[G.R. No. L-27289. April 15, 1985.]JUANAGUINALDO, Substituted by MARINA and PRIMITIVOAGUINALDO,plaintiffs-appellants,vs.JOSEESTEBANand FRANCISCA SARMIENTO,defendants-appellees.Crisostomo M. Dioknofor plaintiff-appellants.Andres Francofor defendants-appellees.SYLLABUS1.CIVIL LAW; CONTRACTS; DEED OF TRANSFER; LACK OF CONSIDERATION; RENDERS DOCUMENT NULL AND VOID; CASE AT BAR. It is significant to note that herein plaintiff-appellant was not even a witness in the document when his father who is of low intelligence, illiterate and could not even sign his name, affixed his thumbmark in the document in question. It would appear that the execution of the contract was made behind his back and/or without giving notice to him. Stated differently, if the transaction was on the level, why was not plaintiff-appellant asked to sign as a witness to the document. It may be true that the contract was read to the old man but it is doubtful if he understood the meaning of its contents. The contract was so written that anyone could believe he was only giving his property by way of mortgage, not as a sale. For instance, in paragraph 2 thereof, it reads ". . . ay isinasangla at patuloyan ipaaari ko sa nasabing magasawa ang lupang nabanggit ko sa itaas, . . ." In some Tagalog provinces the word "Sangla" means "Bilihan Mabibiling Muli" or "Pacto de Retro." By this contract, the vendee-a-retro takes possession of the property as owner until the same is repurchased or redeemed. On the other hand, mortgage is understood as "Prenda." In the case at bar, defendants-appellees took possession of the property on March 26, 1955 when they started giving JoseAguinaldothe fifty centavos (P0.50) a day. It would appear then that the money which he has been receiving from the Estebans come from his own property. In effect, there was no consideration for the transfer of the property - be it sale, mortgage or Pacto Comisario.D E C I S I O NRELOVA,Jp:In Civil Case No. 6977, the Court of First Instance of Rizal declared the contract, entitled: "Sanglaan ng Isang Lupa na Patuluyan Ipaaari," valid and binding contract of sale and dismissed the complaint as well as the counterclaim with costs against the plaintiff. From said judgment of the lower court, appeal was taken to this Court, "the same involving, as it does, a question of law." (p. 25, Rollo)prLLPlaintiff JuanAguinaldoin his complaint alleged, among others, that on June 23, 1958, defendants, through fraud, deceit and misrepresentations and exercising undue pressure, influence and advantage, procured the thumbmark of JoseAguinaldo, father of plaintiff, to be affixed on subject contract; that defendants caused the cancellation of Tax Declaration No. 4004, Rizal (1948) in the name of JoseAguinaldoand the issuance in lieu thereof of Tax Declaration No. 10725-Rizal in the names of defendant spouses; that the document in question on which JoseAguinaldoaffixed his thumbmark is not true and genuine, as the thumbmark appearing thereon is a forgery; that it contains terms and conditions which partake the nature of "pacto comisario" which render same null and void; that it does not fix a period for the payment of the loan nor does it state the duration of the mortgage; that plaintiff is the sole successor-in-interest and legal heir of JoseAguinaldowho died intestate in October 1960; that defendants having no right to win and possess the property in question are withholding the possession thereof from plaintiff and consequently deprived plaintiff of the fruits of said property; and that by reason of the willful and malevolent acts of defendants, plaintiff suffered moral and actual damages in the amount of P4,000.00.In their answer, defendants claim absolute ownership of subject property upon the death of JoseAguinaldoin October 1960 on the theory that the document in controversy is one of sale and not one of mortgage.The parties, through their respective counsels, agreed to submit the case for decision solely on whether the contract in question, Annex "A" of the complaint, is one of mortgage or of sale.When plaintiff JuanAguinaldodied intestate on August 6, 1966, his heirs, namely: Marina and Primitivo, both surnamedAguinaldo, petitioned the trial court that they be substituted as party plaintiffs in lieu of their deceased father.LibLexIt is the position of plaintiffs-appellants that the document in question, Annex "A" of the complaint, is null and void because it contains stipulations which partake of the nature of "pacto comisario." On the other hand, the defendants contend that the contract is a valid sale and, as such, it passed the title to them.

Hereunder is the contract in question:"SANGLAAN NG ISANG LUPA-CANAVERAL NA PATULUYAN IPAAARI.HAYAG SA SINO MAN MAKAKABASA:"Na, ako JOSEAGUINALDO, Pilipino, balo, may karampatan gulang, tubo at naninirahan sa Bo. Bambang, Tagig, Rizal, Kapuluan Pilipinas, sa pamamagitan nito ayISINASAYSAY KO AT PINAGTITIBAY:"1.Na, sarili at tunay kong pagaari dahil sa ipinagkaloob sa akin ng aking amain Martin Concepcion (patay) ang isang parcelang lupa-canaveral, at ang lupang ito ay napagkikilala at naliligiran ng mga pagaaring lupa ng mga kahangganan kagaya ng mga sumusunod:'Isang parcelang lupa-canaveral na nasa pook ng Bo. Bambang, Tagig, Rizal, at siyang lupang nakatala sa Tax Declaration No. 4004-Rizal (1948), sa Tanggapan ng Tasador ng lupa sa lalawigan ng Rizal, Pasig, Rizal, at valor ameliarado ng P70.00 at napaloob sa mga pagaaring lupa ng mga kahangganan kagaya ng mga sumusunod: Sa Norte, Antonio Silvestre at Pedro Sarmiento; sa Este, Domingo Luga; sa Sur, Dionisio Dionisio at Pedro Sarmiento, at sa Weste, Tomas Cruz'"2.Na, alang-alang sa halagang LIMANG DAAN AT APATNAPUNG PISO (P540.00), salaping Pilipino na sa kasalukuyan ay ating ginagamit, ay natanggap ko na, sa hindi biglaan kung hindi LIMANGPUNG SENTIMOS (P0.50) lamang araw-araw magbuhat pa nuong Marzo 26, 1955, at ang kabuuang halaga ng halagang nabanggit sa itaas nito, sa oras na ito, ay kusang loob kong tinanggap sa magasawang JOSEESTEBANat FRANCISCA SARMIENTO, mga Pilipino, may karampatan gulang, naninirahan at may padalahan sulat sa Bo. Bambang, Tagig, Rizal, ay ISINASANGLA AT PATULOYAN IPAARI KO sa nasabing magasawa ang lupang nabanggit ko sa Itaas, sa aming mga kasunduan kagaya ng mga sumusunod:"NA AKO, JOSEAGUINALDOAY PAKAKANIN HABANG NABUBUHAY NG MAGASAWANG JOSEESTEBANAT FRANCISCA SARMIENTO, O NG KANILANG KAHALILI AT TAGAPAGMANA, AT BILANG KABAYARAN NAMAN SA HALAGANG LIMANG DAAN AT APATNAPUNG PISO (P540.00) AT PAGPAPAKAIN SA AKIN NG MAGASAWANG JOSEESTEBANAT FRANCISCA SARMIENTO, ORAS NA AKO AY MAMATAY SILA (JOSEESTEBANAT FRANCISCA SARMIENTO) NA ANG LUBOSAN MAGMAMAYARI NG AKING LUPANG ISINANGLANG ITO SA KANILA, SAPAGKAT ANG LAHAT NG AKING KARAPATAN SA LUPA, NGAYON PA AY IPINAGKAKALOOB KO SA KANILA SA ILALIM NG KASUNDUAN.'"3.Na, ang lupa-canaveral na isinasangla ko sa pamamagitan ng kasulatan ito na ipaaring patuluyan ay pinamomosiyonan ng mag-asawang JoseEstebanat Francisca Sarmiento, nuong pang Marzo 26, 1955."4.Na, ang lupang akin binabanggit sa kasulatan ito, ay hindi ko ipinagkakautang sa kanino man tao, na maliban sa magasawang JoseEstebanat Francisca Sarmiento."5.Na, ang lupa kong ito na siyang nakatala sa Tax Declaration No. 4004-Rizal (1948), ay hindi nakatala sa bisa ng Batas Blg. 496 o maging sa Hipotecaria Espaola, at napagkasunduan ang kasulatan ito, ay nais ipatala sa bisa ng Batas Blg. 3344, at sinusugan."SA KATUNAYAN NG LAHAT KONG IPINAHAYAG SA DOKUMENTONG ITO, ay inilagda ko ang aking pangalan at apelyedo dito sa Lunsod ng Maynila, Pilipinas, ngayong ika _____ ng Hunyo 1958, sa harap ng dalawang saksi.(Thumbmark)JOSEAGUINALDONagsanglaSUMASANGAYON SA MGA ALITUNTUNIN:(Sgd.) JOSEESTEBANPinagsanglaan(Sgd.) FRANCISCA SARMIENTOPinagsanglaanMGA SAKSI:(Sgd.) Illegible(Sgd.) Eugenia S. Relon.ACKNOWLEDGMENT"(pp. 7-10, Record on Appeal)There is merit in the appeal.On the issue as to whether or not the subject contract is one of sale or of mortgage, an inquiry into the surrounding facts would disclose the intention of the parties and thereby determine the truth of plaintiff-appellant's allegation that his father, JoseAguinaldo, was misled into affixing his thumbmark on the said contract.llcdPlaintiff-appellant, JuanAguinaldo, is the son of Jose and it is indeed intriguing why defendants-appellees, who are not related at all to the old man, would give him fifty centavos (P0.50) everyday beginning May 26, 1955. The contract in question was executed in June 1958, or after three (3) years from the time the daily amount of half-a-peso was given the old man. Thereafter, the defendants-appellees saw to it that the recipient of the money would execute the contract, entitled: Sanglaan ng isang lupang-canaveral na Patuluyang Ipaaari."It is significant to note that herein plaintiff-appellant was not even a witness in the document when his father who is of low intelligence, illiterate and could not even sign his name, affixed his thumbmark in the document in question. It would appear that the execution of the contract was made behind his back and/or without giving notice to him. Stated differently, if the transaction was on the level, why was not plaintiff-appellant asked to sign as a witness to the document. It may be true that the contract was read to the old man but it is doubtful if he understood the meaning of its contents. The contract was so written that anyone could believe he was only giving his property by way of mortgage, not as a sale. For instance, in paragraph 2 thereof, it reads ". . . ay isinasangla at patuloyan ipaaari ko sa nasabing magasawa ang lupang nabanggit ko sa itaas, . . ." In some Tagalog provinces the word "Sangla" means "Bilihan Mabibiling Muli" or "Pacto de Retro." By this contract, the vendee-a-retro takes possession of the property as owner until the same is repurchased or redeemed. On the other hand, mortgage is understood as "Prenda."In the case at bar, defendants-appellees took possession of the property on March 26, 1955 when they started giving JoseAguinaldothe fifty centavos (P0.50) a day. It would appear then that the money which he has been receiving from the Estebans come from his own property. In effect, there was no consideration for the transfer of the property - be it sale, mortgage or Pacto Comisario.WHEREFORE, the decision of the trial court, dated August 16, 1966, is REVERSED and the contract "Sanglaan ng Isang Lupa-Canaveral na Patuluyan Ipaaari" is declared null and void, and the deceased plaintiff JuanAguinaldois declared as the true and lawful owner of subject property.Further, defendants-appellees are hereby ordered to transfer and deliver the possession of subject property to the said deceased plaintiff JuanAguinaldo's heirs, MarinaAguinaldoand PrimitivoAguinaldo, who substituted him as plaintiffs in this case and/or their respective heirs and successors; and the Provincial Assessor of Rizal is directed to cancel Tax Declaration No. 10725 (Rizal) in the name of defendants-appellees, JoseEstebanand Francisca Sarmiento, and in lieu thereof issue another in the name of the deceased plaintiff JuanAguinaldo's heirs, MarinaAguinaldoand Primitivo Aguinaldo.LibLexSO ORDERED.Teehankee, Plana, Gutierrez, Jr., De la FuenteandAlampay, JJ.,concur.Melencio-Herrera, J.,took no part.|||(Aguinaldo v. Esteban, G.R. No. L-27289, [April 15, 1985], 220 PHIL 319-325)

