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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
November-2006 Jurisprudence                 

  • A.C. No. 6266 - ESTELA ANASTACIO-BRIONES vs ATTY. ALFREDO A. ZAPANTA

  • A.C. No. 7123 - MARIA DIVINA CRUZ-VILLANUEVA vs ATTY. CARLOS P. RIVERA, ET AL.

  • A.C. No. 7214 - AILEEN A. FERANCULLO vs ATTY. SANCHO M. FERANCULLO, JR.

  • A.C. No. 6266 - ESTELA ANASTACIO-BRIONES vs ATTY. ALFREDO A. ZAPANTA

  • A.C. No. 7123 - MARIA DIVINA CRUZ-VILLANUEVA vs ATTY. CARLOS P. RIVERA, ET AL.

  • A.C. No. 7214 - AILEEN A. FERANCULLO vs ATTY. SANCHO M. FERANCULLO, JR.

  • A.C. No. 6266 - ESTELA ANASTACIO-BRIONES vs ATTY. ALFREDO A. ZAPANTA

  • A.C. No. 7123 - MARIA DIVINA CRUZ-VILLANUEVA vs ATTY. CARLOS P. RIVERA, ET AL.

  • A.C. No. 7214 - AILEEN A. FERANCULLO vs ATTY. SANCHO M. FERANCULLO, JR.

  • Adm. Case No. 7252 - CBD 05-1434 - JOHNNY NG vs ATTY. BENJAMIN C. ALAR

  • A.C. No. 7280 - DAHLIA S. GACIAS vs ATTY. ALEXANDER BULAUITAN

  • A.M. No. 06-4-219-RTC - RE: REPORT ON THE JUDICIAL AUDIT AND PHYSICAL INVENTORY

  • A.M. No. 2004-15-SC - PROSECUTOR AGAPITO B. ROSALES vs ENGR. CELERINO BUENAVENTURA

  • A.M. No. 2005-26-SC - RE: LOST CHECKS ISSUED TO THE LATE RODERICK ROY P. MELLIZA, ETC.

  • A.M. No. MTJ-03-1503 - NATIONAL BUREAU OF INVESTIGATION vs JUDGE LUISITO T. ADAOAG

  • A.M. No. MTJ-06-1660 - Formerly A.M. No. OCA IPI 04-1519-MTJ - SPOUSES TREFIL AND LINA A. UMALE vs JUDGE NICOLAS V. FADUL, JR.

  • A.M. No. P-03-1731 - PNB MANAGEMENT AND DEVELOPMENT CORPORATION vs CARMELO CACHERO

  • A.M. No. P-03-1737 - Formerly OCA IPI No. 01-1250-P - NICOLAS PACLIBAR vs RENAN V. PAMPOSA

  • A.M. No. P-05-2092 - ATTY. PERFECTO A.S. LAGUIO, JR. vs MILA AMANTE-CASICAS

  • A.M. No. P-05-1979 - JUDGE LEONARDO P. CARREON vs ERIC ANTHONY S. ORTEGA

  • A.M. No. P-06-2109 - LIGAYA V. REYES vs MARIO PABLICO

  • A.M. No. P-06-2204 - NYDIA S. SERVINO vs MA. MAWILYNN CONCEPCION B. ADOLFO

  • A.M. No. P-06-2266 - ENCARNACION FLORES vs ROMEO S. GATCHECO, JR.

  • A.M. No. P-06-2257 - SPS. ARTHUR and LEONORA STILGROVE vs ERIBERTO R. SABAS, ET AL.

  • A.M. No. P-06-2268 - BIENVENIDO L. PUNZALAN vs RUMEL M. MACALISANG

  • A.M. No. RTJ-05-1901 - FORTUNE LIFE INSURANCE, COMPANY, INC. vs JUDGE JIMMY H. F. LUCZON, JR.

  • A.M. No. RTJ-06-2002 - ROCKLAND CONSTRUCTION CO., INC. vs JUDGE MARIANO M. SINGZON, JR.

  • G.R. No. 74269 & 92137 - SOLID HOMES, INC., ET AL. vs HON. INTERMEDIATE APPELLATE COURT, ET AL.

