Co vs. Court of Appeals

A contract of sale is perfected only upon a meeting of the minds on the object and the price, and a definite agreement on the manner of payment is essential; the trial court's factual findings may be set aside where substantial facts and circumstances were overlooked. On these facts, no sale was perfected because the Minutes did not show any agreement and petitioner's evidence failed to establish a definite price and manner of payment.

Benito Ngo owned Lot No. 7 in Iriga City, which he had acquired in parts from Nazario Gonzales, and Leon Co is Ngo's brother-in-law. Antonio Ong claimed a competing purchase of Lots Nos. 7-A and 7-B from Gonzales through an attorney-in-fact. The dispute among the parties was among the controversies that the Filipino-Chinese Chambers of Commerce of Naga City and Iriga City sought to settle amicably among their members.

On 3 September 1976 Benito Ngo purchased from Nazario Gonzales Lots Nos. 7-A and 7-B, Psd-05-000239, with an area of 155 square meters, forming part of a bigger area covered by OCT No. RO-16 (1355) in Iriga City. Ngo had earlier acquired the adjacent Lots Nos. 7-C, 7-D, and 7-E also from Gonzales, and the entire Lot No. 7 was subsequently segregated from OCT No. RO-16 (1355); on 15 September 1976 TCT No. 91 was issued over Lot No. 7 in Ngo's name. On 3 November 1976 Antonio Ong, claiming to have purchased Lots Nos. 7-A and 7-B from Nazario Gonzales through his attorney-in-fact Rustica Gonzales Rivera, filed an action against Ngo with the then Court of First Instance of Camarines Sur for annulment of sale, reconveyance and damages.

On 11 March 1979 the Filipino-Chinese Chambers of Commerce of Naga City and of Iriga City held a joint meeting to amicably settle certain controversies among their members, but only the dispute between Antonio Ong and Benito Ngo was taken up. A consensus was reached that the litigated area should be divided between Ong and Ngo, with Lot No. 7-A going to Ong and Lot No. 7-B to Ngo. Antonio Ong was not satisfied because he claimed to have bought the whole property for P60,000.00, so his uncle Jorge Ong agreed to give him P30,000.00 to compensate for half of the purchase price. As to Lot No. 7-B, which was leased by Ong To, the Chambers jointly issued a resolution that Ong To should give up his occupancy for P40,000.00; Buenaventura and Melecio Ngo, brothers of Benito Ngo, should each give Ong To P15,000.00, while petitioner Leon Co, brother-in-law of Benito Ngo, would pay P10,000.00 to Ong To, who would vacate Lot No. 7-B and deliver it to Benito Ngo.

Thereafter, on 23 April 1979 Antonio Ong and Benito Ngo, assisted by their respective counsel, executed an amicable settlement providing that Lot No. 7-A would belong to Antonio Ong and Lot No. 7-B to Benito Ngo. The amicable settlement was submitted to the trial court for approval. Before it could be approved, Leon Co filed a complaint-in-intervention alleging that in the joint conference between the two Chambers it was agreed that Lot No. 7-B would go to him after paying Benito Ngo P49,500.00 for the lot. Ngo vehemently denied having entered into such agreement, much less having received any amount therefor.

After remand, the case proceeded to trial. Leon Co presented as his sole documentary basis the Minutes of the special meeting of the Filipino-Chinese Chambers of Commerce held on 11 March 1979, which recorded the resolutions on Ong To's occupancy and the contributions of Leon Co, Buenaventura Ngo, Nemesio Ngo, and Jorge Ong but did not speak of any agreement between Leon Co and Benito Ngo for the sale of Lot No. 7-B; Leon Co admitted on cross-examination that neither such agreement of sale nor facts from which such agreement could be inferred were set forth in the Minutes. In the absence of any other document showing the alleged sale, Leon Co tried to prove his claim through testimonial evidence, but the CA found several inconsistencies and contradictions in the testimonies of his witnesses regarding the identity of the land claimed and the circumstances surrounding the alleged sale and payment of the purchase price: Leon Co and his wife Ester Co testified that Ngo had offered to sell Lot No. 7-B in August or about two weeks before 6 September 1976; Antonio Ong stated that Ngo bought Lot No. 7-A which should pertain to Leon Co and Lot No. 7-B to Ong To; and Buenaventura Ngo narrated a different version, asserting that the subject property was actually purchased by Leon Co but in the name of Benito Ngo.