[G.R. No. 156437. March 1, 2004.]NATIONALHOUSINGAUTHORITY,petitioner,vs.GRACEBAPTISTCHURCHand the COURT OF APPEALS,respondents.YNARES-SANTIAGO,Jp:This is a petition for review under Rule 45 of the Rules of Court, seeking to reverse the Decision of the Court of Appeals dated February 26, 2001,1and its Resolution dated November 8, 2002,2which modified the decision of the Regional Trial Court of Quezon City, Branch 90, dated February 25, 1997.3On June 13, 1986, respondentGraceBaptistChurch(hereinafter, theChurch) wrote a letter to petitionerNationalHousingAuthority(NHA), manifesting its interest in acquiring Lots 4 and 17 of the General Mariano Alvarez Resettlement Project in Cavite.4In its letter-reply dated July 9, 1986, petitioner informed respondent:In reference to your request letter dated 13 June 1986, regarding your application for Lots 4 and 17, Block C-3-CL, we are glad to inform you that your request was granted and you may now visit our Project Office at General Mariano Alvarez for processing of your application to purchase said lots.We hereby advise you also that prior to approval of such application and in accordance with our existing policies and guidelines, your other accounts with us shall be maintained in good standing.5Respondent entered into possession of the lots and introduced improvements thereon.6On February 22, 1991, the NHA's Board of Directors passed Resolution No. 2126, approving the sale of the subject lots to respondentChurchat the price of P700.00 per square meter, or a total price of P430,500.00.7TheChurchwas duly informed of this Resolution through a letter sent by the NHA.8On April 8, 1991, theChurchtendered to the NHA a managers check in the amount of P55,350.00, purportedly in full payment of the subject properties.9TheChurchinsisted that this was the price quoted to them by the NHA Field Office, as shown by an unsigned piece of paper with a handwritten computation scribbled thereon.10Petitioner NHA returned the check, stating that the amount was insufficient considering that the price of the properties have changed. TheChurchmade several demands on the NHA to accept their tender of payment, but the latter refused. Thus, theChurchinstituted a complaint for specific performance and damages against the NHA with the Regional Trial Court of Quezon City,11where it was docketed as Civil Case No. Q-91-9148.On February 25, 1997, the trial court rendered its decision, the dispositive portion of which reads:WHEREFORE, premises considered, judgment is hereby rendered as follows:1.Ordering the defendant to reimburse to the plaintiff the amount of P4,290.00 representing the overpayment made for Lots 1, 2, 3, 18, 19 and 20;2.Declaring that there was no perfected contract of sale with respect to Lots 4 and 17 and ordering the plaintiff to return possession of the property to the defendant and to pay the latter reasonable rental for the use of the property at P200.00 per month computed from the time it took possession thereof until finally vacated. Costs against defendant.SO ORDERED.12On appeal, the Court of Appeals, affirmed the trial courts finding that there was indeed no contract of sale between the parties. However, petitioner was ordered to execute the sale of the lots toGraceBaptistChurchat the price of P700.00 per square meter, with 6% interestper annumfrom March 1991. The dispositive portion of the Court of Appeals decision, dated February 26, 2001, reads:WHEREFORE, the appealed Decision is hereby AFFIRMED with the MODIFICATION that defendant-appellee NHA is hereby ordered to sell to plaintiff-appellantGraceBaptistChurchLots 4 and 17 at the price of P700.00 per square meter, or a total cost P430,000.00 with 6% interest per annum from March, 1991 until full payment in cash.SO ORDERED.13The appellate court ruled that the NHA's Resolution No. 2126, which earlier approved the sale of the subject lots toGraceBaptistChurchat the price of P700.00 per square meter, has not been revoked at any time and was therefore still in effect. As a result, the NHA was estopped from fixing a different price for the subject properties. Considering further that theChurchhad been occupying the subject lots and even introduced improvements thereon, the Court of Appeals ruled that, in the interest of equity, it should be allowed to purchase the subject properties.14Petitioner NHA filed a Motion for Reconsideration which was denied in a Resolution dated November 8, 2002. Hence, the instant petition for review on the sole issue of: Can the NHA be compelled to sell the subject lots toGraceBaptistChurchin the absence of any perfected contract of sale between the parties?Petitioner submits that the Court cannot compel it to sell the subject property toGraceBaptistChurchwithout violating its freedom to contract.15Moreover, it contends that equity should be applied only in the absence of any law governing the relationship between the parties, and that the law on sales and the law on contracts in general apply to the present case.16We find merit in petitioners submission.Petitioner NHA is not estopped from selling the subject lots at a price equal to their fair market value, even if it failed to expressly revoke Resolution No. 2126. It is, after all, hornbook law that the principle of estoppel does not operate against the Government for the act of its agents,17or, as in this case, their inaction.HTcDEaOn the application of equity, it appears that the crux of the controversy involves the characterization of equity in the context of contract law. Preliminarily, we reiterate that this Court, while aware of its equity jurisdiction, is first and foremost, a court of law. While equity might tilt on the side of one party, the same cannot be enforced so as to overrule positive provisions of law in favor of the other.18Thus, before we can pass upon the propriety of an application of equitable principles in the case at bar, we must first determine whether or not positive provisions of law govern.It is a fundamental rule that contracts, once perfected, bind both contracting parties, and obligations arising therefrom have the force of law between the parties and should be complied with in good faith.19However, it must be understood that contracts are not theonlysource of law thatgovernthe rights and obligations between the parties.More specifically, no contractual stipulation may contradict law, morals, good customs, public order or public policy.20Verily, the mereinexistenceof a contract, which would ordinarily serve as the law between the parties, does not automatically authorize disposing of a controversy based on equitable principles alone. Notwithstanding the absence of a perfected contract between the parties, their relationship may be governed byother existing lawswhich provide for their reciprocal rights and obligations.It must be remembered that contracts in which the Government is a party are subject to the same rules of contract law which govern the validity and sufficiency of contract between individuals. All the essential elements and characteristics of a contract in general must be present in order to create a binding and enforceable Government contract.21It appearing that there is no dispute that this case involves an unperfected contract, the Civil Law principles governing contracts should apply. InVda. de Urbanov. Government Service Insurance System,22it was ruled that a qualified acceptance constitutes a counter-offer as expressly stated byArticle 1319 of the Civil Code. In said case, petitioners offered to redeem mortgaged property and requested for an extension of the period of redemption. However, the offer was not accepted by the GSIS. Instead, it made a counter-offer, which petitioners did not accept. Petitioners again offer to pay the redemption price on staggered basis. In deciding said case, it was held that when there is absolutely no acceptance of an offer or if the offer is expressly rejected, there is no meeting of the minds. Since petitioners offer was denied twice by GSIS, it was held that there was clearly no meeting of the minds and, thus, no perfected contract. All that is established was a counter-offer.23In the case at bar, the offer of the NHA to sell the subject property, as embodied in Resolution No. 2126, was similarly not accepted by the respondent.24Thus, the alleged contract involved in this case should be more accurately denominated asinexistent. There being no concurrence of the offer and acceptance, it did not pass the stage of generation to the point of perfection.25As such, it is without force and effect from the very beginning or from its incipiency, as if it had never been entered into, and hence, cannot be validated either by lapse of time or ratification.26Equity can not give validity to a void contract,27and this rule should apply with equal force to inexistent contracts.We note from the records, however, that theChurch, despite knowledge that its intended contract of sale with the NHA had not been perfected, proceeded to introduce improvements on the disputed land. On the other hand, the NHA knowingly granted theChurchtemporary use of the subject properties and did not prevent theChurchfrom making improvements thereon. Thus, theChurchand the NHA, who both acted in bad faith, shall be treated as if they werebothin good faith.28In this connection,Article 448 of the Civil Code provides:The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land and if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.Pursuant to our ruling inDeprav. Dumlao,29there is a need to remand this case to the trial court, which shall conduct the appropriate proceedings to assess the respective values of the improvements and of the land, as well as the amounts of reasonable rentals and indemnity, fix the terms of the lease if the parties so agree, and to determine other matters necessary for the proper application of Article 448, in relation toArticles 546 and 548, of the Civil Code.WHEREFORE, in view of the foregoing, the petition is GRANTED. The Court of Appeals' Decision dated February 26, 2001 and Resolution dated November 8, 2002 are REVERSED and SET ASIDE. The Decision of the Regional Trial Court of Quezon City-Branch 90, dated February 25, 1997, is REINSTATED. This case is REMANDED to the Regional Trial Court of Quezon City, Branch 90, for further proceedings consistent with Articles 448 and 546 of the Civil Code.