  • G.R. No. 127636 - E. ROMMEL REALTY AND DEVELOPMENT CORPORATION, ET AL. vs STA. LUCIA REALTY DEVELOPMENT CORPORATION

  • G.R. No. 126890 - UNITED PLANTERS SUGAR MILLING COMPANY, INC. vs COURT OF APPEALS, ET AL.

  • G.R. No. 129820 - PNOC-ENERGY DEVELOPMENT CORPORATION vs EMILIANO G. VENERACION, JR.

  • G.R. No. 132834 - RUPERTO LUCERO, JR., ET AL. vs CITY GOVERNMENT OF PASIG

  • G.R. No. 135817 - REYNALDO RODRIGUEZ, ET AL. vs CONCORDIA ONG LIM, ET AL.

  • G.R. NOS. 140371-72 - DY YIENG SEANGIO, ET AL. vs AMOR A. REYES, ET AL.

  • G.R. No. 140833 - LACEPI T. MAGNANAO vs PEOPLE OF THE PHILIPPINES

  • G.R. No. 141480 - CARLOS B. DE GUZMAN vs TOYOTA CUBAO, INC.

  • G.R. No. 142351 - ST. MARTIN FUNERAL HOMES vs NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. No. 143219 - ASIAN TERMINALS, INC. vs RENATO P. VILLANUEVA, ET AL.

  • G.R. No. 143382 - SECURITY BANK and TRUST COMPANY vs MAR TIERRA CORPORATION, ET AL.

  • G.R. No. 144062 - THE BASES CONVERSION AND DEVELOPMENT AUTHORITY, ET AL. vs ELPIDIO UY

  • G.R. No. 146707 - ERNESTO DUMLAO, JR., ET AL. vs RODOLFO PONFERRADA, ET AL.

  • G.R. No. 148090 - STRONGHOLD INSURANCE COMPANY, INC. vs NEMESIO S. FELIX, ET AL.

  • G.R. No. 148490 - 7K CORPORATION vs NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. NOS. 148500-01 - TIMES TRANSPORTATION CO. INC. vs NATIONAL LABOR RELATIONS COMMISSION, ET AL.

  • G.R. NOS. 148839-40 - NAGKAHIUSANG MAMUMUO SA PICOP RESOURCES, INC. - SOUTHERN PHILIPPINES FEDERATION OF LABOR (NAMAPRI - SPFL), ET AL. vs COURT OF APPEALS, ET AL.

  • G.R. No. 148971 - ALBERTO GARONG vs PEOPLE OF THE PHILIPPINES

  • G.R. No. 149633 - EXECUTIVE DIRECTOR GABRIEL S. CASAL, ET AL. v. COMMISSION ON AUDIT

  • G.R. No. 149748 - JANG LIM, ET AL vs COURT OF APPEALS, ET AL.

  • G.R. No. 149753 - Miguel Cosme, Jr. v. People of the Philippines

  • G.R. NO. 149764 - PHILIPPINE OVERSEAS TELECOMMUNICATIONS CORPORATION vs ENRIQUE GUTIERREZ, ET AL.

  • G.R. No. 150253 - DAVAO LIGHT AND POWER CORPORATION, INC. vs ANTONIO G. DIAZ, ET AL.

  • G.R. No. 150402 - EPARWA SECURITY AND JANITORIAL SERVICES, INC. vs LICEO DE CAGAYAN UNIVERSITY

  • G.R. No. 152258 - ROGELIO P. ANTALAN vs ANIANO DESIERTO

  • G.R. No. 152984 - WILLIAM G. KWONG vs ATTY. RAMON GARGANTOS, ET AL.

  • G.R. NO. 154006 - STAR PAPER CORPORATION vs CARLITO ESPIRI TU, ET AL.

  • G.R. NO. 154565 - REMEDIOS RAMOS vs TESSIE PABAS

  • G.R. No. 154685 - METROPOLITAN BANK and TRUST COMPANY, ET AL. vs COURT OF APPEALS, ET AL.

