SILVERIO Q. CORNEJO, PLAINTIFF AND APPELLANT, VS. MANUEL B. CALUPITAN, D.B. CASTAÑEDA AND EUSTACIO BARRERA, DEFENDANTS AND APPELLEES.

This is an appeal prosecuted by the plaintiff Silverio Q. Cornejo
directly from the judgment of the Court of First Instance of Manila,
absolving the defendants from the complaint for specific performance,
seeking to compel Manuel B. Calupitan to convey his land containing
about 110 hectares situated in the province of Tayabas (now Quezon) in
favor of plaintiff-appellant.

By a direct appeal from the Court of First Instance, only questions
of law may be raised here, and counsel for appellant so states and
intimates in his brief where on page one thereof, he says:

“This appeal is now brought to this Honorable Tribunal that it may finally resolve certain questions of law, involved herein.”

Under the circumstances, we may therefore rely on the findings of
fact made by the trial court. Said facts necessary for the
determination of the appeal may be briefly stated as follows:

In January, 1945, defendant Manuel B. Calupitan who owned a parcel
of land in the barrio of Mayabobo, Candelaria, Tayabas with an area of
110.912? hectares,.authorized his co-defendants D, B. Castañeda and
Eustacio Barrera, real estate brokers operating in Manila, to sell the
aforementioned parcel. The defendant brokers contacted their friends
and clients and finally received an offer in writing (Exhibit B, Annex
2) from plaintiff Silverio Q. Cornejo, which reads thus:

“Castañeda-Barrera Realty Co.

“R. 317 Kneedler Bldg,

“Manila.

“The undersigned respectfully offers to buy the 110.912? hectares in
Bo. Mayabobo, Candelaria, Tayabas of Dr. Manuel Calupitan for the total
amount of Six hundred fifty thousand (P650,000) pesos with an earnest
money of Seventy thousand (P70,000) pesos; the balance payable within
fifteen (15) days from date hereof; with the condition that all the
papers evidencing ownership are in order.

“Manila, Philippines this 4th day of Jan. 1945.

“(Sgd.) “S. Q. Cornejo

“Accepted by:

(Sgd.) “Manuel B. Calupitan”

It will be noted that on the same day that the offer was made,
January 4, 1945, defendant Calupitan accepted it by signing his name at
the foot thereof under the phrase “accepted by”. The parties are agreed
that the price of P650,000, including the earnest money of P70,000 was
payable in Japanese military notes. Cornejo, however, because he did
not have the cash to pay the P70,000 earnest money and to complete the
payment within the period specified in his offer as accepted by Calupitan, delivered only P65,000 Japanese war notes to defendant
brokers Castañeda & Barrera on January 6, 1945, with instructions
to deliver the same to Calupitan on the same date and to inform the
latter that the balance of P585,000 was to be made on January 25, 1945.
This transaction or proposition was reduced to writing in the form of a
receipt, and is now Exhibit C. A carbon copy of the said exhibit was
given to Calupitan by the brokers on the same date, January 6, 1945,
presumably for his approval and acceptance, together with the P65,000
earnest money in Japanese military notes. Calupitan, however, instead
of merely affixing his signature at the foot thereof to show his
conformity, as he had formerly done with the original offer, Exhibit B,
wrote out a receipt for the P65,000 earnest money in military notes
delivered to him by Castañeda & Barrera, specifying his own terms
as to the payment of the balance, so that the carbon copy of Exhibit C
and said receipt written out by Calupitan at the bottom thereof, now
marked Exhibit M, Annex 3 reads as follows:

“Castañeda-Barrera Reality Co., Ltd.
“317 Kneedler Building. Manila
“Telephone 2-48-88

“Received from Atty. Silverio Q. Cornejo the sum of
Sixty-five thousand (P65,000) pesos to be delivered to Dr. Manuel
Calupitan (Owner) as partial payment of the 110.9095 hectares, more or
less, in the Barrio of Mayabobo, Candelaria, Tayabas, Philippines and
covered by T.C.T. No. 3366.

“The balance of Five hundred
eighty-five (P585.000) pesos to be paid in accordance with the written
offer of Atty. Cornejo and accepted by Dr. Manuel Calupitan, on or
before January 25, 1945.

“Manila, Philippines, this 6th day of January, 1945.

“Castañeda-Barrera Reality Co.