[G.R. No. 127540. October 17, 2001.]EUGENIODOMINGO, CRISPIN MANGABAT and SAMUEL CAPALUNGAN,petitioners,vs. HON.COURTOFAPPEALS, FELIPE C. RIGONAN and CONCEPCION R. RIGONAN,respondents.EUGENIODOMINGO, CRISPIN MANGABAT and SAMUEL CAPALUNGAN,petitioners,vs.HON.COURTOFAPPEALS, THE DIRECTOR OF LANDS, and FELIPE C. RIGONAN and CONCEPCION R. RIGONAN,respondents.Herman D. Colomafor petitioners.Eddie Tamondongfor private respondents.SYNOPSISSubject parcels of land were previously owned by Paulina Rigonan. Private respondents claimed that Paulina sold them the lots in 1965. Petitioners, however, alleged that they are the closest surviving relatives of Paulina and they inherited the lots from her when she died in 1966. Here in issue is the existence and due execution of the alleged deed of sale.The Court ruled in the negative on the issue posed. First, no original deed of sale was ever presented, only a carbon copy thereof. No witness directly testified on the execution of the deed of sale and the carbon copy bore only the alleged thumbprint of Paulina. Second, the carbon copy contained filled-in blanks and alterations; it showed intercalations and discrepancies when compared to supposed copies in existence. Third, Paulina was never asked to vacate the purportedly sold premises; in fact, they were still included in her will which was notarized by the same notary public who allegedly notarized the supposed deed of sale. Fourth, at the purported execution of the deed, the Court noted that Paulina was already incapacitated by impaired mental faculties due to advanced years. Lastly, the consideration here is only P850 for 9 lots, a house and abodega. The Court agreed that said amount was grossly inadequate for a valid sale.SYLLABUS1.REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; THAT DECIDING JUDGE PRESIDED ONLY ONCE OVER THE HEARINGS HAS NO ADVERSE EFFECT ON THE DECISION. While the trial judge deciding the case presided over the hearings of the case only once, this circumstance could not have an adverse effect on his decision. The continuity of a court and the efficacy of its proceedings are not affected by the death, resignation or cessation from the service of the presiding judge. A judge may validly render a decision although he has only partly heard the testimony of the witnesses. After all, he could utilize and rely on the records of the case, including the transcripts of testimonies heard by the former presiding judge.2.ID.; ID.; CERTIFICATION AGAINST FORUM-SHOPPING; COMPLIANCE; PRESENT WHEN ONE WAS ATTACHED IN THE COPY INTENDED FOR THE COURT. On the matter of the certification against forum-shopping, petitioners aver that they attached one in the copy intended for this Court. This is substantial compliance. A deviation from a rigid enforcement of the rules may be allowed to attain their prime objective for, after all, the dispensation of justice is the core reason for the court's existence.3.ID.; ID.; APPEAL; REVIEW OF THE CONTRADICTORY FINDINGS OF THE TRIAL COURT ANDCOURTOFAPPEALS. While the issues raised in this petition might appear to be mainly factual, this petition is properly given due course because of the contradictory findings of the trial court and theCourtofAppeals. Further, the latter court apparently overlooked certain relevant facts which justify a different conclusion. Moreover, a compelling sense to make sure that justice is done, and done rightly in the light of the issues raised herein, constrains us from relying on technicalities alone to resolve this petition.4.CIVIL LAW; CONTRACTS; DEED OF SALE; DOUBTFUL IN THE PRESENCE OF VARIOUS IRREGULARITIES. Irregularities abound regarding the execution and registration of the alleged deed of sale. The original was nowhere to be found and none could be presented at the trial. The carbon copy on file, which is allegedly a duplicate original, shows intercalations and discrepancies when compared to purported copies in existence. Furthermore, it appears that the alleged vendor was never asked to vacate the premises she had purportedly sold. The alleged vendor's continued possession of the property in this case throws an inverse implication, a serious doubt on the due execution of the deed of sale. Noteworthy, the same parcels of land involved in the alleged sale were still included in the will subsequently executed by Paulina and notarized by the same notary public, Atty. Tagatag. These circumstances, taken together, militate against unguarded acceptance of the due execution and genuineness of the alleged deed of sale.5.ID.; ID.; CONSIDERATION; NOT APPRECIATED WHEN AMOUNT THEREOF DUBIOUS. We have to take into account the element of consideration for the sale. The price allegedly paid by private respondents for nine (9) parcels, including the three parcels in dispute, a house and a warehouse, raises further questions. Consideration is the why of a contract, the essential reason which moves the contracting parties to enter into the contract. On record, there is unrebutted testimony that Paulina as landowner was financially well off. She loaned money to several people. We see no apparent and compelling reason for her to sell the subject parcels of land with a house and warehouse at a meager price of P850 only.6.ID.; ID.; CONSENT; NOT APPRECIATED WHEN THERE IS INCAPACITY DUE TO ADVANCED YEARS IMPAIRING THE MENTAL FACULTY OF A PARTY. The general rule is that a person is not incompetent to contract merely because of advanced years or by reason of physical infirmities. However, when such age or infirmities have impaired the mental faculties so as to prevent the person from properly, intelligently, and firmly protecting her property rights then she is undeniably incapacitated. The unrebutted testimony of ZosimaDomingoshows that at the time of the alleged execution of the deed, Paulina was already incapacitated physically and mentally. She narrated that Paulina played with her waste and urinated in bed. Given these circumstances, there is in our view sufficient reason to seriously doubt that she consented to the sale of and the price for her parcels of land. Moreover, there is no receipt to show that said price was paid to and received by her.QUISUMBING,Jp:This petition1seeks to annul the decision of theCourtofAppealsdated August 29, 1996, which set aside the decision of the Regional Trial Court of Batac, Ilocos Norte, Branch 17, in Civil Case No. 582-17 forreivindicacionconsolidated with Cadastral Case No. 1.2The petition likewise seeks to annul the resolution dated December 11, 1996, denying petitioners' motion for reconsideration.The facts of this case, culled from the records, are as follows:Paulina Rigonan owned three (3) parcels of land, located at Batac and Espiritu, Ilocos Norte, including the house and warehouse on one parcel. She allegedly sold them to private respondents, the spouses Felipe and Concepcion Rigonan, who claim to be her relatives. In 1966, herein petitioners EugenioDomingo, Crispin Mangabat and Samuel Capalungan, who claim to be her closest surviving relatives, allegedly took possession of the properties by means of stealth, force and intimidation, and refused to vacate the same. Consequently, on February 2, 1976, herein respondent Felipe Rigonan filed a complaint forreivindicacionagainst petitioners in the Regional Trial Court of Batac, Ilocos Norte. On July 3, 1977, he amended the complaint and included his wife as co-plaintiff. They alleged that they were the owners of the three parcels of land through the deed of sale executed by Paulina Rigonan on January 28, 1965; that since then, they had been in continuous possession of the subject properties and had introduced permanent improvements thereon; and that defendants (now petitioners) entered the properties illegally, and they refused to leave them when asked to do so.Herein petitioners, as defendants below, contested plaintiffs' claims. According to defendants, the alleged deed of absolute sale was void for being spurious as well as lacking consideration. They said that Paulina Rigonan did not sell her properties to anyone. As her nearest surviving kin within the fifth degree of consanguinity, they inherited the three lots and the permanent improvements thereon when Paulina died in 1966. They said they had been in possession of the contested properties for more than 10 years. Defendants asked for damages against plaintiffs.HAICTDDuring trial, Juan Franco, Notary Public Evaristo P. Tagatag3and plaintiff Felipe Rigonan testified for plaintiffs (private respondents now).Franco testified that he was a witness to the execution of the questioned deed of absolute sale. However, when cross-examined and shown the deed he stated that the deed was not the document he signed as a witness, but rather it was the will and testament made by Paulina Rigonan.Atty. Tagatag testified that he personally prepared the deed, he saw Paulina Rigonan affix her thumbprint on it and he signed it both as witness and notary public. He further testified that he also notarized Paulina's last will and testament dated February 19, 1965. The will mentioned the same lots sold to private respondents. When asked why the subject lots were still included in the last will and testament, he could not explain. Atty. Tagatag also mentioned that he registered the original deed of absolute sale with the Register of Deeds.Plaintiff Felipe Rigonan claimed that he was Paulina's close relative. Their fathers were first cousins. However, he could not recall the name of Paulina's grandfather. His claim was disputed by defendants, who lived with Paulina as their close kin. He admitted the discrepancies between the Register of Deeds' copy of the deed and the copy in his possession. But he attributed them to the representative from the Office of the Register of Deeds who went to plaintiffs' house after that Office received a subpoenaducestecum. According to him, the representative showed him blanks in the deed and then the representative filled in the blanks by copying from his (plaintiffs) copy.Counsel for defendants (petitioners herein) presented as witnesses Jose Flores, the owner of the adjacent lot; Ruben Blanco, then acting Registrar of Deeds in Ilocos Norte; and ZosimaDomingo, wife of defendant EugenioDomingo.Jose Flores testified that he knew defendants, herein petitioners, who had lived on the land with Paulina Rigonan since he could remember and continued to live there even after Paulina's death. He said he did not receive any notice nor any offer to sell the lots from Paulina, contrary to what was indicated in the deed of sale that the vendor had notified all the adjacent owners of the sale. He averred he had no knowledge of any sale between Paulina and private respondents.Ruben Blanco, the acting Registrar of Deeds, testified that only the carbon copy, also called a duplicate original, of the deed of sale was filed in his office, but he could not explain why this was so.ZosimaDomingotestified that her husband, EugenioDomingo, was Paulina's nephew. Paulina was a first cousin of Eugenio's father. She also said that they lived with Paulina and her husband, Jose Guerson, since 1956. They took care of her, spent for her daily needs and