G.R. No. L-2342 - Cornejo vs. Calupitan

Plaintiff and Appellant: Silverio Q. Cornejo, who sought specific performance of an agreement for the sale of a parcel of land.
Defendants and Appellees: Manuel B. Calupitan (landowner), D.B. Castaneda, and Eustacio Barrera (real estate brokers).
The dispute arose from an alleged contract for the sale of a parcel of land covering approximately 110 hectares in the barrio of Mayabobo, Candelaria, Tayabas (now Quezon).

On January 4, 1945, defendant Calupitan, owner of the land, authorized brokers Castaneda and Barrera to sell the property.
An offer in writing (Exhibit B) was submitted by Cornejo, proposing to purchase the property for P650,000, which included an earnest money of P70,000 with the balance payable within fifteen days from the date of the offer.
Calupitan accepted the offer on the same day by signing under the phrase “accepted by” on the document.

Cornejo, lacking sufficient cash, delivered only P65,000 in Japanese military notes as earnest money on January 6, 1945, instead of the stipulated P70,000.
This partial payment, along with instructions on the balance payment totaling P585,000 (to be made on January 25, 1945), was documented in Exhibit C.
A carbon copy of the transaction was given to Calupitan along with the P65,000, thereby setting in motion what amounted to a modification of the previously agreed terms.

Instead of simply signing the receipt to indicate conformity with the original or modified terms, Calupitan issued a receipt (Exhibit M) which added specific conditions for the payment of the balance.
The receipt clearly differentiated the earnest money (noted as “P65,000 J. N.” referring to Japanese military notes) from the balance (referred to as “P585,000 Philippine currency”).
Calupitan’s counter-proposal indicated that the balance should be paid in genuine Philippine currency rather than in Japanese military notes, suggesting that he was not willing to accept Cornejo’s proposition as originally modified.

The balance of P585,000 was never paid or delivered by Cornejo, leading to a failure of performance under the modified agreement.
Cornejo claimed that Calupitan evaded him by either avoiding, hiding, or leaving the city, which prevented the delivery of the balance amount.
On January 22, 1945, following the failure to deliver the balance, Cornejo deposited the amount with the Clerk of Court (Exhibit H) and filed a complaint for specific performance and damages in court.
The trial court ruled in favor of Calupitan by affirming that Cornejo had effectively abandoned the original terms and that there was no meeting of the minds under the new proposition.

Whether a new contract binding upon the parties was perfected by the modified proposition.

Did Calupitan’s counter-proposal, which stipulated payment of the balance in genuine Philippine currency, signify his acceptance of the modified terms proposed by Cornejo?
Was there a meeting of the minds between the parties regarding the terms of the sale, particularly on the form of currency to be used for the balance payment?

The meaning and legal interpretation of the term “Philippine currency” as used in Exhibit M.

Whether the term was intended by Calupitan to mean genuine Philippine currency as opposed to Japanese military notes.
The implications of such a determination on the enforceability of Cornejo’s revised proposal under the circumstances prevailing in January 1945.

The effect of the modification of the original agreement on Cornejo’s claim for specific performance.

Whether Cornejo’s acceptance of the modification (i.e., delivering a lower earnest money and setting an extended period for balance payment) amounted to abandonment of the original contract.
Whether the subsequent failure to meet the modified terms discharged the obligation of Calupitan to effectuate the sale.