  • G.R. No. 155645 - PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC. vs MAYFLOR T. YLAGAN

  • G.R. No. 155574 - TIMOTEO A. GARCIA vs SANDIGANBAYAN

  • G.R. No. 156294 - MELVA THERESA ALVIAR GONZALES vs RIZAL COMMERCIAL BANKING CORPORATION

  • G. R. No. 156888 - PEDRO R. SANTIAGO vs SUBIC BAY METROPOLITAN AUTHORITY

  • G.R. No. 156903 - SPOUSES CARLOS and TERESITA RUSTIA vs EMERITA RIVERA

  • G.R. No. 157107 - ALPINE LENDING INVESTORS, ET AL. vs ESTRELLA CORPUZ

  • G.R. No. 157117 - COASTAL SUBIC BAY TERMINAL, INC. vs DEPARTMENT OF LABOR and EMPLOYMENT, ET AL.

  • G.R. NOS. 157236-45 - ROMEO D. LONZANIDA vs SANDIGANBAYAN

  • G.R. No. 157906 - JOAQUINITA P. CAPILI vs SPS. DOMINADOR CARDAÑA and ROSALITA CARDAÑA,

  • G.R. No. 158676 - BPI-FAMILY SAVINGS BANK, INC. vs SPS. ZENAIDA DOMINGO & ABUNDIO S. DOMINGO, ET AL.

  • G.R. No. 158707 - COMMUNITY RURAL BANK OF SAN ISIDRO (N.E.), INC. vs YSAGANI V. PAEZ

  • G.R. NOS. 157294-95 - JOSEPH VICTOR G. EJERCITO vs SANDIGANBAYAN, ET AL.

  • G.R. No. 158960 - LORNA FRANCES FILIPINO vs F. WALTER R. MACABUHAY

  • G.R. No. 159373 - JOSE R. MORENO, JR. vs PRIVATE MANAGEMENT OFFICE

  • G.R. No. 159991 - CARMELINO F. PANSACOLA vs COMMISSIONER OF INTERNAL REVENUE

  • G.R. No. 159734 and G.R. NO. 159745 - ROSARIO V. ASTUDILLO vs PEOPLE OF THE PHILIPPINES

  • G.R. No. 160347 - ARCADIO and MARIA LUISA CARANDANG vs HEIRS OF QUIRINO A. DE GUZMAN, ET AL.

  • G.R. No. 160618 - DENNIS D. SY vs METROPOLITAN BANK & TRUST COMPANY

  • G.R. No. 160805 - SPOUSES ADIEL DE LA CENA and CARIDAD AREVALO DE LA CENA vs SPOUSES JOSE BRIONES and HERMINIA LLEDO BRIONES

  • G.R. No. 161086 - CIVIL SERVICE COMMISSION vs COURT OF APPEALS

  • G.R. No. 161136 - WILFREDO VAGILIDAD, ET AL. vs GABINO VAGILIDAD, JR., ET AL.

  • G.R. No. 161115 - DOLE PHILIPPINES, INC. vs MEDEL ESTEVA, ET AL.

  • G.R. No. 162037 - Heirs of Enrique Diaz v. Elinor A. Virata

  • G.R. No. 162243, G.R. No. 164516 & G.R. No. 171875 - HEHERSON ALVAREZ vs PICOP RESOURCES, INC.

  • G.R. No. 162308 - G & M PHILIPPINES, INC. vs ROMIL V. CUAMBOT

  • G.R. No. 162331 - LEPANTO CONSOLIDATED MINING CO. vs WMC RESOURCES INT L. PTY. LTD., ET AL.

  • G.R. No. 162366 - FEDERICA M. SERRANO, ET AL. vs SPOUSES ANSELMO GUTIERREZ AND CARMELITA GUTIERREZ

  • G.R. No. 163735 - GREEN ASIA CONSTRUCTION AND DEVELOPMENT CORPORATION, ET AL. vs COURT OF APPEALS, ET AL.

  • G.R. No. 163712 - METROPOLITAN BANK AND TRUST COMPANY, ET AL. vs JOSE B. TAN, ET AL.