medical expenses, especially when she was hospitalized prior to her death. She stated that Paulina was never badly in need of money during her lifetime.aSEDHCOn March 23, 1994, the trial court rendered judgment in favor of defendants (now the petitioners). It disposed:WHEREFORE, premises considered, judgment is hereby rendered in favor of defendants and against the plaintiffs, and as prayed for, the Amended Complaint is herebyDISMISSED.Defendants are hereby declared, by virtue of intestate succession, the lawful owners and possessors of the house including thebodegaand the three (3) parcels of land in suit and a Decree of Registration adjudicating the ownership of the said properties to defendants is hereby issued.The alleged deed of sale (Exhs. "A", "A-1", "1" and "1-a") is hereby declared null and void and fake and the prayer for the issuance of a writ of preliminary injunction is hereby denied.Plaintiffs are hereby ordered to pay defendants:a)P20,000.00 as moral damages;b)P10,000.00 as exemplary damages;c)P10,000.00 attorney's fees and other litigation expenses.No pronouncement as to costs.4Private respondents herein appealed to theCourtofAppeals.On August 29, 1996, the CA reversed the trial court's decision, thus:WHEREFORE, the decision dated March 23, 1994 is hereby SET ASIDE. The plaintiffs-appellants Felipe Rigonan and Concepcion Rigonan are declared the owners of the properties under litigation and the defendants-appellees are hereby ordered to VACATE the subject properties and SURRENDER the possession thereof to the heirs of the plaintiffs-appellants.Costs against the defendants-appellees.5Hence, this petition assigning the following as errors:ITHE RESPONDENTCOURTOFAPPEALSHAS DECIDED QUESTIONS OF LEGAL SUBSTANCE AND SIGNIFICANCE NOT IN ACCORDANCE WITH THE EVIDENCE, LAW AND WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT.IITHAT THE FINDINGS OF RESPONDENTCOURTOFAPPEALSARE CONTRARY TO THOSE OF THE TRIAL COURT AND CLEARLY VIOLATES THE RULE THAT THE FACTUAL FINDINGS OF TRIAL COURTS ARE ENTITLED TO GREAT WEIGHT AND RESPECT ON APPEAL, ESPECIALLY WHEN SAID FINDINGS ARE ESTABLISHED BY UNREBUTTED TESTIMONIAL AND DOCUMENTARY EVIDENCE.IIITHAT THE FINDINGS AND CONCLUSIONS OF RESPONDENTCOURTOFAPPEALSARE GROUNDED ENTIRELY ON SPECULATIONS, SURMISES, CONJECTURES, OR ON INFERENCES MANIFESTLY MISTAKEN.IVTHAT THE RESPONDENTCOURTOFAPPEALSMANIFESTLY OVERLOOKED CERTAIN RELEVANT FACTS NOT DISPUTED BY THE PARTIES AND WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY A DIFFERENT CONCLUSION.VTHAT THE FINDINGS OF FACT OF RESPONDENTCOURTOFAPPEALSARE PREMISED ON SUPPOSED ABSENCE OF EVIDENCE BUT IS CONTRADICTED BY THE EVIDENCE ON RECORD THUS CONSTITUTES GRAVE ABUSE OF DISCRETION.6The basic issue for our consideration is, did private respondents sufficiently establish the existence and due execution of the Deed of Absolute and Irrevocable Sale of Real Property? Marked as Exhibits "A", "A-1", "1" and "1-a", this deed purportedly involved nine (9) parcels of land, inclusive of the three (3) parcels in dispute, sold at the price of P850 by Paulina Rigonan to private respondents on January 28, 1965, at Batac, Ilocos Norte.7The trial court found the deed "fake," being a carbon copy with no typewritten original presented; and the court concluded that the document's execution "was tainted with alterations, defects, tamperings, and irregularities which render it null and voidabinitio."8Petitioners argue that theCourtofAppealserred in not applying the doctrine that factual findings of trial courts are entitled to great weight and respect on appeal, especially when said findings are established by unrebutted testimonial and documentary evidence. They add that theCourtofAppeals, in reaching a different conclusion, had decided the case contrary to the evidence presented and the law applicable to the case. Petitioners maintain that the due execution of the deed of sale was not sufficiently established by private respondents, who as plaintiffs had the burden of proving it.First, the testimonies of the two alleged instrumental witnesses of the sale, namely, Juan Franco and Efren Sibucao, were dispensed with and discarded when Franco retracted his oral and written testimony that he was a witness to the execution of the subject deed. As a consequence, the appellate court merely relied on Atty. Tagatag's (the notary public) testimony, which was incredible because aside from taking the double role of a witness and notary public, he was a paid witness. Further his testimony, that the subject deed was executed in the house of Paulina Rigonan, was rebutted by ZosimaDomingo, Paulina's housekeeper, who said that she did not see Atty. Tagatag, Juan Franco and Efren Sibucao in Paulina's house on the alleged date of the deed's execution.Secondly,petitioners said that private respondents failed to account for the typewritten original of the deed of sale and that the carbon copy filed with the Register of Deeds was only a duplicate which contained insertions and erasures. Further, the carbon copy was without an affidavit of explanation, in violation of the Administrative Code as amended, which requires that if the original deed of sale is not presented or available upon registration of the deed, the carbon copy or so-called "duplicate original" must be accompanied by an affidavit of explanation, otherwise, registration must be denied.9Thirdly,petitioners aver that the consideration of only P850 for the parcels of land sold, together with a house and a warehouse, was another indication that the sale was fictitious because no person who was financially stable would sell said property at such a grossly inadequate consideration.Lastly,petitioners assert that there was abundant evidence that at the time of the execution of the deed of sale, Paulina Rigonan was already senile. She could not have consented to the sale by merely imprinting her thumbmark on the deed.In their comment, private respondents counter that at the outset the petition must be dismissed for it lacks a certification against forum-shopping. Nonetheless, even disregarding this requirement, the petition must still be denied in due course for it does not present any substantial legal issue, but factual or evidentiary ones which were already firmly resolved by theCourtofAppealsbased on records and the evidence presented by the parties. Private respondents' claim that the factual determination by the trial court lacks credibility for it was made by the trial judge who presided only in one hearing of the case. The trial judge could not validly say that the deed of absolute sale was "fake" because no signature was forged, according to private respondents; and indeed a thumbmark, said to be the seller's own, appears thereon.ECcDAHIn their reply, petitioners said that the copy of the petition filed with this Court was accompanied with a certification against forum-shopping. If private respondents' copy did not contain same certification, this was only due to inadvertence.Petitioners ask for the Court's indulgence for anyway there was substantial compliance with Revised Circular No. 28-91.On the contention that here only factual issues had been raised, hence not the proper subject for review by this Court, petitioners reply that this general rule admits of exceptions, as when the factual findings of theCourtofAppealsand the trial court are contradictory; when the findings are grounded entirely on speculations, surmises or conjectures; and when theCourtofAppealsoverlooked certain relevant facts not disputed by the parties which if properly considered would justify a different conclusion. All these, according to petitioners, are present in this case.Before proceeding to the main issue, we shall first settle procedural issues raised by private respondents.While the trial judge deciding the case presided over the hearings of the case only once, this circumstance could not have an adverse effect on his decision. The continuity of a court and the efficacy of its proceedings are not affected by the death, resignation or cessation from the service of the presiding judge. A judge may validly render a decision although he has only partly heard the testimony of the witnesses.10After all, he could utilize and rely on the records of the case, including the transcripts of testimonies heard by the former presiding judge.On the matter of the certification against forum-shopping, petitioners aver that they attached one in the copy intended for this Court. This is substantial compliance. A deviation from a rigid enforcement of the rules may be allowed to attain their prime objective for, after all, the dispensation of justice is the core reason for the court's existence.11While the issues raised in this petition might appear to be mainly factual, this petition is properly given due course because of the contradictory findings of the trial court and theCourtofAppeals. Further, the latter court apparently overlooked certain relevant facts which justify a different conclusion.12Moreover, a compelling sense to make sure that justice is done, and done rightly in the light of the issues raised herein, constrains us from relying on technicalities alone to resolve this petition.Now, on the main issue. Did private respondents establish the existence and due execution of the deed of sale? Our finding is in the negative.First, note that private respondents as plaintiffs below presented only a carbon copy of this deed. When the Register of Deeds was subpoenaed to produce the deed, no original typewritten deed but only a carbon copy was presented to the trial court. Although theCourtofAppealscalls it a "duplicate original," the deed contained filled in blanks and alterations. None of the witnesses directly testified to prove positively and convincingly Paulina's execution of the original deed of sale. The carbon copy did not bear her signature, but only her alleged thumbprint. Juan Franco testified during the direct examination that he was an instrumental witness to the deed. However, when cross-examined and shown a copy of the subject deed, he retracted and said that said deed of sale was not the document he signed as witness.13He declared categorically he knew nothing about it.14We note that another witness, Efren Sibucao, whose testimony should have corroborated Atty. Tagatag's, was not presented and his affidavit was withdrawn from the court,15leaving only Atty. Tagatag's testimony, which aside from being uncorroborated, was self-serving.Secondly, we agree with the trial court that irregularities abound regarding the execution and registration of the alleged deed of sale. On record, Atty. Tagatag testified that he himself registered the original deed with the Register of Deeds.16Yet, the original was nowhere to be found and none could be presented at the trial. Also, the carbon copy on file, which is allegedly a duplicate original, shows intercalations and discrepancies when compared to purported copies in existence. The intercalations were allegedly due to blanks left unfilled by Atty. Tagatag at the time of the deed's registration. The blanks were allegedly filled in much later by a representative of the Register of Deeds. In