Cases 1 Sales

8/12/2019 Cases 1 Sales

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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-61623 December 26, 1984

PEOPLE'S HOMESITE HO!SING "ORPOR#TION, petitioner-appellant,vs."O!RT O$ #PPE#LS, RI%#LINO L. MENDO%# &( #DEL#ID# R. MENDO%#,respondents-appellees.

Manuel M. Lazaro, Pilipinas Arenas Laborte and Antonio M. Brillantes for petitionerPHHC.

Tolentino, Cruz, Reyes, Lava and Manuel for private respondents.

#)!INO, J.:

The question in this case is whether the People's Homesite & Housing Corporationbound itself to sell to the endo!a spouses "ot # $%oad Pcs- #(# of the revisedconsolidation subdivision plan with an area of 2,6,!." #2,$%."& s'uare (eters locatedat )iliman, *ue!on Cit+.

The PHHC board of directors on ebruar+ , /(0 passed %esolution 1o. 2 whereinit stated 3that sub)e*t to t+e approval of t+e uezon City Coun*ilof the above-mentioned Consolidation 4ubdivision Plan, "ot #. containing -,!2.2 s'uare (etersbe,as it is hereb+ awarded to 4pouses %i!alino endo!a and 5delaida endo!a, at a priceof twent+-one pesos $P6.00 per square meter3 and /t+at t+is a0ard s+all be sub)e*t tot+e approval of t+e 1C #PHHC& 3aluation Co((ittee and +i4+er aut+orities/.

The cit+ council disapproved the proposed consolidation subdivision plan on 5ugust 60,/( $78h. 6. T+e said spouses 0ere advised by re4istered (ail of t+e disapproval oft+e plan $78h. 6-PHHC. 5nother subdivision plan was prepared and submitted to thecit+ council for approval. The revised plan, which included "ot #, with a reduced area of

6,(0.9, was approved b+ the cit+ council on ebruar+ 6, /(# $78h. H.

:n 5pril 6(, /( the PHHC board of directors passed a resolution re*allin4 all a0ardsof lots to persons who failed to pa+ the deposit or down pa+ment for the lots awarded tothem $78h. . The endo!as never paid the price of the lot nor made the 60; initialdeposit.


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:n :ctober , /( the PHHC board of directors passed %esolution 1o. 6,withdrawing the tentative award of "ot # to the endo!a -spouses under %esolution 1o.2 and re-awarding said lot


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34on, sin embargo, e8cepcion a esta regla los casos en que por virtud de la voluntad delas partes o de la le+, se celebra la venta ba


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t+o parcels of land re"istered in the na%e of respondent 2ilia D. ai"o) . . . %arried to

Re!naldo ai"o)2 one containin" 3/ s4uare %eters and the other containin" 351 s4uare %eters.

The %ort"a"es +ere dul! re"istered in the Re"istr! of Deeds of 6ue7on Cit!.

The loans +ere pa!able +ithin *, %onths fro% the e8ecution of the pro%issor! notes coverin"the loans. 0s of ,999) respondents failed to settle their outstandin" obli"ation) dra+in" the% to

verball! offer to cede to Dao &en" one of the t+o %ort"a"ed lots b! +a! of dacion en pago. To

appraise the value of the %ort"a"ed lands) Dao &en" in fact co%%issioned an appraiser +hosefees +ere shouldered b! it and respondents.

There appears to have been no further action ta(en b! the parties after the appraisal of the

properties.

Dao &en" +as later to de%and the settle%ent of respondents: obli"ation b! letter of 0u"ust *-)

,999*+herein it indicated that the! had an outstandin" obli"ation of P*9)5-3)*9., inclusive of

interests and other char"es. Respondents failed to heed the de%and) ho+ever.

Dao &en" thereupon filed in Septe%ber ,999 an application to foreclose the real estate

%ort"a"es e8ecuted b! respondents. The properties sub;ect of the %ort"a"e +ere sold forP*9)11/),une ,) ,99*

letter,to the%) petitioner) to +hich Dao &en" had been %er"ed) throu"h its Vice President onPropert! Mana"e%ent ? Credit Services Depart%ent) advised respondent ilia ai"o as follo+s@

This is to for%all! advise !ou of the ban(:s response to !our proposal pertainin" to therede%ption of the t+o #,$ foreclosed lots located in Aairvie+) 6ue7on Cit! as has been rela!ed to

!ou last >une *5) ,99* as follo+s@

*. Rede%ption price shall be P11.5MMplus *,B interest based on di%inishin" balancepa!able in sta""ered pa!%ents up to >anuar! ,) ,99, as follo+s@

a. P5MM i%%ediatel! upon receipt of this approval

b. 'alance pa!able in sta""ered pa!%ents #plus interest$ up to >anuar! ,) ,99,

,. Release Values for Partial Rede%ption@

a. TCT No. ,,31 #alon" Co%%on+ealth$ P1.399 MM

b. TCT No. N*


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5. Other Conditions@

a. Pa!%ents shall be covered b! post dated chec(s

b. TCT No. ,,31 shall be the first propert! to be released upon pa!%ent of the

first P1.3MM plus interest

c. 0rran"e%ent to be covered b! an 0"ree%ent

If !ou are a"reeable to the fore"oin" ter%s and conditions) please affi8 !our si"nature sho+in"

!our confor%it! thereto at the space provided belo+. #E%phasis and underscorin" in the ori"inal

italics supplied$

Nothin" +as heard fro% respondents) hence) petitioner b! its Mana"er) Propert! Mana"e%ent ?Credit Services Depart%ent) advised her b! letter of Dece%ber ,/) ,99* 5that in vie+ of their

failure to confor% to the conditions set b! it for the rede%ption of the properties) it +ould

proceed to consolidate the titles i%%ediatel! after the e8piration of the rede%ption period on>anuar! ,) ,99,.

Si8 da!s before the e8piration of the rede%ption period or on Dece%ber ,1) ,99*) respondents

filed a co%plaint before the Re"ional Trial Court #RTC$ of 6ue7on Cit!) for 0nnul%ent)

In;unction +ith Pra!er for Te%porar! Restrainin" Order #TRO$) pra!in" for the annul%ent of theforeclosure of the properties sub;ect of the real estate %ort"a"es and for the% to be allo+ed 2to

deliver b! +a! of Fdacion en pago: one of the %ort"a"ed properties as full pa!%ent of GtheirH

%ort"a"ed obli"ation2 and to) in the %eanti%e) issue a TRO directin" the defendanthereinpetitioner to desist fro% consolidatin" o+nership over their properties.

'! respondents: clai%) Dao &en" verball! a"reed to enter into a dacion en pago.

In its Opposition to respondents: 0pplication for a TRO)


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persuaded b! plaintiffs: contention that their case is an e8ception to the operation of the

rule on statute of frauds because of their partial perfor%ance of the obli"ation in the

dacion en pagoconsistin" of the deliver! of the titles of the properties to the defendants.0s correctl! pointed out b! the defendants) the ++-e %ere $o+ (e-vere( +o +/emr'$+ +o +/e dacion en pago b+ b re'o$ o +/e e4e+o$ o +/e mor+'e -o'$

'reeme$+. If indeed a dacion en pagoa"ree%ent +as entered into bet+een the parties) itis inconceivable that a +ritten docu%ent +ould not be drafted considerin" the %a"nitudeof the a%ount involved.3#E%phasis and underscorin" supplied$

Respondents assailed the dis%issal of their co%plaint via Petition for Revie+ before this Court

+hich referred it to the Court of 0ppeals for disposition.