By: “D. B. Castañeda

“Received
from Atty. Silverio Q. Cornejo thru Atty, D. B. Castañeda of the
Castañeda-Barrera Realty Co., Ltd. the sum of Sixty-five thousand pesos
(P65.000) J. N. only as earnest money and/or partial payment of my one
hundred ten hectares, ninety centares and 95 ares (110.9095 hectares)
more or less in barrio Mayabobo, Municipality of Candelaria. Province
of Tayabas, Philippines, as described in the Escritura de Venta dated
Dec. 28, 1937, made by Maria Pardel in favor of Manuel B. Calupitan,
Doc. No. 219, page No, 48, Libro No. VI, serie de 1937, of Notary
Public Arturo Fanlo of Manila, and more particularly described in
T.C.T. No. 3366 in the name of Jose Javier, as administrator of the
Estate of Margarita Valenzuela, deceased. The balance of Five hundred
and Eighty-five thousand pesos (P585,000) Phil. Currency, to be paid on
or before January 25, 1945.

“Manila, Philippines, this 6th day of January, 1945.

“(Sgd.) “Manuel B. Calupitan”

The balance of P585,000 was never paid or delivered by Cornejo nor
received by Calupitan. Cornejo claims that he had been looking in vain
for Calupitan to deliver to him the said balance in Japanese military
notes but that Calupitan had either avoided him, hidden himself or had
left the City so as to prevent delivery of the money to him. Calupitan
on the other hand, insists that he never avoided Corned nor purposely
prevented delivery of the balance of the purchase price but that for
security reasons he made it a point not to disclose his address because
he was being sought by the Japanese military authorities for his
guerrilla activities. The fact is that on January 22, 1945, after
supposedly failing to deliver the balance of P585,000 in Japanese war
notes to Calupitan, Cornejo deposited the sum with the Clerk of Court,
securing the corresponding receipt therefor, Exhibti H, and then on the
same day Cornejo filed the corresponding complaint in court against
Calupitan and the two real estate brokers for specific performance and
for payment of damages.

The trial court thru Judge Dionisio de Leon in absolving the
defendant-appellee from the complaint, held that appellant Come to
repudiated the original agreement by proposing that the earnest money
be reduced from P70,000 to P65,000 and that the period for payment of
the balance of the purchase price be extended from the 19th to the 25th
of January, 1945; that in that particular agreement or transaction,
time was of the essence of the contract, and that in such a case,
acceptance of option and payment of the purchase price constituted a
condition precedent for specific performance; that this was
particularly true during those days in January, 1945 when the American
liberation forces were already at the outskirt of Manila and the people
in the City were living from day to day in constant expectation of
being liberated from the Japanese, and that those who ventured into
business were greatly influenced in their decisions by the
circumstances of the times and the fact that Japanese military notes,
then used as legal tender, were depreciating in value by leaps and
bounds. The trial court further held that the plaintiff himself
rendered the original agreement null and void, and that in making his
new proposition as to the payment of the earnest money and the period
for the delivery of the balance of the purchase price, Calupitan could
either accept or reject said new proposition or make a counter
proposition which he did by imposing the condition that the said
balance be paid in genuine Philippine currency on or before January 25,
1945, as proposed by Cornejo.

Did Calupitan really intend and make it clear that said balance be
paid in genuine Philippine currency instead of Japanese military notes,
and did Cornejo so understand it? This is really the crucial point on
which the decision in the case mainly hinges. Counsel for appellant
correctly boils down the controversy in the present appeal when he
states in his brief:

“The critical point to be determined in this
controversy particularly centers on the meaning to be given to the
phrase ‘Philippine currency’ which was used by one of the parties. The
interpretation of that phrase will ultimately decide all other
questions subsidiary to this issue, and will eventually formulate the
status which the parties assumed in this case. For if it can be
Interpreted to mean what the defendant and the lower court contended to
be the ‘genuine’ Philippine currency, then the stand taken by the
plaintiff cannot be maintained; but if it should be held to be the
currency prevailing during the period when the contract was made and
when it was enforceable, then the decision cannot bat be favorable to
the plaintiff. For then the plaintiff will have complied with his end
of the bargain and the contract deemed enforced in accordance with its
terms.”

As we stated at the beginning of this decision, we have to rely
upon the findings of fact of the trial court, for only questions of law
may be raised in this appellate tribunal. The trial court found and
held that Calupitan wanted, intended and made it clear that the balance
of the purchase price of P585,000 be paid in genuine Philippine
currency, not in Japanese war notes. This finding is based not only on
what appears on Exhibit M, particularly the note or receipt written out
in longhand and signed by Calupitan, but also on the oral evidence
submitted, consisting of several hundred pages of transcript. If the
appellant was dissatisfied by the findings of the trial court and
wanted the oral evidence reviewed, he should have appealed to the
Court of Appeals. Instead, he came direct to this Court and made it of
record that he was raising only questions of law.