addition, the alleged other copies of the document bore different dates of entry: May 16, 1966, 10:20 A.M.17and June 10, 1966, 3:16 P.M.,18and different entry numbers: 66246, 7438919and 64369.20The deed was apparently registered long after its alleged date of execution and after Paulina's death on March 20, 1966.21Admittedly, the alleged vendor Paulina Rigonan was not given a copy.22Furthermore, it appears that the alleged vendor was never asked to vacate the premises she had purportedly sold. Felipe testified that he had agreed to let Paulina stay in the house until her death.23InAlcosv. IAC,162 SCRA 823 (1988), the buyer's immediate possession and occupation of the property was deemed corroborative of the truthfulness and authenticity of the deed of sale. The alleged vendor's continued possession of the property in this case throws an inverse implication, a serious doubt on the due execution of the deed of sale. Noteworthy, the same parcels of land involved in the alleged sale were still included in the will subsequently executed by Paulina and notarized by the same notary public, Atty. Tagatag.24These circumstances, taken together, militate against unguarded acceptance of the due execution and genuineness of the alleged deed of sale.CTIEacThirdly, we have to take into account the element of consideration for the sale. The price allegedly paid by private respondents for nine (9) parcels, including the three parcels in dispute, a house and a warehouse, raises further questions. Consideration is thewhyof a contract, the essential reason which moves the contracting parties to enter into the contract.25On record, there is unrebutted testimony that Paulina as landowner was financially well off. She loaned money to several people.26We see no apparent and compelling reason for her to sell the subject parcels of land with a house and warehouse at a meager price of P850 only.InRongavillavs. CA,294 SCRA 289 (1998), private respondents were in their advanced years, and were not in dire need of money, except for a small amount of P2,000 which they said were loaned by petitioners for the repair of their house's roof. We ruled against petitioners, and declared that there was no valid sale because of lack of consideration.In the present case, at the time of the execution of the alleged contract, Paulina Rigonan was already of advanced age and senile. She died an octogenarian on March 20, 1966, barely over a year when the deed was allegedly executed on January 28, 1965, but before copies of the deed were entered in the registry allegedly on May 16 and June 10, 1966. The general rule is that a person is not incompetent to contract merely because of advanced years or by reason of physical infirmities.27However, when such age or infirmities have impaired the mental faculties so as to prevent the person from properly, intelligently, and firmly protecting her property rights then she is undeniably incapacitated. The unrebutted testimony of ZosimaDomingoshows that at the time of the alleged execution of the deed, Paulina was already incapacitated physically and mentally. She narrated that Paulina played with her waste and urinated in bed. Given these circumstances, there is in our view sufficient reason to seriously doubt that she consented to the sale of and the price for her parcels of land. Moreover, there is no receipt to show that said price was paid to and received by her. Thus, we are in agreement with the trial court's finding and conclusion on the matter:The whole evidence on record does not show clearly that the fictitious P850.00 consideration was ever delivered to the vendor. Undisputably, the P850.00 consideration for the nine (9) parcels of land including the house and bodega is grossly and shockingly inadequate, and the sale is null and voidabinitio.28WHEREFORE, the petition is GRANTED. The decision and resolution of theCourtofAppealsdated August 29, 1996 and December 11, 1996, respectively, are REVERSED and SET ASIDE. The decision of the Regional Trial Court of Batac, Ilocos Norte, Branch 17, dated March 23, 1994, is REINSTATED.Costs against private respondents.SO ORDERED.Bellosillo, Mendoza, BuenaandDe Leon Jr., JJ., concur.|||(Domingo v. Court of Appeals, G.R. No. 127540, [October 17, 2001], 419 PHIL 651-664)

[G.R. No.59266. February 29, 1988.]SILVESTRE DIGNOS and ISABEL LUMUNGSOD,petitioners,vs.HON. COURT OF APPEALS and ATILANO G. JABIL,respondents.SYLLABUS1.CIVIL LAW; CONTRACTS; DEED OF SALE; ABSOLUTE IN NATURE WHERE THERE IS NO PROVISION THAT TITLE IS RESERVED TO THE VENDOR OR UNILATERALLY GIVING THE VENDOR THE RIGHT TO RESCIND CONTRACT. It has been held that a deed of sale is absolute in nature although denominated as a "Deed of Conditional Sale" where nowhere in the contract in question is a proviso or stipulation to the effect that title to the property sold is reserved in the vendor until full payment of the purchase price, nor is there a stipulation giving the vendor the right to unilaterally rescind the contract the moment the vendee fails to pay within a fixed period (Taguba v. Vda. de Leon, 132 SCRA 722;Luzon Brokerage Co., Inc. v. Maritime Building Co., Inc., 86 SCRA 305). A careful examination of the contract shows that there is no such stipulation reserving the title of the property on the vendors nor does it give them the right to unilaterally rescind the contract upon non-payment of the balance thereof within a fixed period.2.ID.; ID.; SALE; ELEMENTS. On the contrary, all the elements of a valid contract of sale under Article 1458 of the Civil Code, are present, such as: (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent.3.ID.; ID.; OWNERSHIP IS TRANSFERRED BY DELIVERY OF THE THING SOLD. In addition, Article 1477 of the same Code provides that "The ownership of the thing sold shall be transferred to the vendee upon actual or constructive delivery thereof." As applied in the case ofFroilan v. Pan Oriental Shipping Co., et al.(12 SCRA 276), this Court held that in the absence of stipulation to the contrary, the ownership of the thing sold passes to the vendee upon actual or constructive delivery thereof.4.ID.; ID.; ID.; ID.; ACTUAL DELIVERY IN CASE AT BAR. While it may be conceded that there was no constructive delivery of the land sold in the case at bar, as subject Deed of Sale is a private instrument, it is beyond question that there was actual delivery thereof. As found by the trial court, the Dignos spouses delivered the possession of the land in question to Jabil as early as March 27, 1965 so that the latter constructed thereon Sally's Beach Resort also known as Jabil's Beach Resort in March, 1965; Mactan White Beach Resort on January 15, 1966 and Bevirlyn's Beach Resort on September 1, 1965. Such facts were admitted by petitioner spouses (Decision, Civil Case No. 23-L; Record on Appeal, p. 108).5.ID.; ID.; ID.; SLIGHT DELAY IN THE PERFORMANCE OF OBLIGATION, NOT SUFFICIENT GROUND FOR RESCISSION. It has been ruled, however, that "where time is not of the essence of the agreement, a slight delay on the part of one party in the performance of his obligation is not a sufficient ground for the rescission of the agreement" (Taguba v. Vda. de Leon,supra). Considering that private respondent has only a balance of P4,000.00 and was delayed in payment only for one month, equity and justice mandate as in the aforecited case that Jabil be given an additional period within which to complete payment of the purchase price.D E C I S I O NBIDIN,Jp:This is a petition for review on certiorari seeking the reversal of the: (1) Decision*of the 9th Division, Court of Appeals dated July 31, 1981, affirming with modification the Decision**dated August 25, 1972 of the Court of First Instance of Cebu in Civil Case No. 23-L entitled Atilano G. Jabil vs. Silvestre T. Dignos and Isabela Lumungsod de Dignos and Panfilo Jabalde, as Attorney-in-Fact of Luciano Cabigas and Jovita L. de Cabigas; and (2) its Resolution dated December 16, 1981, denying defendant-appellant's (Petitioner's) motion for reconsideration, for lack of merit.The undisputed facts as found by the Court of Appeals are as follows:"The Dignos spouses were owners of a parcel of land, known as Lot No. 3453, of the cadastral survey of Opon, Lapu-Lapu City. On June 7, 1965, appellants (petitioners) Dignos spouses sold the said parcel of land to plaintiff-appellant (respondent Atilano J. Jabil) for the sum of P28,000.00, payable in two installments, with an assumption of indebtedness with the First Insular Bank of Cebu in the sum of P12,000.00, which was paid and acknowledged by the vendors in the deed of sale (Exh. C) executed in favor of plaintiff-appellant, and the next installment in the sum of P4,000.00 to be paid on or before September 15, 1965."On November 25, 1965, the Dignos spouses sold the same land in favor of defendants spouses, Luciano Cabigas and Jovita L. De Cabigas, who were then U.S. citizens, for the price of P35,000.00. A deed of absolute sale (Exh. J, also marked Exh. 3) was executed by the Dignos spouses in favor of the Cabigas spouses, and which was registered in the Office of the Register of Deeds pursuant to the provisions ofAct No. 3344."As the Dignos spouses refused to accept from plaintiff-appellant the balance of the purchase price of the land, and as plaintiff- appellant discovered the second sale made by defendants-appellants to the Cabigas spouses, plaintiff-appellant brought the present suit." (Rollo, pp. 27-28)After due trial, the Court of First Instance of Cebu rendered its Decision on August 25, 1972, the decretal portion of which reads:"WHEREFORE, the Court hereby declares the deed of sale executed on November 25, 1965 by defendant Isabela L. de Dignos in favor of defendant Luciano Cabigas, a citizen of the United States of America, null and void ab initio, and the deed of sale executed by defendants Silvestre T. Dignos and Isabela Lumungsod de Dignos not rescinded. Consequently, the plaintiff Atilano G. Jabil is hereby ordered to pay the sum, of Sixteen Thousand Pesos (P16,000.00) to the defendants-spouses upon the execution of the Deed of Absolute Sale of Lot No. 3453, Opon Cadastre and when the decision of this case becomes final and executory."The plaintiff Atilano G. Jabil is ordered to reimburse the defendants Luciano Cabigas and Jovita L. de Cabigas, through their attorney-in-fact, Panfilo Jabalde, reasonable amount corresponding to the expenses or costs of the hollow block fence, so far constructed."It is further ordered that defendants-spouses Silvestre T. Dignos and Isabela Lumungsod de Dignos should return to defendants-spouses Luciano Cabigas and Jovita L. de Cabigas the sum of P35,000.00, as equity demands that nobody shall enrich himself at the expense of another."The writ of preliminary injunction issued on September 23, 1966, automatically becomes permanent in virtue of this decision."With costs against the defendants."From the foregoing, the plaintiff (respondent herein) and defendants-spouses (petitioners herein) appealed to the Court of Appeals, which appeal was docketed therein as CA-G.R. No. 54393-R, "Atilano G. Jabil v. Silvestre T. Dignos, et al."On July 31, 1981, the Court of Appeals affirmed the