NAKPIL & SONS v.

CA
To be exempt from liability due to an act of God, the engineer/architect/contractor must not have
been negligent in the construction of the building.

FACTS:

Private respondents – Philippine Bar Association (PBA) – a non-profit organization formed

under the corporation law decided to put up a building in Intramuros, Manila. Hired to plan the
specifications of the building were Juan Nakpil & Sons, while United Construction was hired to
construct it. The proposal was approved by the Board of Directors and signed by the President,
Ramon Ozaeta. The building was completed in 1966.

In 1968, there was an unusually strong earthquake which caused the building heavy damage,
which led the building to tilt forward, leading the tenants to vacate the premises. United
Construction took remedial measures to sustain the building.

PBA filed a suit for damages against United Construction, but United Construction subsequently
filed a suit against Nakpil and Sons, alleging defects in the plans and specifications.

Technical Issues in the case were referred to Mr. Hizon, as a court appointed Commissioner.
PBA moved for the demolition of the building, but was opposed. PBA eventually paid for the
demolition after the building suffered more damages in 1970 due to previous earthquakes. The
Commissioner found that there were deviations in the specifications and plans, as well as
defects in the construction of the building.

ISSUE:

Whether or not an act of God (fortuitous event) exempts from liability parties who would
otherwise be due to negligence?

HELD:

Art. 1723 dictates that the engineer/architect and contractor are liable for damages should the
building collapse within 15 years from completion.
Art. 1174 of the NCC, however, states that no person shall be responsible for events, which
could not be foreseen. But to be exempt from liability due to an act of God, the ff must occur:

1) cause of breach must be independent of the will of the debtor

2) event must be unforeseeable or unavoidable
3) event must be such that it would render it impossible for the debtor to fulfill the obligation
4) debtor must be free from any participation or aggravation of the industry to the creditor.

In the case at bar, although the damage was ultimately caused by the earthquake which was an
act of God, the defects in the construction, as well as the deviations in the specifications and
plans aggravated the damage, and lessened the preventive measures that the building would
otherwise have had.

EUFEMIA and ROMEL ALMEDA v. BATHALA MARKETING

G.R.No. 150806, January 28, 2008

FACTS: In May 1997, Bathala Marketng, renewed its Contract of Lease with Ponciano Almeda.
Under the contract, Ponciano agreed to lease a porton of Almeda Compound for a monthly
rental of P1,107,348.69 for four years. On January 26, 1998, petitioner informed respondent that
its monthly rental be increased by 73% pursuant to the condition No. 7 of the contract and
Article 1250. Respondent refused the demand and insisted that there was no extraordinary
inflation to warrant such application. Respondent refused to pay the VAT and adjusted rentals
as demanded by the petitioners but continually paid the stipulated amount. RTC ruled in favor of
the respondent and declared that plaintiff is not liable for the payment of VAT and the
adjustment rental, there being no extraordinary inflation or devaluation. CA affirmed the decision
deleting the amounts representing 10% VAT and rental adjustment.

ISSUE: Whether the amount of rentals due the petitioners should be adjusted by reason of
extraordinary inflation or devaluation

RULING: Petitioners are stopped from shifting to respondent the burden of paying the VAT. 6th
Condition states that respondent can only be held liable for new taxes imposed after the
effectivity of the contract of lease, after 1977, VAT cannot be considered a “new tax”. Neither
can petitioners legitimately demand rental adjustment because of extraordinary inflation or
devaluation. Absent an official pronouncement or declaration by competent authorities of its
existence, its effects are not to be applied.

Petition is denied. CA decision is affirmed.

ISSUE:
Whether or not the claim was premature as the loan obligations have not yet matured

RULING:

No. The Court affirms the findings of the lower courts that there is no date of payment indicated
in the Promissory Notes. The RTC is correct in ruling that since the Promissory Notes do not
contain a period, HSBCL-SRP has the right to demand immediate payment. Article 1179 of the
Civil Code applies: Every obligation whose performance does not depend upon a future or
uncertain event, or upon a past event unknown to the parties, is demandable at once. The
spouses Broquezas obligation to pay HSBCL-SRP is a pure obligation. The fact that
HSBCL-SRP was content with the prior monthly check-off from Editha Broquezas salary is of no
moment. Once Editha Broqueza defaulted in her monthly payment, HSBCL-SRP made a
demand to enforce e a pure obligation.

