FIRST DIVISION

[G.R. No. 172674. July 12, 2007.]

SPS. JORGE NAVARRA and CARMELITA BERNARDO

NAVARRA and RRRC DEVELOPMENT
CORPORATION, petitioners, vs. PLANTERS DEVELOPMENT
BANK and ROBERTO GATCHALIAN REALTY,
INC., respondents.

DECISION

GARCIA, J : p

Assailed and sought to be set aside in this petition for review under Rule 45
of the Rules of Court is the decision 1 dated September 27, 2004 of the Court of
Appeals (CA) in CA-G.R. CV No. 50002, as reiterated in its resolution 2 dated May
8, 2006, denying reconsideration thereof. The challenged decision reversed that
of the Regional Trial Court (RTC) of Makati City, Branch 66, in its Civil Case No.
16917, an action for Specific Performance and Injunction thereat commenced by
the herein petitioners against the respondents. The Makati RTC ruled that a
perfected contract of sale existed in favor of Jorge Navarra and Carmelita
Bernardo Navarra (Navarras) over the properties involved in the suit and
accordingly ordered Planters Development Bank (Planters Bank) to execute the
necessary deed of sale therefor. The CA reversed that ruling. Hence, this recourse
by the petitioners.
The facts:
The Navarras are the owners of five (5) parcels of land located at B.F.
Homes, Parañaque and covered by Transfer Certificates of Title (TCT) Nos. S-
58017, S-58011, S-51732, S-51733 and A-14574. All these five (5) parcels of land
are the subject of this controversy.
On July 5, 1982, the Navarras obtained a loan of P1,200,000.00 from
Planters Bank and, by way of security therefor, executed a deed of mortgage over
their aforementioned five (5) parcels of land. Unfortunately, the couple failed to pay
their loan obligation. Hence, Planters Bank foreclosed on the mortgage and the
mortgaged assets were sold to it for P1,341,850.00, it being the highest bidder in
the auction sale conducted on May 16, 1984. The one-year redemption period
expired without the Navarras having redeemed the foreclosed properties. aHTDAc

On the other hand, co-petitioner RRRC Development Corporation (RRRC)

is a real estate company owned by the parents of Carmelita Bernardo Navarra.
RRRC itself obtained a loan from Planters Bank secured by a mortgage over
another set of properties owned by RRRC. The loan having been likewise unpaid,
Planters Bank similarly foreclosed the mortgaged assets of RRRC. Unlike the
Navarras, however, RRRC was able to negotiate with the Bank for the redemption
of its foreclosed properties by way of a concession whereby the Bank allowed
RRRC to refer to it would-be buyers of the foreclosed RRRC properties who would
remit their payments directly to the Bank, which payments would then be
considered as redemption price for RRRC. Eventually, the foreclosed properties
of RRRC were sold to third persons whose payments therefor, directly made to the
Bank, were in excess by P300,000.00 for the redemption price.
In the meantime, Jorge Navarra sent a letter to Planters Bank, proposing to
repurchase the five (5) lots earlier auctioned to the Bank, with a request that he be
given until August 31, 1985 to pay the down payment of P300,000.00. Dated July
18, 1985 and addressed to then Planters Bank President Jesus Tambunting, the
letter reads in full:
This will formalize my request for your kind consideration in
allowing my brother and me to buy back my house and lot and my
restaurant building and lot together with the adjacent road lot.
Since my brother, who is working in Saudi Arabia, has accepted
this arrangement only recently as a result of my urgent offer to him,
perhaps it will be safe for us to set August 31, 1985 as the last day for the
payment of a P300,000.00 downpayment. I hope you will grant us the
opportunity to raise the funds within this period, which includes an
allowance for delays.
The purchase price, I understand, will be based on the redemption
value plus accrued interest at the prevailing rate up to the date of our sales
contract. Maybe you can give us a long term payment scheme on the
basis of my brother's annual savings of roughly US$30,000.00 everytime
he comes home for his home leave.
I realize that this is not a regular transaction but I am seeking your
favor to give me a chance to reserve whatever values I can still recover
from the properties and to avoid any legal complications that may arise as
a consequence of the total loss of the Balangay lot. I hope that you will
extend to me your favorable action on this grave matter. AaHTIE