decision of the lower court except as to the portion ordering Jabil to pay for the expenses incurred by the Cabigas spouses for the building of a fence upon the land in question. The dispositive portion of said decision of the Court of Appeals reads:"IN VIEW OF THE FOREGOING CONSIDERATIONS, except as to the modification of the judgment as pertains to plaintiff-appellant above indicated, the judgment appealed from is hereby AFFIRMED in all other respects."With costs against defendants-appellants."SO ORDERED."Judgment MODIFIED."A motion for reconsideration of said decision was filed by the defendants-appellants (petitioners) Dignos spouses, but on December 16, 1981, a resolution was issued by the Court of Appeals denying the motion for lack of merit.Hence, this petition.In the resolution of February 10, 1982, the Second Division of this Court denied the petition for lack of merit. A motion for reconsideration of said resolution was filed on March 16, 1982. In the resolution dated April 26, 1982, respondents were required to comment thereon, which comment was filed on May 11, 1982 and a reply thereto was filed on July 26, 1982 in compliance with the resolution of June 16, 1982 . On August 9, 1982, acting on the motion for reconsideration and on all subsequent pleadings filed, this Court resolved to reconsider its resolution of February 10, 1982 and to give due course to the instant petition. On September 6, 1982, respondents filed a rejoinder to reply of petitioners which was noted on the resolution of September 20, 1982.Petitioners raised the following assignment of errors:ITHE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW IN GROSSLY, INCORRECTLY INTERPRETING THE TERMS OF THE CONTRACT, EXHIBIT C, HOLDING IT AS AN ABSOLUTE SALE, EFFECTIVE TO TRANSFER OWNERSHIP OVER THE PROPERTY IN QUESTION TO THE RESPONDENT AND NOT MERELY A CONTRACT TO SELL OR PROMISE TO SELL; THE COURT ALSO ERRED IN MISAPPLYING ARTICLE 1371 AS WARRANTING READING OF THE AGREEMENT, EXHIBIT C, AS ONE OF ABSOLUTE SALE, DESPITE THE CLARITY OF THE TERMS THEREOF SHOWING IT IS A CONTRACT OF PROMISE TO SELL.IITHE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN INCORRECTLY APPLYING AND OR IN MISAPPLYING ARTICLE 1592 OF THE NEW CIVIL CODE AS WARRANTING THE ERRONEOUS CONCLUSION THAT THE NOTICE OF RESCISSION, EXHIBIT G, IS INEFFECTIVE SINCE IT HAS NOT BEEN JUDICIALLY DEMANDED NOR IS IT A NOTARIAL ACT.IIITHE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN REJECTING THE APPLICABILITY OF ARTICLES 2208, 2217 and 2219 OF THE NEW CIVIL CODE AND ESTABLISHED JURISPRUDENCE AS TO WARRANT THE AWARD OF DAMAGES AND ATTORNEY'S FEES TO PETITIONERS.IVPLAINTIFF'S COMPLAINT FOR SPECIFIC PERFORMANCE SHOULD HAVE BEEN DISMISSED, HE HAVING COME TO COURT WITH UNCLEAN HANDS.VBY AND LARGE, THE COURT OF APPEALS COMMITTED AN ERROR IN AFFIRMING WITH MODIFICATION THE DECISION OF THE TRIAL COURT DUE TO GRAVE MISINTERPRETATION, MISAPPLICATION AND MISAPPREHENSION OF THE TERMS OF THE QUESTIONED CONTRACT AND THE LAW APPLICABLE THERETO.The foregoing assignment of errors may be synthesized into two main issues, to wit:I.Whether or not subject contract is a deed of absolute sale or a contract to sell.II.Whether or not there was a valid rescission thereof.There is no merit in this petition.It is significant to note that this petition was denied by the Second Division of this Court in its Resolution dated February 10, 1982 for lack of merit, but on motion for reconsideration and on the basis of all subsequent pleadings filed, the petition was given due course.I.The contract in question (Exhibit C) is a Deed of Sale, with the following conditions:"1.That Atilano G. Jabil is to pay the amount of Twelve Thousand Pesos (P12,000.00) Philippine Currency as advance payment;"2.That Atilano G. Jabil is to assume the balance of Twelve Thousand Pesos (P12,000.00) Loan from the First Insular Bank of Cebu;"3.That Atilano G. Jabil is to pay the said spouses the balance of Four Thousand Pesos (P4,000.00) on or before September 15, 1965."4.That the said spouses agreed to defend the said Atilano G. Jabil from other claims on the said property;"5.That the spouses agrees to sign a final deed of absolute sale in favor of Atilano G. Jabil over the above-mentioned property upon the payment of the balance of Four Thousand Pesos." (Original Record, pp. 10-11)In their motion for reconsideration, petitioners reiterated their contention that the Deed of Sale (Exhibit "C") is a mere contract to sell and not an absolute sale; that the same is subject to two (2) positive suspensive conditions, namely: the payment of the balance of P4,000.00 on or before September 15, 1965 and the immediate assumption of the mortgage of P12,000.00 with the First Insular Bank of Cebu. It is further contended that in said contract, title or ownership over the property was expressly reserved in the vendor, the Dignos spouses, until the suspensive condition of full and punctual payment of the balance of the purchase price shall have been met. So that there is no actual sale until full payment is made (Rollo, pp. 51-52).In bolstering their contention that Exhibit "C" is merely a contract to sell, petitioners aver that there is absolutely nothing in Exhibit "C" that indicates that the vendors thereby sell, convey or transfer their ownership to the alleged vendee. Petitioners insist that Exhibit "C" (or 6) is a private instrument and the absence of a formal deed of conveyance is a very strong indication that the parties did not intend "transfer of ownership and title but only a transfer after full payment" (Rollo, p. 52). Moreover, petitioners anchored their contention on the very terms and conditions of the contract, more particularly paragraph four which reads, "that said spouses has agreed to sell the herein mentioned property to Atilano G. Jabil . . ." and condition number five which reads, "that the spouses agrees to sign a final deed of absolute sale over the mentioned property upon the payment of the balance of four thousand pesos."Such contention is untenable.By and large, the issues in this case have already been settled by this Court in analogous cases.Thus, it has been held that a deed of sale is absolute in nature although denominated as a "Deed of Conditional Sale" where nowhere in the contract in question is a proviso or stipulation to the effect that title to the property sold is reserved in the vendor until full payment of the purchase price, nor is there a stipulation giving the vendor the right to unilaterally rescind the contract the moment the vendee fails to pay within a fixed period (Taguba v. Vda. de Leon, 132 SCRA 722;Luzon Brokerage Co., Inc. v. Maritime Building Co., Inc., 86 SCRA 305).A careful examination of the contract shows that there is no such stipulation reserving the title of the property on the vendors nor does it give them the right to unilaterally rescind the contract upon non-payment of the balance thereof within a fixed period.On the contrary, all the elements of a valid contract of sale underArticle 1458 of the Civil Code, are present, such as: (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent. In addition,Article 1477 of the same Code provides that "The ownership of the thing sold shall be transferred to the vendee upon actual or constructive delivery thereof. As applied in the case ofFroilan v. Pan Oriental Shipping Co., et al.(12 SCRA 276), this Court held that in the absence of stipulation to the contrary, the ownership of the thing sold passes to the vendee upon actual or constructive delivery thereof.While it may be conceded that there was no constructive delivery of the land sold in the case at bar, as subject Deed of Sale is a private instrument, it is beyond question that there was actual delivery thereof. As found by the trial court, the Dignos spouses delivered the possession of the land in question to Jabil as early as March 27, 1965 so that the latter constructed thereon Sally's Beach Resort also known as Jabil's Beach Resort in March, 1965; Mactan White Beach Resort on January 15, 1966 and Bevirlyn's Beach Resort on September 1, 1965. Such facts were admitted by petitioner spouses (Decision, Civil Case No. 23-L; Record on Appeal, p. 108).Moreover, the Court of Appeals in its resolution dated December 16, 1981 found that the acts of petitioners, contemporaneous with the contract, clearly show that an absolute deed of sale was intended by the parties and not a contract to sell.Be that as it may, it is evident that when petitioners sold said land to the Cabigas spouses, they were no longer owners of the same and the sale is null and void.II.Petitioners claim that when they sold the land to the Cabigas spouses, the contract of sale was already rescinded.Applying the rationale of the case ofTaguba v. Vda. de Leon(supra) which is on all fours with the case at bar, the contract of sale being absolute in nature is governed byArticle 1592 of the Civil Code. It is undisputed that petitioners never notified private respondents Jabil by notarial act that they were rescinding the contract, and neither did they file a suit in court to rescind the sale. The most that they were able to show is a letter of Cipriano Amistad who, claiming to be an emissary of Jabil, informed the Dignos spouses not to go to the house of Jabil because the latter had no money and further advised petitioners to sell the land in litigation to another party (Record on Appeal, p. 23). As correctly found by the Court of Appeals, there is no showing that Amistad was properly authorized by Jabil to make such extra judicial rescission for the latter who, on the contrary, vigorously denied having sent Amistad to tell petitioners that he was already waiving his rights to the land in question. UnderArticle 1358 of the Civil Code, it is required that acts and contracts which have for their object the extinguishment of real rights over immovable property must appear in a public document.Petitioners laid considerable emphasis on the fact that private respondent Jabil had no money on the stipulated date of payment on September 15, 1965 and was able to raise the necessary amount only by mid-October, 1965.It has been ruled, however, that "where time is not of the essence of the agreement, a slight delay on the part of one party in the performance of his obligation is not a sufficient ground for the rescission of the agreement" (Taguba v. Vda. de Leon,supra). Considering that private respondent has only a balance of P4,000.00 and was delayed in payment only for one month, equity and justice mandate as in the aforecited case that Jabil be given an additional period within which to complete payment of the purchase price.WHEREFORE, the petition filed is hereby Dismissed for lack of merit and the assailed decision of the Court of Appeals is Affirmedin toto.SO ORDERED[G.R. No. 11491. August 23, 1918.]ANDRESQUIROGA,plaintiff-appellant,vs.PARSONSHARDWARE CO.,defendant-appellee.Alfredo Chicote, Jose ArnaizandPascual B. Azanza,for appellant.Crossfield & O'Brien,for appellee.SYLLABUS1.SALES; INTERPRETATION OF CONTRACT. For the classification of contracts, due regard must be paid to their essential clauses. In the contract in the instant case, what