BOSTON BANK OF THE PHILIPPINES, (formerly BANK OF COMMERCE) vs. PERLA P. MANALO G. R. No. 158149 (Digested)

BOSTON BANK OF THE PHILIPPINES, (formerly BANK OF COMMERCE) vs. PERLA P. MANALO and CARLOS MANALO, JR., 

G. R. No. 158149. February 9, 2006

CALLEJO, SR., J.:

 

Facts: 

·         The Xavierville Estate, Inc. (XEI) was the owner of parcels of land in Quezon City, known as the Xavierville Estate Subdivision, with an area of 42 hectares. XEI caused the subdivision of the property into residential lots, which was then offered for sale to individual lot buyers.

·         XEI, through its General Manager, Antonio Ramos, as vendor, and The Overseas Bank of Manila (OBM), as vendee, executed a "Deed of Sale of Real Estate" over some residential lots in the subdivision.

·         The transaction was subject to the approval of the Board of Directors of OBM, and was covered by real estate mortgages in favor of the Philippine National Bank as security for its account amounting to ₱5,187,000.00, and the Central Bank of the Philippines as security for advances amounting to ₱22,185,193.74.⁴ Nevertheless, XEI continued selling the residential lots in the subdivision as agent of OBM.⁵

·         XEI president Emerito Ramos, Jr. contracted the services of Engr. Carlos Manalo, Jr. who was in business of drilling deep water wells and installing pumps under the business name Hurricane Commercial.

XEI turned over its selling operations to OBM. Subsequently, Commercial Bank of Manila (CBM) acquired the Xavierville Estate from OBM. CBM requested Perla Manalo to stop any on-going construction on the property since it (CBM) was the owner of the lot and she had no permission for such construction. Perla informed them that her husband had a contract with OBM, through XEI, to purchase the property. She promised to send CBM the documents. However, she failed to do so. Thus, CBM filed a complaint for unlawful detainer against the spouses. But later on, CBM moved to withdraw its complaint because of the issues raised. In the meantime, CBM was renamed the Boston Bank of the Philippines.  Then, the spouses filed a complaint for specific performance and damages against the bank before the RTC. The spouses alleged that they had always been ready and willing to pay the installments on the lots sold to them but no contract was forthcoming. The spouses further alleged that upon their partial payment of the downpayment, they were entitled to the execution and delivery of a Deed of Absolute Sale covering the subject lots. During the trial, the spouses adduced in evidence the separate Contracts of Conditional Sale executed between XEI and 3 other buyers to prove that XEI continued selling residential lots in the subdivision as agent of OBM after the latter had acquired the said lots.  The trial court ordered the petitioner to execute a Deed of Absolute Sale in favor of the spouses upon the payment of the spouses of the balance of the purchase price. It ruled that under the August 22, 1972 letter agreement of XEI and the spouses, the parties had a "complete contract to sell" over the lots, and that they had already partially consummated the same. The Court of Appeals sustained the ruling of  the RTC, but declared that the balance of the purchase price of the property was payable in fixed amounts on a monthly basis for 120 months, based on the deeds of conditional sale executed by XEI in favor of  other lot buyers. Boston Bank filed a Motion for the Reconsideration of the decision alleging that there was no perfected contract to sell the two lots, as there was no agreement between XEI and the respondents on the manner of payment as well as the other terms and conditions of the sale. Boston Bank also asserts that there is no factual basis for the CA ruling that the terms and conditions relating to the payment of the balance of the purchase price of the property (as agreed upon by XEI and other lot buyers in the same subdivision) were also applicable to the contract entered into between the petitioner and the respondents. CA denied the MR.

Issue:

            Whether or not the CA correctly held that the terms of the deeds of conditional sale executed by XEI in favor of the other lot buyers in the subdivision, which contained uniform terms of 120 equal monthly installments, constitute evidence that XEI also agreed to give the Manalo spouses the same mode and timeline of payment. (Evidence, Disputable Presumptions, Habits and Customs Rule 130, Section 34)

 Held:

NO. The bare fact that other lot buyers were allowed to pay the balance of the purchase price of lots purchased by them in 120 or 180 monthly installments does not constitute evidence that XEI also agreed to give the respondents the same mode and timeline of payment.

Under Section 34, Rule 130 of the Revised Rules of Court, evidence that one did a certain thing at one time is not admissible to prove that he did the same or similar thing at another time, although such evidence may be received to prove habit, usage, pattern of conduct or the intent of the parties.

Habit, custom, usage or pattern of conduct must be proved like any other facts. The offering party must establish the degree of specificity and frequency of uniform response that ensures more than a mere tendency to act in a given manner but rather, conduct that is semi-automatic in nature. The offering party must allege and prove specific, repetitive conduct that might constitute evidence of habit. The examples offered in evidence to prove habit, or pattern of evidence must be numerous enough to base on inference of systematic conduct. Mere similarity of contracts does not present the kind of sufficiently similar circumstances to outweigh the danger of prejudice and confusion. In determining whether the examples are numerous enough, and sufficiently regular, the key criteria are adequacy of sampling and uniformity of response. It is only when examples offered to establish pattern of conduct or habit are numerous enough to lose an inference of systematic conduct that examples are admissible.

 Respondents failed to allege and prove that, as a matter of business usage, habit or pattern of  conduct, XEI granted all lot buyers the right to pay the balance of the purchase price in installments of  120 months of fixed amounts with pre-computed interests, and that XEI and the respondents had intended to adopt such terms of payment relative to the sale of the two lots in question. Indeed, respondents adduced in evidence the three contracts of conditional sale executed by XEI and other lot buyers merely to prove that XEI continued to sell lots in the subdivision as sales agent of OBM after it acquired said lots, not to prove usage, habit or pattern of conduct on the part of XEI to require all lot buyers in the subdivision to pay the balance of the purchase price of said lots in 120 months.