G.R. No. 194785 VIRGILIO S. DAVID, PETITIONER, VS. MISAMIS OCCIDENTAL II ELECTRIC COOPERATIVE, INC., RESPONDENT.

DECISION MENDOZA, J.: Before this Court is a petition for review under Rule 45 of the Rules of Court assailing the July 8, 2010 De ision!1" of the Court of #ppeals $C#%, in C#&'(R( CR )o( *18+*, whi h affir,ed the July 1-, 2008 De ision!2" of the Regional .rial Court, Bran h /000, 1anila (RTC)in Civil Case )o( *42*402, an a tion for spe ifi perfor,an e and da,ages( The F !"#: 3etitioner /irgilio 4( David (David) was the owner or proprietor of /4D 5le tri 4ales, a o,pany engaged in the 6usiness of supplying ele tri al hardware in luding transfor,ers for rural ele tri ooperatives li7e respondent 1isa,is 8 idental 00 5le tri Cooperative, 0n ( (MOELCI), with prin ipal offi e lo ated in 89a,is City( .o solve its pro6le, of power shortage affe ting so,e areas within its overage, 185:C0 e;pressed its intention to pur hase a 10 1/# power transfor,er fro, David( <or this reason, its 'eneral 1anager, 5ngr( Reynaldo Rada (Engr. Rada), went to ,eet David in the latter=s offi e in >ue9on City( David agreed to supply the power transfor,er provided that 185:C0 would se ure a 6oard resolution 6e ause the ite, would still have to 6e i,ported( 8n June 8, 1**2, 5ngr( Rada and Dire tor Jose Ji,ene9 (Jimenez), who was in& harge of pro ure,ent, returned to 1anila and presented to David the re?uested 6oard resolution whi h authori9ed the pur hase of one 10 1/# power transfor,er( 0n turn, David presented his proposal for the a ?uisition of said transfor,er( .his proposal was the sa,e proposal that he would usually give to his lients( #fter the reading of the proposal and the dis ussion of ter,s, David instru ted his then se retary and 6oo77eeper, 5llen 1( @ong, to type the na,es of 5ngr( Rada and Ji,ene9 at the end of the proposal( Both signed the do u,ent under the word A onfor,e(B .he 6oard resolution was thereafter atta hed to the proposal( #s stated in the proposal, the su6Ce t transfor,er, together with the 6asi a essories, was valued at 35,200,000(00( 0t was also stipulated therein that 50D of the pur hase pri e should 6e paid as downpay,ent and the re,aining 6alan e to 6e paid upon delivery( <reight handling, insuran e, usto,s duties, and in idental e;penses were for the a ount of the 6uyer( .he Board Resolution, on the other hand, stated that the pur hase of the said transfor,er was to 6e finan ed through a loan fro, the )ational 5le trifi ation #d,inistration $)5#%( #s there was no i,,ediate a tion on the loan appli ation, 5ngr( Rada returned to 1anila in early De e,6er 1**2 and re?uested David to deliver the transfor,er to the, even without the re?uired downpay,ent( David granted the re?uest provided that 185:C0 would pay interest at 24D per annu,( 5ngr( Rada a ?uies ed to the ondition( 8n De e,6er 1-, 1**2, the goods were shipped to 89a,i9 City via

@illia, :ines( 0n the Bill of :ading, a sales invoi e was in luded whi h stated the agreed interest rate of 24D per annu,( @hen nothing was heard fro, 185:C0 for so,eti,e after the ship,ent, 5,anuel 1edina (Medina), David=s 1ar7eting 1anager, went to 89a,i9 City to he 7 on the ship,ent( 1edina was a6le to onfer with 5ngr( Rada who told hi, that the loan was not yet released and as7ed if it was possi6le to withdraw the shipped ite,s( 1edina agreed( @hen no pay,ent was ,ade after several ,onths, 1edina was onstrained to send a de,and letter, dated 4epte,6er 15, 1**+, whi h 185:C0 duly re eived( 5ngr( Rada replied in writing that the goods were still in the warehouse of @illia, :ines again reiterating that the loan had not 