveyance which they failed to do. Accordingly, an action for reconveyance based on implied or constructive trust prescribes in ten years counted from the date when an adverse title is asserted by the possessor of the property x x x moreover, "the rule in this jurisdiction is that an action to enforce an implied trust may be barred not only by prescription but also bylachesin which case repudiation is not even required."On 26 February 1998 the Court of Appeals, as stated earlier, affirmed the Decision of the trial court.[7]Petitioners now seek a review of the appellate court's Decision contending that:(a) the litigated property was originally registered under the Torrens system and, as such, it cannot be acquired by prescription or adverse possession; (b) prescription is unavailing not only against the registered owner but also against his hereditary successors because the latter merely step into the shoes of the former by operation of law and are merely the continuation of the personality of their predecessors in interest; (c) the right to recover possession of a registered property is equally imprescriptible; (d)lachestoo may not be considered a valid defense for claiming ownership of land registered under the Torrens system.When prescription would not lie, neither wouldlachesbe available; (e) respondents are not in possession of the land in the concept of owners, but are merely holding the same in trust for petitioners; (f) neither could possession of respondents be characterized as adverse possession in good faith; (g) Francisco Ingjug could not have been a party to theDeed of Extrajudicial Settlement and Confirmation of Salein 1967 because he died on 17 August 1963; and, (h) Eufemio Ingjug, one of the signatories to the Deed of Sale, was not the son of Mamerto Ingjug but only a son-in-law, he being a Tiro and husband of Ramona Ingjug-Tiro.[8]The pivotal issue is whether petitioners' right to institute a complaint for partition and reconveyance is effectively barred by prescription andlaches.We grant the petition.It should be noted that the trial court dismissed the complaint based on prescription andlachesalone without taking into consideration the other issues raised by petitioners concerning the validity of the contract and its bearing on the matter of prescription.The Court of Appeals likewise skirted the other issues and sustained the trial court's theory that herein petitioners' cause of action - which is essentially one for reconveyance based upon a constructive or implied trust resulting from fraud - had been effectively lost through prescription andlaches.A cursory reading of the complaint, however, reveals that the action filed by petitioners was for partition, recovery of ownership and possession,declaration of nullity of a deed of sale of unregistered land and extrajudicial settlement and confirmation of sale.Petitioners' causes of action are premised on their claim that:(a) theDeed of Sale of Unregistered Landis void and of no effect since their respective shares in the inheritance were included in the sale without their knowledge and consent, and one of the vendor-signatories therein, Eufemio Ingjug (Eufemio Tiro,[9]husband of Romana Ingjug[10]), was not even a direct and compulsory heir of the decedent; and (b) theExtrajudicial Settlement and Confirmation of Saleis simulated and therefore null and voidab initio, as it was purportedly executed in1967by, among others, Eufemio Tiro who was not an heir, and by Francisco Ingjug who died in1963.Also, the prayer in the same complaint expressly asks that all those transactions be declared null and void.In other words, it is the nullity of the deeds of sale and the extrajudicial settlement and confirmation of the sale which is the basic hypothesis upon which the instant civil action rests.Thus, it appears that we are dealing here not with simple voidable contracts tainted with fraud, but with contracts that are altogether null and voidab initio.Assuming petitioners' allegations to be true, without however prejudging the validity or invalidity of the contract of sale and the extrajudicial settlement which will ultimately be determined by the trial court, Romana, Francisco, Francisca, Luisa and Maria, succeeded to the possession and ownership of the land from the time of the death of their father Mamerto Ingjug.The property should have been divided