In response, Planters Bank, thru its Vice-President Ma. Flordeliza Aguenza,

wrote back Navarra via a letter dated August 16, 1985, thus:
 Regarding your letter dated July 18, 1985, requesting that we give
up to August 31, 1985 to buy back your house and lot and restaurant and
building subject to a P300,000.00 downpayment on the purchase price,
please be advised that the Collection Committee has agreed to your
request.
Please see Mr. Rene Castillo, Head, Acquired Assets Unit, as soon
as possible for the details of the transaction so that they may work on the
necessary documentation.
Accordingly, Jorge Navarra went to the Office of Mr. Rene Castillo on August
20, 1985, bringing with him a letter requesting that the excess payment of
P300,000.00 in connection with the redemption made by the RRRC be applied as
down payment for the Navarras' repurchase of their foreclosed properties.
Because the amount of P300,000.00 was sourced from a different
transaction between RRRC and Planters Bank and involved different debtors, the
Bank required Navarra to submit a board resolution from RRRC authorizing him to
negotiate for and its behalf and empowering him to apply the excess amount of
P300,000.00 in RRRC's redemption payment as down payment for the repurchase
of the Navarras' foreclosed properties.
Meanwhile, titles to said properties were consolidated in the name of
Planters Bank, and on August 27, 1985, new certificates of title were issued in its
name, to wit: TCT Nos. 97073, 97074, 97075, 97076 and 97077.
Then, on January 21, 1987, Planters Bank sent a letter to Jorge Navarra
informing him that it could not proceed with the documentation of the proposed
repurchase of the foreclosed properties on account of his non-compliance with the
Bank's request for the submission of the needed board resolution of RRRC.
In his reply-letter of January 28, 1987, Navarra claimed having already
delivered copies of the required board resolution to the Bank. The Bank, however,
did not receive said copies. Thus, on February 19, 1987, the Bank sent a notice to
the Navarras demanding that they surrender and vacate the properties in question
for their failure to exercise their right of redemption. DAEIHT

Such was the state of things when, on June 31, 1987, in the RTC of Makati
City, the Navarras filed their complaint for Specific Performance with
Injunction against Planters Bank. In their complaint docketed in said court as Civil
Case No. 16917 and raffled to Branch 66 thereof, the Navarras, as plaintiffs,
alleged that a perfected contract of sale was made between them and Planters
Bank whereby they would repurchase the subject properties for P1,800,000.00
with a down payment of P300,000.00.
 In its Answer, Planters Bank asserted that there was no perfected contract
of sale because the terms and conditions for the repurchase have not yet been
agreed upon.
On September 9, 1988, a portion of the lot covered by TCT No. 97077
(formerly TCT No. A-14574) was sold by Planters Bank to herein co-respondent
Roberto Gatchalian Realty, Inc. (Gatchalian Realty). Consequently, TCT No.
97077 was cancelled and TCT No. 12692 was issued in the name of Gatchalian
Realty. This prompted the Navarras to amend their complaint by impleading
Gatchalian Realty as additional defendant.
In a decision dated July 10, 1995, the trial court ruled that there was a
perfected contract of sale between the Navarras and Planters Bank, and
accordingly rendered judgment as follows:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered ordering:
a) the cancellation of the Deed of Absolute Sale (Exh. "2") over lot
4137-C between defendant Planters Development Bank
and defendant Roberto Gatchalian Realty Corporation
(RGRI) with the vendor bank refunding all the payments
made by the vendee RGRI "without interest less the five
percent (5%) broker's commission":
b) the defendant Planters Development Bank to execute the Deed
of Absolute Sale over the lots covered by TCT Nos. 97073,
97074, 97075, 97076, and 97077 in favor of all the plaintiffs
for a consideration of ONE MILLION EIGHT HUNDRED
THOUSAND (P1,800,000.00) less the downpayment of
P300,000.00 plus interest at the rate of twenty five percent
(25%) per year for five (5) years to be paid in full upon the
execution of the contract;aEAIDH

c) the defendant Planters Development Bank the amount of TEN

THOUSAND PESOS (P10,000.00) by way of attorney's
fees.
d) No costs.
SO ORDERED.
Therefrom, Planters Bank and Gatchalian Realty separately went on appeal
to the CA whereat their appellate recourse were consolidated and docketed as CA-
G.R. CV No. 50002.
As stated at the threshold hereof, the appellate court, in its decision of
September 27, 2004, reversed that of the trial court and ruled that there was no
perfected contract of sale between the parties. Partly says the CA in its decision:
 The Court cannot go along with the deduction of the trial court that
the response of Planters Bank was favorable to Jorge Navarra's proposal
and that the P300,000.00 in its possession is a down payment and as
such sufficient bases to conclude that there was a valid and perfected
contract of sale. Based on the turn of events and the tenor of the
communications between the offerors and the creditor bank, it appears
that there was not even a perfected contract to sell, much less a perfected
contract of sale.
Article 1319 cited by the trial court provides that the acceptance to
an offer must be absolute. Simply put, there must be unqualified
acceptance and no condition must tag along. But Jorge Navarra in trying
to convince the bank to agree, had himself laid out terms in offering (1) a
downpayment of P300,000.00 and setting (2) as deadline August 31, 1985
for the payment thereof. Under these terms and conditions the bank
indeed accepted his offer, and these are essentially the contents of
Exhibits "J" and "K."
But was there compliance? According to the evidence on file the
P300,000.00, if at all, was given beyond the agreed period. The court a
quo missed the fact that the said amount came from the excess of the
proceeds of the sale to the Peña spouses which Jorge Navarra made to
appear was made before the deadline he set of August 31, 1985. But this
is athwart Exhibits "M-1" and "N", the Contract to Sell and the Deed of
Sale between RRRC and the Peñas, for these were executed only on
September 13, 1985 and October 7, 1985 respectively. 2005cdasia