IN THE MATTER OF THE INTESTATE ESTATE OF JUSTO PALANCA, Deceased, GEORGE

PAY, petitioner-appellant,
vs.
SEGUNDINA CHUA VDA. DE PALANCA, oppositor-appellee.

From the appealed decision, the following appears: "The parties in this case agreed to submit
the matter for resolution on the basis of their pleadings and annexes and their respective
memoranda submitted. Petitioner George Pay is a creditor of the Late Justo Palanca who died
in Manila on July 3, 1963. The claim of the petitioner is based on a promissory note dated
January 30, 1952, whereby the late Justo Palanca and Rosa Gonzales Vda. de Carlos Palanca
promised to pay George Pay the amount of P26,900.00, with interest thereon at the rate of 12%
per annum. George Pay is now before this Court, asking that Segundina Chua vda. de Palanca,
surviving spouse of the late Justo Palanca, he appointed as administratrix of a certain piece of
property which is a residential dwelling located at 2656 Taft Avenue, Manila, covered by Tax
Declaration No. 3114 in the name of Justo Palanca, assessed at P41,800.00. The idea is that
once said property is brought under administration, George Pay, as creditor, can file his claim
against the administratrix."1 It then stated that the petition could not prosper as there was a
refusal on the part of Segundina Chua Vda. de Palanca to be appointed as administratrix; that
the property sought to be administered no longer belonged to the debtor, the late Justo Palanca;
and that the rights of petitioner-creditor had already prescribed. The promissory note, dated
January 30, 1962, is worded thus: " `For value received from time to time since 1947, we [jointly
and severally promise to] pay to Mr. [George Pay] at his office at the China Banking Corporation
the sum of [Twenty Six Thousand Nine Hundred Pesos] (P26,900.00), with interest thereon at
the rate of 12% per annum upon receipt by either of the undersigned of cash payment from the
Estate of the late Don Carlos Palanca or upon demand'. . . . As stated, this promissory note is
signed by Rosa Gonzales Vda. de Carlos Palanca and Justo Palanca."2 Then came this
paragraph: "The Court has inquired whether any cash payment has been received by either of
the signers of this promissory note from the Estate of the late Carlos Palanca. Petitioner
informed that he does not insist on this provision but that petitioner is only claiming on his right
under the promissory note ."3 After which, came the ruling that the wording of the promissory
note being "upon demand," the obligation was immediately due. Since it was dated January 30,
1952, it was clear that more "than ten (10) years has already transpired from that time until to
date. The action, therefore, of the creditor has definitely prescribed."4 The result, as above
noted, was the dismissal of the petition.

In an exhaustive brief prepared by Attorney Florentino B. del Rosario, petitioner did assail the
correctness of the rulings of the lower court as to the effect of the refusal of the surviving spouse
of the late Justo Palanca to be appointed as administratrix, as to the property sought to be
administered no longer belonging to the debtor, the late Justo Palanca, and as to the rights of
petitioner-creditor having already prescribed. As noted at the outset, only the question of
prescription need detain us in the disposition of this appeal. Likewise, as intimated, the decision
must be affirmed, considering the clear tenor of the promissory note.

From the manner in which the promissory note was executed, it would appear that petitioner
was hopeful that the satisfaction of his credit could he realized either through the debtor sued
receiving cash payment from the estate of the late Carlos Palanca presumptively as one of the
heirs, or, as expressed therein, "upon demand." There is nothing in the record that would
indicate whether or not the first alternative was fulfilled. What is undeniable is that on August 26,
1967, more than fifteen years after the execution of the promissory note on January 30, 1952,
this petition was filed. The defense interposed was prescription. Its merit is rather obvious.
Article 1179 of the Civil Code provides: "Every obligation whose performance does not depend
upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at
once." This used to be Article 1113 of the Spanish Civil Code of 1889. As far back as Floriano v.
Delgado,5 a 1908 decision, it has been applied according to its express language. The
well-known Spanish commentator, Manresa, on this point, states: "Dejando con acierto, el
caracter mas teorico y grafico del acto, o sea la perfeccion de este, se fija, para determinar el
concepto de la obligacion pura, en el distinctive de esta, y que es consecuencia de aquel: la
exigibilidad immediata."6

The obligation being due and demandable, it would appear that the filing of the suit after fifteen
years was much too late. For again, according to the Civil Code, which is based on Section 43
of Act No. 190, the prescriptive period for a written contract is that of ten years.7 This is another
instance where this Court has consistently adhered to the express language of the applicable
norm.8 There is no necessity therefore of passing upon the other legal questions as to whether
or not it did suffice for the petition to fail just because the surviving spouse refuses to be made
administratrix, or just because the estate was left with no other property. The decision of the
lower court cannot be overturned.