6een approved 6y )5#( .his pro,pted 1edina to head 6a 7 to 89a,i9 City where he found out that the goods had already 6een released to 185:C0 eviden ed 6y the shipping o,pany=s opy of the Bill of :ading whi h was sta,ped Released, and with the notation that the arrastre harges in the a,ount of 35,0*5(20 had 6een paid( .his was supported 6y a re eipt of pay,ent with the orresponding argo delivery re eipt issued 6y the 0ntegrated 3ort 4ervi es of 89a,i9, 0n ( 4u6se?uently, de,and letters were sent to 185:C0 de,anding the pay,ent of the whole a,ount plus the 6alan e of previous pur hases of other ele tri al hardware( #side fro, the for,al de,and letters, David added that several state,ents of a ounts were regularly sent through the ,ails 6y the o,pany and these were never disputed 6y 185:C0( 8n <e6ruary 1-, 1**4, David filed a o,plaint for spe ifi perfor,an e with da,ages with the R.C( 0n response, 185C:0 ,oved for its dis,issal on the ground that there was la 7 of ause of a tion as there was no ontra t of sale, to 6egin with, or in the alternative, the said ontra t was unenfor ea6le under the 4tatute of <rauds( 185:C0 argued that the ?uotation letter ould not 6e onsidered a 6inding ontra t 6e ause there was nothing in the said do u,ent fro, whi h onsent, on its part, to the ter,s and onditions proposed 6y David ould 6e inferred( David 7new that 185:C0=s assent ould only 6e o6tained upon the issuan e of a pur hase order in favor of the 6idder hosen 6y the Canvass and #wards Co,,ittee( 5ventually, pursuant to Rule 12, 4e tion 5 of the Rules of Court, 185:C0 filed its 1otion for 3reli,inary Eearing of #ffir,ative Defenses and Defer,ent of the 3re&.rial Conferen e whi h was denied 6y the R.C to a66reviate pro eedings and for the parties to pro eed to trial and avoid pie e,eal resolution of issues( .he order denying its ,otion was raised with the C#, and then with this Court( Both ourts sustained the R.C ruling( .rial ensued( By reason of 185:C0=s ontinued failure to appear despite noti e, David was allowed to present his testi,onial and do u,entary eviden e ex par e, pursuant to Rule 18, 4e tion 5 of the Rules( # /ery Frgent 1otion to #llow Defendant to 3resent 5viden e was filed 6y 185:C0, 6ut was denied( 0n its July 1-, 2008 De ision, the R.C dis,issed the o,plaint( 0t found that although a ontra t of sale was perfe ted, it was not onsu,,ated 6e ause David failed to prove that there was indeed a delivery of the su6Ce t ite, and that 185:C0 re eived it( !+" #ggrieved, David appealed his ase to the C!( 8n July 8, 2010, the C# affir,ed the ruling of the R.C( 0n the assailed de ision, the C# reasoned out that although David was orre t in saying that 185:C0 was dee,ed to have ad,itted the genuineness and due e;e ution of the A?uotation letterB $5;hi6it #%, wherein the signatures of the Chair,an and the 'eneral 1anager of 185:C0 appeared, he failed to offer any te;tual support to

his stand that it was a ontra t of sale instead of a ,ere pri e ?uotation agreed to 6y 185:C0 representatives( 8n this s ore, the R.C erred in stating that a ontra t of sale was perfe ted 6etween the parties despite the irregularities that tainted their transa tion( <urther, the fa t that 185:C0=s representatives agreed to the ter,s e,6odied in the agree,ent would not pre lude the finding that said ontra t was at 6est a ,ere ontra t to sell( # ,otion for re onsideration was filed 6y David 6ut it was denied( !4" Een e, this petition( Before this Court, David presents the following issues for onsiderationG 0( $%ET%ER OR NOT T%ERE $AS A PERFECTED CONTRACT OF SALE. 00( @E5.E5R 8R )8. .E5R5 @#4 # D5:0/5RH .E#. C8)4F11#.5D .E5 C8).R#C.