xxx xxx xxx

There were two separate and independent loans secured by
distinct mortgages on different lots and their only commonality is the
relationship of the Navarras and Bernardo families. It is thus difficult to
conceive and to conclude that such Byzantine arrangement was
acquiesced to and provided for in that single and simple letter of the bank.
With their motion for reconsideration having been denied by the CA in its
resolution of May 8, 2006, petitioners are now with this Court via this recourse on
their submission that the CA erred —
I
. . . IN CONCLUDING THAT THERE WAS NO PERFECTED
CONTRACT TO REPURCHASE THE FORECLOSED PROPERTIES
BETWEEN THE PETITIONERS AND THE PRIVATE RESPONDENT
PLANTERS DEVELOPMENT BANK, AS CORRECTLY FOUND BY THE
TRIAL COURT.
II
 . . . IN HOLDING THAT THE PARTIES NEVER GOT PAST THE
NEGOTIATION STAGE.
While the question raised is essentially one of fact, of which the Court
normally eschews from, yet, given the conflicting factual findings of the trial and
appellate courts, the Court shall go by the exception 3 to the general rule and
proceed to make its own assessment of the evidence.
We DENY.
Petitioners contend that a perfected contract of sale came into being when
respondent Bank, thru a letter dated August 16, 1985, formally accepted the offer
of the Navarras to repurchase the subject properties. aDIHTE

In general, contracts undergo three distinct stages, to wit: negotiation,

perfection or birth, and consummation. Negotiation begins from the time the
prospective contracting parties manifest their interest in the contract and ends at
the moment of their agreement. Perfection or birth of the contract takes place
when the parties agree upon the essential elements of the contract, i.e., consent,
object and price. Consummation occurs when the parties fulfill or perform the
terms agreed upon in the contract, culminating in the extinguishment thereof. 4
A negotiation is formally initiated by an offer which should be certain with
respect to both the object and the cause or consideration of the envisioned
contract. In order to produce a contract, there must be acceptance, which may be
express or implied, but it must not qualify the terms of the offer. The acceptance
of an offer must be unqualified and absolute to perfect the contract. In other words,
it must be identical in all respects with that of the offer so as to produce consent or
meeting of the minds. 5
Here, the Navarras assert that the following exchange of correspondence
between them and Planters Bank constitutes the offer and acceptance, thus:
Letter dated July 18, 1985 of Jorge Navarra:
This will formalize my request for your kind consideration in
allowing my brother and me to buy back my house and lot and my
restaurant building and lot together with the adjacent road lot.
Since my brother, who is working in Saudi Arabia, has accepted
this arrangement only recently as a result of my urgent offer to him,
perhaps it will be safe for us to set August 31, 1985 as the last day for the
payment of a P300,000.00 downpayment. I hope you will grant us the
opportunity to raise the funds within this period, which includes an
allowance for delays.
The purchase price, I understand, will be based on the redemption
value plus accrued interest at the prevailing rate up to the date of our sales
contract. Maybe you can give us a long term payment scheme on the
 basis of my brother's annual savings of roughly US$30,000.00 everytime
he comes home for his home leave. EHaASD