WHEREFORE, the lower court decision of July 24, 1968 is affirmed. Costs against George Pay.
Javier vs CA
Javier vs CA, GR No L-78953, January 22, 1990

Victoria Javier, wife of the private respondent received from Prudential bank and Trust
Company the amount of USD 999,973.70 remitted by her sister, Mrs. Dolores Vertosa, through
some banks in the US, among which is Mellon Bank,NA.

Mellon Bank filed a complaint against private respondent, his wife and other defendants,
claiming that its remittance of US$1M was a clerical error and should have been US$1,000. On
the ground that the defendants are trustees of an implied trust for the benefit of Mellon Bank
with the clear, immediate and continuing duty to return the said amount from the moment it was
received.

Private respondent filed his income tax return for the taxable year 1977 showing a gross income
of PhP 53,053.38 and a net income of PhP 48.053.88 and stating in the footnote of the return
that “Taxpayer was a recipient of some money received from abroad which he presumed to be a
gift but turned out to be an error and is now subject to litigation.”

Private respondent wrote the BIR that he was paying the deficiency income assessment for the
year 1976 but denying that he had any undeclared income for the year 1977 and requested that
the assessment for 1977 be made to wait final court decision on the case filed against him for
filing an allegedly fraudulent return.

CIR reply stating that the amount of Mellon Bank erroneous remittance which were depose is
definitely taxable. The Commission also imposed a 50% fraud penalty against Javier.

ISSUE: WON private respondent is liable for the 50% fraud?

HELD:

Under Sec 72 of the Tax Code, a taxpayer who files a false return is liable to pay a fraud penalty
of 50% of the tax due from him of the deficiency tax in case payment has been made on the
basis of the return filed before the discovery of the falsity or fraud. The fraud contemplated by
law is actual and not constructive.

In the case at bar, there was no actual and intentional fraud through willful and deliberate
misleading of the government agency concerned, the BIR. The government was not induced to
give up some legal right and place itself at a disadvantage so as to prevent its lawful agents
from proper assessment of tax liabilities because Javier did not conceal anything. Error or
mistake of law is not fraud.

The imposition of the fraud penalty in this case is not justifies by the extant facts because he did
not conceal the facts that he received an amount of money although it was a subject of litigation.
As ruled by respondent CTA, the 50% surcharge imposed as fraud penalty by the petitioner
against the private respondent in the deficiency assessment should be deleted.

HEIRS OF PAULINO ATIENZA versus DOMINGO P. ESPIDOL

G.R. No. 180665, Aug. 11,2010

Facts:

This case is about the legal consequences when a buyer in a contract to sell on installment fails
to make the next payments that he promised.

On August 12, 2002 the Atienzas and respondent Domingo P. Espidol entered into a contract
called Kasunduan sa Pagbibili ng Lupa na may Paunang-Bayad (contract to sell land with a
down payment) covering the property. They agreed on a price, payable in three installments.

When the Atienzas demanded payment of the second installment of P1,750,000.00 in

December 2002, however, respondent Espidol could not pay it. Claiming that Espidol breached
his obligation, on February 21, 2003 the Atienzas filed a complaint for the annulment of their
agreement with damages before the Regional Trial Court (RTC)of Cabanatuan City in a Civil
Case.

Issue:

Whether or not the Atienzas were entitled to the cancellation of the contract to sell they entered
into with respondent Espidol on the ground of the latter’s failure to pay the second installment
when it fell due.

Held:

The Court declares the Kasunduan sa Pagbibili ng Lupa na may Paunang-Bayad between
petitioner Heirs of Paulino Atienza and respondent Domingo P. Espidol dated August 12, 2002
cancelled and the Heirs’ obligation under it non-existent. Regarding the right to cancel the
contract for non-payment of an installment, there is need to initially determine if what the parties
had was a contract of sale or a contract to sell. In a contract of sale, the title to the property
passes to the buyer upon the delivery of the thing sold. In a contract to sell, on the other hand,
the ownership is, by agreement, retained by the seller and is not to pass to the vendee until full
payment of the purchase price. In the first place, since Espidol failed to pay the installment on a
day certain fixed in their agreement, the Atienzas can afterwards validly cancel and ignore the
contract to sell because their obligation to sell under it did not arise. Since the suspensive
condition did not arise, the parties stood as if the conditional obligation had never existed.