Reversin" the trial court:s dis%issal of the co%plaint) the appellate court) b! Decision of >anuar!

,/) ,99/)/reinstated respondents: co%plaint.1

In orderin" the reinstate%ent of respondents: co%plaint) the appellate court held that the

co%plaint states a cause of action) respondents havin" alle"ed that there +as partial perfor%anceof the a"ree%ent to settle their obli"ation via dacion en pago+hen the! a"reed to have the

properties appraised to thus place their a"ree%ent +ithin the e8ceptions provided under 0rticle

*


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. . . T&0T T&E 0EEDDACION EN PAGOIS NOT =NENAORCE0'E =NDER

T&E ST0T=TE OA AR0=DS) DESPITE T&E 0'SENCE OA 0 JRITTEN ?

'INDIN CONTR0CT

III.

. . . T&0T T&E COMP0INT S=AAICIENTK ST0TED 0 C0=SE OA 0CTION.

enerall!) the presence of a cause of action is deter%ined fro% the facts alle"ed in the

co%plaint.

In their co%plaint) respondents alle"ed@

8 8 8 8


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In its Opposition to respondents: application for the issuance of a TRO)**petitioner) respondin"

to respondents: alle"ation that it a"reed to the settle%ent of their obli"ation via the assi"n%ent of

one of the t+o %ort"a"ed properties) alle"ed that there +as no %eetin" of the %inds thereon@


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Arauds so lon" as the essential re4uisites of consent of the contractin" parties) obe+ and 'eof the obli"ation concurand are clearl! established to be present.*/

Respondents clai% that petitioner:s co%%issionin" of an appraiser to appraise the value of the%ort"a"ed properties) his services for +hich the! and petitioner paid) and their deliver! to

petitioner of the titles to the properties constitute partial perfor%ance of their a"ree%ent to ta(ethe case out of the provisions on the Statute of Arauds.

There is no concrete sho+in") ho+ever) that after the appraisal of the properties) petitionerapproved respondents: proposal to settle their obli"ation via dacion en pago. The deliver! to

petitioner of the titles to the properties is a usual conditionsine qua nonto the e8ecution of the

%ort"a"e) both for securit! and re"istration purposes. Aor if the title to a propert! is not deliveredto the %ort"a"ee) +hat +ill prevent the %ort"a"or fro% a"ain encu%berin" it also b! %ort"a"e

or even b! sale to a third part!.

Ainall!) that respondents did not den! proposin" to redee% the %ort"a"es)*1as reflected in

petitioner:s >une ,) ,99* letter to the%) doo%s their clai% of the e8istence of a perfected dacionen pago.

!ERE9ORE,the Court of 0ppeals Decision of >anuar! ,/) ,99/ is REVERSED '$( SETSIDE. The Resolution of >ul! ,) ,99, of the Re"ional Trial Court of 6ue7on Cit!) 'ranch ,*3dis%issin" respondents: co%plaint is REINSTTED.

SO ORDERED.

CONC!IT CRPIO MOR&ES0ssociate >ustice

JE CONC=R@

&EONRDO . :UISUM"ING0ssociate >ustice

Chairperson

DNTE O. TING

0ssociate >ustice

PRES"ITERO ;. VE&SCO, ;R.

0ssociate >ustice

RTURO D. "RION0ssociate >ustice

TTESTTION
http://www.lawphil.net/judjuris/juri2008/nov2008/gr_173856_2008.html#fnt16http://www.lawphil.net/judjuris/juri2008/nov2008/gr_173856_2008.html#fnt17http://www.lawphil.net/judjuris/juri2008/nov2008/gr_173856_2008.html#fnt16http://www.lawphil.net/judjuris/juri2008/nov2008/gr_173856_2008.html#fnt17


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I attest that the conclusions in the above Decision had been reached in consultation before the

case +as assi"ned to the +riter of the opinion of the Court:s Division.

&EONRDO . :UISUM"ING0ssociate >ustice

Chairperson

CERTI9ICTION

Pursuant to Section *5) 0rticle VIII of the Constitution) and the Division Chairperson:s0ttestation) it is hereb! certified that the conclusions in the above Decision +ere reached in

consultation before the case +as assi"ned to the +riter of the opinion of the Court:s Division.

RE)NTO S. PUNO

Chief >ustice

9oo+$o+e

*Records) p. ,.

,Id. at 5-.

5Id. at 5ustices 0ndres'. Re!es) >r. and Ros%ari D. Carandan". C0 rollo) pp. **5*,


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#e$ 0n a"ree%ent for the leasin" for a lon"er period than one !ear) or for the sale

of real propert! or of an interest therein 8 8 8

Rollo) p. 5,.

*9

Aloren7 D. Re"alado) Re%edial a+ Co%pendiu%) Vol. * #,993$) citin"Tan v.Director of Aorestr!) et al.),


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These two consolidated cases stemmed from a complaint 1filed against the)evelopment ?an@ of the Philippines $hereafter )?P and 5gripina Caperal filed b+"+dia Cuba $hereafter CE?5 on 6 a+ / with the %egional Trial Court ofPangasinan, ?ranch #. The said complaint sought $ the declaration of nullit+ of)?P's appropriation of CE?5's rights, title, and interests over a ##-hectares fishpond

located in ?olinao, Pangasinan, for being violative of 5rticle 60 of the Civil CodeF $6the annulment of the )eed of Conditional 4ale e8ecuted in her favor b+ )?PF $2 theannulment of )?P's sale of the sub


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plaintiff "+dia Cuba promised to ma@e certain pa+ments as stated in temporar+5rrangement dated ebruar+ 62, /6F

. )efendant )?P thereafter sent a 1otice of %escission thru 1otarial 5ct dated arch2, /#, and which was received b+ plaintiff "+dia CubaF

6. 5fter the 1otice of %escission, defendant )?P too@ possession of the "easehold%ights of the fishpond in questionF

2. That after defendant )?P too@ possession of the "easehold %ights over the fishpondin question, )?P advertised in the 4E1)5 PE1CH the public bidding dated >une 6#,/#, to dispose of the propert+F

#. That the )?P thereafter e8ecuted a )eed of Conditional 4ale in favor of defendant5gripina Caperal on 5ugust (, /#F

. Thereafter, defendant Caperal was awarded ishpond "ease 5greement 1o. 602-5on )ecember 6, /# b+ the inistr+ of 5griculture and ood.

)efendant Caperal admitted onl+ the facts stated in paragraphs # and of the pre-trial order.3

Trial was thereafter had on other matters.

The principal issue presented was whether the act of )?P in appropriating to itselfCE?5's leasehold rights over the fishpond in question without foreclosure proceedingswas contrar+ to 5rticle 60 of the Civil Code and, therefore, invalid. CE?5 insisted onan affirmative resolution. )?P stressed that it merel+ e8ercised its contractual rightunder the 5ssignments of "easehold %ights, which was not a contract of mortgage.)efendant Caperal sided with )?P.

The trial court resolved the issue in favor of CE?5 b+ declaring that )?P's ta@ingpossession and ownership of the propert+ without foreclosure was plainl+ violative of

5rticle 60 of the Civil Code which provides as followsG

5rt. 60. The creditor cannot appropriate the things given b+ wa+ of pledge or mortgage,or dispose of them. 5n+ stipulation to the contrar+ is null and void.