  • G.R. No. 163763 - MALAYAN REALTY, INC. vs UY HAN YONG

  • G.R. No. 164300 - SPOUSES BENJAMIN AND AGRIFINA SIM vs M.B. FINANCE CORPORATION

  • G.R. No. 164321 - SKECHERS, U.S.A., INC. vs INTER PACIFIC INDUSTRIAL TRADING CORP., ET AL.

  • G.R. No. 164545 - LORBE REBUCAN y BALTAZAR vs PEOPLE OF THE PHILIPPINES

  • G.R. No. 165038 - HEIRS OF EMILIO R. DOMINGO AND FELICIDAD CORNEJO, ET AL. vs THE HEIRS OF CLARITA D. MARTIN, ET AL.

  • G.R. No. 164858 - HENRY P. LANOT vs COMMISSION ON ELECTIONS

  • G.R. No. 165724 - ZAMORA REALTY and DEVELOPMENT CORPORATION, ET AL. vs OFFICE OF THE PRESIDENT OF THE PHILIPPINES, ET AL.

  • G.R. No. 165879 - MARIA B. CHING vs JOSEPH C. GOYANKO, JR., ET AL.

  • G.R. No. 166403 - BENZON O. ALDEMITA vs HEIRS OF MELQUIADES SILVA

  • G.R. NOS. 166143-47 and G.R. NO. 166891 - ABDUSAKUR M. TAN, ET AL. vs COMMISSION ON ELECTIONS, ET AL.

  • G.R. No. 166496 - JOSEFA BAUTISTA FERRER vs SPS. MANUEL M. FERRER, ET AL.

  • G.R. No. 166501 - ERNESTO B. FRANCISCO, JR. vs HON. BAYANI F. FERNANDO

  • G.R. No. 166649 - ROBERT B. CABUYOC vs INTER-ORIENT NAVIGATION SHIPMANAGEMENT, INC., ET AL.

  • G.R. No. 166833 - FELIXBERTO CUBERO, ET AL. vs LAGUNA WEST MULTI-PURPOSE COOPERATIVE, INC., ET AL.

  • G.R. No. 166837 - LIGAYA S. ORBETA vs RUBEN P. ORBETA, ET AL.

  • G.R. No. 167680 - SAMUEL PARILLA, ET AL. vs DR. PROSPERO PILAR

  • G.R. No. 167723 - CLUB FILIPINO, INC. vs ROMEO ARAULLO

  • G.R. No. 167743 - HILARIO P. SORIANO vs OMBUDSMAN SIMEON V. MARCELO, ET AL.

  • G.R. No. 167844 - OFFICE OF THE OMBUDSMAN vs COURT OF APPEALS, ET AL.

  • G.R. No. 168035 - MELANIE M. MESINA, ET AL. vs GLORIA C. GARCIA

  • G.R. No. 168718 - OFFICE OF THE OMBUDSMAN vs FARIDA T. LUCERO, ET AL.

  • G.R. No. 168694 - THE PEOPLE OF THE PHILIPPINES vs SAIDAMIN MACABALANG y MALAMAMA

  • G.R. No. 169193 - SPOUSES ILUMINADA CAPITLE and CIRILO CAPITLE vs FORTUNATA ELBAMBUENA, ET AL.

  • G.R. NOS. 169295-96 - REMINGTON INDUSTRIAL SALES CORPORATION vs ERLINDA CASTANEDA

  • G.R. No. 169341 - City of Cebu v. Vicente B. Del Rosario

  • G.R. No. 169578 - TERESITA DIO vs ST. FERDINAND MEMORIAL PARK, INC., ET AL.

  • G.R. No. 169698 - LUPO ATIENZA vs YOLANDA DE CASTRO

  • G.R. No. 169891 - PHILIPPINE NATIONAL RAILWAYS vs ETHEL BRUNTY, ET AL.

  • G.R. No. 170220 - JOSEFINA S. LUBRICA, ET AL. vs LAND BANK OF THE PHILIPPINES

  • G.R. No. 170522 - CELSO LOPEZ OCATE vs COMMISSION ON ELECTIONS, ET AL.

  • G.R. No. 170829 - Perla G. Patricio v. Marcelino G. Dario III, et al.

