JULIO T. DE LA CRUZ, (SUBSTITUTED BY ROSITA C. DE LA CRUZ, ELIZABETH, JULIO, JR., EMMANUEL, EVELYN, ELAINE, JULIO JESUS AND EMILY, ALL SURNAMED DE LA CRUZ), PLAINTIFFS-APPELLEES…

While the South
Super Highway was being constructed, the late
Julio T. de la Cruz individually contacted owners of land in the vicinity.  He was able to gather a group owning a total
of 129 hectares, hereinafter referred to as Parañaque
estate, which, out of his efforts, he was able to sell to the People’s Homesite and Housing Corporation or PHHC for short.

On November 2, 1959, Earthwealth
(Phil.), Inc., thru its General Manager, Antonio Martinez, asked aforenamed Julio T. de la Cruz to make legal
representations and to negotiate in behalf of the former for the acquisition of
the Parañaque estate from the PHHC for P3.50 a square
meter, with the understanding that if he should succeed in the negotiation for
the purchase of said estate at a price much lower than P3.50, he would be
entitled to the difference between the actual purchase price and the said
amount as compensation for his legal services.^[1]

However, the said parties, in an “Amended Memorandum
Agreement”^[2]
dated June 15, 1960,
modified their agreement of November
2, 1959, thus –

“WHEREAS, the parties hereto signed an agreement between them
on November 2, 1959;

“WHEREAS, in view of developments in the case, the parties
have deemed it necessary to amend their original agreement of November 2, 1959;

“WHEREAS, the CLIENT has agreed to buy only 100 hectares of
the PHHC Parañaque Estate and pay a price as high as
P3.80 per square meter, under such terms and conditions as may be imposed by
the People’s Homesite and Housing Corporation and the
Cabinet and/or the President of the Philippines, and that in addition thereto,
the further sum of P320,000.00 as attorney’s fees for the ATTORNEY herein and 2
hectares of the said Parañaque Estate to be acquired
by the CLIENT herein, title to which shall be conveyed free of any liens and
encumbrances upon the subdivision and development thereof;

“WHEREAS, in addition to the aforesaid sum set aside for
attorney’s fees, the CLIENT herein agrees and undertakes to provide the
ATTORNEY the necessary expenses in connection with said purchase, including
representation and other legal expenses;

“WHEREAS, the CLIENT herein agrees to authorize the ATTORNEY
to solicit such assistance and employ such persons as may be necessary to carry
out the mission assigned to him, provided that the ATTORNEY shall respond for
the payment of their compensation out of the sum of P320,000.00 set aside for
him;

“NOW, THEREFORE, IT IS MUTUALLY AGREED, by the undersigned
parties that their AGREEMENT of November 2, 1959, is hereby amended and
substituted with their new agreement stipulated herein; and

“FINALLY, it is understood that the CLIENT herein shall
undertake to pay the ATTORNEY the sums above-stated upon the approval of the
purchase of the PHHC Para­ñaque Estate, through his
legal representations, by the Cabinet and/or the President of the Philippines.”

On March 22, 1961, aforesaid Earthwealth
(Phil.), Inc., and Better Living, Inc., entered into an agreement denominated
as “Absolute Conveyance of Right to Buy Real Estate With All The
Obligations Thereto Appertaining And/Or Arising Therefrom“,
which reads as follows –

“I.     WHEREAS, the offer of Earthwealth
to purchase the 129 hectares of land of the People’s Homesite
& Housing Corporation or PHHC at Parañaque, Rizal, was approved by the Cabinet at its meeting on
December 14, 1960, at the unit price of P3.80 per sq. m., which property
consisting of several parcels of land are described in the attached list herein
identified as Annex-A;