I realize that this is not a regular transaction but I am seeking your

favor to give me a chance to reserve whatever values I can still recover
from the properties and to avoid any legal complications that may arise as
a consequence of the total loss of the Balangay lot. I hope that you will
extend to me your favorable action on this grave matter.
Letter dated August 16, 1985 of Planters Bank
Regarding your letter dated July 18, 1985, requesting that we give
up to August 31, 1985 to buy back your house and lot and restaurant and
building subject to a P300,000.00 downpayment on the purchase price,
please be advised that the Collection Committee has agreed to your
request.
Please see Mr. Rene Castillo, Head, Acquired Assets Unit, as
soon as possible for the details of the transaction so that they may
work on the necessary documentation. (Emphasis ours)
Given the above, the basic question that comes to mind is: Was the offer
certain and the acceptance absolute enough so as to engender a meeting of the
minds between the parties? Definitely not.
While the foregoing letters indicate the amount of P300,000.00 as down
payment, they are, however, completely silent as to how the succeeding
installment payments shall be made. At most, the letters merely acknowledge that
the down payment of P300,000.00 was agreed upon by the parties. However, this
fact cannot lead to the conclusion that a contract of sale had been perfected. Quite
recently, this Court held that before a valid and binding contract of sale can exist,
the manner of payment of the purchase price must first be established since the
agreement on 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. 6
Too, the Navarras' letter/offer failed to specify a definite amount of the
purchase price for the sale/repurchase of the subject properties. It merely stated
that the "purchase price will be based on the redemption value plus accrued
interest at the prevailing rate up to the date of the sales contract." The ambiguity
of this statement only bolsters the uncertainty of the Navarras' so-called "offer" for
it leaves much rooms for such questions, as: what is the redemption value? what
prevailing rate of interest shall be followed: is it the rate stipulated in the loan
agreement or the legal rate? when will the date of the contract of sale be based,
shall it be upon the time of the execution of the deed of sale or upon the time when
the last installment payment shall have been made? To our mind, these questions
need first to be addressed, discussed and negotiated upon by the parties before a
definite purchase price can be arrived at. SDHAEC
 Significantly, the Navarras wrote in the same letter the following:
Maybe you can give us a long-term payment scheme on the basis
of my brother's annual savings of roughly US$30,000.00 every time he
comes home for his home leave.
Again, the offer was not clear insofar as concerned the exact number of
years that will comprise the long-term payment scheme. As we see it, the absence
of a stipulated period within which the repurchase price shall be paid all the more
adds to the indefiniteness of the Navarras' offer.
Clearly, then, the lack of a definite offer on the part of the spouses could not
possibly serve as the basis of their claim that the sale/repurchase of their
foreclosed properties was perfected. The reason is obvious: one essential element
of a contract of sale is wanting: the price certain. There can be no contract of sale
unless the following elements concur: (a) consent or meeting of the minds; (b)
determinate subject matter; and (c) price certain in money or its equivalent. Such
contract is born or perfected from the moment there is a meeting of minds upon
the thing which is the object of the contract and upon the price. 7 Here, what is
dramatically clear is that there was no meeting of minds vis-a-vis the price,
expressly or impliedly, directly or indirectly.
Further, the tenor of Planters Bank's letter-reply negates the contention of
the Navarras that the Bank fully accepted their offer. The letter specifically stated
that there is a need to negotiate on the other details of the transaction 8 before the
sale may be formalized. Such statement in the Bank's letter clearly manifests lack
of agreement between the parties as to the terms of the purported contract of
sale/repurchase, particularly the mode of payment of the purchase price and the
period for its payment. The law requires acceptance to be absolute and
unqualified. As it is, the Bank's letter is not the kind which would constitute
acceptance as contemplated by law for it does not evince any categorical and
unequivocal undertaking on the part of the Bank to sell the subject properties to
the Navarras. EICSDT

The Navarras' attempt to prove the existence of a perfected contract of sale

all the more becomes futile in the light of the evidence that there was in the first
place no acceptance of their offer. It should be noted that aside from their first letter
dated July 18, 1985, the Navarras wrote another letter dated August 20, 1985, this
time requesting the Bank that the down payment of P300,000.00 be instead taken
from the excess payment made by the RRRC in redeeming its own foreclosed
properties. The very circumstance that the Navarras had to make this new request
is a clear indication that no definite agreement has yet been reached at that point.
As we see it, this request constitutes a new offer on the part of the Navarras, which
offer was again conditionally accepted by the Bank as in fact it even required the
Navarras to submit a board resolution of RRRC before it could proceed with the
proposed sale/repurchase. The eventual failure of the spouses to submit the
required board resolution precludes the perfection of a contract of sale/repurchase
between the parties. As earlier mentioned, contracts are perfected when there is
concurrence of the parties' wills, manifested by the acceptance by one of the offer
made by the other. 9 Here, there was no concurrence of the offer and acceptance
as would result in a perfected contract of sale.
Evidently, what transpired between the parties was only a prolonged
negotiation to buy and to sell, and, at the most, an offer and a counter-offer with
no definite agreement having been reached by them. With the hard reality that no
perfected contract of sale/repurchase exists in this case, any independent
transaction between the Planters Bank and a third-party, like the one involving the
Gatchalian Realty, cannot be affected.
WHEREFORE, the petition is DENIED and the assailed decision and
resolution of the Court of Appeals are AFFIRMED.
No pronouncement as to costs.
SO ORDERED.
Puno, C.J., Corona and Azcuna, JJ., concur.
Sandoval-Gutierrez, J., is on leave.