  • G.R. No. 171102 - ATP TECHNOLOGIES INTERNATIONAL, INC. vs MICRON PRECISION PHILS., INC.

  • G.R. No. 170840 - THE PEOPLE OF THE PHILIPPINES vs GREGORIO CARPIO @ "GORIO"

  • G.R. No. 171144 - SANTOS L. NACAYTUNA vs PEOPLE OF THE PHILIPPINES

  • G.R. NOS. 171322-24 - MARIANITO S. VICTORIANO vs PEOPLE OF THE PHILIPPINES

  • G.R. No. 172274 - ROMEO D. CABARLO vs PEOPLE OF THE PHILIPPINES

  • G. R. No. 171447 - PEOPLE OF THE PHILIPPINES vs FEDERICO ARNAIZ y ARMONIO

  • G.R. No. 173290 - ZENAIDA M. LIMBONA vs JUDGE RALPH S. LEE, ET AL.

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    G.R. No. 152984 - WILLIAM G. KWONG  vs  ATTY. RAMON GARGANTOS, ET AL.

      G.R. No. 152984 - WILLIAM G. KWONG vs ATTY. RAMON GARGANTOS, ET AL.

    PHILIPPINE SUPREME COURT DECISIONS

    FIRST DIVISION

    [G.R. NO. 152984 : November 22, 2006]

    WILLIAM G. KWONG, Petitioner, v. ATTY. RAMON GARGANTOS, ANACLETO GARGANTOS, SPS. REY & REMY SANTOS, and SPS. LORNA & DANIEL ARCEO, Respondents.

    D E C I S I O N

    AUSTRIA-MARTINEZ, J.:

    Petitioner William G. Kwong is the owner of fifteen (15) lots located in the province of Pampanga. In an unnotarized Deed of Conditional Sale, petitioner, for himself and in behalf of William G. Kwong Management, sold said lots to respondents Anacleto Gargantos, Remy Santos and Lorna Arceo for the sum of $137,255.00 payable in two installments, with $10,000.00 being paid by respondents at the time of the execution of the contract, and the balance of $127,255.00 to be paid on or before December 15, 1986.1 When respondents failed to pay the balance on the expected date, it was subsequently agreed that the same shall be paid on a staggered basis starting March 1989. Respondents, however, again failed to comply with their obligation. This compelled petitioner to write a letter of demand, through counsel, on November 16, 1989, asking respondents' compliance with their monetary obligation; otherwise, the contract shall be rescinded.2 The letter was addressed to respondent Gargantos. There being no reply, another letter of demand dated February 21, 1990 was sent.3

    On May 1, 1990, Atty. Ramon Gargantos (brother of respondent Anacleto Gargantos), armed with a Special Power of Attorney4 executed by respondents, paid the amount of P1,776,200.00.5 Thereafter, petitioner and Atty. Gargantos executed a notarized Deed of Absolute Sale, wherein petitioner sold to respondent Gargantos 11 out of the 15 lots for the sum of P500,000.00,6 and Atty. Gargantos signed a Promissory Note for the payment of the amount of P373,074.95, on or before June 30, 1990, representing the unpaid balance of the purchase covering the remaining four lots.7

    Again, respondent Gargantos failed to pay the agreed amount, forcing petitioner to write subsequent demand letters on November 12, 1990,8 November 10, 1994,9 October 15, 1995,10 and July 29, 1996.11 Respondent Gargantos, through counsel, finally answered, claiming that it was petitioner who did not comply with his undertaking to transfer 11 of the 15 titles to respondents prior to the payment of the balance, with the remaining four titles to be transferred afterwards.12

    Petitioner then wrote respondents on September 15, 1996 asking for a conference in order to settle the matter.13 In a letter dated November 12, 1996, respondent Gargantos's counsel reiterated his demand for the delivery of the 11 titles, failing which a complaint for specific performance with damages and a criminal case for estafa will be filed against petitioner.14

    On November 14, 1996, petitioner filed before the Regional Trial Court (RTC) of Angeles City, Branch 62, a complaint for the rescission of the Deed of Conditional Sale and forfeiture of all the payments made by respondents against herein respondents.15

    Respondents filed an Answer with Compulsory Counterclaim, denying petitioner's allegations, and asking for the dismissal of the complaint. Respondents also prayed for the delivery of the 11 titles indicated in the Deed of Absolute Sale in exchange for the remaining balance and for damages.16

    In a Pre-trial Order issued by the RTC on June 9, 1997, the following facts were admitted:

    1. That plaintiff [petitioner] agreed to sell his real properties, consisting of 15 lots, to defendant for $137,255.00 U.S. Currency or in Philippine Currency at the rate of P20.40 per dollar, as evidenced by a deed of conditional sale dated November 1986.