( .he Court finds ,erit in the petition( 0( 8n the issue as to whether or not there was a perfe ted ontra t of sale, this Court is re?uired to delve into the eviden e of the ase( 0n a petition for review on ertiorari under Rule 45 of the Rules of Court, the issues to 6e threshed out are generally ?uestions of law only, and not of fa t( .his was reiterated in the ase of "#enaven #ra v. $as%#al,!5"where it was writtenG Time and again, &is C'#r &as s ressed &a i s (#risdi% i'n in a pe i i'n )'r revie* 'n%er i'rari #nder R#le +, ') &e R#les ') C'#r is limi ed ' revie*ing 'nl- err'rs ') la*, n' ') )a% , #nless &e )indings ') )a% %'mplained ') are dev'id ') s#pp'r .- &e eviden%e 'n re%'rd, 'r &e assailed (#dgmen is .ased 'n &e misappre&ensi'n ') )a% s. T&e rial %'#r , &aving &eard &e *i nesses and '.served &eir demean'r and manner ') es i)-ing, is in a .e er p'si i'n ' de%ide &e /#es i'n ') &eir %redi.ili -. 0en%e, &e )indings ') &e rial %'#r m#s .e a%%'rded &e &ig&es respe% , even )inali -, .- &is C'#r . .hat 6eing said, the Court is not un,indful, however, of the re ogni9ed e; eptions well&entren hed in Curispruden e( 0t has always 6een stressed that when supported 6y su6stantial eviden e, the findings of fa t of the C# are on lusive and 6inding on the parties and are not reviewa6le 6y this Court, unless the ase falls under any of the following re ogni9ed e; eptionsG (1) 2&en &e %'n%l#si'n is a )inding gr'#nded en irel- 'n spe%#la i'n, s#rmises and %'n(e% #res3 (4) 2&en &e in)eren%e made is mani)es l- mis a5en, a.s#rd 'r imp'ssi.le3 (6) 2&ere &ere is a grave a.#se ') dis%re i'n7 (+) 2&en &e (#dgmen is .ased 'n a misappre&ensi'n ') )a% s3 (,) 2&en &e )indings ') )a% are %'n)li% ing3 (8) 2&en &e C'#r ') !ppeals, in ma5ing i s )indings, *en .e-'nd &e iss#es ') &e %ase and &e same is %'n rar- ' &e admissi'ns ') .' & appellan and appellee3 (9) When the findings are contrary to those of the trial court; (:) 2&en &e )indings ') )a% are *i &'# %i a i'n ') spe%i)i% eviden%e 'n *&i%& &e %'n%l#si'ns are .ased3 (;) 2&en &e )a% s se )'r & in &e pe i i'n as *ell as in &e pe i i'ner<s main and repl- .rie)s are n' disp# ed .- &e resp'nden s3 and

(1=) 2&en &e )indings ') )a% ') &e C'#r ') !ppeals are premised 'n &e s#pp'sed a.sen%e ') eviden%e and %'n radi% ed .- &e eviden%e 'n re%'rd. >8? >Emp&asis s#pplied? 0n this ase, the C# and the R.C rea hed different on lusions on the ?uestion of whether or not there was a perfe ted ontra t of sale( .he R.C ruled that a ontra t of sale was perfe ted although the sa,e was not onsu,,ated 6e ause David failed to show proof of delivery( !-" .he C# was of the opposite view( .he C# wroteG "e &a as i ma-, i m#s .e emp&asized &a &e appellan )ailed ' '))er an- ex #al s#pp'r ' &is insis en%e &a Ex&i.i ! is a %'n ra% ') sale ins ead ') a mere pri%e /#' a i'n %'n)'rmed ' .MOELCI represen a ives. T' &a ex en , &e rial %'#r erred in la-ing d'*n &e premise &a indeed a %'n ra% ') sale is per)e% ed .e *een &e par ies despi e &e irreg#lari ies a ending &e ransa% i'n. x x x T&a represen a ives ') MOELCI %'n)'rmed ' &e erms em.'died in &e agreemen d'es n' pre%l#de &e )inding &a s#%& %'n ra% is, a .es , a mere %'n ra% ' sell *i & s ip#la ed %'s s /#' ed s&'#ld i #l ima el- ripen in ' 'ne ') sale. T&e %'ndi i'ns #p'n *&i%& &a devel'pmen ma- '%%#r ma- even .e '.vi'#s )r'm s a emen s in &e agreemen i sel), &a g' .e-'nd (#s %ap i'ns. T&#s, &e appellan 'pens *i &, 2E are pleased ' s#.mi '#r /#' a i'n xxx. T&e p#rp'r ed %'n ra% als' ends *i &. T&an5 -'# )'r giving #s &e 'pp'r #ni - ' /#' e 'n -'#r re/#iremen s and *e &'pe ' re%eive -'#r 'rder s''n apparen l- re)erring ' a p#r%&ase 'rder *&i%& MOELCI %'n ends ' .e a )'rmal re/#iremen )'r &e en ire ransa% i'n. >:? 