equally among them, but prior to its partition these heirs of Mamerto Ingjug owned the property in common.It follows then that Luisa, Maria and Guillerma (daughter of Francisca) and Eufemio Ingjug could not, by themselves, validly dispose of the entire litigated property to the exclusion of and without the knowledge and consent of the other heirs since Luisa, Maria, Guillerma and Eufemio are not the exclusive owners thereof.More so in the case of Eufemio, who is claimed to be a total stranger to and therefore has no legal interest whatsoever in the inherited property not being a direct heir.Article 1458 of the New Civil Code provides:"By the contract of sale one of the contracting parties obligates himself totransfer the ownership of and to delivera determinate thing, and the other to pay therefor a price certain in money or its equivalent."It is essential that the vendors be the owners of the property sold otherwise they cannot dispose that which does not belong to them.As the Romans put it:"Nemo dat quod non habet."No one can give more than what he has.The sale of the realty to respondents is null and void insofar as it prejudiced petitioners' interests and participation therein.At best, only the ownership of the shares of Luisa, Maria and Guillerma in the disputed property could have been transferred to respondents.Consequently, respondents could not have acquired ownership over the land to the extent of the shares of petitioners.The issuance of a certificate of title in their favor could not vest upon them ownership of the entire property; neither could it validate the purchase thereof which is null and void.Registration does not vest title; it is merely the evidence of such title.Our land registration laws do not give the holder any better title than what he actually has.[11]Being null and void, the sale to respondents of petitioners' shares produced no legal effects whatsoever.Similarly, the claim that Francisco Ingjug died in 1963 but appeared to be a party to theExtrajudicial Settlement and Confirmation of Saleexecuted in 1967 would be fatal to the validity of the contract, if proved by clear and convincing evidence.Contracting parties must be juristic entities at the time of the consummation of the contract.Stated otherwise, to form a valid and legal agreement it is necessary that there be a party capable of contracting and a party capable of being contracted with.Hence, if any one party to a supposed contract was already dead at the time of its execution, such contract is undoubtedly simulated and false and therefore null and void by reason of its having been made after the death of the party who appears as one of the contracting parties therein.[12]The death of a person terminates contractual capacity.In actions for reconveyance of property predicated on the fact that the conveyance complained of was null and voidab initio, a claim of prescription of action would be unavailing.[13]The action or defense for the declaration of the inexistence of a contract does not prescribe."[14]Neither couldlachesbe invoked in the case at bar.Lachesis a doctrine in equity and our courts are basically courts of law and not courts of equity.Equity, which has been aptly described as "justice outside legality," should be applied only in the absence of, and never against, statutory law.Aequetas nunguam contravenit legis.The positive mandate of Art. 1410 of the New Civil Code conferring imprescriptibility to actions for declaration of the inexistence of a contract should pre-empt and prevail over all abstract arguments based only on equity.Certainly,lachescannot be set up to resist the enforcement of an imprescriptible legal right, and petitioners can validly vindicate their inheritance despite the lapse of time.Considering the foregoing, the trial court judge should not have summarily dismissed petitioners' complaint; instead, he should have required the defendants to answer the complaint, deferred action on the special defenses of prescription andlaches, and ordered the parties to proceed with the trial on the merits.Verily, the dismissal of the case on the ground of prescription andlacheswas premature.The summary or outright dismissal of an action is not proper where there are factual matters in dispute which need presentation and appreciation of evidence.Here, petitioners still had to prove the following:first, that