    2. That on the date the conditional sale was executed, defendants paid $10,000.00 U.S. Currency or P204,000.00, Philippine Currency thereby leaving a balance of $127,255.00 or P2,596,002.00 Philippine Currency which shall be paid on December 15, 1986 without interest.

    3. That to guarantee payment of the balance defendants thru their attorney-in-fact, Atty. Ramon Gargantos, executed a promissory note dated May 1, 1990; andcralawlibrary

    4. That on the same date a deed of absolute sale was likewise executed.17

    The issues were defined as follows:

    1. Whether or not the terms and conditions of the deed of conditional sale dated November 1986 has been complied with by the parties;

    2. Whether or not the said deed of conditional sale has been superseded or novated by the subsequent execution of the deed of absolute sale dated May 1, 1990; andcralawlibrary

    3. Whether or not the deed of absolute sale is binding and/or enforceable.18

    On the first issue, the RTC ruled that "not only that defendants failed to comply with the terms and conditions of the Deed of Conditional Sale of 1986 but also of the Promissory Note of May 1, 1990."19

    On the second issue, the RTC ruled that there was no novation of the Deed of Conditional Sale by the execution of the Deed of Absolute Sale because the parties continued to recognize the validity of the conditional sale; the absolute sale was executed without the knowledge and consent of the other respondents; and there was no showing that the other respondents were released from their obligation under the conditional sale.20

    On the third and last issue, the RTC ruled that the Deed of Absolute Sale cannot be enforced since Atty. Gargantos exceeded his powers under the Special Power of Attorney when he entered into the transaction.21

    Thus, in its Decision dated February 4, 1999, the RTC granted rescission of the Deed of Conditional Sale and ordered petitioner to refund one-half of the amount paid by respondents, subject to 6% interest, with respondents forfeiting the other half in favor of petitioner. Respondents' counterclaim was dismissed.22

    Respondents appealed to the Court of Appeals (CA), which reversed and set aside the RTC Decision, and dismissed petitioner's complaint and respondents' counterclaim per its Decision23 dated December 14, 2001. The CA held that petitioner does not have any right to rescind the Deed of Conditional Sale because the Deed of Absolute Sale and the Promissory Note have already superseded it.24 The CA also denied petitioner's Motion for Reconsideration per Resolution dated April 11, 2002.25

    Petitioner now comes before the Court by way of a Petition for Review under Rule 45 of the Rules of Court, submitting that the CA committed a serious reversible error when it held that it was the parties' intention to supersede the Deed of Conditional Sale with the Deed of Absolute Sale.

    The petition lacks merit.

    Novation is the extinguishment of an obligation by the substitution or change of the obligation by a subsequent one which extinguishes or modifies the first, either by changing the object or principal conditions, or, by substituting another in place of the debtor, or by subrogating a third person in the rights of the creditor.26

    Under Article 1292 of the Civil Code, in order that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on every point incompatible with each other. The parties to a contract must expressly agree that they are abrogating their old contract in favor of a new one. In the absence of an express agreement, novation takes place only when the old and the new obligations are incompatible on every point.27

    In Iloilo Traders Finance, Inc, v. Heirs of Soriano, Jr.,28 the nature of novation was explained, thus:

    Novation may either be extinctive or modificatory, much being dependent on the nature of the change and the intention of the parties. Extinctive novation is never presumed; there must be an express intention to novate; in cases where it is implied, the acts of the parties must clearly demonstrate their intent to dissolve the old obligation as the moving consideration for the emergence of the new one. Implied novation necessitates that the incompatibility between the old and new obligation be total on every point such that the old obligation is completely superseded by the new one. The test of incompatibility is whether they can stand together, each one having an independent existence; if they cannot and are irreconcilable, the subsequent obligation would also extinguish the first. (Emphasis supplied)cralawlibrary