(Spouses Navarra v. Planters Development Bank, G.R. No. 172674, [July 12,
|||

2007], 554 PHIL 434-448)

THIRD DIVISION

[G.R. No. 152132. July 24, 2007.]

LORDITO ARROGANTE, JOHNSTON ARROGANTE, ARME

ARROGANTE, and FE D. ARROGANTE, petitioners, vs.
BEETHOVEN DELIARTE, Joined by SPOUSE LEONORA
DUENAS, respondents.

DECISION

NACHURA, J : p
 This Petition for Review on Certiorari assails the Decision 1 dated August
28, 2001 of the Court of Appeals (CA) in CA-G.R. CV No. 58493 which affirmed
the Decision2 dated February 18, 1997 of the Regional Trial Court (RTC), Branch
10, of Cebu City in an action for quieting of title and damages. SDEHCc

It appears that the lot in controversy, Lot No. 472-A (subject lot), is situated
in Poblacion Daanbantayan, Cebu, and was originally conjugal property of the
spouses Bernabe Deliarte, Sr. and Gregoria Placencia who had nine children,
including herein respondent Beethoven Deliarte and petitioner Fe Deliarte
Arrogante. The other petitioners, Lordito, Johnston, and Arme, Jr., all surnamed
Arrogante, are the children of Fe and, thus, nephews of Beethoven. Respondent
Leonora Duenas is the wife of Beethoven.
A series of misfortunes struck the Deliarte family. The first tragedy occurred
when a brother of Beethoven and Fe was hospitalized and eventually died in
Davao. Beethoven shouldered the hospitalization and other related expenses,
including the transport of the body from Davao to Cebu and then to Daanbantayan.
The next occurrence took place a year after, when Gregoria was likewise
hospitalized and subsequently died on July 29, 1978. Once again, Beethoven paid
for all necessary expenses. Soon thereafter, it was Bernabe, the parties' ailing
father, who died on November 7, 1980. Not surprisingly, it was Beethoven who
spent for their father's hospitalization and burial.
In between the deaths of Gregoria and Bernabe, on November 16, 1978, the
Deliarte siblings agreed to waive and convey in favor of Beethoven all their rights,
interests, and claims to the subject lot in consideration of P15,000.00. 3 At the
signing of the deed of absolute sale, the siblings who failed to attend the family
gathering, either because they were dead or were simply unable to, were
represented by their respective spouses who signed the document on their
behalf. 4 Bernabe, who was already blind at that time, was likewise present and
knew of the sale that took place among his children.
Thus, from then on, Beethoven occupied and possessed the subject lot
openly, peacefully, and in the concept of owner. He exercised full ownership and
control over the subject lot without any objection from all his siblings, or their heirs,
until 1993 when the controversy arose. 5 In fact, on March 26, 1986, all of
Beethoven's siblings, except Fe, signed a deed of confirmation of sale in favor of
Beethoven to ratify the 1978 private deed of sale.
Sometime in August 1993, petitioner Lordito Arrogante installed placards on
the fence erected by respondents, claiming that the subject lot was illegally
acquired by the latter. 6 The placards depicted Beethoven as a land grabber who
had unconscionably taken the subject lot from Lordito who claimed that the lot is a
devise from his grandfather. 7 Allegedly, the bequeathal was made in Bernabe's
last will and testament which was, unfortunately, torn up and destroyed by
Beethoven. 8
Thus, on November 10, 1993, respondents filed an action for quieting of title
and damages against the petitioners.
In their answer, the petitioners averred that Beethoven does not own the
whole of the subject lot because Bernabe was still alive in 1978 when Beethoven's
siblings sold to him all their rights and claims to and interests in that lot. Thus, the
siblings could sell only their respective inheritance from one-half of the subject lot,
representing Gregoria's share in the conjugal property. Corollarily, the petitioners
claimed that Fe continues to own 1/9 of one-half of the subject lot, comprising
Bernabe's share of the property, which allegedly was not contemplated in the
conveyance in 1978. According to petitioners, this contention is supported by Fe's
failure to sign the deed of confirmation of sale in 1986. DaHSIT