“II.    WHEREAS, the said offer of Earthwealth to buy the 129 hectares afore-stated was
likewise before approved under Resolution No. 38, dated July 21, 1960, of the
PHHC Board of Directors, and pursuant to the let­ter of its General Manager
Bernardo Torres, dated December 16, 1960 notifying Earthwealth
of the acceptance and approval of its offer, Earthwealth
has deposited on December 27, 1960, with the PHHC, the amount of P100,000.00
under Official Receipt No. C-2279486 as de­posit for the purchase price
thereof, thus establishing its right to buy the property listed in Annex-A;

“III.    WHEREAS, Earthwealth
under its Resolution No. 103 dated February 17, 1961, has agreed and decided to
convey and transfer in a way irrevocable and absolute said right to buy and/or
whatever lien or interest it has on the 129 hectares of land of the PHHC, unto
the Better Living, Inc., its successors, assigns, executors and administrators
together with all the obligations thereto appertaining and/or arising therefrom;

“IV.   WHEREAS, among the obligations Earthwealth is transferring with this conveyance and to be
assumed in full and without recourse by the Better Living, Inc., are (1)
purchase price of the land, (2) undertakings or obligations enumerated in the
deed of sale between Earthwealth and the PHHC; (3)
commitments of Earthwealth to the Mahogany
Construction Company, Raul Lopez & Company, Top Service, Luzon Surveying Company;
and (4) Sundries which Earthwealth, one way or
another, are liable under the circumstances;

“V.    WHEREAS, the Better Living, Inc. fully
aware of the foregoing and acting under the authority of its Resolution No. 1
dated March 22, 1961, agrees with Earthwealth to
purchase the latter’s rights and interest to buy the PHHC 129 hectares of land
described in the aforecited Annex-A with all of the
obligations mentioned in the preceding paragraph IV; that Earthwealth,
duly authorized representative of Better Living, Inc. shall continue to
negotiate with the PHHC for the final sale and registration of these properties
in its name, and thereafter, Earthwealth shall surrender
the titles thereof to the Better Living, Inc.;

“VI.   NOW THEREFORE, for and in consideration
of the amount of P25,000.00 in hand paid by the Better Living, Inc. unto Earthwealth, receipt of the whole amount is hereby
acknowledged and confessed, and other valuable considerations herein, Earthwealth, by these presents, sells, conveys and transfer
in a way absolute and irrevocable all its afore-stated rights and interests to
buy the PHHC 129 hectares of land listed in Annex-A with all the obligations,
thereto appertaining, unto the Better Living, Inc., its successors, as­signs,
executors and administrators free from all claims of any person whomsoever,
other than above enumerated.”^[3]

On March 29, 1961, the PHHC and Earthwealth
(Phil.) Ltd. executed a “Contract of Sale”, whereby the former, for
and in consideration of P3.80 a square meter, sold to the latter and its
successors and assigns, absolutely and irrevocably, 1,003,345 square meters of
its properties situated in Parañaque, Rizal, subject to the following terms and conditions –

“1. MANNER OF PAYMENT

EARTHWEALTH shall pay directly to the
PHHC the total purchase price as agreed upon as follows:

(a)  P100,000.00 upon being formally notified of
the acceptance of offer, receipt of which amount is hereby acknowledged;

(b)  P1,400,000.00 upon the signing of this contract
of sale, receipt of which amount is also hereby acknowledged;

(c)  The balance of the purchase price after
deducting the above stated amounts will be paid to the PHHC within a period of
sixty (60) days from and after the date this deed of sale is annotated on the
titles of the PHHC above listed, it being expressly understood that the subject
properties will remain in the name of the PHHC until the full payment of the
purchase price;

(d)  In addition to the above amounts, EARTHWEALTH
shall also pay PHHC on the same day that the balance mentioned in the next
preceding paragraph hereof (I-c) is agreed to be paid, not as part of the
purchase price but as reim­bursement to the PHHC, the interest that the PHHC
shall have paid the GSIS from March 24, 1960 to December 31, 1960 on the amount
that the GSIS should have credited the PHHC as of March 23, 1960 for the Parañaque property;

2.  Within sixty (60) days
from the date of registration of this deed of sale, the development of and
construction of the houses on the area purchased will be started by the
EARTHWEALTH and the completion thereof shall be effected within five (5) years
from said regis­tration provided that at least twenty percent (20%) of the work
shall be finished each year;