CASE DIGEST: MILA A. REYES v. VICTORIA T. TUPARAN

FACTS: Mila A. Reyes (petitioner) filed a complaint for Rescission of Contract with Damages
against Victoria T. Tuparan (respondent) before the RTC.In her Complaint, petitioner alleged,
among others, that she was the registered owner of a 1,274 square meter residential and
commercial lot located in Karuhatan, Valenzuela City, and covered by TCT No. V-4130.

Petitioner mortgaged the subject real properties to the Farmers Savings Bank and Loan Bank,
Inc. (FSL Bank) to secure a loan. Petitioner then decided to sell her real properties so she could
liquidate her bank loan and finance her businesses. As a gesture of friendship, respondent
verbally offered to conditionally buy petitioner's real properties.

The parties and FSL Bank executed the corresponding Deed of Conditional Sale of Real
Properties with Assumption of Mortgage. Due to their close personal friendship and business
relationship, both parties chose not to reduce into writing the other terms of their agreement
mentioned in paragraph 11 of the complaint.

Respondent, however, defaulted in the payment of her obligations on their due dates. Instead of
paying the amounts due in lump sum on their respective maturity dates, respondent paid
petitioner in small amounts from time to time.

Respondent countered, among others, that the tripartite agreement erroneously designated by
the petitioner as a Deed of Conditional Sale of Real Property with Assumption of Mortgage was
actually a pure and absolute contract of sale with a term period. It could not be considered a
conditional sale because the acquisition of contractual rights and the performance of the
obligation therein did not depend upon a future and uncertain event.

Respondent further averred that she successfully rescued the properties from a definite
foreclosure by paying the assumed mortgage plus interest and other finance charges.

The RTC handed down its decision finding that respondent failed to pay in full the total purchase
price of the subject real properties. It stated that the checks and receipts presented by
respondent refer to her payments of the mortgage obligation with FSL Bank. The RTC also
considered the Deed of Conditional Sale of Real Property with Assumption of Mortgage
executed by and among the two parties and FSL Bank a contract to sell, and not a contract of
sale.
The CA rendered its decision affirming with modification the RTC Decision.The CA agreed with
the RTC that the contract entered into by the parties is a contract to sell but ruled that the
remedy of rescission could not apply because the respondent's failure to pay the petitioner the
balance of the purchase was not a breach of contract, but merely an event that prevented the
seller (petitioner) from conveying title to the purchaser (respondent).

ISSUE:

Was the agreement a contract to sell and not a contract of sale?

HELD: The Court agrees with the ruling of the courts below that the subject Deed of Conditional
Sale with Assumption of Mortgage entered into by and among the two parties and FSL Bank on
November 26, 1990 is a contract to sell and not a contract of sale.

The title and ownership of the subject properties remains with the petitioner until the respondent
fully pays the balance of the purchase price and the assumed mortgage obligation. Thereafter,
FSL Bank shall then issue the corresponding deed of cancellation of mortgage and the
petitioner shall execute the corresponding deed of absolute sale in favor of the respondent.

Accordingly, the petitioner's obligation to sell the subject properties becomes demandable only
upon the happening of the positive suspensive condition, which is the respondent's full payment
of the purchase price. Without respondent's full payment, there can be no breach of contract to
speak of because petitioner has no obligation yet to turn over the title. Respondent's failure to
pay in full the purchase price is not the breach of contract contemplated under Article 1191 of
the New Civil Code but rather just an event that prevents the petitioner from being bound to
convey title to the respondent.

Thus, the Court fully agrees with the CA when it resolved: "Considering, however, that the Deed
of Conditional Sale was not cancelled by Vendor Reyes (petitioner) and that out of the total
purchase price of the subject property in the amount of ?4,200,000.00, the remaining unpaid
balance of Tuparan (respondent) is only ?805,000.00, a substantial amount of the purchase
price has already been paid.It is only right and just to allow Tuparan to pay the said unpaid
balance of the purchase price to Reyes."

Granting that a rescission can be permitted under Article 1191, the Court still cannot allow it for
the reason that, considering the circumstances, there was only a slight or casual breach in the
fulfillment of the obligation.