Bt disagreed with )?P's stand that the 5ssignments of "easehold %ights were notcontracts of mortgage because $ the+ were given as securit+ for loans, $6 althoughthe 3fishpond land3 in question is still a public land, CE?5's leasehold rights and interest

thereon are alienable rights which can be the proper sub


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)?P never acquired lawful ownership of CE?5's leasehold rights, all acts of ownershipand possession b+ the said ban@ were void. 5ccordingl+, the )eed of Conditional 4alein favor of CE?5, the notarial rescission of such sale, and the )eed of Conditional 4alein favor of defendant Caperal, as well as the 5ssignment of "easehold %ights e8ecutedb+ Caperal in favor of )?P, were also void and ineffective.

5s to damages, the trial court found 3ample evidence on record3 that in /# therepresentatives of )?P e


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6, the ishpond "ease 5greement 1o. 602-5 dated )ecember 6, /# of defendant5gripina Caperal $78h. 62 and the 5ssignment of "easehold %ights dated ebruar+ 6,/ e8ecuted b+ defendant 5gripina Caperal in favor of the defendant )evelopment?an@ of the Philippines $78h. 6# as void ab initioF

#. :%)7%B1D defendant )evelopment ?an@ of the Philippines and defendant 5gripina

Caperal,


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award of moral damages from P00,000 to P0,000 and attorne+'s fees, from P00,000to P0,000.

The Court of 5ppeals thus declared as valid the followingG $ the act of )?P inappropriating Cuba's leasehold rights and interest under ishpond "ease 5greement

1o. 602F $6 the deeds of assignment e8ecuted b+ Cuba in favor of )?PF $2 the deedof conditional sale between CE?5 and )?PF and $# the deed of conditional salebetween )?P and Caperal, the ishpond "ease 5greement in favor of Caperal, and theassignment of leasehold rights e8ecuted b+ Caperal in favor of )?P. Bt then ordered)?P to turn over possession of the propert+ to Caperal as lawful holder of the leaseholdrights and to pa+ CE?5 the following amountsG $a P,0(9,00 as actual damagesFP0,000 as moral damagesF and P0,000 as attorne+'s fees.

4ince their motions for reconsideration were denied, 6)?P and CE?5 filed separatepetitions for review.

Bn its petition $D.%. 1o. 2#6, )?P assails the award of actual and moral damagesand attorne+'s fees in favor of CE?5.

Epon the other hand, in her petition $D.%. 1o. 2(9, CE?5 contends that the Courtof 5ppeals erred $ in not holding that the questioned deed of assignment was a

pa*tu( *o((issoriu(contrar+ to 5rticle 60 of the Civil CodeF $b in holding that thedeed of assignment effected a novation of the promissor+ notesF $c in holding thatCE?5 was estopped from questioning the validit+ of the deed of assignment when sheagreed to repurchase her leasehold rights under a deed of conditional saleF and $d inreducing the amounts of moral damages and attorne+'s fees, in deleting the award ofe8emplar+ damages, and in not increasing the amount of damages.

Ae agree with CE?5 that the assignment of leasehold rights was a mortgage contract.

Bt is undisputed that CE?5 obtained from )?P three separate loans totalling P22,000,each of which was covered b+ a promissor+ note. Bn all of these notes, there was aprovision thatG 3Bn the event of foreclosure of the (ort4a4esecuring this notes, BKAefurther bind m+selfKourselves,


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?esides, in their stipulation of facts the parties admitted that the assignment was b+ wa+of securit+ for the pa+ment of the loansF thusG

2. 5s securit+ for said loans, plaintiff "+dia P. Cuba e8ecuted two )eeds of 5ssignment ofher "easehold %ights.

Bn People8s Ban5 9 Trust Co.vs.1do(,9this Court had the occasion to rule that anassignment to guarantee an obligation is in effect a mortgage.

Ae find no merit in )?P's contention that the assignment novated the promissor+ notesin that the obligation to pa+ a sum of mone+ the loans $under the promissor+ notes wassubstituted b+ the assignment of the rights over the fishpond $under the deed ofassignment. 5s correctl+ pointed out b+ CE?5, the said assignment merel+complemented or supplemented the notesF both could stand together. The former wasonl+ an accessor+ to the latter. Contrar+ to )?P's submission, the obligation to pa+ asum of mone+ remained, and the assignment merel+ served as securit+ for the loanscovered b+ the promissor+ notes. 4ignificantl+, both the deeds of assignment and the

promissor+ notes were e8ecuted on the same dates the loans were granted. 5lso, thelast paragraph of the assignment statedG 3The assignor further reiterates and states allter(s, *ovenants, and *onditions stipulated in t+e pro(issory note or notes covering theproceeds of this loan, ma@ing said promissor+ note or notes, to all intent and purposes,an inte4ral parthereof.3

1either did the assignment amount to pa+ment b+ *essionunder 5rticle 6 of theCivil Code for the plain and simple reason that there was onl+ one creditor, the )?P.

5rticle 6 contemplates the e8istence of two or more creditors and involves theassignment of all the debtor's propert+.

1or did the assignment constitute dationin pa+ment under 5rticle 6# of the civilCode, which readsG 3:ationin pa+ment, whereb+ propert+ is alienated to the creditor insatisfaction of a debt in mone+, shall be governed b+ the law on sales.3 Bt bearsstressing that the assignment, being in its essence a mortgage, was but a securit+ andnot a satisfaction of indebtedness.1

Ae do not, however, bu+ CE?5's argument that condition no. 6 of the deed ofassignment constitutedpa*tu( *o((issoriu(. 4aid condition readsG

6. That effective upon the breach of an+ condition of this assignment, the 5ssignorhereb+ appoints the 5ssignee his 5ttorne+-in-fact with full power and authorit+ to ta@e

actual possession of the propert+ above-described, together with all improvementsthereon, sub


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ta8es, assessments and other incidental e8penses and obligations and the balance, ifan+, to the pa+ment of interest and then on the capital of the indebtedness securedhereb+. Bf after disposal or sale of said propert+ and upon application of total amountsreceived there shall remain a deficienc+, said 5ssignor hereb+ binds himself to pa+ thesame to the 5ssignee upon demand, together with all interest thereon until full+ paid. Thepower herein granted shall not be revo@ed as long as the 5ssignor is indebted to the

5ssignee and all acts that ma+ be e8ecuted b+ the 5ssignee b+ virtue of said power arehereb+ ratified.

The elements ofpa*tu( *o((issoriu(are as followsG $ there should be a propert+mortgaged b+ wa+ of securit+ for the pa+ment of the principal obligation, and $6 thereshould be a stipulation for automatic appropriation b+ the creditor of the thingmortgaged in case of non-pa+ment of the principal obligation within the stipulatedperiod.11

Condition no. 6 did not provide that the ownership over the leasehold rights wouldautomaticall+ pass to )?P upon CE?5's failure to pa+ the loan on time. Bt merel+provided for the appointment of )?P as attorne+-in-fact with authorit+, among other

things, to sell or otherwise dispose of the said real rights, in case of default b+ CE?5,and to appl+ the proceeds to the pa+ment of the loan. This provision is a standardcondition in mortgage contracts and is in conformit+ with 5rticle 609 of the Civil Code,which authori!es the mortgagee to foreclose the mortgage and alienate the mortgagedpropert+ for the pa+ment of the principal obligation.