3.  EARTHWEALTH will respect
and step into the shoes of the PHHC in regard to the right-of- way agreement
entered into by and between the PHHC and Maura Santos-Pascual,
EARTHWEALTH hereby agreeing to give Maura Santos-Pascual
out of its agreed area (1,003,345) square meters as said EARTHWEALTH and Maura
Santos-Pascual may agree, in exchange for the area to
be covered by the road to be constructed on the latter’s property to provide a
right-of-way from the New South Super Highway to the subject property, and in
this connection the PHHC will undertake to secure the conformity of Maura
Santos-Pascual to this arrangement within a period of
sixty (60) days from the signing and registration of this deed of sale,
provided that all negotiations with Maura Santos-Pascual
shall be undertaken by and in the name of the PHHC;

4.  At its own expense,
EARTHWEALTH will construct the road, not less than 30 meters wide, connecting
the PHHC retained area with the new South Super Highway, con­struction to begin
immediately upon approval by the PHHC Board if this Deed of Sale, and for this
purpose, EARTHWEALTH may take immediate possession of the subject properties,
that is, the portion being sold to EARTHWEALTH as well as the portion to be
retained by the PHHC;

5.  EARTHWEALTH will provide
a consolidated development plan of the entire area of 129 hectares and under
such terms and conditions as will be agreed later on and subject to the usual
requirements of government contracts, EARTHWEALTH will undertake the
construction of roads, drainage, and gutters within the PHHC retained area as
well as the subdivision of the individual lots therein, with the understanding
that all expenses (actual costs) to be incurred by EARTHWEALTH for the
development of area to be retained by the PHHC except the two main road, which
shall be fully constructed at the expense of EARTHWEALTH, shall be reimbursed
by the PHHC to the EARTHWEALTH and that EARTHWEALTH will be allowed to rent at reasonable rates PHHC available
equipment;

6.  In the resale of the
units to be developed and constructed by the EARTHWEALTH, a portion equivalent
to not less than 20% of the total area to be acquired by the EARTHWEALTH under
this contract shall be sold exclusively to recommendees,
qualified under PHHC rules and regulations, of the Secretary of National
Defense who are disabled, veterans, war widows, and orphans, of the SWA and the
COGEO, provided that with respect to the rest of the whole area, qualified PHHC
applicants shall have priority, provided that this condition shall be binding
only for a period of one (1) year from that date that resale shall have become
legally possible within the area herein sold by PHHC to EARTHWEALTH within the
20% portion;

7.  All planning and
development of the land as well as the houses within the whole area acquired by
EARTHWEALTH under this contract as well as their pricing in the resale shall be
made in consultation with the PHHC to the end that said resale may be within
the spirit of the objectives of the PHHC charter and in accordance with the low
cost housing program of the administration, provided that with respect to the
areas reserved for the recommendees of the Secretary
of National Defense the SWA and the COGEO, the resale price shall be such as
would make the amortization as low as P35.00 to P50.00 per months for a period
of 15 to 20 years;

8. It is agreed that the PHHC shall pay the expenses for
documentary stamps whereas EARTHWEALTH will pay for the expenses of annotation,
registration and issuance of new titles and other legal expenses incident to this
contract;

9.  Failure of EARTHWEALTH to
comply with its obligations under any of the foregoing terms and conditions
shall be a ground for immediate rescission of this contract, with the
understanding that in case this contract of sale is rescinded through the fault
of EARTHWEALTH, the PHHC will be entitled to retain the P100,000.00 paid pursuant
to Paragraph I (a) hereof, provided that should the damages of the PHHC exceed
P100,000.00, said P100,000.00 shall be deducted by PHHC from whatever amount
PHHC shall have to return to EARTHWEALTH as a result of the rescission, with
the understanding, that, on the other hand, PHHC shall pay at cost the value of
all the development and improvements which EARTHWEALTH may have already
finished at the time of said rescission, and it being finally understood that
title to all the lands herein sold shall immediately revert to the PHHC upon
said rescission, free from all liens and encumbrances;