    The test of incompatibility between two obligations or contracts is whether or not they can stand together, each one having an independent existence. If they cannot, they are incompatible, and the later obligation novates the first.29

    In this case, an examination of the Deed of Absolute Sale and the Promissory Note, as well as the surrounding circumstances of this case, shows that it was meant to novate and replace the Deed of Conditional Sale. Logically, the Deed of Conditional Sale and the Deed of Absolute Sale cannot co-exist as these are of different nature and provide for separate and distinct obligations, to wit:

    A contract of sale is absolute when title to the property passes to the vendee upon delivery of the thing sold. A deed of sale is absolute when there is no stipulation in the contract that title to the property remains with the seller until full payment of the purchase price. The sale is also absolute if there is no stipulation giving the vendor the right to cancel unilaterally the contract the moment the vendee fails to pay within a fixed period. In a conditional sale, as in a contract to sell, ownership remains with the vendor and does not pass to the vendee until full payment of the purchase price. The full payment of the purchase price partakes of a suspensive condition, and non-fulfillment of the condition prevents the obligation to sell from arising.30

    The fact that the Deed of Absolute Sale of the 11 lots was executed even without respondents having fully paid the purchase price for the entire 15 parcels of land covered by the Deed of Conditional Sale enforces the conclusion that the parties intended to enter into a new agreement and discard the old one; otherwise, petitioner could have enforced his right to rescind the contract by filing a complaint instead of dealing anew with respondents and entering into the succeeding agreements. What subsequently occurred was a segregated sale of the 11 lots, while the Promissory Note covered the remaining four lots.

    The Court notes that respondents had already paid a substantial amount for the subject lots. Petitioner admitted that a down payment of $10,000.00 was made upon the execution of the Deed of Conditional Sale, and respondents also made further payments in the amount of $20,000.00.31 Thereafter, Atty. Gargantos, in behalf of respondents, paid P1,776,200.00 on May 1, 1990. It was after such payment was made that the parties entered into the Deed of Absolute Sale and the Promissory Note. Obviously, the Deed of Absolute Sale was intended by the parties to close the transaction involving the 11 lots. What remained for enforcement is the Promissory Note, which covers the four remaining lots.

    The Court also notes that the Deed of Conditional Sale reflected the amount of $137,255.00 or its peso equivalent at the rate of P20.40 per US dollar (or P2,800,002.00), as purchase price for the entire 15 lots. On the other hand, the Deed of Absolute Sale provided that the 11 parcels of land were being sold for P500,000.00, while the Promissory Note reflects the intention of petitioner to sell the other four lots for an undisclosed amount the balance of which is P373,074.95. Apparently, these two subsequent agreements do not show the true value of the subject lots.

    Nevertheless, it is well-settled that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control; however, if the contract appears to be contrary to the evident intentions of the parties,the latter shall prevail over the former. Moreover, the agreement of the parties may be embodied in only one contract or in two or more separate writings. In such event, the writings of the parties should be read and interpreted together in such a way as to render their intention effective.32

    It is at this point that the receipt33 dated May 1, 1990 for P1,776,200.00 becomes material. Construed in conjunction with the Deed of Absolute Sale and the Promissory Note, it becomes clear that the 15 lots have already been substantially paid for by respondents, and there only remains the balance of P373,074.95. What the parties clearly intended was that the Deed of Absolute Sale will then cover the 11 lots, the purchase price of which shall be considered as fully paid, with the payment of the P500,000.00 acknowledged in the Deed of Absolute Sale, while the Promissory Note will answer for the other four lots. For whatever purpose the parties in this case may have had in undervaluing the properties, the fact remains that the Deed of Absolute Sale and the Promissory Note were meant to supplant the Deed of Conditional Sale.