)?P, however, e8ceeded the authorit+ vested b+ condition no. 6 of the deed ofassignment. 5s admitted b+ it during the pre-trial, it had 3LwMithout foreclosureproceedings, whether


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5t an+ rate, )?P's act of appropriating CE?5's leasehold rights was violative of 5rticle60 of the Civil Code, which forbids a credit or from appropriating, or disposing of, thething given as securit+ for the pa+ment of a debt.

The fact that CE?5 offered and agreed to repurchase her leasehold rights from )?P did

not estop her from questioning )?P's act of appropriation. 7stoppel is unavailing in thiscase. 5s held b+ this Court in some cases, 13estoppel cannot give validit+ to an act thatis prohibited b+ law or against public polic+. Hence, the appropriation of the leaseholdrights, being contrar+ to 5rticle 60 of the Civil Code and to public polic+, cannot bedeemed validated b+ estoppel.

Bnstead of ta@ing ownership of the questioned real rights upon default b+ CE?5, )?Pshould have foreclosed the mortgage, as has been stipulated in condition no. 66 of thedeed of assignment. ?ut, as admitted b+ )?P, there was no such foreclosure. et, in itsletter dated 6( :ctober /9/, addressed to the inister of 5griculture and 1atural%esources and coursed through the )irector of the ?ureau of isheries and 5quatic

%esources, )?P declared that it 3had fore*losed t+e (ort4a4e and enforced theassignment of leasehold rights on arch 6, /9/ for failure of said spouses LCubaspoucesM to pa+ their loan amorti!ations.3 14This onl+ goes to show that )?P was awareof the necessit+ of foreclosure proceedings.

Bn view of the false representation of )?P that it had alread+ foreclosed the mortgage,the ?ureau of isheries cancelled CE?5's original lease permit, approved the deed ofconditional sale, and issued a new permit in favor of CE?5. 4aid acts which werepredicated on such false representation, as well as the subsequent acts emanating from)?P's appropriation of the leasehold rights, should therefore be set aside. To validatethese acts would open the floodgates to circumvention of 5rticle 60 of the Civil Code.

7ven in cases where foreclosure proceedings were had, this Court had not hesitated tonullif+ the consequent auction sale for failure to compl+ with the requirements laid downb+ law, such as 5ct 1o. 22, as amended. 1Aith more reason that the sale of propert+given as securit+ for the pa+ment of a debt be set aside if there was no prior foreclosure proceeding.

Hence, )?P should render an accounting of the income derived from the operation ofthe fishpond in question and appl+ the said income in accordance with condition no. 6of the deed of assignment which providedG 35n+ amount received from rents,administration, . . . ma+ be applied to the pa+ment of repairs, improvements, ta8es,

assessment, and other incidental e8penses and obligations and the balance, if an+, tothe pa+ment of interest and then on the capital of the indebtedness. . .3

Ae shall now ta@e up the issue of damages.

5rticle 6// providesG


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78cept as provided b+ law or b+ stipulation, one is entitled to an adequate compensationonl+ for such pecuniar+ loss suffered b+ him as he has dul+ proved. 4uch compensationis referred to as actual or compensator+ damages.

5ctual or compensator+ damages cannot be presumed, but must be proved withreasonable degree of certaint+.165 court cannot rel+ on speculations, con


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620,000 pieces of bangus, but all of which died because of )?P's representativesprevented her men from feeding the fish.

The award of actual damages should, therefore, be struc@ down for lac@ of sufficientbasis.

Bn view, however, of )?P's act of appropriating CE?5's leasehold rights which wascontrar+ to law and public polic+, as well as its false representation to the then inistr+of 5griculture and 1atural %esources that it had 3foreclosed the mortgage,3 an award ofmoral damages in the amount of P0,000 is in order conformabl+ with 5rticle 66/$0,in relation to 5rticle 6, of the Civil Code. 78emplar+ or corrective damages in theamount of P6,000 should li@ewise be awarded b+ wa+ of e8ample or correction for thepublic good.2There being an award of e8emplar+ damages, attorne+'s fees are alsorecoverable.21

AH7%7:%7, the 6 a+ //# )ecision of the Court of 5ppeals in C5-D.%. C= 1o.

6(2 is hereb+ %7=7%47), e8cept as to the award of P0,000 as moral damages,which is hereb+ sustained. The 2 >anuar+ //0 )ecision of the %egional Trial Court ofPangasinan, ?ranch #, in Civil Case 1o. 5-9# is :)BB7) setting aside the findingthat condition no. 6 of the deed of assignment constituted pa*tu( *o((issoriu( andthe award of actual damagesF and b+ reducing the amounts of moral damages fromP00,000 to P0,000F the e8emplar+ damages, from P0,000 to P6,000F and theattorne+'s fees, from P00,000 to P60,000. The )evelopment ?an@ of the Philippines ishereb+ ordered to render an accounting of the income derived from the operation of thefishpond in question.

"et this case be %751)7) to the trial court for the reception of the income statement

of )?P, as well as the statement of the account of "+dia P. Cuba, and for thedetermination of each part+'s financial obligation to one another.

4: :%)7%7).

Bellosillo, 3itu4 and ;apunan, ., *on*ur.

$oooe5

:riginal %ecord $:%, -9.

6 :%, (-90.

2 7ee:%, (/.

# Per >udge 5rtemio %. Corpu!, :%, ((-90.

Per anuel C. Herrera, ., with 5rtemon ). "una and 5lfredo >. "agamon, .,concurring, Rollo, D.%. 1o. 2#6, 6-#F Rollo, D.%. 1o. 2(9, 2-2.


22/52

( Rollo, D.%. 1o. 2#6, #2F Rollo, D.%. 1o. 2(9, .

9 78hibits 3?,3 3C,3 and 3)3F :%, 29-2/.

78hibits 3?-,3 3C-3 and 3)-.3

/ (# Phil. 6(, 26 L/29M.

0 Philippine ?an@ of Commerce v. )e =era, ( 4C%5 06(, 06/ L/(6M.

= T:"71TB1:, 5%TE%: ., C:71T5%B74 & >E%B4P%E)71C7 :1 TH7 CB=B"C:)7 : TH7 PHB"BPPB174 2(-29 L//6M *itin4E+ Tong v. Court of 5ppeals, (4C%5 22 L/M.

6 Philippine ?an@ of Commerce v. )e =era, supranote 0.

2 7ugenio v. Perdido, /9 Phil. #, ## L/MF %epublic v. Do ?on "ee, 4C%5 ((,90 L/(MF Hian v. Court of Ta8 5ppeals, / 4C%5 0, 6# L/9#M.

# 78hibit 31--53F :%, ##.

%o8as v. Court of 5ppeals, 66 4C%5 96/ L//2MF 4empio v. Court of 5ppeals, 6(24C%5 (9 L//(M.

( )el undo v. Court of 5ppeals, 6#0 4C%5 2# L//MF "ufthansa Derman 5irlines v.Court of 5ppeals, 6#2 4C%5 (00 L//MF )evelopment ?an@ of the Philippines v. Court of

5ppeals, 6#/ 4C%5 22 L//MF )el %osario v. Court of 5ppeals, D.%. 1o. 26, 6/>anuar+ //9.

9 "ufthansa Derman 5irlines v. Court of 5ppeals, supranote (F People v. %osario, 6#(4C%5 ( L//MF )el %osario v. Court of 5ppeals, supranote (F 4umalpong v. Court of

5ppeals, D.%. 1o. 62#0#, 6( ebruar+ //9.