10. GUARANTEE

EARTHWEALTH will put up a
surety bond in the amount of P500,000.00 with a surety company acceptable to
the PHHC, to guarantee faithful compliance with its obligations under this
contract, which bond must be submitted to the PHHC within thirty (30) days
after the signing of this contract;

11. This contract shall be subject to review and
approval by the Auditor General pursuant to Administrative Order No. 290 dated February 3, 1957 of the President of
the Philippines
before being considered enforceable.”^[4]

As Better Living, Inc. and Earthwealth,
Ltd., had allegedly failed to comply with their obligation to Julio T. de la
Cruz, he filed a complaint against them for specific performance.  Subsequently, he amended his complaint by including Tropical
Homes, Inc. as party defendant.

After the defendants had filed their respective answers, and after the parties had
submitted stipulations of facts, additional evidence was adduced by them.  How­ever, during the pendency
of this case in the court below, the original plaintiff, Julio T. de la Cruz,
died.  Conse­quently, a motion for
substitution was filed by his widow and children which was granted.

On January 18, 1966,
decision was rendered “in favor of the plaintiff and against the
defendants jointly and severally, for P401,000.00, with interest at the legal
rate from the filing of the complaint, and another P10,000.00 for attorney’s
fees, and the costs of the suit.”^[5]

Defendants Better Living, Inc. and Tropical Homes, Inc. now come
before us by way of the instant appeal.

Lately, however, the present plaintiffs-appellees
and appellant Tropical Homes, Inc. entered into a “Com­promise
Agreement”, which is in the following tenor –

“COMPROMISE AGREEMENT

Plaintiffs-appellees and
defendant-appellant Tropical Homes, Inc., assisted by their respective counsel,
desiring to settle amicably and terminate their controversies in this case,
have agreed, as they do hereby
agree, by way of a compromise, as follows:

1.  That
for and in consideration of the sum of One Hundred Fifty Thousand (P150,000.00)
Pesos, Philippine Currency, paid by defendant-appellant Tropical Homes, Inc.
unto plaintiffs-appellees in the form of the
following checks, namely:

all of which checks plaintiffs-appellees acknowledged having received, plaintiffs-appellees do hereby relinquish and waive, as they have
relinquished and waived, in favor of defendant-appellant Tropical Homes, Inc.,
all of their rights, interests, and participation in and to their cause or
causes of action embodied in their amended complaint dated August 16, 1963 in
this case, as well as in and to the judgment on the merits based thereon of the
Court a quo, subject of the present appeal;

2.  That defendant-appellant in consequence also
relinquishes and waives whatever rights of action it has or may have, if any,
against plaintiffs-appellees and/or the original
plaintiff, on the matters involved in this case;

3.  That this compromise agreement will be
submitted to the Hon. Supreme Court for approval and reduction into judgment,
without special pronouncement as to costs.”^[6]

They, therefore, pray that the compromise
agreement be approved and that judgment be rendered accordingly.

Finding the compromise agreement in order, and not against the
law, morals and public policy, We hereby approve the same.

Thus, only the appeal of appellant Better Living, Inc. remains to
be resolved.  In its attempt to avoid any
liabi­lity to the appellees, the remaining appellant
maintains that the lower court erred –

I

IN FINDING THAT DEFENDANT-APPELLANT BETTER LIVING, INC., HAD
ASSUMED THE OBLIGATION TO PAY PLAINTIFF-APPELLEE’S CLAIM AND IN HOLDING IT
JOINTLY AND SEVERALLY LIABLE WITH THE OTHER DEFENDANT-APPELLANTS;