After a careful study of the record, particularly Exhibit M, we
agree with the trial court that in varying and modifying the terms of
the original agreement, Exhibit B, offered by Cornejo and accepted by
Calupitan, that the earnest money was to be P70,000 and the balance was
to be paid fifteen days after January 4, 1945, which modification
consisted in reducing the earnest money from P70,000 to P65,000 and in
extending the period of payment of the balance from January 19th to
January 25th, Cornejo Abandoned and rendered void the said original
agreement. His new proposition, a modification of the old one, was
subject to acceptance or rejection by Calupitan who, as already stated,
may make a counter proposition which he did, and unless accepted and
complied with by Cornejo, then the deal between the two parties was off.

We are also convinced that Calupitan wanted to have, the balance
paid in genuine Philippine currency. This is established not only by
his extended testimony during the hearing as found by the trial court
but also by the very terms of Exhibit M, particularly the portion
written out in longhand by Calupitan. It will be noticed that In
referring to the earnest money of P65,000 which he received, he added
the two letters “J. N.”, meaning Japanese notes. On the other hand, in
describing the balance of P585,000, he denominates it “Philippine
currency”. Moreover, as found by the trial court, during the latter
part of January, 1945, when Manila where the parties were then living
was on the eve of being assaulted and liberated by the American
liberation forces, the Japanese military notes were fast losing their
purchasing power not only by the week but by the day if not by the
hour. According to the trial court’s findings, Calupitan said that at
the beginning when he accepted the original offer of Come jo to pay the
balance in Japanese military notes, he intended to re-invest the sales
price in urban property. However, when the terms of the original
agreement were varied and the balance was not to be paid as early as
was originally agreed upon, and realizing that investment of said
balance would be hazardous, difficult, if not impossible because of the
approaching battle of Manila, he changed his mind and wanted said
balance to be paid in genuine Philippine currency altho he accepted the
earnest money of P65,000 in Japanese military notes. This, he said, he
made plain to the brokers who delivered to him said earnest money.

According to the very testimony of Come jo quoted by the trial
court in its decision, Cornejo himself had his doubts about the payment
of the balance of P585,000 in Japanese military notes as he now claims.
In fact, he was rather intrigued or worried about the phrase
“Philippine currency” written by Calupitan on Exhibit M, and that was
the reason why he made so much effort to see Calupitan to put his mind
at ease on that point. This, of course, greatly weakens the stand now
taken by the appellant that the understanding between himself and
Calupitan as to the payment of the balance of the purchase price, even
under Calupitan’ s counter proposition (Philippine currency) was to be
made in Japanese military notes.

It is urged on the part of the appellant that the balance of the
purchase price of P585,000 in genuine Philippine currency is out of all
proportion to the real value of the land in question whose assessed
value is only about P5,000. This may be true but as the trial court
well said, the owner of a parcel of land could quote his own price,
reasonable or unreasonable. It is up to the prospective purchaser to
accept or reject it. It might even be possible that Calupitan had
changed his mind not to part with his land and so he imposed a
condition hard to fulfill and named a price quite unreasonable, but he
was well within his rights as owner of the land because the original
agreement had already been abandoned and rendered void.

But Calupitan had received the P65,000 earnest money in Japanese
war notes. He should not be allowed to enrich himself at the expense of
the plaintiff. He should return the value of said sum at the time, to
the plaintiff.

In view of the foregoing, we find that the original agreement,
Exhibit B, between Cornejo and Calupitan had been abandoned and
rendered void by Cornejo himself, and that as to the new proposition
made by Cornejo, there was no meeting of the minds of the parties for
it was not accepted entirely by Calupitan. Consequently, the contract
of sale of the land in question was not perfected and so Calupitan may
not now be compelled to convey said land to plaintiff-appellant.
However, Calupitan is ordered to return to the plaintiff the value of
the P65,000 Japanese war notes he received, which value is to be
ascertained according to the Ballantyne schedule as of January 6, 1945,
in Manila. Said value is hereby fixed at P541.66, with legal interest
from January 6, 1945, until paid.

With this modification, the decision appealed from is hereby affirmed. No pronouncement as to costs.

Moran, C.J., Pablo, Bengzon, Tuason, and Reyes, JJ., concur.