was essential, constituting its cause and subject matter, was that the plaintiff was to furnish the defendant with the beds which the latter might order, at the stipulated price, and that the defendant was to pay this price in the manner agreed upon. These are precisely the essential features of a contract of purchase and sale. There was the obligation on the part of the plaintiff to supply the beds, and, on that of the defendant, to pay their price. These features exclude the legal conception of an agency or older to sell whereby the mandatary or agent receives the thing to sell it, and does not pay its price, but delivers to the principal the price he obtains from the sale of the thing to a third person, and if he does not succeed in selling it, he returns it,Held: That this contract is one of purchase and sale, and not of commercial agency.2.ID., ID. The testimony of the person who drafted this contract, to the effect that his purpose wasto be an agent for the beds and to collect a commission on the sales, is of no importance to prove that the contract was one of agency, inasmuch as the agreements contained in the contract constitute, according to law, covenants of purchase and sale, and not of commercial agency. It must be understood that a contract is what the law defines it to be, and not what it is called by the contracting parties.3.ID.; ID. The fact that the contracting parties did not perform the contract in accordance with its terms, only shows mutual tolerance and gives no right to have the contract considered, not as the parties stipulated it, but as they performed it.4.ID.; ID. Only the acts of the contracting parties, subsequent to and in connection with, the performance of the contract must be considered in the interpretation of the contract when such interpretation is necessary, but not when, as in the instant case its essential agreements are clearly set forth and plainly show that the contract belongs to a certain kind and not to another5.ID.; ID. The defendant obligated itself to order the beds from the plaintiff by the dozen. Held: That the effect of a breach of this clause by the defendant would only entitle the plaintiff to disregard the orders which the defendant might place under other conditions, but if the plaintiff consents to fill them, he waives his right and cannot complain for having acted thus at his own free will.D E C I S I O NAVANCEA,Jp:On January 24, 1911, in this city of Manila, a contract in the following tenor was entered into by and between the plaintiff, as party of the first part, and J.Parsons(to whose rights and obligations the present defendant later subrogated itself), as party of the second part:CONTRACT EXECUTED BY AND BETWEEN ANDRESQUIROGAAND J.PARSONS, BOTH MERCHANTS ESTABLISHED IN MANILA FOR THE EXCLUSIVE SALE OFQUIROGABEDS IN THE VISAYAN ISLANDS."ARTICLE 1.Don AndresQuirogagrants the exclusive right to sell his beds in the Visayan Islands to J.Parsonsunder the following conditions:"(A)Mr.Quirogashall furnish beds of his manufacture to Mr.Parsonsfor the latter's establishment in Iloilo, and shall invoice them at the same price he has fixed for sales, in Manila, and, in the invoices, shall make an allowance of a discount of 25 per cent of the invoiced prices, as commission on the sales; and Mr.Parsonsshall order the beds by the dozen, whether of the same or of different styles."(B)Mr.Parsonsbinds himself to pay Mr.Quirogafor the beds received, within a period of sixty days from the date of their shipment."(C)The expenses for transportation and shipment shall be borne by M.Quiroga, and the freight, insurance, and cost of unloading from the vessel at the point where the beds are received, shall be paid by Mr.Parsons."(D)If, before an invoice falls due, Mr.Quirogashould request its payment, said payment when made shall be considered as a prompt payment, and as such a deduction of 2 per cent shall be made from the amount of the invoice."The same discount shall be made on the amount of any invoice which Mr.Parsonsmay deem convenient to pay in cash."(E)Mr.Quirogabinds himself to give notice at least fifteen days before hand of any alteration in price which he may plan to make in respect to his beds, and agrees that if on the date when such alteration takes effect he should have any order pending to be served to Mr.Parsons, such order shall enjoy the advantage of the alteration if the price thereby be lowered, but shall not be affected by said alteration if the price thereby be increased, for, in this latter case, Mr.Quirogaassumed the obligation to invoice the beds at the price at which the order was given."(F)Mr.Parsonsbinds himself not to sell any other kind except the 'Quiroga' beds."ART. 2.In compensation for the expenses of advertisement which, for the benefit of both contracting parties, Mr.Parsonsmay find himself obliged to make, Mr.Quirogaassumes the obligation to offer and give the preference to Mr.Parsonsin case anyone should apply for the exclusive agency for any island not comprised within the Visayan group."ART. 3.Mr.Parsonsmay sell, or establish branches of his agency for the sale of 'Quiroga' beds in all the towns of the Archipelago where there are no exclusive agents, and shall immediately report such action to Mr.Quirogafor his approval."ART. 4.This contract is made for an unlimited period, and may be terminated by either of the contracting parties on a previous notice of ninety days to the other party "Of the three causes of action alleged by the plaintiff in his complaint, only two of them constitute the subject matter of this appeal and both substantially amount to the averment that the defendant violated the following obligations: not to sell the beds at higher prices than those of the invoices; to have an open establishment in Iloilo; itself to conduct the agency; to keep the beds on public exhibition, and to pay for the advertisement expenses for the same; and to order the beds by the dozen and in no other manner. As may be seen, with the exception of the obligation on the part of the defendant to order the beds by the dozen and in no other manner, none of the obligations imputed to the defendant in the two causes of action are expressly set forth in the contract. But the plaintiff alleged that the defendant was his agent for the sale of his beds in Iloilo, and that said obligations are implied in a contract of commercial agency. The whole question, therefore, reduces itself to a determination as to whether the defendant, by reason of the contract hereinbefore transcribed, was a purchaser or an agent of the plaintiff for the sale of his beds.In order to classify a contract, due regard must be given to its essential clauses. In the contract in question, what was essential, as constituting its cause and subject matter, is that the plaintiff was to furnish the defendant with the beds which the latter might order, at the price stipulated) and that the defendant was to pay the price in the manner stipulated. The price agreed upon was the one determined by the plaintiff for the sale of these beds in Manila, with a discount of from 20 to 25 per cent, according to their class. Payment was to be made at the end of sixty days, or before, at the plaintiff's request, or in cash, if the defendant so preferred, and in these last two cases an additional discount was to be allowed for prompt payment. These are precisely the essential features of a contract of purchase and sale. There was the obligation on the part of the plaintiff to supply the beds, and, on the part of the defendant, to pay their price. These features exclude the legal conception of an agency or order to sell whereby the mandatory or agent received the thing to sell it, and does not pay its price, but delivers to the principal the price he obtains from the sale of the thing to a third person, and if he does not succeed in selling it, he returns it. By virtue of the contract between the plaintiff and the defendant, the latter, on receiving the beds, was necessarily obliged to pay their price within the term fixed, without any other consideration and regardless as to whether he had or had not sold the beds.It would be enough to hold, as we do, that the contract by and between the defendant and the plaintiff is one of purchase and sale, in order to show that it was not one made on the basis of a commission on sales, as the plaintiff claims it was, for these contracts are incompatible with each other. But, besides, examining the clauses of this contract, none of them is found that substantially supports the plaintiff's contention. Not a single one of these clauses necessarily conveys the idea of an agency. The wordscommissiononsalesused in clause (A) of article 1 mean nothing else, as stated in the contract itself, than a mere discount on the invoice price. The wordagency, also used in articles 2 and 3, only expresses that the defendant was the only one that could sell the plaintiff's beds in the Visayan Islands. With regard to the remaining clauses, the least that can be said is that they are not incompatible with the contract of purchase and sale.The plaintiff calls attention to the testimony of Ernesto Vidal, a former vice-president of the defendant corporation and who established and managed the latter's business in Iloilo. It appears that this witness, prior to the time of his testimony, had serious trouble with the defendant, had maintained a civil suit against it, and had even accused one of its partners, GuillermoParsons, of falsification. He testified that it was he who drafted the contract Exhibit A, and when questioned as to what was his purpose in contracting with the plaintiff, replied that it wasto be an agent for his beds and to collect a commission on sales. However, according to the defendant's evidence, it was Mariano Lopez Santos, a director of the corporation, who prepared Exhibit A. But, even supposing that Ernesto Vidal has stated the truth, his statement as to what was his idea in contracting with the plaintiff is of no importance, inasmuch as the agreements contained in Exhibit A which he claims to have drafted, constitute, as we have said, a contract of purchase and sale, and not one of commercial agency. This only means that Ernesto Vidal was mistaken in his classification of the contract. But it must be understood that a contract is what the law defines it to be, and not what it is called by the contracting parties.The plaintiff also endeavored to prove that the defendant had returned beds that it could not sell; that, without previous notice, it forwarded to the defendant the beds that it wanted; and that the defendant received its commission for the beds sold by the plaintiff directly to persons in Iloilo. But all this, at the most only shows that, on the part of both of them, there was mutual tolerance in the performance of the contract in disregard of its terms; and it gives no right to have the contract considered, not as the parties stipulated it, but as they performed it. Only the acts of the contracting parties, subsequent to, and in connection with, the execution of the contract, must be considered for the purpose interpreting the contract, when such interpretation