they were the coheirs and co-owners of the inherited property;second, that their coheirs-co-owners sold their hereditary rights thereto without their knowledge and consent;third, that forgery, fraud and deceit were committed in the execution of theDeed of Extrajudicial Settlementand Confirmation of Salesince Francisco Ingjug who allegedly executed the deed in 1967 actually died in 1963, hence, the thumbprint found in the document could not be his;fourth, that Eufemio Ingjug who signed the deed of sale is not the son of Mamerto Ingjug, and therefore not an heir entitled to participate in the disposition of the inheritance;fifth, that respondents have not paid the taxes since the execution of the sale in 1965 until the present date and the land in question is still declared for taxation purposes in the name of Mamerto Ingjug, the original registered owner, as of 1998;sixth, that respondents had not taken possession of the land subject of the complaint nor introduced any improvement thereon; andseventh, that respondents are not innocent purchasers for value.Without any evidence on record relating to these points, this Court cannot affix itsimprimaturto the peremptory dismissal of the complaint in light of the pleas of petitioners for their just share in the inheritance and for the partition of their common predecessor's estate.Indeed, it is but fair and just that, without prejudging the issues, the parties be allowed to substantiate their respective claims and defenses in a full-blown trial, and secure a ruling on all the issues presented in their respective pleadings.WHEREFORE, the petition is GRANTED.The assailed Decision of the Court of Appeals isREVERSED and SET ASIDE, and the case is REMANDED to the RTC-Br. 27, Lapu-Lapu City, for trial and judgment on the merits.No costs.SO ORDERED.

FIRST DIVISION[G.R. No. 136054.September 5, 2001]HEIRS OF SEVERINA SAN MIGUEL, namely: MAGNO LAPINA, PACENCIA LAPINA, MARCELO LAPINA, SEVERINO LAPINA, ROSARIO LAPINA, FRANCISCO LAPINA, CELIA LAPINA assisted by husband RODOLFO TOLEDO,petitioners,vs. THE HONORABLE COURT OF APPEALS, DOMINADOR SAN MIGUEL, GUILLERMO F. SAN MIGUEL, PACIENCIA F. SAN MIGUEL, CELESTINO, assisted by husband, ANTERO CELESTINO, represented by their Attorney-in-Fact ENRICO CELESTINO, AUGUSTO SAN MIGUEL, ANTONIO SAN MIGUEL, RODOLFO SAN MIGUEL, CONRADO SAN MIGUEL and LUCITA SAN MIGUEL,respondents.D E C I S I O NPARDO,J.:The CaseThe case is a petition for review oncertiorari[1]of the decision of the Court of Appeals,[2]affirming that of the Regional Trial Court, Cavite, Branch 19, Bacoor[3]ordering petitioners, Heirs of Severina San Miguel (hereafter, Severinas heirs) to surrender to respondents Dominador San Miguel, et al. (hereafter, Dominador, et al.), Transfer Certificate of Title No. 223511 and further directing Severinas heirs to pay for the capital gains and related expenses for the transfer of the two (2) lots to Dominador, et al.The FactsThis case involves a parcel of land originally claimed by Severina San Miguel (petitioners predecessor-in-interest, hereafter, Severina). The land is situated in Panapan, Bacoor, Cavite with an area of six hundred thirty two square meters (632 sq. m.), more or less.Without Severinas knowledge, Dominador managed to cause the subdivision of the land into three (3) lots, to wit:[4]LRC Psu 1312- with an area of 108 square meters;LRC Psu -1313- Lot 1, with an area of 299 square meters;LRC Psu -1313- Lot 2, with an area of 225 square meters.On September 25, 1974, Dominador, et al. filed a petition with the Court of First Instance, Cavite, as a land registration court, to issue title over Lots 1 and 2 of LRC Psu-1313, in their names.[5]On July 19, 1977, the Land Registration Commission (hereafter LRC) rendered a decision directing the issuance of Original Certificate of Title No. 0-1816 in the names of Dominador, et al.On or about August 22, 1978, Severina filed with the Court of First Instance of Cavite a petition for review of the decision alleging that the land registration proceedings were fraudulently concealed by Dominador from her.[6]On December 27, 1982, the court resolved to set aside the decision of July 19, 1977, and declared Original Certificate of Title No. 0-1816 as null and void.On July 13, 1987, the Register of Deeds of Cavite issued Transfer Certificate of Title No. T-223511 in the names of Severina and her heirs.