---

PARAS, J.:

In the result.

FERIA, J., dissenting and concurring:

In his direct appeal from the Court of First Instance of Manila to
this court, only questions of law may be raised by the appellant and
passed upon by this court, as admitted by the appellant in his brief
and stated in the decision of the majority. The solution of the
question of law raised in this appeal depends on the interpretation of
the phrase “Philippine currency” used by the appellee Calupitan in
Exhibit M. And the conclusion of the trial court that it was the
intention of Calupitan in using said phrase that the balance of the
purchase price be paid in genuine Philippine currency, and not in
Japanese war notes, in view of his testimony and other evidence in the
record, is certainly a conclusion or finding of fact.

The decision of the majority correctly holds that “we have to rely
upon the findings of the trial court, for only questions of law may be
raised in this appellate tribunal.” But, instead of accepting the above
finding of the court below, regardless of whether it is supported by
the evidence or not, and basing on it as a minor premise its conclusion
of law in the question properly raised by the appellant, the majority
examines the evidence and concludes that “We are also convinced that Calupitan wanted to have the balance paid in genuine Philippine
currency,” because “This is established not only by his extended
testimony during the hearing as found by the trial court, but also by
the very terms of Exhibit M.” In passing upon this finding of fact of
the court a quo, the majority says:

“We are also convinced that Calupitan wanted to have
the balance paid in genuine Philippine currency. This is established
not only by his extended testimony during the hearing as forward by
the trial court but also by the very terms of Exhibit M, particularly
the portion written out in longhand by Calupitan. It will be noticed
that in referring to the earnest money of P65,000 which he received, he
added the two letters “J. N.”, meaning Japanese notes. On the other
hand, in describing the balance of P585,000, he denominates it ‘Phil.
currency’. Moreover, as found by the trial court, during the latter
part of January, 1945, when Manila where the parties were then living
was on the eve of feeing assaulted and liberated by the American
liberation forces, the Japanese military notes were fast losing their
purchasing power not only by the week but by the day if not by the
hour. According to the trial court’s findings, Calupitan said that at
the beginning when he accepted the original offer of Cornejo to pay the
balance in Japanese military notes, he intended to re-invest the sales
price in urban property. However, when the terms of the original
agreement were varied and the balance was not to be paid as early as
was originally agreed upon, and realizing that investment of said
balance would be hazardous, difficult, if not impossible because of the
approaching battle of Manila, he changed his mind and wanted said
balance to be paid in genuine Philippine currency altho he accepted the
earnest money of P65,000 in Japanese military notes. This, he said, he
made plaint to the brokers who delivered to him said earnest money.

“According to the very testimony of Cornejo quoted by the trial court in
its decision, Cornejo himself had his doubts about the payment of the
balance of P585,000 in Japanese military notes as ho now claims. In
fact, he was rather intrigued or worried about the phrase ‘Philippine
currency’ written by Calupitan on Exhibit M, and that was the reason
why he made so much.effort to see Calupitan to put his mind at ease on
that point. This, or course greatly weakens the stand now taken by the
appellant that the understanding between himself and Calupitan as to
the payment of the balance of the purchase price, even under
Calupitan’s counter proposition (Philippine currency) was to be made in
Japanese military notes.”

In view of the foregoing, I am sorry to dissent from the decision
of the majority, because this Supreme Court has no jurisdiction or
power to pass upon the findings of fact of the Court of First Instance
in appeals like the present, and the decision is misleading. I would have signed it without hesitation/had the above-quoted portion of the decision been omitted or stricken out.

The question of law raised by the appellant is whether or not the
new offer made by him to buy the land on the condition that he has to
pay an earnest money of P65,000 and the balance of P585,000 in Japanese
war notes on or before January 25, 1945, was accepted by Calupitan, and
therefore a new contract binding upon the parties was perfected as
contended by the appellant.

In view of the conclusive finding of the lower court that, according
to the evidence, the words or phrase “Philippine currency” used by the
appellee Calupitan in his counter-proposition Exhibit M was intended to
mean genuine Philippine currency, it is obvious that appellant’s
contention is without foundation, and the lower court did not commit
any error in deciding that the new contraet proposed by appellant
Cornejo to appellee Calupitan was not perfected. Because there was no
meeting of the minds of the parties, since Cornejo’s proposition to pay
the balance in Japanese war notes was not accepted by Calupitan, who
made the counter-proposition that it be paid in genuine Philippine
currency.

I therefore concur in the decision of the majority on this question of law and in the result.