0n other words, the C# was of the position that 5;hi6it # was at 6est a ontra t to sell( # perusal of the re ords persuades the Court to hold otherwise( .he ele,ents of a ontra t of sale are, to witG a% Consent or ,eeting of the ,inds, that is, onsent to transfer ownership in e; hange for the pri eI 6% Deter,inate su6Ce t ,atterI and % 3ri e ertain in ,oney or its e?uivalent( !*" 0t is the a6sen e of the first ele,ent whi h distinguishes a ontra t of sale fro, that of a ontra t to sell( 0n a ontra t to sell, the prospe tive seller e;pli itly reserves the transfer of title to the prospe tive 6uyer, ,eaning, the prospe tive seller does not as yet agree or onsent to transfer ownership of the property su6Ce t of the ontra t to sell until the happening of an event, su h as, in ,ost ases, the full pay,ent of the pur hase pri e( @hat the seller agrees or o6liges hi,self to do is to fulfill his pro,ise to sell the su6Ce t property when the entire a,ount of the pur hase pri e is delivered to hi,( 0n other words, the full pay,ent of the pur hase pri e parta7es of a suspensive ondition, the non& fulfill,ent of whi h prevents the o6ligation to sell fro, arising and, thus, ownership is retained 6y the prospe tive seller without further re,edies 6y the prospe tive 6uyer( !10" 0n a ontra t of sale, on the other hand, the title to the property passes to the vendee upon the delivery of the thing sold( Fnli7e in a ontra t to sell, the first ele,ent of onsent is present, although it is onditioned upon the happening of a ontingent event whi h ,ay or ,ay not o ur( 0f the suspensive ondition is not fulfilled, the perfe tion of the ontra t of sale is o,pletely a6ated( Eowever, if the suspensive ondition is fulfilled, the ontra t of sale is there6y perfe ted, su h that if there had already 6een previous delivery of the property su6Ce t of the sale to the 6uyer, ownership thereto auto,ati ally transfers to the 6uyer 6y operation of law without any further a t having to 6e perfor,ed 6y the seller( .he vendor loses ownership over the property and annot re over it until and unless the ontra t is resolved or res inded( !11"

#n e;a,ination of the alleged ontra t to sell, A5;hi6it #,B despite its un onventional for,, would show that said do u,ent, with all the stipulations therein and with the attendant ir u,stan es surrounding it, was a tually a Contra t of 4ale( .he rule is that it is not the title of the ontra t, 6ut its e;press ter,s or stipulations that deter,ine the 7ind of ontra t entered into 6y the parties( !12" First, "he&e ' # (ee")*+ o, ()*-# # "o "he "& *#,e& o, o'*e&#h). o, "he #/01e!" ( ""e&. .he letter $5;hi6it #%, though appearing to 6e a ,ere pri e ?uotationJproposal, was not what it see,ed( 0t ontained ter,s and onditions, so that, 6y the fa t that Ji,ene9, Chair,an of the Co,,ittee on 1anage,ent, and 5ngr( Rada, 'eneral 1anager of 185:C0, had signed their na,es under the word AC8)<8R15,B they, in effe t, agreed with the ter,s and onditions with respe t to the pur hase of the su6Ce t 10 1/# 3ower .ransfor,er( #s orre tly argued 6y David, if their purpose was ,erely to a 7nowledge the re eipt of the proposal, they would not have signed their na,e under the word AC8)<8R15(B Besides, the un ontroverted attending ir u,stan es 6olster the fa t that there was onsent or ,eeting of ,inds in the transfer of ownership( .o 6egin with, a 6oard resolution was issued authori9ing the pur hase of the su6Ce t power transfor,er( )e;t, ar,ed with the said resolution, top offi ials of 185:C0 visited David=s offi e in >ue9on City three ti,es to dis uss the ter,s of the pur hase( .hen, when the loan that 185:C0 was relying upon to finan e the pur hase was not forth o,ing, 185:C0, through 5ngr( Rada, onvin ed David to do away with the 50D downpay,ent and deliver the unit so that it ould already address its a ute power shortage predi a,ent, to whi h David a eded when it ,ade the delivery, through the arrier @illia, :ines, as eviden ed 6y a 6ill of lading( Second, "he -o!