[7]On February 15, 1990, the trial court issued an order in favor of Severinas heirs, to wit:[8]WHEREFORE, as prayed for, let the writ of possession previously issued in favor of petitioner Severina San Miguel be implemented.However, the writ was returned unsatisfied.On November 28, 1991, the trial court ordered:[9]WHEREFORE, as prayed for, let an alias writ of demolition be issued in favor of petitioners, Severina San Miguel.Again, the writ was not satisfied.On August 6, 1993, Severinas heirs, decided not to pursue the writs of possession and demolition and entered into a compromise with Dominador, et al. According to the compromise, Severinas heirs were to sell the subject lots[10]to Dominador, et al. for one and a half million pesos (P1.5 M) with the delivery of Transfer Certificate of Title No. T-223511 (hereafter, the certificate of title) conditioned upon the purchase of another lot[11]which was not yet titled at an additional sum of three hundred thousand pesos (P300,000.00).The salient features of the compromise (hereafter kasunduan) are:[12]5.Na angLot 1atLot 2, planoLRCPsu-1313na binabanggit sa itaas na ipinagkasundo ng mga tagapagmana ni Severina San Miguel na kilala sa kasulatang ito sa taguringLAPINA(representing Severinas heirs), na ilipat sa pangalan ninaSAN MIGUEL(representing Dominadors heirs) alang alang sa halagang ISANG MILYON AT LIMANG DAANG LIBONG PISO(P1,500,000.00)na babayaran ninaSAN MIGUELkinaLAPINA;6.Na siLAPINAatSAN MIGUELay nagkakasundo na ang lote na sakop ng planoLRC- Psu-1312, may sukat na 108 metro cuadrado ay ipagbibili na rin kinaSAN MIGUELsa halagang TATLONG DAANG LIBONG PISO (P300,000.00);7.Na kinikilala niSAN MIGUELna ang tunay na may-ari ng nasabing lote na sakop ng planoLRC Psu-1312ay sinaLAPINAat sila na ang magpapatitulo nito at sinaLAPINAay walang pananagutan sa pagpapatitulo nito at sa paghahabol ng sino mang tao;8.Na ang nasabing halaga na TATLONG DAANG LIBONG PISO(P300,000.00)ay babayaran ninaSAN MIGUELkinaLAPINAsa loob ng dalawang(2)buwan mula sa petsa ng kasulatang ito at kung hindi mabayaran ninaSAN MIGUELang nasabing halaga sa takdang panahon ay mawawalan ng kabuluhan ang kasulatang ito;9.Na sinaLAPINAatSAN MIGUELay nagkakadunso (sic) rin na ang owners copy ngTransfer Certificate of Title No. T-223511na sumasakop saLots 1at2, planoLRC Psu-1313ay ilalagay lamang ninaLAPINAkinaSAN MIGUELpagkatapos mabayaran ang nabanggit na P300,000.00On the same day, on August 6, 1993, pursuant to thekasunduan,Severinas heirs and Dominador, et al. executed a deed of sale designated as kasulatan sa bilihan ng lupa.[13]On November 16, 1993, Dominador, et al. filed with the trial court,[14]Branch 19, Bacoor, Cavite, a motion praying that Severinas heirs deliver the owners copy of the certificate of title to them.[15]In time, Severinas heirs opposed the motion stressing that under thekasunduan, the certificate of title would only be surrendered upon Dominador, et al.s payment of the amount of three hundred thousand pesos (P300,000.00) within two months from August 6, 1993, which was not complied with.[16]Dominador, et al. admitted non-payment of three hundred thousand pesos (P300,000.00) forthe reason that Severinas heirs have not presented any proof of ownership over the untitled parcel of land covered by LRC- Psu-1312.Apparently, the parcel of land is declared in the name of a third party, a certain Emiliano Eugenio.[17]Dominador, et al. prayed that compliance with thekasunduanbe deferred until such time that Severinas heirs could produce proof of ownership over the parcel of land.[18]Severinas heirs countered that the arguments of Dominador, et al. were untenable in light of the provision in thekasunduanwhere Dominador, et al. admitted their ownership over the parcel of land, hence dispensing with the requirement that they produce actual proof of title over it.[19]Specifically, they called the trial courts attention to the following statement in thekasunduan:[20]7.Na kinikilala niSAN MIGUELna ang tunay na may-ari ng nasabing lote na sakop ng planoLRC Psu-1312ay sinaLAPINAat sila na ang magpapatitulo nito at sinaLAPINAay walang pananagutan sa pagpapatitulo nito at sa paghahabol ng sino mang tao;According to Severinas heirs, since Dominador, et al. have not paid the amount of three hundred thousand pesos (P300,000.00), then they were justified in withholding release of the certificate of title.