II

IN SENTENCING DEFENDANT-APPELLANT BETTER LIVING, INC. TO PAY
P401,000.00, WITH INTEREST AT THE LEGAL RATE FROM THE FILING OF THE COMPLAINT,
SUCH AMOUNT BEING UNREASONABLE AND UNCONSCIONABLE COMPENSATION FOR LEGAL
SERVICES, AND TO PAY ANOTHER P10,000.00 FOR ATTORNEY’S FEES, AND THE COSTS OF
SUIT; AND

III

IN FAILING TO DECLARE VOID AND UNENFORCEABLE PLAINTIFF’S AGREEMENTS
WITH DEFENDANT-APPELLANT EARTHWEALTH (PHIL.) LTD. AS CONTRARY TO PUBLIC POLICY
AND TO LAW AND TO DECLARE THAT ANYWAY PLAINTIFF HAD NOT FULFILLED OR PERFORMED
HIS AGENCY IF HE WAS AGENT.

Appellant Better Living, Inc. pretends that it did not assume the
obligation of Earthwealth (Phil.), Ltd. to the appellee.  This is
quite far from the truth.  For, under the
“Absolute Conveyance of Right To Buy Real Estate With All The Obligation
Thereto Appertaining And/Or Arising Therefrom“,
executed on March 12, 1961^[7]
“among the obligations Earthwealth is
transferring with this conveyance and to be assumed in full and without re­course
by the Better Living, Inc. are:  x x x (4) Sundries which Earthwealth, one way or another, are liable under the
circumstances; x x x.”
It further says –

“VI.   NOW
THEREFORE, for and in consideration of the amount of P25,000.00 in hand
paid by the Better Living, Inc. unto Earthwealth,
receipt of the whole amount is hereby acknowledged and confessed, and other
valuable consideration herein, Earthwealth, by these
presents, sells, conveys and transfers in a way absolute and irrevo­cable all
its aforestated rights and interests to buy the PHHC
129 hectares of land listed in Annex-A with
all the obligations thereto appertaining, unto the Better Living, Inc., its successors, assigns, executors and
administrators free from all claims of any person whomsoever, other than those
above enumerated.”

Added to the foregoing is the fact that appellant Better Living, Inc. had already paid to the appellee a total of P24,000.00 on account of the latter’s
fees.^[8]
These circumstances taken
together crystalize the assumption by said appellant
of the obligation of Earthwealth (Phil.), Ltd. to the
appellee.

Anent the second and third assignments of error of appellant
Better Living, Inc. suffice it to say that it is now too late at this instance
for said appellant to assail appellee’s compensation
as “unreasonable and unconscionable”, simply because it did not raise
such issue in its answer to appellee’s
complaint or in its amended
answer to the amended complaint.^[9]

In connection with appellee’s services,
he elucidated thereon on the witness stand, thus –

x x
x              x
x x                 x x x

“Q.  How
come, Mr. de la Cruz, that your fees for all your services total P296,000.00
plus two hectares, according to this Exhibit H?

A.    Well,
it was denominated attorney’s fees because I happened to be a lawyer, but
actually, the services I performed in this was in the nature of promoting the
business of the defendants and it was based on a contingent basis.  I was to be paid only if I succeeded, and the
amount involved in the transaction runs to 100 hectares x P4.20 —
P4,200,000.00 and the defendants, through my efforts, are now profiting from
that; as a matter of fact, selling the property at P38.00 per square meter.^[10]

x x
x              x
x x                 x x x

“Q.  Mr.
de la Cruz, I invite your atten­tion to Exhibit H appearing on page 171 of the
records, particularly to the last paragraph thereof, which reads:  “Finally, it is understood that the
Client herein shall undertake to pay the Attorney the sums above-stated upon
the approval of the purchase of the PHHC Parañaque
Estate through his legal representations, by the Cabinet and/or the President
of the Philippines.” Is it not a fact, Atty. de la Cruz that your
agreement, particularly with respect to that portion quoted, refers only to
your rendering legal services for the purpose stated therein, that is, to secure
the approval of the purchase of the PHHC, Parañaque
Estate by the Cabinet and the President of the Philippines?