/(e*" #.e!),)e-e"e&()* "e #/01e!" ( ""e& whi h was one $1% Fnit of 10 1/# 3ower .ransfor,er with orresponding K/ :ine # essories( A*- third, "he -o!/(e*" #" "e! "e+o&)! 223 "he .&)!e !e&" )* )* (o*e3 whi h was 35,200,000(00 for one $1% unit of 10 1/# 3ower .ransfor,er and 32,12*,500(00 for the K/ :ine # essories( 0n su,, sin e there was a ,eeting of the ,inds, there was onsent on the part of David to transfer ownership of the power transfor,er to 185:C0 in e; hange for the pri e, there6y o,plying with the first ele,ent( .hus, the said do u,ent annot Cust 6e onsidered a ontra t to sell 6ut rather a perfe ted ontra t of sale( 00( )ow, the ne;t ?uestion is, was there a deliveryL 185:C0, in denying that the power transfor,er was delivered to it, argued that the Bill of :ading whi h David was relying upon was not on lusive( 0t argued that although the 6ill of lading was sta,ped AReleased,B there was nothing in it that indi ated that said power transfor,er was indeed released to it or delivered to its possession( <or this reason, it is its position that it is not lia6le to pay the pur hase pri e of the 10 1/# power transfor,er( .his Court is una6le to agree with the C# that there was no delivery of the ite,s( 8n the ontrary, there was delivery and release( .o 6egin with, a,ong the ter,s and onditions of the proposal to whi h 185:C0 agreed statedG 4. Deliver- @ Aine - (;=) *'r5ing da-s #p'n re%eip ') -'#r p#r%&ase 'rder and d'*npa-men . C&F Manila, freight, handling, insurance, custom duties and incidental expenses shall be for the account of MOE C! !!.>16? (Emp&asis s#pplied)

8n this s ore, it is lear that 185:C0 agreed that the power transfor,er would 6e delivered and that the freight, handling, insuran e, usto, duties, and in idental e;penses shall 6e shouldered 6y it( 8n the 6asis of this e;press agree,ent, #rti le 152+ of the Civil Code 6e o,es appli a6le( 0t providesG 2&ere, in p#rs#an%e ') a %'n ra% ') sale, the seller is authori"ed or re#uired to send the goods to the buyer deli$ery of the goods to a carrier, %hether named by the buyer or not, for the purpose of transmission to the buyer is deemed to be a deli$ery of the goods to the buyer , ex%ep in &e %ases pr'vided )'r in !r i%le 1,=6, )irs , se%'nd and &ird paragrap&s, 'r #nless a %'n rar- in en appears. (Emp&asis s#pplied) .hus, the delivery ,ade 6y David to @illia, :ines, 0n (, as eviden ed 6y the Bill of :ading, was dee,ed to 6e a delivery to 185:C0( David was authori9ed to send the power transfor,er to the 6uyer pursuant to their agree,ent( @hen David sent the ite, through the arrier, it a,ounted to a delivery to 185:C0( <urther,ore, in the ase of "e&n, Me-er B C'. (L d.) v. Cang%', !14" it was pointed out that a spe ifi ation in a ontra t relative to the pay,ent of freight an 6e ta7en to indi ate the intention of the parties with regard to the pla e of delivery( 4o that, if the 6uyer is to pay the freight, as in this ase, it is reasona6le to suppose that the su6Ce t of the sale is transferred to the 6uyer at the point of ship,ent( 0n other words, the title to the goods transfers to the 6uyer upon ship,ent or