[21]The trial court conducted no hearing and then rendered judgment based on the pleadings and memoranda submitted by the parties.The Trial Courts RulingOn June 27, 1994, the trial court issued an order to wit:[22]WHEREFORE, finding the Motion to Order to be impressed with merit, the defendants-oppositors-vendors Heirs of Severina San Miguel are hereby ordered to surrender to the movant-plaintiffs-vendees-Heirs of Dominador San Miguel the Transfer Certificates of Title No. 223511 and for herein defendants-oppositors-vendors to pay for the capital gains and related expenses for the transfer of the two lots subject of the sale to herein movants-plaintiffs-vendees-Heirs of Dominador San Miguel.SO ORDERED.On July 25, 1994, Severinas heirs filed with the trial court a motion for reconsideration of the afore-quoted order.[23]On January 23, 1995, the trial court denied the motion for reconsideration for lack of merit and further ordered:[24]xxx...Considering that the Lots 1 and 2 covered by TCT No. T-223511 had already been paid since August 6, 1993 by the plaintiffs-vendees Dominador San Miguel, et al. (Vide, Kasulatan sa Bilihan ng Lupa, Rollo, pp. 174-176), herein defendants-vendors-Heirs of Severina San Miguel is hereby ordered (sic) to deliver the aforesaid title to the former (Dominador San Miguel, et al.) within thirty (30) days from receipt of this order.In case the defendants-vendors-Heirs of Severina San Miguel fail and refuse to do the same, then the Register of Deeds of Cavite is ordered to immediately cancel TCT No. T-223511 in the name of Severina San Miguel and issue another one in the name of plaintiffs Dominador San Miguel, et al.Also send a copy of this Order to the Register of Deeds of the Province of Cavite, Trece Martires City, for her information and guidance.SO ORDERED.On February 7, 1995, Severinas heirs appealed the orders to the Court of Appeals.[25]The Court of Appeals RulingOn June 29, 1998, the Court of Appeals promulgated a decision denying the appeal, and affirming the decision of the trial court.The Court of Appeals added that the other matters raised in the petition were extraneous to thekasunduan.[26]The Court of Appeals upheld the validity of the contract of sale and sustained the parties freedom to contract.The Court of Appeals decided, thus:[27]WHEREFORE, the decision appealed from is hereby AFFIRMED.SO ORDERED.On August 4, 1998, Severinas heirs filed with the Court of Appeals a motion for reconsideration of the above decision.[28]On October 14, 1998, the Court of Appeals denied the motion for reconsideration for lack of merit.[29]Hence, this appeal.[30]The IssuesSeverinas heirs submit that the Court of Appeals erred and committed grave abuse of discretion:First, when it held that thekasunduanhad no effect on the kasulatan sa bilihan ng lupa.Second, when it ordered them to surrender the certificate of title to Dominador, et al., despite non-compliance with their prior obligations stipulated under thekasunduan.Third, when it did not find that thekasunduanwas null and void for having been entered into by Dominador, et al. fraudulently and in bad faith.[31]We find the above issues raised by Severinas heirs to be factual.The question whether the prerequisites to justify release of the certificate of title to Dominador, et al. have been complied with is a question of fact.[32]However, we sift through the arguments and identify the main legal issue, which is whether Dominador, et al. may be compelled to pay the three hundred thousand pesos (P300,000.00) as agreed upon in the kasunduan (as a pre-requisite for the release of the certificate of title), despite Severinas heirs lack of evidence of ownership over the parcel of land covered by LRC Psu-1312.The Courts RulingWe resolve the issue in the negative, and find the petition without merit.Severinas heirs anchor their claim on thekasunduan, stressing on their freedom to stipulate and the binding effect of contracts.This argument is misplaced.[33]The Civil Codeprovides:Article 1306.The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenientprovided they are not contrary to law, morals, good customs, public order or public policy (underscoring ours).It is basic that the law is deemed written into every contract.