A.    May
I have the exhibit please?  (Witness
handed the document, Exhibit H).  Well,
actually, as I have explained in my direct examination, the contract that we
signed, which is this document you are referring to, was in consideration of
the services I had rendered for Earthwealth referred
to therein as CLIENT, and that the services therein contem­plated not only
legal but also promotional.  Now, in
connection with my appearance before the Cabinet which required legal services,
I had to appear before the Cabinet in my capacity as a lawyer, especially so
because before the case was brought up to the Cabinet, I remember having made
the testimony that I had a hard time convincing the Department of Justice, the
Secretary of Justice, as to the feasibility and reasonableness of the action
taken by the PHHC in connection with my client’s views, because the Secretary
of Justice rendered an opinion, very much adverse to the Earthwealth,
and this opinion is the one appearing on pages 186 to 188, which is Exhibit M
for the plaintiff.  And because of this
opinion I had to file a memorandum with the Cabinet, dated December 1, 1960, copy of which appears on pages
189 to 192 of the expediente which is marked as
Exhibit N for the plaintiff, to contradict the opinion of the Secretary of
Justice.  Subsequent to that time, when
the Cabinet met, resulting in the approval of the sale as shown by the letter
dated December 14, 1960, I was called upon to argue orally before the Cabinet
the transaction of my client Earthwealth with the
PHHC to justify the purchase of the property so much so that this reference you
made to the contract, to the portion of the contract you made, refers to legal
representation insofar as appearing before the Cabinet is concerned.”^[11]

It is thus quite clear from the foregoing that the appellee’s services were those of a real estate broker and
a lawyer.

Better Living, Inc. has adopted the claim of Tropical Homes, Inc.
that the Memorandum Agreement, wherein Earthwealth
had agreed to pay the late plaintiff, Julio de la Cruz the amount of
P320,000.00 for the latter’s services, is in violation of Republic Act No.
3019, the Anti-Graft and Corrupt Practices Act and therefore, inexistent and
void from the beginning.  In support
thereof, the appellant points to certain admissions made by the late plaintiff
during the trial that the sale to Earthwealth was
mainly due to his representation and close personal relations with the then
General Manager of the PHHC which actions amounted to “influence
peddling” within the concept of the Anti-Graft Law.^[12]

The Anti-Graft and Corrupt Practices Act (Rep. Act No. 3019) was
enacted on August 17, 1960 and Section 4 of the said act provides, among
others, that it shall be unlawful for any person having family or close
personal relation with any public official to capitalize or exploit or take
advantage of such family or close personal relation by directly or indirectly
requesting or receiving any present, gift or material or pecuniary advantage
from any other person having some business, transaction, application, request
or contract with the government, in which such public official has to intervene.  Family relation shall include the spouse or
relatives by consanguinity or affinity in the third civil degree.  The word “close per­sonal relation”
shall include close personal friendship, social and fraternal connections, and
professional employment all giving rise to intimacy which assures free access
to such public officer.

Here, it is contended that there is a violation of the Anti-Graft
Law since the late plaintiff admitted that there existed a close intimacy
between him and Bernardo Torres, the then General Manager of the PHHC; that the
late plaintiff did capitalize upon, exploit and take advantage of such close
personal relation; that plaintiff capitalized and took advantage of such
relation by directly receiving pecuniary advantage from the Earthwealth
through their agreement,^[13]
and that the public official he influenced, Mr. Bernardo Torres had to
intervene in the transaction which Earthwealth had
with the PHHC of which Mr. Torres was the Chairman of the Board and General
Manager.

Indeed, it is very clear on the records that the late plaintiff-appellee had capitalized on his friendship and intimacy
with the General Manager of the PHHC in promoting the sale of the Parañaque Estate to his client, Earthwealth.  The exploitation of friendship, however,
ceased on July 21, 1960, when the PHHC Board of Directors approved the said
sale through its Resolution No. 38.^[14]
Considering that the Anti-Graft Law was enacted subsequent thereto, on August 17, 1960, the provisions of
said law cannot be given retroactive effect and invoked against the late
plaintiff-appellee. 
Although the sale was finally approved by the President and/or his
Cabinet on December 14, 1960,^[15]
there is no evidence to show that the late Julio de la Cruz is a close intimate
of the President and capitalized on such close personal relations in the final
approval of the sale.