delivery to the arrier( 8f ourse, #rti le 152+ provides a ,ere presu,ption and in order to over o,e said presu,ption, 185:C0 should have presented eviden e to the ontrary( .he 6urden of proof was shifted to 185:C0, who had to show that the rule under #rti le 152+ was not appli a6le( 0n this regard, however, 185:C0 failed( .here 6eing delivery and release, said fa t onstitutes partial perfor,an e whi h ta7es the ase out of the prote tion of the 4tatute of <rauds( 0t is ele,entary that the partial e;e ution of a ontra t of sale ta7es the transa tion out of the provisions of the 4tatute of <rauds so long as the essential re?uisites of onsent of the ontra ting parties, o6Ce t and ause of the o6ligation on ur and are learly esta6lished to 6e present( !15" .hat 6eing said, the Court now o,es to David=s prayer that 185:C0 6e ,ade to pay the total su, of 35,4-2,-22(2- plus the stipulated interest at 24D per annu, fro, the filing of the o,plaint( #lthough the Court agrees that 185:C0 should pay interest, the stipulated rate is, however, un ons iona6le and should 6e e?uita6ly redu ed( @hile there is no ?uestion that parties to a loan agree,ent have wide latitude to stipulate on any interest rate in view of the Central Ban7 Cir ular )o( *05 s( 1*82 whi h suspended the Fsury :aw eiling on interest effe tive January 1, 1*8+, it is also worth stressing that interest rates whenever un ons iona6le ,ay still 6e redu ed to a reasona6le and fair level( .here is nothing in the said ir ular whi h grants lenders %ar e .lan%&e authority to raise interest rates to levels whi h will either enslave their 6orrowers or lead to a he,orrhaging of their assets(!12" # ordingly, the e; essive interest of 24D per annu, stipulated in the sales invoi e should 6e redu ed to 12D per annu,( 0ndeed, David was o,pelled to file an a tion against 185:C0 6ut this reason alone will not warrant an award of attorney=s fees( 0t is settled that the award of attorney=s fees is the e; eption rather than the rule( Counsel=s fees are not awarded every ti,e a party prevails in a suit 6e ause of the poli y that no pre,iu, should 6e pla ed on the right to litigate( #ttorney=s fees, as part of da,ages, are not ne essarily e?uated to the a,ount paid 6y a litigant to a lawyer( 0n the ordinary sense, attorney=s

fees represent the reasona6le o,pensation paid to a lawyer 6y his lient for the legal servi es he has rendered to the latterI while in its e;traordinary on ept, they ,ay 6e awarded 6y the ourt as inde,nity for da,ages to 6e paid 6y the losing party to the prevailing party( #ttorney=s fees as part of da,ages are awarded only in the instan es spe ified in #rti le 2208 of the Civil Code1- whi h de,ands fa tual, legal, and e?uita6le Custifi ation( 0ts 6asis annot 6e left to spe ulation or onCe ture( 0n this regard, none was proven( 1oreover, in the a6sen e of stipulation, a winning party ,ay 6e awarded attorney=s fees only in ase plaintiffs a tion or defendant=s stand is so untena6le as to a,ount to gross and evident 6ad faith( !18" 185:C0=s ase annot 6e si,ilarly lassified( #lso, David=s lai, for the 6alan e of 3-+,05*(-2 plus the stipulated interest is denied for 6eing unsu6stantiated( $%EREFORE, the petition is GRANTED( .he July 8, 2010 De ision of the Court of #ppeals 0s REVERSED and SET ASIDE( Respondent 1isa,is 8 idental 00 5le tri Cooperative, 0n ( is ordered to pay petitioner /irgilio 4( David the total su, of 35,4-2,-22(2- with interest at the rate of 12D per annu, re 7oned fro, the filing of the o,plaint until fully paid( 48 8RD5R5D( /elas o, Jr(, $Chairperson%, 3eralta, Reyes,M and 3erlas&Berna6e, JJ(, on ur(