is necessary, but not when, as in the instant case, its essential agreements are clearly set forth and plainly show that the contract belongs to a certain kind and not to another. Furthermore, the return made was of certain brass beds, and was not effected in exchange for the price paid for them, but was for other beds of another kind; and for the purpose of making this return, the defendant, in its letter Exhibit L-1, requested the plaintiff's prior consent with respect to said beds, which shows that it was not considered that the defendant had a right, by virtue of the contract, to make this return. As regards the shipment of beds without previous notice, it is insinuated in the record that these brass beds were precisely the ones so shipped, and that, for this very reason, the plaintiff agreed to their return. And with respect to the so-called commissions, we have said that they merely constituted a discount on the invoice price, and the reason for applying this benefit to the beds sold directly by the plaintiff to persons in Iloilo was because, as the defendant obligated itself in the contract to incur the expenses of advertisement of the plaintiff's beds, such sales were to be considered as a result of that advertisement.In respect to the defendant's obligation to order by the dozen, the only one expressly imposed by the contract, the effect of its breach would only entitle the plaintiff to disregard the orders which the defendant might place under other conditions; but if the plaintiff consents to fill them, he waives his right and cannot complain for having acted thus at his own free will.For the foregoing reasons, we are of opinion that the contract by and between the plaintiff and the defendant was one of purchase and sale, and that the obligations the breach of which is alleged as a cause of action are not imposed upon the defendant, either by agreement or by law. The judgment appealed from is affirmed, with costs against the appellant. So ordered.Arellano, C.J., Torres, Johnson, StreetandMalcolm, JJ.,concur.|||(Quiroga v. Parsons Hardware Co., G.R. No. 11491, [August 23, 1918], 38 PHIL 501-507)

[G.R. No. L-20871. April 30, 1971.]KER&CO., LTD.,petitioner,vs.JOSE B. LINGAD, as Acting Commissioner of Internal Revenue,respondent.Ross, Selph & Carrascosofor petitioner.Solicitor General Arturo A.Alafriz, Solicitor Alejandro B.AfurongandSpecial Atty.Balbino Gatdula, Jr.for respondent.SYLLABUS1.TAXATION; NATIONAL INTERNAL REVENUE CODE; COMMERCIAL BROKER, DEFINED; TEST FOLLOWED IN DETERMINING WHO FALLS WITHIN THE DEFINITION. According to the National Internal Revenue Code a commercial broker "includes all persons, other than importers, manufacturers, producers, or bona fide employees, who, for compensation or profit, sell or bring about sales or purchases of merchandise for other persons or bring proposed buyers and sellers together, or negotiate freights or other business for owners of vessels or other means of transportation, or for the shippers, or consignors or consignees of freight carried by vessels or other means of transportation. The term includes commission merchants [Section 194(t)]." The controlling decision as to the test to be followed as to who falls within the above definition of a commercial broker is that of Commissioner of Internal Revenue v. Constantino L-25926, February 27, 1970, 31 SCRA 779. In the language of Justice J.B.L. Reyes, who penned the opinion: "Since the company retained ownership of the goods, even as it delivered possession unto the dealer for resale to customers, the price and terms of which were subject to the company's control, the relationship between the company and the dealer is one of agency, . . ." An excerpt from Salisbury v. Brooks [94 SE 117 (1917)] cited in support of such a view follows: "'The difficulty in distinguishing between contracts of sale and the creation of an agency to sell has led to the establishment of rules by the application of which this difficulty may be solved. The decisions say the transfer of title or agreement to transfer it for a price paid or promised is the essence of sale. If such transfer puts the transferee in the attitude or position of an owner and makes him liable to the transferor as a debtor for the agreed price, and not merely as an agent who must account for the proceeds of a resale, the transaction is a sale; while the essence of an agency to sell is the delivery to an agent, not as his property, but as the property of the principal, who remains the owner and has the right to control sales, fix the price, and terms, demand and receive the proceeds less the agent's commission upon sales made."'2.ID.; ID.; ID.; ID.; APPLICATION IN CASE AT BAR. The mere disclaimer in a contract that an entity like petitioner is not "the agent or legal representative . . . for any purpose whatsoever" does not suffice to yield the conclusion that it is an independent merchant if the control over the goods for resale of the goods consigned is pervasive in character. The terms of the contract, as noted, speak quite clearly. There is lacking that degree of ambiguity sufficient to give rise to serious doubt as to what was contemplated by the parties. A reading thereof discloses that the relationship arising therefrom was not one of seller and purchaser. If it were thus intended, then it would not have included covenants which in their totality would negate the concept of a firm acquiring as vendee goods from another. Instead, the stipulations were so worded as to lead to no other conclusion than that the control by the United States Rubber International over the goods in question is, in the language of the Constantino opinion, "pervasive". The insistence on a relationship opposed to that apparent from the language employed might even yield the impression that such a mode of construction was resorted to in order that the applicability of a taxing statute might be rendered nugatory. Certainly, such a result is to be avoided.D E C I S I O NFERNANDO,Jp:PetitionerKer&Co., Ltd. would have us reverse a decision of the Court of Tax Appeals, holding it liable as a commercial broker under Section 194(t) of the National Internal Revenue Code. Its plea, notwithstanding the vigorous effort of its counsel, is not sufficiently persuasive. An obstacle, well-nigh insuperable, stands in the way. The decision under review conforms to and is in accordance with the controlling doctrine announced in the recent case of Commissioner of Internal Revenue v. Constantino.1The decisive test, as therein set forth, is the retention of the ownership of the goods delivered to the possession of the dealer, like herein petitioner, for resale to customers, the price and terms remaining subject to the control of the firm consigning such goods. The facts, as found by respondent Court, to which we defer, unmistakably indicate that such a situation does exist. The juridical consequences must inevitably follow. We affirm.It was shown that petitioner was assessed by the then Commissioner of Internal Revenue Melecio R. Domingo the sum of P20,272.33 as the commercial broker's percentage tax, surcharge, and compromise penalty for the period from July 1, 1949 to December 31, 1953. There was a request on the part of petitioner for the cancellation of such assessment, which request was turned down. As a result, it filed a petition for review with the Court of Tax Appeals. In its answer, the then Commissioner Domingo maintained his stand that petitioner should be taxed in such amount as a commercial broker. In the decision now under review, promulgated on October 19, 1962, the Court of Tax Appeals held petitioner taxable except as to the compromise penalty of P500.00, the amount due from it being fixed at P19,772.33.Such liability arose from a contract of petitioner with the United States Rubber International, the former being referred to as the Distributor and the latter specifically designated as the Company. The contract was to apply to transactions between the former and petitioner, as Distributor, from July 1, 1948 to continue in force until terminated by their party giving to the other sixty days' notice.2The shipments would cover products "for consumption in Cebu, Bohol, Leyte, Samar, Jolo, Negros Oriental, and Mindanao except [the] province of Davao", petitioner, as Distributor, being precluded from disposing such products elsewhere than in the above places unless written consent would first be obtained from the Company.3Petitioner, as Distributor, is required to exert every effort to have the shipment of the products in the maximum quantity and to promote in every way the sale thereof.4The prices, discounts, terms of payment, terms of delivery and other conditions of sale were subject to change in the discretion of the Company.5Then came this crucial stipulation: "The Company shall from time to time consign to the Distributor and the Distributor will receive, accept and/or hold upon consignment the products specified under the terms of this agreement in such quantities as in the judgment of the Company may be necessary for the successful solicitation and maintenance of business in the territory, and the Distributor agrees that responsibility for the final sale of all goods delivered shall rest with him. All goods on consignment shall remain the property of the Company until sold by the Distributor to the purchaser or purchasers, but all sales made by the Distributor shall be in his name, in which case the sale price of all goods sold less the discount given to the Distributor by the Company in accordance with the provision of paragraph 13 of this agreement, whether or not such sale price shall have been collected by the Distributor from the purchaser or purchasers, shall immediately be paid and remitted by the Distributor to the Company. It is further agreed that this agreement does not constitute Distributor the agent or legal representative of the Company for any purpose whatsoever. Distributor is not granted any right or authority to assume or to create any obligation or responsibility, express or implied, in behalf of or in the name of the Company, or to bind the Company in any manner or thing whatsoever."6All specifications for the goods ordered were subject to acceptance by the Company with petitioner, as Distributor, required to accept such goods shipped as well as to clear the same through customs and to arrange for delivery in its warehouse in Cebu City. Moreover, orders are to be filled in whole or in part from the stocks carried by the Company's neighboring branches, subsidiaries or other sources of Company's brands.7Shipments were to be invoiced at prices to be agreed upon, with the customs duties being paid by petitioner, as Distributor, for account of the Company.8Moreover, all resale prices, lists, discounts and general terms and conditions of local resale were to be subject to the approval of the Company and to change from time to time in its discretion.9The dealer, as Distributor, is allowed a discount of ten percent on the net amount of sales of merchandise made under such agreement.10On a date to be determined by the Company, the petitioner, as Distributor, was required to