[34]Although a contract is the law between the parties, the provisions of positive law which regulate contracts are deemed written therein and shall limit and govern the relations between the parties.[35]The Civil Code provisions on sales state:Article 1458.By the contract of sale one of the contracting parties obligates himselfto transfer the ownershipof and to deliver a determinate thing, and the other to pay a price certain in money or its equivalent. xxxArticle 1459.The thing must be licit and thevendor must have a right to transfer the ownershipthereof at the time it is delivered.Article 1495.Thevendor is bound to transfer the ownershipof and deliver, as well as warrant the thing which is the object of sale (underscoring ours).True, in contracts of sale, the vendor need not possess title to the thing sold at the perfection of the contract.[36]However, the vendor must possess title and must be able to transfer title at the time of delivery.In a contract of sale, title only passes to the vendee upon full payment of the stipulated consideration, or upon delivery of the thing sold.[37]Under the facts of the case, Severinas heirs are not in a position to transfer title.Without passing on the question of who actually owned the land covered by LRC Psu -1312, we note that there is no proof of ownership in favor of Severinas heirs.In fact, it is a certain Emiliano Eugenio, who holds a tax declaration over the said land in his name.[38]Though tax declarations do not prove ownership of the property of the declarant, tax declarations and receipts can be strong evidence of ownership of land when accompanied by possession for a period sufficient for prescription.[39]Severinas heirs have nothing to counter this document.Therefore, to insist that Dominador, et al. pay the price under such circumstances would result in Severinas heirs unjust enrichment.[40]Basic is the principle in law, Niguno non deueenriquecerse tortizamente condano de otro.[41]The essence of a sale is the transfer of title or an agreement to transfer it for a price actually paid or promised.[42]InNool v. Court of Appeals,[43]we held that if the sellers cannot deliver the object of the sale to the buyers, such contract may be deemed to be inoperative.By analogy, such a contract may fall under Article 1405, No. 5 of the Civil Code, to wit:Article 1405. The following contracts are inexistent and void from the beginning: xxx(5)Those which contemplate an impossible service.Severinas heirs insist that delivery of the certificate of title is predicated on a condition - payment of three hundred thousand pesos (P300,000.00) to cover the sale of Lot 3 of LRO Psu 1312.We find this argument not meritorious.The condition cannot be honored for reasons afore-discussed.Article 1183 of the Civil Code provides that,Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them.If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid. xxxHence, the non-payment of the three hundred thousand pesos (P300,000.00) is not a valid justification for refusal to deliver the certificate of title.Besides, we note that the certificate of title covers Lots 1 and 2 of LRC Psu-1313, which were fully paid for by Dominador, et al.Therefore, Severinas heirs are bound to deliver the certificate of title covering the lots.The FalloWHEREFORE, the petition is DENIED and the decision of the Court of Appeals in CA-G. R. CV No. 48430 is AFFIRMEDin toto. No costs. SO ORDERED.

Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. L-17527 April 30, 1963SUN BROTHERS APPLIANCES, INC.,plaintiff-appellee,vs. DAMASO P. PEREZ,defendant-appellant.Dominador A. Alafriz for plaintiff-appellee.Robert P. Halili & Associates for defendant-appellant.LABRADOR,J.:This is an action brought by the plaintiff to recover from defendant the sum of P1,404.00, the price of one Admiral Air Conditioner, Slim Style, Model 100-23-1 H.P., Serial No. 2978828, delivered to the defendant by the plaintiff under a conditional sale agreement entered into by and between them on December 6, 1958, in the City of Manila, plus stipulated interest of 12% from January 6, 1959 until the same is fully paid, together with P200 as attorney's fees, and costs. Defendant answered that the air-conditioner in question was delivered to him installed in the office of the defendant located at Gardiner street, Lucena, Quezon on December 14, 1959 but that said air-conditioner was totally destroyed by fire which occured in the morning of December 