)el undo v. Court of 5ppeals, supranote (.

/ 78hibit #, :%, (0.

60 5rticle 666/, Civil Code.

6 5rticle 660$, Civil Code.


Manila

EN '0NC

G.R. No. &1 + 23, 1>18


23/52

NDRES :UIROG,plaintiffappellant)vs.PRSONS !RDRE CO.,defendantappellee.

Al!redo Chicote" Jose Arnai# and Pascual $. A#an#a !or appellant.

Cross!ield % O&$rien !or appellee.

VNCE?,J.*

On >anuar! ,.

P0RSONS) 'OT& MERC&0NTS EST0'IS&ED IN M0NI0) AOR T&E

EC=SIVE S0E OA 26=IRO02 'EDS IN T&E VIS0K0N IS0NDS.

0RTICE *. Don 0ndres 6uiro"a "rants the e8clusive ri"ht to sell his beds in the

Visa!an Islands to >. Parsons under the follo+in" conditions@

#0$ Mr. 6uiro"a shall furnish beds of his %anufacture to Mr. Parsons for the latter:s

establish%ent in Iloilo) and shall invoice the% at the sa%e price he has fi8ed for sales) inManila) and) in the invoices) shall %a(e and allo+ance of a discount of ,3 per cent of the

invoiced prices) as co%%ission on the sale and Mr. Parsons shall order the beds b! the

do7en) +hether of the sa%e or of different st!les.

#'$ Mr. Parsons binds hi%self to pa! Mr. 6uiro"a for the beds received) +ithin a period

of si8t! da!s fro% the date of their ship%ent.

#C$ The e8penses for transportation and ship%ent shall be borne b! M. 6uiro"a) and the

frei"ht) insurance) and cost of unloadin" fro% the vessel at the point +here the beds are

received) shall be paid b! Mr. Parsons.

#D$ If) before an invoice falls due) Mr. 6uiro"a should re4uest its pa!%ent) said pa!%ent

+hen %ade shall be considered as a pro%pt pa!%ent) and as such a deduction of , per

cent shall be %ade fro% the a%ount of the invoice.

The sa%e discount shall be %ade on the a%ount of an! invoice +hich Mr. Parsons %a!

dee% convenient to pa! in cash.

#E$ Mr. 6uiro"a binds hi%self to "ive notice at least fifteen da!s before hand of an!

alteration in price +hich he %a! plan to %a(e in respect to his beds) and a"rees that if on

the date +hen such alteration ta(es effect he should have an! order pendin" to be servedto Mr. Parsons) such order shall en;o! the advanta"e of the alteration if the price thereb!

be lo+ered) but shall not be affected b! said alteration if the price thereb! be increased)


24/52

for) in this latter case) Mr. 6uiro"a assu%ed the obli"ation to invoice the beds at the price

at +hich the order +as "iven.

#A$ Mr. Parsons binds hi%self not to sell an! other (ind e8cept the 26uiro"a2 beds.

0RT. ,. In co%pensation for the e8penses of advertise%ent +hich) for the benefit of bothcontractin" parties) Mr. Parsons %a! find hi%self obli"ed to %a(e) Mr. 6uiro"a assu%es

the obli"ation to offer and "ive the preference to Mr. Parsons in case an!one should appl!

for the e8clusive a"enc! for an! island not co%prised +ith the Visa!an "roup.

0RT. 5. Mr. Parsons %a! sell) or establish branches of his a"enc! for the sale of26uiro"a2 beds in all the to+ns of the 0rchipela"o +here there are no e8clusive a"ents)

and shall i%%ediatel! report such action to Mr. 6uiro"a for his approval.

0RT.


25/52

It +ould be enou"h to hold) as +e do) that the contract b! and bet+een the defendant and the

plaintiff is one of purchase and sale) in order to sho+ that it +as not one %ade on the basis of a

co%%ission on sales) as the plaintiff clai%s it +as) for these contracts are inco%patible +ith eachother. 'ut) besides) e8a%inin" the clauses of this contract) none of the% is found that

substantiall! supports the plaintiff:s contention. Not a sin"le one of these clauses necessaril!

conve!s the idea of an a"enc!. The +ords coission on sales used in clause #0$ of article *%ean nothin" else) as stated in the contract itself) than a %ere discount on the invoice price. The

+ord agenc') also used in articles , and 5) onl! e8presses that the defendant +as the onl! one

that could sell the plaintiff:s beds in the Visa!an Islands. Jith re"ard to the re%ainin" clauses)the least that can be said is that the! are not inco%patible +ith the contract of purchase and sale.

The plaintiff calls attention to the testi%on! of Ernesto Vidal) a for%er vicepresident of the

defendant corporation and +ho established and %ana"ed the latter:s business in Iloilo. It appears

that this +itness) prior to the ti%e of his testi%on!) had serious trouble +ith the defendant) had%aintained a civil suit a"ainst it) and had even accused one of its partners) uiller%o Parsons) of

falsification. &e testified that it +as he +ho drafted the contract E8hibit 0) and) +hen 4uestioned

as to +hat +as his purpose in contractin" +ith the plaintiff) replied that it +as to be an agent !orhis beds and to collect a coission on sales. &o+ever) accordin" to the defendant:s evidence) it

+as Mariano ope7 Santos) a director of the corporation) +ho prepared E8hibit 0. 'ut) even

supposin" that Ernesto Vidal has stated the truth) his state%ent as to +hat +as his idea in

contractin" +ith the plaintiff is of no i%portance) inas%uch as the a"ree%ents contained inE8hibit 0 +hich he clai%s to have drafted) constitute) as +e have said) a contract of purchase

and sale) and not one of co%%ercial a"enc!. This onl! %eans that Ernesto Vidal +as %ista(en in

his classification of the contract. 'ut it %ust be understood that a contract is +hat the la+ definesit to be) and not +hat it is called b! the contractin" parties.

The plaintiff also endeavored to prove that the defendant had returned beds that it could not sell

that) +ithout previous notice) it for+arded to the defendant the beds that it +anted and that thedefendant received its co%%ission for the beds sold b! the plaintiff directl! to persons in Iloilo.'ut all this) at the %ost onl! sho+s that) on the part of both of the%) there +as %utual tolerance

in the perfor%ance of the contract in disre"ard of its ter%s and it "ives no ri"ht to have the

contract considered) not as the parties stipulated it) but as the! perfor%ed it. Onl! the acts of thecontractin" parties) subse4uent to) and in connection +ith) the e8ecution of the contract) %ust be

considered for the purpose of interpretin" the contract) +hen such interpretation is necessar!) but

not +hen) as in the instant case) its essential a"ree%ents are clearl! set forth and plainl! sho+that the contract belon"s to a certain (ind and not to another. Aurther%ore) the return %ade +as

of certain brass beds) and +as not effected in e8chan"e for the price paid for the%) but +as for

other beds of another (ind and for the letter E8hibit *) re4uested the plaintiff:s prior consent

+ith respect to said beds) +hich sho+s that it +as not considered that the defendant had a ri"ht)b! virtue of the contract) to %a(e this return. 0s re"ards the ship%ent of beds +ithout previous

notice) it is insinuated in the record that these brass beds +ere precisel! the ones so shipped) and

that) for this ver! reason) the plaintiff a"reed to their return. 0nd +ith respect to the socalledco%%issions) +e have said that the! %erel! constituted a discount on the invoice price) and the

reason for appl!in" this benefit to the beds sold directl! b! the plaintiff to persons in Iloilo +as

because) as the defendant obli"ated itself in the contract to incur the e8penses of advertise%entof the plaintiff:s beds) such sales +ere to be considered as a result of that advertise%ent.