Leon Co claimed to have made payments to Ngo totaling P49,500.00: P20,000.00 in cash in 1976; P10,000.00 by Feati Bank and Trust Company (FBTC) Check No. 033180 dated 5 April 1979 payable to Ngo; P10,000.00 by FBTC Check No. 003181 dated 15 May 1979; and P9,500.00 by FBTC Check No. 033182 dated 15 June 1979 payable to Ngo. While alleging that Ngo encashed the check dated 15 April 1979 for P10,000.00, Leon Co affirmed that Ngo returned the two other checks amounting to P10,000.00 and P9,500.00, which were refused acceptance by Leon Co, so Ngo crossed out the checks and destroyed their efficacy. Leon Co thereafter withdrew the amounts covered by the two checks destroyed by Ngo, resulting in actual payment of only P20,000.00 in favor of Ngo as of 11 March 1979. These admissions contradicted Leon Co's own statement that his payment of P49,500.00 caused the execution of the agreement on 11 March 1979 during the arbitration meeting. Ngo contended that the payment by Leon Co in his favor was not for the purchase price of the property but for the liquidation of their 1978 accounts.

The trial court sustained Leon Co's claim that Ngo had verbally sold Lot No. 7-B to him in August 1976 for P49,500.00. The CA, upon reexamination of the record independent of the trial court's assessment of the evidence, found that certain facts had been overlooked, resulting in a misappreciation of the documentary and testimonial evidence; it ruled that the Minutes clearly negated the existence of Leon Co's cause and that Leon Co's evidence did not establish a definitive agreement or meeting of the minds on the price or term of payment.

• Appellate Review of Credibility: Petitioner argued that the CA deviated from its duty by intruding into the province of the trial court, which is in a much better position to assess the credibility of witnesses.
• Sufficiency of Evidence of Sale: Petitioner contended that the CA failed to appreciate the credible testimonies of his witnesses which jibe with the documentary evidence showing that a contract of sale existed between the parties.
• Inconsistencies in Respondent's Evidence: Petitioner faulted the CA for not considering the glaring inconsistencies and contradictions in the pleadings and testimony of private respondent Ngo, who failed to overcome petitioner's evidence that there was an agreement to sell the property.
• Bias in the Trial Court's Assessment: Petitioner alleged that the CA erred in reversing its prior decision of 14 September 1994 and in concluding that there was bias on the part of the trial court in the assessment of the evidence.

• No Agreement to Sell: Respondent Ngo countered that he never entered into an agreement to sell Lot No. 7-B to petitioner and never received any amount for such sale.
• Payments for 1978 Accounts: Respondent contended that petitioner's payments in his favor were not for the purchase price of the property but for the liquidation of their 1978 accounts.

• Appellate Review of Factual Findings: Whether the CA erred in reversing its prior decision and concluding that there was bias on the part of the trial court in the assessment of the evidence, thereby intruding into the trial court's province.
• Contract of Sale — Meeting of Minds: Whether a contract of sale over Lot No. 7-B was perfected between petitioner Leon Co and respondent Benito Ngo.
• Evidence of Sale and Inconsistencies: Whether the CA erred in ignoring the alleged inconsistencies in respondent Ngo's testimony and in declaring that there was no evidence of sale between petitioner and private respondent.

• Appellate Review of Factual Findings: No. The CA did not err in reversing its prior decision; the rule that the trial court's factual findings are entitled to great weight is not absolute, and an exception applies where substantial facts and circumstances were overlooked.
• Contract of Sale — Meeting of Minds: No. No contract of sale was perfected because petitioner failed to establish a meeting of the minds on the object and the price, including a definite agreement on the manner of payment.
• Evidence of Sale and Inconsistencies: No. The CA did not err in finding no evidence of sale; the Minutes did not show any sale agreement, and petitioner's evidence failed to establish a definitive agreement on price or terms.

• Appellate Review of Factual Findings: The SC rejected the argument that the CA had improperly intruded into the trial court's assessment of evidence. It held that the rule that factual findings of the trial court are entitled to great weight and respect on appeal is neither absolute nor inflexible; one exception is where substantial facts and circumstances have been overlooked which, if properly considered, would justify a different conclusion or alter the result of the case. Although the CA had earlier affirmed the trial court's factual findings, it reversed itself after a reexamination of the record independent of the trial court's assessment and ruled that certain facts had been overlooked, resulting in a misappreciation of the documentary and testimonial evidence. On that basis, the SC sustained the CA's reversal.