Out of the P1,200,000.00 remaining balance, respondent paid on several dates the first and
second installments of P200,000.00 each. She, however, failed to pay the third and last
installment of P800,000.00 due on December 31, 1991. Nevertheless, on August 31, 1992,
respondent, through counsel, offered to pay the amount of P751,000.00, which was rejected by
petitioner for the reason that the actual balance was P805,000.00 excluding the interest
charges.

Considering that out of the total purchase price of P4,200,000.00, respondent has already paid
the substantial amount of P3,400,000.00, more or less, leaving an unpaid balance of only
P805,000.00, it is right and just to allow her to settle, within a reasonable period of time, the
balance of the unpaid purchase price. The Court agrees with the courts below that the
respondent showed her sincerity and willingness to comply with her obligation when she offered
to pay the petitioner the amount of P751,000.00.

DENIED
Central Philippine University vs. Court of Appeals G.R. No. 112230. July 17, 1995
Central Philippine University vs. Court of Appeals
G.R. No. 112230. July 17, 1995
246 SCRA 511

FACTS:
In 1939, Don Ramon Lopez Sr. executed a deed of donation in favor of CPU together with the
following conditions:
a) The land should be utilized by CPU exclusively for the establishment & use of medical
college;
b) The said college shall not sell transfer or convey to any 3rd party;
c) The said land shall be called “Ramon Lopez Campus” and any income from that land shall be
put in the fund to be known as “Ramon Lopez Campus Fund”.

However, on May 31, 1989, PR, who are the heirs of Don Ramon filed an action for annulment
of donation, reconveyance & damages against CPU for not complying with the conditions. The
heirs also argued that CPU had negotiated with the NHA to exchange the donated property with
another land owned by the latter.

Petitioner alleged that the right of private respondents to file the action had prescribed.

ISSUE:
1) WON petitioner failed to comply the resolutely conditions annotated at the back of petitioner’s
certificate of title without a fixed period when to comply with such conditions? YES
2) WON there is a need to fix the period for compliance of the condition? NO

HELD:

1)
Under Art. 1181, on conditional obligations, the acquisition of rights as well the extinguishment
or loss of those already acquired shall depend upon the happening of the event which
constitutes the condition. Thus, when a person donates land to another on the condition that the
latter would build upon the land a school is such a resolutory one. The donation had to be valid
before the fulfillment of the condition. If there was no fulfillment with the condition such as what
obtains in the instant case, the donation may be revoked & all rights which the donee may have
acquired shall be deemed lost & extinguished.

More than a reasonable period of fifty (50) years has already been allowed petitioner to avail of
the opportunity to comply with the condition even if it be burdensome, to make the donation in
its favor forever valid. But, unfortunately, it failed to do so. Hence, there is no more need to fix
the duration of a term of the obligation when such procedure would be a mere technicality and
formality and would serve no purpose than to delay or lead to an unnecessary and expensive
multiplication of suits.

Records are clear and facts are undisputed that since the execution of the deed of donation up
to the time of filing of the instant action, petitioner has failed to comply with its obligation as
donee. Petitioner has slept on its obligation for an unreasonable length of time. Hence, it is only
just and equitable now to declare the subject donation already ineffective and, for all purposes,
revoked so that petitioner as donee should now return the donated property to the heirs of the
donor, private respondents herein, by means of reconveyance.

2)
Under Art. 1197, when the obligation does not fix a period but from its nature & circumstance it
can be inferred that the period was intended, the court may fix the duration thereof because the
fulfillment of the obligation itself cannot be demanded until after the court has fixed the period
for compliance therewith & such period has arrived. However, this general rule cannot be
applied in this case considering the different set of circumstances existing more than a
reasonable period of 50yrs has already been allowed to petitioner to avail of the opportunity to
comply but unfortunately, it failed to do so. Hence, there is no need to fix a period when such
procedure would be a mere technicality & formality & would serve no purpose than to delay or
load to unnecessary and expensive multiplication of suits.

Under Art. 1191, when one of the obligors cannot comply with what is incumbent upon him, the
obligee may seek rescission before the court unless there is just cause authorizing the fixing of
a period. In the absence of any just cause for the court to determine the period of compliance
there is no more obstacle for the court to decree recission.
RADIOWEALTH FINANCE COMPANY vs. DEL ROSARIO 335 SCRA 288
RADIOWEALTH FINANCE COMPANY vs. DEL ROSARIO
335 SCRA 288

FACTS:
Spouses Vicente & Maria Del Rosario jointly & severally executed, signed and delivered in favor
of Radiowealth Finance Company a promissory note for P138,948.