    What's more, it was petitioner's own counsel, Atty. Avelino Liangco, who drafted the Deed of Absolute Sale and Promissory Note on May 1, 1990, after petitioner met with Atty. Gargantos at the Shanghai Restaurant, which was owned by petitioner. According to Atty. Liangco, on May 1, 1990, Atty. Gargantos paid a "considerable" sum of money to petitioner as partial fulfillment of respondents' obligation under the Deed of Conditional Sale. Thereafter, Atty. Liangco prepared the Deed of Absolute Sale of the 11 lots and the Promissory Note for the remaining obligation.34 Atty. Liangco also testified that it was petitioner himself who dictated the amount to be indicated in the Deed of Absolute Sale and the Promissory Note, and petitioner kept the original copies of these documents.35 It is settled that in order to ascertain the true intention of the parties, their actions, subsequent or contemporaneous, must be principally considered.36 The foregoing circumstances confirm petitioner's grasp of what he was entering into and was very well aware of the terms and conditions of the Deed of Absolute Sale and the Promissory Note. He cannot now turn his back on it and claim that it was merely executed so that Atty. Gargantos will have something to show his principals. To sustain this is to make a mockery of the sanctity of contracts. In addition, it is merely bare allegation supported by nothing but uncorroborated words.

    In fine, the Deed of Conditional Sale had ceased to exist with the execution of the Deed of Absolute Sale and the Promissory Note.ςηαñrοblεš νιr υαl lαω lιbrαrÿ

    There is nothing more to rescind. Petitioner's complaint must therefore fail.

    Petitioner cannot be compelled, in the present petition, to deliver to respondents the titles to the 11 lots because the latter did not appeal from the CA's dismissal of their counterclaim.

    WHEREFORE the petition is DENIED. The assailed Decision dated December 14, 2001 and Resolution dated April 11, 2002 of the Court of Appeals are AFFIRMED.

    Costs against petitioner.

    SO ORDERED.


    Endnotes:


    1 Exhibit "A", Folder of Plaintiff's Exhibits, pp. 128-131.

    2 Folder of Plaintiff's Exhibits, p. 139.

    3 Id. at 141.

    4 Exhibit "N", records, p. 184.

    5 Exhibits "D" and "4", Folder of Defendants' Exhibits, p. 197.

    6 Exhibits "C" and "3", id. at 193-196.

    7 Exhibits "B" and "2", id. at 22-23.

    8 Folder of Plaintiff's Exhibits, p. 142.

    9 Id. at 144.

    10 Id. at 145.

    11 Id. at 158.

    12 Id. at 159.

    13 Id. at 160.

    14 Folder of Defendants' Exhibits, p. 199.

    15 Records, pp. 6-11.

    16 Id. at 61-63.

    17 Id. at 82-83.

    18 Id. at 83.

    19 Id. at 194.

    20 Id. at 196-199.

    21 Id. at 199-202.

    22 Id. at 202-203.

    23 Penned by Associate Justice Rodrigo V. Cosico, with Associate Justices Eubulo J. Verzola and Eliezer R. De los Santos, concurring, CA rollo, p. 162.

    24 Id.

    25 Id. at 188.

    26 Philippine Savings Bank v. Mañalac, Jr., G.R. No. 145441, April 26, 2005, 457 SCRA 203, 217.

    27 Rillo v. Court of Appeals, G.R. No. 125347, June 19, 1997, 274 SCRA 461, 469.

    28 452 Phil. 82, 89 (2003).

    29 Young v. Court of Appeals, 274 Phil. 205, 210 (1991).

    30 Ramos v. Heruela, G.R. No. 145330, October 14, 2005, 473 SCRA 79, 86.

    31 TSN, July 16, 1997, p. 17.

    32 Valdez v. Court of Appeals, G.R. No. 140715, September 24, 2004, 439 SCRA 55, 73.

    33 Exhibits "D" and "4", supra, note 5.

    34 TSN, October 20, 1997, pp. 7-11.

    35 Id. at 18-20.

    36 Buce v. Court of Appeals, 387 Phil. 897, 905 (2000).

    G.R. No. 152984 - WILLIAM G. KWONG  vs  ATTY. RAMON GARGANTOS, ET AL.


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