As regards the damaging placards, the petitioners asseverated that Lordito

acted on his own when he installed the same, and that this was resorted to merely
to air his grievance against his uncle, Beethoven, for claiming ownership of the
entire lot.
After trial, the RTC rendered a Decision quieting title on the subject lot in
favor of respondents and directing petitioners, jointly and severally, to pay the
respondents P150,000.00 as moral damages, P25,000.00 as attorney's fees, and
P10,000.00 as litigation expenses.
On appeal, the CA affirmed the trial court's decision but deleted the award
of attorney's fees and litigation expenses. In ruling for the respondents, both the
trial and appellate courts upheld the validity of the 1978 sale as between the
parties. Considering that petitioner Fe signed the document and consented to the
transaction, she is now barred from repudiating the terms thereof. In this regard,
the RTC and the CA applied the parole evidence rule and allowed the introduction
of evidence on the additional consideration for the conveyance, namely, the
expenses incurred by Beethoven during the three tragedies that had befallen the
Deliarte family. Both courts found that the sale was already completely executed,
thus removing it from the ambit of the Statute of Frauds. 9
As for the award of moral damages, the trial and appellate courts held that
the other petitioners' failure to prevent Lordito from putting up, or at least, removing
the placards, amounted to the defamation and opprobrium of Beethoven with their
knowledge and acquiescence. Thus, the assessment of moral damages was
appropriate, given the humiliation and embarrassment suffered by Beethoven
considering his stature and reputation in the community as an electrical engineer
handling several big projects.
 However, petitioners insist that the lower courts erred in their rulings. They
maintain that the 1978 sale did not contemplate the alienation of Bernabe's share
in the conjugal partnership as he failed to sign the private document. As such, the
courts' application of the parole evidence rule and the Statute of Frauds were
erroneous. In the same vein, the petitioners posit that both courts' ruling that they
are jointly and severally liable for moral damages is inconsistent with the evidence
on record that Lordito was the sole author of the damaging placards.
In this appeal, the issues for the resolution of this Court are:
I.
WHETHER OR NOT THE PRIVATE DEED OF SALE EXECUTED IN
1978 IS A VALID CONVEYANCE OF THE ENTIRE LOT 472-A TO
PETITIONER BEETHOVEN DELIARTE.
II.
WHETHER OR NOT THE PAROLE EVIDENCE RULE IS APPLICABLE
TO THIS CASE.
III.
WHETHER OR NOT THE STATUTE OF FRAUDS IS APPLICABLE TO
THIS CASE.
IV.
WHETHER OR NOT THE PETITIONERS ARE JOINTLY AND
SEVERALLY LIABLE FOR MORAL DAMAGES. STcHDC

At the outset, we note that both the lower and the appellate courts failed to
identify the applicable law.
First. The 1978 private deed of sale, insofar as it disposed of Bernabe's
share in the conjugal partnership prior to his death, is void for being a conveyance
of the Deliarte siblings' future inheritance.
Article 1347, paragraph 2 of the Civil Code characterizes a contract entered
into upon future inheritance as void. 10 The law applies when the following
requisites concur: (1) the succession has not yet been opened; (2) the object of
the contract forms part of the inheritance; and (3) the promissor has, with respect
to the object, an expectancy of a right which is purely hereditary in nature. 11
In this case, at the time the contract was entered into, succession to
Bernabe's estate had yet to be opened, and the object thereof, i.e., Bernabe's
share in the subject lot, formed part of his children's inheritance, and the children
merely had an inchoate hereditary right thereto.
True, the prohibition on contracts respecting future inheritance admits of
exceptions, as when a person partitions his estate by an act inter vivos under
Article 1080 of the Civil Code. 12 However, the private deed of sale does not
purport to be a partition of Bernabe's estate as would exempt it from the application
of Article 1347. Nowhere in the said document does Bernabe separate, divide, and
assign to his children his share in the subject lot effective only upon his
death. 13 Indeed, the document does not even bear the signature of Bernabe.
Neither did the parties demonstrate that Bernabe undertook an oral partition
of his estate. Although we have held on several occasions that an oral or parole
partition is valid, our holdings thereon were confined to instances wherein the
partition had actually been consummated, enforced, and recognized by the
parties. 14Absent a showing of an overt act by Bernabe indicative of an unequivocal
intent to partition his estate among his children, his knowledge and ostensible
acquiescence to the private deed of sale does not equate to an oral partition by an
act inter vivos. Besides, partition of property representing future inheritance cannot
be made effective during the lifetime of its owner. 15
Considering the foregoing, it follows that the 1986 deed of confirmation of
sale which sought to ratify the 1978 sale likewise suffers from the same
infirmity. 16 In short, the 1986 deed is also void.
Nevertheless, it is apparent that Bernabe treated his share 17 in the subject
lot as his children's present inheritance, and he relinquished all his rights and claim
thereon in their favor subject to Beethoven's compensation for the expenses he
initially shouldered for the family. The records reveal that Bernabe, prior to his
hospitalization and death, wanted to ensure that his children attended to the
expenditure relating thereto, and even articulated his desire that such surpass the
provision for both his son and wife, Beethoven's and Fe's brother and mother,
respectively. 18 Their arrangement contemplated the Deliarte siblings' equal
responsibility for the family's incurred expenses. ASHICc