Thereafter, respondents defaulted on the monthly installments. Despite repeated demands, they
failed to pay their obligation.

Petitioner filed a complaint for the collection of sum of money before the RTC.

Trial court dismissed the complaint for the evidence presented were merely hearsay.

CA reversed & remanded the case for further proceedings.

Petitioner claims that respondents are liable for the whole amount of their debt and the interest
thereon, after they defaulted on the monthly installments. Respondents counter that the
installments were not yet due and demandable. They theorize that the action for immediate
enforcement of their obligation is premature because its fulfillment is dependent on the sole will
of the debtor. Hence, they consider that the proper court should first fix a period for payment,
pursuant to Articles 1180 and 1197 of the Civil Code.

ISSUE:

WON the installments had already became due and demandable? YES

HELD:

The act of leaving blank space the due date of the first installment did not necessary mean that
the debtors were allowed to pay as & when they could. If this was the intention of the parties,
they should have so indicated in the promissory note. However, it did not reflect any such
intention.

While the specific date on which each installment would be due was left blank, the note clearly
provided that each installment should be payable each month.

Furthermore, it also provided for an acceleration clause and a late payment penalty, both of
which showed the intention of the parties that the installment should be paid at a definite date.
Had they intended that the debtors could pay as & when they could, there would have been no
need for these 2 clauses.

The installments had already became due & demandable is bolstered by the fact that
respondents started paying installments on the promissory note. The obligation of the
respondents had matured & they clearly defaulted when their checks bounced. Per the
acceleration clause, the whole debt became due one month after the date of the note because
the check representing their first installment bounced.
LOURDES VALERIO LIM, petitioner,
vs.
PEOPLE OF THE PHILIPPINES, respondent.

RELOVA, J.:

Petitioner Lourdes Valerio Lim was found guilty of the crime of estafa and was sentenced "to
suffer an imprisonment of four (4) months and one (1) day as minimum to two (2) years and four
(4) months as maximum, to indemnify the offended party in the amount of P559.50, with
subsidize imprisonment in case of insolvency, and to pay the costs." (p. 14, Rollo)

From this judgment, appeal was taken to the then Court of Appeals which affirmed the decision
of the lower court but modified the penalty imposed by sentencing her "to suffer an
indeterminate penalty of one (1) month and one (1) day of arresto mayor as minimum to one (1)
year and one (1) day of prision correccional as maximum, to indemnify the complainant in the
amount of P550.50 without subsidiary imprisonment, and to pay the costs of suit." (p. 24, Rollo)

The question involved in this case is whether the receipt, Exhibit "A", is a contract of agency to
sell or a contract of sale of the subject tobacco between petitioner and the complainant, Maria
de Guzman Vda. de Ayroso, thereby precluding criminal liability of petitioner for the crime
charged.

The findings of facts of the appellate court are as follows:

... The appellant is a businesswoman. On January 10, 1966, the appellant went to the house of
Maria Ayroso and proposed to sell Ayroso's tobacco. Ayroso agreed to the proposition of the
appellant to sell her tobacco consisting of 615 kilos at P1.30 a kilo. The appellant was to receive
the overprice for which she could sell the tobacco. This agreement was made in the presence of
plaintiff's sister, Salud G. Bantug. Salvador Bantug drew the document, Exh. A, dated January
10, 1966, which reads:

To Whom It May Concern:

This is to certify that I have received from Mrs. Maria de Guzman Vda. de Ayroso. of Gapan,
Nueva Ecija, six hundred fifteen kilos of leaf tobacco to be sold at Pl.30 per kilo. The proceed in
the amount of Seven Hundred Ninety Nine Pesos and 50/100 (P 799.50) will be given to her as
soon as it was sold.