26/52

In respect to the defendant:s obli"ation to order b! the do7en) the onl! one e8pressl! i%posed b!

the contract) the effect of its breach +ould onl! entitle the plaintiff to disre"ard the orders +hich

the defendant %i"ht place under other conditions but if the plaintiff consents to fill the%) he+aives his ri"ht and cannot co%plain for havin" acted thus at his o+n free +ill.

Aor the fore"oin" reasons) +e are of opinion that the contract b! and bet+een the plaintiff andthe defendant +as one of purchase and sale) and that the obli"ations the breach of +hich is

alle"ed as a cause of action are not i%posed upon the defendant) either b! a"ree%ent or b! la+.

The ;ud"%ent appealed fro% is affir%ed) +ith costs a"ainst the appellant. So ordered.

Arellano" C.J." (orres" Johnson" )treet and *alcol" JJ."concur.


Manila

EN '0NC

G.R. No. L-281 #r7 3, 191

0ER "O., LTD., petitioner,vs.*OSE /. LING#D, &5 #c7 "omm7557oer o: Ier& Re;e+e, respondent.

Ross, 7elp+ and Carras*oso for petitioner.

1ffi*e of t+e 7oli*itor


27/52

such a situation does e8ist. The


28/52

5ll specifications for the goods ordered were sub


29/52

report showing sales during the month $Par. #F that the rubber compan+ shall invoicethe sales as of the dates of inventor+ and sales report $Par. #F that the rubbercompan+ agrees to @eep the consigned goods full+ insured under insurance policiespa+able to it in case of loss $Par. F that upon request of the rubber compan+ at an+time, petitioner shall render an inventor+ of the e8isting stoc@ which ma+ be chec@ed b+

an authori!ed representative of the former $Par. F and that upon termination orcancellation of the 5greement, all goods held on consignment shall be held b+ petitionerfor the account of the rubber compan+ until their disposition is provided for b+ the latter$Par. /. 5ll these circumstances are irreconcilabl+ antagonistic to the idea of anindependent merchant.3 14Hence its conclusionG 3However, upon anal+sis of thecontract, as a whole, together with the actual conduct of the parties in respect thereto,we have arrived at the conclusion that the relationship between them is one ofbro@erage or agenc+.3 1Ae find ourselves in agreement, notwithstanding the able brieffiled on behalf of petitioner b+ its counsel. 5s noted at the outset, we cannot heedpetitioner's plea for reversal.

. 5ccording to the 1ational Bnternal %evenue Code, a commercial bro@er 3includes allpersons, other than importers, manufacturers, producers, or bona fide emplo+ees, who,for compensation or profit, sell or bring about sales or purchases of merchandise forother persons or bring proposed bu+ers and sellers together, or negotiate freights orother business for owners of vessels or other means of transportation, or for theshippers, or consignors or consignees of freight carried b+ vessels or other means oftransportation. The term includes commission merchants.3 16The controlling decision asto the test to be followed as to who falls within the above definition of a commercialbro@er is that of Co((issioner of =nternal Revenue v. Constantino. 1Bn the language of>ustice >. ?. ". %e+es, who penned the opinionG 34ince the compan+ retained ownershipof the goods, even as it delivered possession unto the dealer for resale to customers,

the price and terms of which were sub


30/52

put the timber owned b+ him into a mar@etable condition in the form of lumberF ?roo@swas to furnish the funds necessar+ for that purpose, sell the manufactured product, andaccount therefor to 4alisbur+ upon the specific terms of the agreement, less thecompensation fi8ed b+ the parties in lieu of interest on the mone+ advanced and forservices as agent. These requirements and stipulations are in tent with an+ other

conception of the contract. Bf it constitutes an agreement to sell, the+ are meaningless.?ut the+ cannot be ignored. The+ were placed there for some purpose, doubtless as theresult of definite antecedent negotiations therefore, consummated b+ the final writtene8pression of the agreement.3 21Hence the Constantino opinion could categoricall+affirm that the mere disclaimer in a contract that an entit+ li@e petitioner is not 3the agentor legal representative for an+ purpose whatsoever3 does not suffice to +ield theconclusion that it is an independent merchant if the control over the goods for resale ofthe goods consigned is pervasive in character. The Court of Ta8 5ppeals decision nowunder review pa+s fealt+ to such an applicable doctrine.

6. 1o merit therefore attaches to the first error imputed b+ petitioner to the Court of Ta8

5ppeals. 1either did such Court fail to appreciate in its true significance the act andconduct pursued in the implementation of the contract b+ both the Enited 4tates %ubberBnternational and petitioner, as was contended in the second assignment of error.Petitioner ought to have been aware that there was no need for such an inquir+. Theterms of the contract, as noted, spea@ quite clearl+. There is lac@ing that degree ofambiguit+ sufficient to give rise to serious doubt as to what was contemplated b+ theparties. 5 reading thereof discloses that the relationship arising therefrom was not oneof seller and purchaser. Bf it were thus intended, then it would not have includedcovenants which in their totalit+ would negate the concept of a firm acquiring as vendeegoods from another. Bnstead, the stipulations were so worded as to lead to no otherconclusion than that the control b+ the Enited 4tates %ubber Bnternational over the

goods in question is, in the language of the Constantino opinion, 3pervasive3. Theinsistence on a relationship opposed to that apparent from the language emplo+edmight even +ield the impression that such a mode of construction was resorted to inorder that the applicabilit+ of a ta8ing statute might be rendered nugator+. Certainl+,such a result is to be avoided.

1or is it to be lost sight of that on a matter left to the discretion of the Court of Ta85ppeals which has developed an e8pertise in view of its function being limited solel+ tothe interpretation of revenue laws, this Court is not prepared to substitute its own


31/52

AH7%7:%7, the Court of Ta8 5ppeals decision of :ctober /, /(6 is affirmed. Aithcosts against petitioner.

Con*ep*ion C.., Reyes, .B.L., :izon, Ma5alintal, >aldivar, Castro, Tee+an5ee,Barredo, 3illa(or and Ma5asiar, ., *on*ur.

$oooe5

"-6/6(, ebruar+ 69, /90, 2 4C%5 99/.

6 Contract between the Enited 4tates %ubber Bnternational and petitioner, par. quoted in the )ecision of the Court ofTa8 5ppeals, 5nne8 5 to Petition, p. 6.

2 =bid., par. 6, p. 6.

# =bid., par. 2, p. 6.

=bid., par. 9, p. 2.

( =bid., par. , pp. 2 and #.

9 =bid., par. /, to #.

=bid., par. 0, p. #.

/ =bid., par. 6, p. #.

0 =bid., par. 2, p. #.

=bid., par. #, p. .

6 =bid., par. , p. .

2 =bid., par. /, p. (.

# )ecision, 5nne8 5 to the Petit ion, pp. 0-.

=bid., p. 0.

( 4ection /#$t.

9 "-6/6(, ebruar+ 69, /90, 2 4C%5 99/.

=bid., p. 9.

/ /# 47 9 $/9.

60 "-6/6(, ebruar+ 69, /90, 2 4C%5 99/, 9/(.