WHEREFORE, and in view
of the aforequoted com­promise agreement
executed by the appellees on one hand and appellant
Tropical Homes, Inc., and the “Joint Motion For Judgment and Termination of
Case” submitted by appellants Tropical Homes, Inc. and Better Living,
Inc., the judgment appealed from is hereby modified, thus:

1. Appellant Tropical Homes, Inc. is hereby relieved from further
liability to the appellees;

2. Appellant Better Living, Inc. is sentenced to pay the appellees the sum of P251,000.00 with legal interest
thereon from the filing of the complaint, and attorney’s fees in the amount of
P10,000.00.  The appealed judgment is
affirmed in all other respects, with costs against appellant Better Living,
Inc.

SO ORDERED.

Martin, Santos, and
Guerrero, JJ., concur.

Antonio, (Acting Chairman), and
Aquino, JJ., in the
result.

Fernando and Barredo, JJ., no part.

Martin and Guerrero, JJ., were
designated to sit in the Second Division.

^[1]
Exhibit C.

^[2]
Exhibit H.

^[3]
Exhibit V.

^[4]
Exhibit W.

^[5]
Rec. on Ap., pp. 104-130.

^[6] Rollo, p. 301.

^[7]
Exhibit V.

^[8]
p. 16, t.s.n., March
1, 1965; Exhs. HH, HH-1; JJ, JJ-1; KK,
MM, MM-1 and OO.

^[9]
Moran’s Comments on the Rules of Court, 1970 Ed., Vol. 2, p. 504.

^[10] t.s.n., pp. 15-16, March
1, 1965.

^[11] t.s.n., pp. 26-28, March
24, 1965.

^[12]
The testimony reads in part, as follows:

“Q.   Now going over the exhibits, I noted Mr. de la Cruz a memorandum
by the then Manager of the People’s Homesite and
Housing Corporation, Mr. Bernardo Torres addressed to the Pre­sident of the
Philippines, justifying the Earthwealth contract,
which is Exhibit J of the records, appearing on pages 173 to 177.  Have you had occasion to read this exhibit
before you have prepared your memorandum to the Cabinet, Exhi­bit ‘N’?

A     Yes, as a matter of fact, I was the one who prepared this before
Mr. Torres’ presence.  We worked together
to jus­tify the sale of the property and I can remember that this was even
typed in my own typewriter.

Q     And it was signed by Mr. Torres after you prepared it?

A     We worked together to justify the sale.

Q     Knowing, as you alleged, that the decision, as you testify now,
to dispose of the Parañaque Estate in favor of third
parties, par­ticularly Earthwealth, was your
suggestion, did you not protest to Mr. Torres that no mention was ever made of
the fact that you made such suggestion in Exhibit ‘J’?

A     There was no need for that. 
All that I was interested was that the sale would go through.  I did not want to claim credit for it, and it
would have been ridiculous for Mr. Torres to make mention there that this
memorandum was made by Mr. de la Cruz.

Q     Will you be kind enough to inform the Hon.
Court why Mr. Torres had such confidence in you to
allow you to prepare a memoran­dum for him addressed to the President of the Philippines?

A     In the first place, I was the
one who grouped together these properties, as I said during my direct
examination, and I know the his­tory and background of these
properties.  Furthermore, Mr. Torres and
I are from the same province, and he knows me in­timately, and he has trust in
me, that is why he asked me to
collaborate with his of­fice to prepare the memorandum to justify the sale,
especially in the light of the opin­ion already rendered by the Department of
Justice.” (t.s.n., pp. 35-36, Hearing of March
25, 1965.)

^[13]
Exhibit H.

^[14]
Exhibit I.

^[15]
Exhibit O.