This was signed by the appellant and witnessed by the complainant's sister, Salud Bantug, and
the latter's maid, Genoveva Ruiz. The appellant at that time was bringing a jeep, and the
tobacco was loaded in the jeep and brought by the appellant. Of the total value of P799.50, the
appellant had paid to Ayroso only P240.00, and this was paid on three different times. Demands
for the payment of the balance of the value of the tobacco were made upon the appellant by
Ayroso, and particularly by her sister, Salud Bantug. Salud Bantug further testified that she had
gone to the house of the appellant several times, but the appellant often eluded her; and that
the "camarin" the appellant was empty. Although the appellant denied that demands for
payment were made upon her, it is a fact that on October 19, 1966, she wrote a letter to Salud
Bantug which reads as follows:

Dear Salud,

Hindi ako nakapunta dian noon a 17 nitong nakaraan, dahil kokonte pa ang nasisingil kong
pera, magintay ka hanggang dito sa linggo ito at tiak na ako ay magdadala sa iyo. Gosto ko
Salud ay makapagbigay man lang ako ng marami para hindi masiadong kahiyahiya sa iyo.
Ngayon kung gosto mo ay kahit konte muna ay bibigyan kita. Pupunta lang kami ni Mina sa
Maynila ngayon. Salud kung talagang kailangan mo ay bukas ay dadalhan kita ng pera.

Medio mahirap ang maningil sa palengke ng Cabanatuan dahil nagsisilipat ang mga suki ko ng
puesto. Huwag kang mabahala at tiyak na babayaran kita.

Patnubayan tayo ng mahal na panginoon Dios. (Exh. B).

Ludy

Pursuant to this letter, the appellant sent a money order for P100.00 on October 24, 1967, Exh.
4, and another for P50.00 on March 8, 1967; and she paid P90.00 on April 18, 1967 as
evidenced by the receipt Exh. 2, dated April 18, 1967, or a total of P240.00. As no further
amount was paid, the complainant filed a complaint against the appellant for estafa. (pp. 14, 15,
16, Rollo)

In this petition for review by certiorari, Lourdes Valerio Lim poses the following questions of law,
to wit:

1. Whether or not the Honorable Court of Appeals was legally right in holding that the foregoing
document (Exhibit "A") "fixed a period" and "the obligation was therefore, immediately
demandable as soon as the tobacco was sold" (Decision, p. 6) as against the theory of the
petitioner that the obligation does not fix a period, but from its nature and the circumstances it
can be inferred that a period was intended in which case the only action that can be maintained
is a petition to ask the court to fix the duration thereof;

2. Whether or not the Honorable Court of Appeals was legally right in holding that "Art. 1197 of
the New Civil Code does not apply" as against the alternative theory of the petitioner that the
fore. going receipt (Exhibit "A") gives rise to an obligation wherein the duration of the period
depends upon the will of the debtor in which case the only action that can be maintained is a
petition to ask the court to fix the duration of the period; and
3. Whether or not the honorable Court of Appeals was legally right in holding that the foregoing
receipt is a contract of agency to sell as against the theory of the petitioner that it is a contract of
sale. (pp. 3-4, Rollo)

It is clear in the agreement, Exhibit "A", that the proceeds of the sale of the tobacco should be
turned over to the complainant as soon as the same was sold, or, that the obligation was
immediately demandable as soon as the tobacco was disposed of. Hence, Article 1197 of the
New Civil Code, which provides that the courts may fix the duration of the obligation if it does
not fix a period, does not apply.

Anent the argument that petitioner was not an agent because Exhibit "A" does not say that she
would be paid the commission if the goods were sold, the Court of Appeals correctly resolved
the matter as follows:

... Aside from the fact that Maria Ayroso testified that the appellant asked her to be her agent in
selling Ayroso's tobacco, the appellant herself admitted that there was an agreement that upon
the sale of the tobacco she would be given something. The appellant is a businesswoman, and
it is unbelievable that she would go to the extent of going to Ayroso's house and take the
tobacco with a jeep which she had brought if she did not intend to make a profit out of the
transaction. Certainly, if she was doing a favor to Maria Ayroso and it was Ayroso who had
requested her to sell her tobacco, it would not have been the appellant who would have gone to
the house of Ayroso, but it would have been Ayroso who would have gone to the house of the
appellant and deliver the tobacco to the appellant. (p. 19, Rollo)

The fact that appellant received the tobacco to be sold at P1.30 per kilo and the proceeds to be
given to complainant as soon as it was sold, strongly negates transfer of ownership of the goods
to the petitioner. The agreement (Exhibit "A') constituted her as an agent with the obligation to
return the tobacco if the same was not sold.

ACCORDINGLY, the petition for review on certiorari is dismissed for lack of merit. With costs.

SO ORDERED.