6 /# 47 9, $/9.


32/52


Manila

AIRST DIVISION

G.R. No. L-34338 No;ember 21, 1984

LO!RDES #LERIO LIM, petitioner,vs.PEOPLE O$ THE PHILIPPINES, respondent.

RELO#, J.:

Petitioner "ourdes =alerio "im was found guilt+ of the crime of estafa and wassentenced 3to suffer an imprisonment of four $# months and one $ da+ as minimum to

two $6 +ears and four $# months as ma8imum, to indemnif+ the offended part+ in theamount of P/.0, with subsidi!e imprisonment in case of insolvenc+, and to pa+ thecosts.3 $p. #, %ollo

rom this anuar+ 0, /((, which readsG

To Ahom Bt a+ ConcernG

This is to certif+ that B have received from rs. aria de Du!man =da. de5+roso. of Dapan, 1ueva 7ci


33/52

This was signed b+ the appellant and witnessed b+ the complainant's sister, 4alud?antug, and the latter's maid, Denoveva %ui!. The appellant at that time was bringing a


34/52

2. Ahether or not the honorable Court of 5ppeals was legall+ right in holding that theforegoing receipt is a contract of agenc+ to sell as against the theor+ of the petitioner thatit is a contract of sale. $pp. 2-#, %ollo

Bt is clear in the agreement, 78hibit 353, that the proceeds of the sale of the tobaccoshould be turned over to the complainant as soon as the same was sold, or, that the

obligation was immediatel+ demandable as soon as the tobacco was disposed of.Hence, 5rticle /9 of the 1ew Civil Code, which provides that the courts ma+ fi8 theduration of the obligation if it does not fi8 a period, does not appl+.

5nent the argument that petitioner was not an agent because 78hibit 353 does not sa+that she would be paid the commission if the goods were sold, the Court of 5ppealscorrectl+ resolved the matter as followsG

... 5side from the fact that aria 5+roso testified that the appellant as@ed her to be heragent in selling 5+roso's tobacco, the appellant herself admitted that there was anagreement that upon the sale of the tobacco she would be given something. Theappellant is a businesswoman, and it is unbelievable that she would go to the e8tent ofgoing to 5+roso's house and ta@e the tobacco with a


35/52

CE&ESTINO CO @ COMPN),petitioner)vs.CO&&ECTOR O9 INTERN& REVENUE,respondent.

O!!ice o! the )olicitor General Abrosio Padilla" +isrt Assistant )olicitor General Guillero E.

(orres and )olicitor +ederico V. )ian !or respondent.

"ENGAON,J.*

0ppeal fro% a decision of the Court of Ta8 0ppeals.

Celestino Co ? Co%pan! is a dul! re"istered "eneral copartnership doin" business under thetrade na%e of 2Oriental Sash Aactor!2. Aro% *anuar! *) *3, to Septe%ber 59) *3,) it sold sash) doors and +indo+s+orth P*--)13


36/52

of its custo%ers) that does not %a(e it a contractor +ithin the purvie+ of section ** of

the national Internal Revenue Code. there are no less than fift! occupations enu%erated

in the aforesaid section of the national Internal Revenue Code sub;ect to percenta"e ta8and after readin" carefull! each and ever! one of the%) +e cannot find under +hich the

business of %anufacturin" sash) doors and +indo+s upon special order of custo%ers fall

under the cate"or! of 2road) buildin") navi"ation) artesian +ell) +ater +or(ers and otherconstruction +or( contractors2 are those +ho alter or repair buildin"s) structures) streets)

hi"h+a!s) se+ers) street rail+a!s railroads lo""in" roads) electric lines or po+er lines)

and includes an! other +or( for the construction) alterin" or repairin" for +hich%achiner! driven b! %echanical po+er is used. #Pa!ton vs. Cit! of 0nadardo /< P. ,d

-1-) --9) *1 O(l. /-$.

&avin" thus eli%inated the feasibilit! off ta8in" petitioner as a contractor under ** of

the national Internal Revenue Code) this leaves us to decide the re%ainin" issue +hetheror not petitioner could be ta8ed +ith lesser strain and %ore accurac! as seller of its

%anufactured articles under section *-/ of the sa%e code) as the respondent Collector of

Internal Revenue has in fact been doin" the Oriental Sash Aactor! +as established in*


37/52

follo+s that the petitioner should be ta8ed under section ** of the Ta8 Code and NOT

under section *-3 of the sa%e Code.2 #0ppellant:s brief) p. ***,$.

'ut the ar"u%ent rests on a false foundation. 0n! builder or ho%eo+ner) +ith sufficient %one!)%a! order +indo+s or doors of the (ind %anufactured b! this appellant. Therefore it is not true

that it serves special custo%ers onl'or confines its services to the% alone. 0nd an!one +ho sees)and li(es) the doors ordered b! Don Toribio Teodoro ? Sons Inc. %a! purchase fro% appellant

doors of the sa%e (ind) provided he pa!s the price. Surel!) the appellant +ill not refuse) for itcan easil! duplicate or even %assproduce the sa%e doorsit is %echanicall! e4uipped to do so.

That the doors and +indo+s %ust %eet desired specifications is neither here nor there. If these

specifications do not happen to be of the (ind habituall! %anufactured b! appellant specialfor%s for sash) %ouldin"s of panels it +ould not accept the order and no sale is %ade. If

the! do) the transaction +ould be no different fro% a purchasers of %anufactured "oods held is

stoc( for sale the! are bou"ht because the! %eet the specifications desired b! the purchaser.

Nobod! +ill sa! that +hen a sa+%ill cuts lu%ber in accordance +ith the peculiar specificationsof a custo%ersi7es not previousl! held in stoc( for sale to the publicit thereb! beco%es an

e%plo!ee or servant of the custo%er)*not the seller of lu%ber. The sa%e consideration applies to

this sash %anufacturer.

The Oriental Sash Aactor! does nothin" %ore than sell the "oods that it %assproduces orhabituall! %a(es sash) panels) %ouldin"s) fra%es) cuttin" the% to such si7es and co%binin"

the% in such for%s as its custo%ers %a! desire.

On the other hand) petitioner:s idea of bein" a contractor doin" construction ;obs is untenable.

Nobod! +ould re"ard the doin" of t+o +indo+ panels a construction +or( in co%%on

parlance.

,

0ppellant invo(es 0rticle *


38/52

it ta(e the transaction out of the cate"or! of sales under 0rticle *


39/52

ENGINEERING E)!IPMENT #ND S!PPL "OMP#N #ND THE "O!RT O$ T#e (ec757o o: >e "o+r o: T&? #e&5 7 "T#"&5e No. 681, (&e( No;ember 29, 1966, &55e557 & come5&7 &? o:P14,441.62 o >e E7eer7 E@+7me &( S+ "om&.

#5 :o+( b >e "o+r o: T&? #e&5, &( &5 e5&b75>e( b >e e;7(ece orecor(, >e :&c5 o: >75 c&5e &re &5 :oo=5A

E7eer7 E@+7me &( S+ "o. BE7eer7 :or 5>orC, & (ome57ccoror&7o, 75 & e7eer7 &( m&c>7er :7rm. #5 oer&or o: & 7er&e(e7eer7 5>o, 7 75 e&e(, &mo o>er5, 7 >e (e57 &( 75&&7o o:cer& e &7r co(77o7 55em, +m7 &5 &( 5ee :&br7c&7o5. Bo. I. 12-16 T.S.N. #++5 23, 196C

O *+ 2, 196, oe *+& (e & "r+, =roe >e >e "oecor, o="omm7557oer, o: Ier& Re;e+e (eo+c7 E7eer7 :or &? e;&57o bm75(ec&r7 75 7more( &r7ce5 &( :&77 o & >e correc erce&e &?e5(+e >ereo 7 co7;&ce =7> 75 :ore7 5+7er5 BE?>. 2 . 1 /IR recor( o.