• Contract of Sale — Meeting of Minds: Under Article 1458 of the Civil Code, a contract of sale is one by which one of the contracting parties obligates himself to transfer the ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. Under Article 1475, the contract of sale is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price; from that moment the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts. A definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale, as held in Toyota vs. Court of Appeals. Petitioner's sole documentary basis was the Minutes of the 11 March 1979 meeting, which did not speak of any agreement between petitioner and Ngo for petitioner to buy and Ngo to sell the property; what transpired was that the relatives of Antonio Ong and Ngo agreed to participate in the amicable settlement by contributing their own funds. The CA correctly ruled that the document clearly negated the existence of petitioner's cause, and petitioner admitted on cross-examination that neither the sale agreement nor facts from which it could be inferred were set forth in the Minutes. Petitioner's testimonial evidence had inconsistencies on the identity of the land and the circumstances of the alleged sale and payment: petitioner and his wife said Ngo offered to sell Lot No. 7-B in August or about two weeks before 6 September 1976; Antonio Ong said Ngo bought Lot No. 7-A which should pertain to Leon Co and Lot No. 7-B to Ong To; and Buenaventura Ngo said the property was actually purchased by petitioner but in Ngo's name. Petitioner claimed P49,500.00 but actual payment was only P20,000.00 as of 11 March 1979 because two checks were destroyed and their amounts withdrawn; these admissions contradicted his claim that payment of P49,500.00 caused the 11 March 1979 agreement. Ngo contended that the payments were for liquidation of their 1978 accounts. There was no definitive agreement or meeting of the minds on the price or term of payment; the non-encashment of the checks indicated non-acceptance of the offer; and there was no showing that petitioner complied with the terms and conditions of the alleged sale, including payment of the complete purchase price of P49,500.00. Thus, no contract of sale was perfected.

• Evidence of Sale and Inconsistencies: The SC held that the CA did not err in declaring that there was no evidence of sale. The CA's conclusion was not based merely on Ngo's testimony but on the absence of any document showing the alleged sale and on the contradictions in petitioner's own witnesses. The Minutes, petitioner's sole documentary basis, negated the existence of his cause, and petitioner admitted that no sale agreement was set forth therein. Petitioner's claim that Ngo's pleadings and testimony contained glaring inconsistencies did not cure the absence of proof of a meeting of the minds; Ngo's denial of the sale and his explanation that the payments were for liquidation of 1978 accounts left petitioner's evidence insufficient. Thus, the CA's finding of no evidence of sale was sustained.

• Perfection of Contract of Sale — A contract of sale is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price; from that moment the parties may reciprocally demand performance subject to the law on form. A definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale. In this case, no sale was perfected because the Minutes did not show any agreement and petitioner's evidence failed to establish a meeting of the minds on price or term of payment.
• Appellate Review of Trial Court's Factual Findings — Overlooked Facts Exception — Factual findings of the trial court are entitled to great weight and respect on appeal, but the rule is neither absolute nor inflexible. One exception is where substantial facts and circumstances have been overlooked which, if properly considered, would justify a different conclusion or alter the result of the case. The SC applied the exception when the CA reexamined the record and found overlooked facts causing misappreciation of documentary and testimonial evidence.
• Non-Encashment of Checks as Indicium of Non-Acceptance — The non-encashment of checks by the respondent is indicative more of his non-acceptance of the petitioner's offer to buy the property. The SC used this to negate a meeting of the minds, since Ngo destroyed the two checks and petitioner withdrew their amounts, leaving only P20,000.00 actually paid.

• "The rule that the factual findings of the trial court are entitled to great weight and respect on appeal is neither absolute nor inflexible. One of the exceptions to the rule is where substantial facts and circumstances have been overlooked which, if properly considered, would justify a different conclusion or alter the result of the case." — The SC used this exception to uphold the CA's reversal of the trial court's factual findings after a reexamination of the record.
• "A definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale." — This is the controlling rule the SC applied to hold that no sale was perfected absent a definite agreement on payment.
• "The non-encashment of the checks by respondent Ngo is indicative more of his non-acceptance of the offer of petitioner to buy the property." — The SC used this circumstance to negate the existence of a meeting of the minds between the parties.
• "the contract of sale is perfected at the moment there is meeting of the minds upon the thing which is the object of the contract and upon the price. From that moment the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts." — This is Article 1475's perfection rule, which the SC applied to hold that no sale arose without a meeting of the minds on the object and price.

• Toyota vs. Court of Appeals, G.R. No. 116650, 23 May 1995, 244 SCRA 320 — Cited as authority for the rule that a definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale.

• Article 1458, Civil Code — Defines a contract of sale as one where one party obligates himself to transfer ownership and deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. The SC used this definition to test whether the alleged sale existed.
• Article 1475, Civil Code — Provides that a contract of sale is perfected at the moment there is a meeting of the minds upon the thing and the price, from which moment the parties may reciprocally demand performance subject to the law on form. The SC applied this to hold that no sale was perfected absent a meeting of the minds on price and manner of payment.