We take judicial notice of this collective sense of responsibility towards

family. As with most nuclear Filipino families, the Deliarte siblings endeavored to
provide for their parents or any member of their family in need. This was evident
in Florenda Deliarte Nacua's, the youngest Deliarte sibling's, remittance to her
parents of her salary for two years so they could redeem the subject lot. 19
Florenda corroborated the testimony of Beethoven that their father was
present during, and was aware of, the transaction that took place among his
children. 20The 1978 deed of sale, albeit void, evidenced the consent and
acquiescence of each Deliarte sibling to said transaction. They raised no objection
even after Beethoven forthwith possessed and occupied the subject lot.
The foregoing arrangement, vaguely reflected in the void deed of sale,
points to a meeting of the minds among the parties constitutive of an innominate
contract, akin to both an onerous and a remuneratory donation. 21 In this regard,
Bernabe's waiver and relinquishment of his share in the subject lot is effectively a
donation inter vivos to his children. However, the gratuitous act is coupled with an
onerous cause — equal accountability of the Deliarte siblings for the hospitalization
and death expenses of deceased family members to be taken from their shares in
the subject lot. In turn, the remunerative cause pertains to Beethoven's
recompense for the family expenses he initially shouldered.
During his lifetime, Bernabe remained the absolute owner of his undivided
interest in the subject lot. Accordingly, he could have validly disposed of his interest
therein. His consent to the disposition of the subject lot in favor of Beethoven,
agreed upon among his children, is evident, considering his presence in,
knowledge of, and acquiescence to the transaction. Further, the arrangement was
immediately effected by the parties with no objection from Bernabe or any of the
Deliarte siblings, including herein petitioner Fe. Ineluctably, the actual
arrangement between the parties included Bernabe, and the object thereof did not
constitute future inheritance.
Second. The parole evidence rule is applicable. While the application
thereof presupposes the existence of a valid agreement, the innominate contract
between the parties has been directly put in issue by the respondents. Verily, the
failure of the deed of sale to express the true intent and agreement of the parties
supports the application of the parole evidence rule. 22
Contrary to petitioners' contention, the absence of Bernabe's signature in
the 1978 deed of sale is not necessarily conclusive of his dissent or opposition to
the effected arrangement. As previously adverted to, the agreement had multiple
causes or consideration, apart from the P15,000.00 stated in the deed of sale. To
repeat, the agreement between the parties had both an onerous and a
remunerative cause. Also worthy of note is the moral consideration for the
agreement given the relationship between the parties.
Third. We agree with both the lower and the appellate courts that the Statute
of Frauds is not applicable to the instant case. DaAISH