28, 1958 at 2 o'clock. Defendant further claimed that the machine was destroyed by force majeure, not by the defendant's fault and/or negligence and, therefore, he is not liable under the conditional sale, Annex "A", which the parties, plaintiff and defendant, had executed.At the trial of the case the parties entered into a stipulation of facts, the most important provision of which are as follows:1. That defendant admits that on December 6, 1958, he entered into a Conditional Sale Agreement with the plaintiff, copy of which contract is attached to the complaint as Annex "A";2. That pursuant to the terms and conditions provided in the said Conditional Sale Agreement the plaintiff delivered to the defendant (1) Admiral Air Conditioner Slim Style Model 100-23-1 HP, Serial No. 2978828 with the contract price of P1,678.00 and that said Air Conditioner was received by the defendant;3. That defendant made a down payment of P274.00 on December 6, 1958, pursuant to the terms and conditions of the Conditional Sales Agreement; and Air Conditioner was installed by the plaintiff, thru its representative, at Lucena, Quezon;4. That said Air Conditioner was burned on December 27,1958, on or about 2:00 o'clock in the morning, however, defendant will present evidence to show that the Air Conditioner subject of the complaint herein was burned where it was installed by the plaintiff;5. That defendant, after making down payment of P274.00 to the plaintiff, did not pay any of the monthly installments of P78.00 thereafter, leaving a balance of P1,404.00 in favor of the plaintiff;6. That after defendant presents evidence to prove that the Air Conditioner was burned where it was installed by the plaintiff to the satisfaction of this Honorable Court, the parties agree to leave to this Honorable Court the resolution of the issue whether loss by fire extinguishes the obligation of the defendant to pay to the plaintiff the subsequent installments of the initial payment;"The Court of First Instance before which the action was brought rendered judgment condemning the defendant to pay the plaintiff the amount demanded in the complaint, including interest and attorney's fees. The defendant has appealed the case directly to us as involving only a question of law.The conditional sale executed by the plaintiff and defendant contained the following stipulation:"2. Title to said property shall vest in the Buyer only upon full payment of the entire account as herein provided, and only upon complete performance of all the other conditions herein specified:"3. The Buyer shall keep said property in good condition and properly protected against the elements, at his/its address above-stated, and undertakes that if said property or any part thereof be lost, damaged, or destroyed for any causes, he shall suffer such loss, or repair such damage, it being distinctly understood and agreed that said property remains at Buyer's risk after delivery;"The Court below declared that as the buyer would be liable in case of loss for any cause, such buyer assumed liability even in case of loss by fortuitous event; so it rendered judgment declaring defendant liable for the sun demanded together with interest and attorney's fees.Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts.1wph1.tIn this Court on appeal defendant-appellant argues that inasmuch as the title to the property sold shall vest in the buyer only upon full payment of the price, the loss of the vendor; that the phrase "for any cause" used in paragraph 2 of the agreement may not be interpreted to include a fortuitous event absolutely beyond the control of the appellant; and that although Article 1174 of the new Civil Code recognizes the exception on fortuitous event when the parties to a contract expressly so stipulate, the phrase "for any cause" used in the contract did not indicate any intention of the parties that the loss of the unit due to fortuitous event is to be included within the responsibility of the vendor.In answer to the arguments above set forth the appellee argues that the stipulation in the contract of sale whereby the buyer shall be liable for any loss, damage or destruction for any cause, is not contrary to law, morals or public policy and is specifically authorized to be stipulated upon between the parties by Article 1174 of the Civil Code; that the risk of loss was expressly