The general rule is that contracts are valid in whatever form they may
be. 23 One exception thereto is the Statute of Frauds which requires a written
instrument for the enforceability of a contract. 24 However, jurisprudence dictates
that the Statute of Frauds only applies to executory, not to completed, executed,
or partially consummated, contracts. 25
In the case at bench, we find that all requisites for a valid contract are
present, specifically: (1) consent of the parties; (2) object or subject matter,
comprised of the parties' respective shares in the subject lot; and (3) the
consideration, over and above the P15,000.00 stipulated price. We note that the
agreement between the parties had long been consummated and completed. In
fact, the agreement clearly contemplated immediate execution by the parties. More
importantly, the parties, including petitioner Fe, ratified the agreement by the
acceptance of benefits thereunder. 26
One other thing militates against Fe's claim of ownership — silence and
palpable failure to object to the execution of the agreement. Fe insists that she
only intended to sell her share of the lot inherited from her mother's estate,
exclusive of her father's share therein.
We are not persuaded by the belated claim. This afterthought is belied by
the express stipulations in the 1978 deed of sale that the heirs of Bernabe and
Gregoria, absolutely sell, quitclaim, and transfer the subject lot in favor of
Beethoven. Although a void contract is not a source of rights and obligations
between the parties, the provisions in the written agreement and their signature
thereon are equivalent to an express waiver of all their rights and interests in the
entire lot in favor of Beethoven, regardless of which part pertained to their mother's
or father's estate.
Truly significant is the fact that in all the years that Beethoven occupied the
subject lot, Fe never disturbed the former in his possession. Neither did she
present her other siblings to buttress her contradicting claim over the subject lot.
Likewise, she never asked for a partition of the property even after the death of
their father, Bernabe, to settle his estate, or when her other siblings executed the
deed of confirmation of sale in 1986. Fe also does not pretend to share in the
payment of realty taxes thereon, but merely advances the claim that Priscillana,
one of their siblings, had already paid said taxes. 27 Ultimately, petitioner Fe is
estopped from staking a claim on the subject lot and wresting ownership therein
from Beethoven.
Our holding in the case of Tinsay v. Yusay 28 is still good law, thus:
Juana Servando not being a party to the partition agreement
Exhibit 1, the agreement standing alone was, of course, ineffective as
against her. The attempt to partition her land among her heirs, constituting
a partition of future inheritance was invalid under the second paragraph of
Article 1271 of the Civil Code and for the same reason the renunciation of
all interest in the land which now constitutes lots Nos. 241 and 713 made
by the appellants in favor of the children of Jovito Yusay would likewise
be of no binding force as to the undivided portion which belonged to Juan
Servando. But if the parties entered into the partition agreement in good
faith and treated all of the land as a present inheritance, and if the
appellants on the strength of the agreement obtained their Torrens title to
the land allotted to them therein, and if Perpetua Sian in reliance on the
appellants' renunciation of all interest claimed by her on behalf of her
children in the cadastral case refrained from presenting any opposition to
the appellants' claim to the entire fee in the land assigned to them in the
partition agreement and if the appellants after the death of Juana
Servando continued to enjoy the benefits of the agreement refusing to
 compensate the heirs of Jovito Yusay for the latters' loss of their interest
in lots Nos. 2 and 744 through the registration of the lots in the name of
the appellants and the subsequent alienation of the same to innocent third
parties, said appellants are now estopped from repudiating the partition
agreement of 1911 and from claiming any further interest in lots Nos. 241
and 713. There is, however, no reason why they should not be allowed to
share in the distribution of the other property left by Juana Servando. EHaCTA

Fourth. As to the lower courts' award of moral damages, we sustain

respondents' entitlement thereto. Undeniably, respondents suffered besmirched
reputation, wounded feelings, and social humiliation due to the damaging
placards. 29 The injury is aggravated because of the relationship among the
parties. Respondent Beethoven was able to prove that his nephews, petitioners
Lordito, Johnston, and Arme, Jr., stayed with him at some point, and that he
financially supported and trained them to be electricians. 30
Yet, Lordito denies malice in the aforesaid act. He argues that his only
quarrel with Beethoven stems from the latter's claim of ownership over the subject
lot which was, supposedly, already bequeathed to him by his grandfather,
Bernabe. Lordito maintains that his claim is valid, supported by a will Beethoven
had torn up, which allegedly negates malice in his act of putting up the placards.
We are not convinced.
To begin with, the supposed devise to Lordito appears to be void.
Considering that Bernabe's estate consisted merely of his conjugal share in the
subject lot, the bequeathal infringes on his compulsory heirs' legitimes, including
that of Lordito's mother, Fe. 31 Lordito's claim, therefore, is only subordinate to
Beethoven's claim as a compulsory heir, even without delving into the innominate
contract between the parties. In all, the ascription of malice and Lordito's
corresponding liability for moral damages is correct given the words he employed
in the placards.
However, we agree with petitioners that there is a dearth of evidence
pointing to their collective responsibility for Lordito's act.
Corollary thereto, Lordito admits and claims sole responsibility for putting up
the placards. The other petitioners' specific participation in the tortious act was not
proven. Failure to prevent Lordito or command him to remove the placards, alone,
does not justify the finding that all the petitioners are jointly and severally liable. It
does not suffice that all the petitioners were moved by a common desire to acquire
the subject property, absent any proof that they individually concurred in Lordito's
act.
Entrenched is the rule that "the rights of a party cannot be prejudiced by an
act, declaration, or omission of another." 32 The exception under Section 32, Rule
130 of the Rules of Court does not obtain in this instance. The other petitioners'
acquiescence to and apparent concurrence in Lordito's act cannot be inferred
merely from their failure to remove the placards or reprimand Lordito. While the
placards indeed defamed Beethoven, there is nothing that directly links the other
petitioners to this dastardly act.
WHEREFORE, premises considered, the petition is PARTIALLY
GRANTED. The August 28, 2001 Decision of the Court of Appeals is hereby
MODIFIED. Petitioner Lordito Arrogante is held solely liable to respondents for
moral damages in the amount of P150,000.00. The quieting of title in favor of
respondents is hereby AFFIRMED. No costs. acCTSE

SO ORDERED.
Ynares-Santiago, Austria-Martinez and Chico-Nazario, JJ., concur.

(Arrogante v. Spouses Deliarte, G.R. No. 152132, [July 24, 2007], 555 PHIL 60-
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74)