IC. E7eer7 =&5 7Fe=75e (eo+ce( o >e "er& /&F B"/C :or &ee( :r&+(7 ob&77 75 (o&r &oc&7o5. #c7 o >e5e (e+c7&7o5, & r&7( &(5e&rc> =&5 co(+ce( b & o7 e&m o: "er& /&F, B"/C, N&7o& /+re&+ o:I;e57&7o BN/IC &( /+re&+ o: Ier& Re;e+e B/IRC &e5 o Seember 2,196, o =>7c> occ&57o ;o+m7o+5 recor(5 o: >e :7rm =ere 5e7e( &(co:75c&e(. B. 13-1 T.S.N.C


40/52

O Seember 3, 19, re;e+e e?&m7er5 )+e5&(& &( "&+(& reore( &(recomme(e( o >e >e "oecor, o= "omm7557oer, o: Ier& Re;e+eB>ere7&:er re:erre( o &5 "omm7557oerC >& E7eer7 be &55e55e( :orP48,912.1 &5 (e:7c7ec &(;&ce 5&e5 &? o >e >eor >& 7 m75(ec&re( 757mor&7o o: &7r co(77o7 +75 &( &r5 &( &cce55or7e5 >ereo: =>7c> &re

5+bec o &? +(er Sec7o 18BmC1

o: >e T&? "o(e, 75e&( o: Sec7o 186 o:>e 5&me "o(e. BE?>. 3 . 9-63 /IR rec. o. IC T>75 &55e55me =&5 re;75e(o *&+&r 23, 199, 7 7e =7> >e ob5er;&7o o: >e ">7e:, /IR L&= D7;757o,&( =&5 r&75e( o P916,362.6 rere5e7 (e:7c7ec &(;&ce 5&e5 &? &(m&+:&c+rer5 5&e5 &?, 7c+57;e o: >e 2 &( 5+rc>&re5. B. 2-8 /IRrec. o. IC

O M&rc> 3, 199. >e "omm7557oer &55e55e( &&75, &( (em&(e( +o,E7eer7 &me o: >e 7cre&5e( &mo+ &( 5+e5e( >& P1, be&7( &5 comrom75e 7 e?r&+(7c7& 5eeme o: E7eer7'5 e& 7&b77 :or;7o&7o o: >e T&? "o(e. T>e :7rm, >o=e;er, coe5e( >e &? &55e55me &(

re@+e5e( >& 7 be :+r75>e( =7> >e (e&75 &( &r7c+&r5 o: >e"omm7557oer'5 &55e55me. BE?>. / &( 1, . 86-88 /IR rec. o. IC T>e"omm7557oer re7e( >& >e &55e55me =&5 7 &ccor(&ce =7> &= &( >e:&c5 o: >e c&5e.

O *+ 3, 199, E7eer7 &e&e( >e c&5e o >e "o+r o: T&? #e&5 &((+r7 >e e(ec o: >e c&5e >e 7;e57&7 re;e+e e?&m7er5 re(+ce(E7eer7'5 (e:7c7ec &? 7&b777e5 :rom P916,362.6 o P4,8.86 BE?>5. R&( 9 . 162-1, /IR rec.C, b&5e( o :7(75 &:er co:erece5 >&( =7>E7eer7'5 #cco+& &( #+(7or.

O No;ember 29, 1966, >e "o+r o: T&? #e&5 re(ere( 75 (ec757o, >e(75o577;e or7o o: =>7c> re&(5 &5 :oo=5A

$or #LL THE $OREGOING "ONSIDER#TIONS, >e (ec757o o: re5o(e&e&e( :rom 75 >ereb mo(7:7e(, &( e77oer, &5 & cor&cor, 75 (ec&re(e?em :rom >e (e:7c7ec m&+:&c+rer5 5&e5 &? co;er7 >e er7o( :rom *+e1, 1948. o Seember 2, 196. Ho=e;er, e77oer 75 or(ere( o & re5o(e, or>75 (+ &+>or7e( coec7o &e, >e 5+m o: P14,141.62 &5 come5&7 &?&( 2 5+rc>&re :or >e er7o( :rom 193 o Seember 196. 7> co55 &&75e77oer.

T>e "omm7557oer, o 5&75:7e( =7> >e (ec757o o: >e "o+r o: T&? #e&5,&e&e( o >75 "o+r o *&+&r 18, 196, BG.R. No. L-244C. O >e o>er >&(,E7eer7, o *&+&r 4, 196, :7e( =7> >e "o+r o: T&? #e&5 & mo7o :orreco57(er&7o o: >e (ec757o &bo;eme7oe(. T>75 =&5 (e7e( o #r7 6,196, rom7 E7eer7 o :7e &5o =7> >75 "o+r 75 &e&, (ocFee( &5G.R. No. L-242.

S7ce >e =o c&5e5, G.R. No. L-244 &( G.R. No. L-242, 7;o;e >e 5&me&r7e5 &( 755+e5, e >&;e (ec7(e( o co5o7(&e &( o7 (ec7(e >em.


41/52

E7eer7 7 75 Pe77o c&7m5 >& >e "o+r o: T&? #e&5 comm7e( >e:oo=7 error5A

1. T>& >e "o+r o: T&? #e&5 erre( 7 >o(7 E7eer7 E@+7me S+"om& 7&be o >e 3 come5&7 &? o 75 7mor&7o5 o: e@+7me &(or(7&r &r7ce5 +5e( 7 >e cer& e &7r co(77o7 55em5 7 (e57e(,

:&br7c&e(, co5r+ce( &( 75&e( 7 >e b+7(75 &( rem75e5 o: 75c+5omer5, r&>er >& o >e come5&7 &? o: o J

2. T>& >e "o+r o: T&? #e&5 erre( 7 >o(7 E7eer7 E@+7me S+"om& +7 o: :r&+( 7 e::ec7 >e 5&7( 7mor&7o5 o >e b&575 o:7comee @+o&7o5 :rom >e coe5 o: &ee( >oo5& co7e5 o: (oc+me55e7e( 7e& :rom E7eer7 E@+7me &( S+ "om& =>7c> 5>o+(o >&;e bee &(m7e( 7 e;7(eceJ

3. T>& >e "o+r o: T&? #e&5 erre( 7 >o(7 E7eer7 E@+7me S+"om& 7&be o >e 2 5+rc>&re re5cr7be( 7 Sec7o 19 o: >e T&? "o(eJ

4. T>& >e "o+r o: T&? #e&5 erre( 7 >o(7 >e &55e55me &5 o >&;7re5cr7be(J

. T>& >e "o+r o: T&? #e&5 erre( 7 >o(7 E7eer7 E@+7me S+"om& 7&be :or >e 5+m o: P14,141.62 &5 3 come5&7 &? &( 25+rc>&re 75e&( o: comee &b5o;7 7 :rom >e (e:7c7ec &55e55me o:>e "omm7557oer.

T>e "omm7557oer o >e o>er >&( c&7m5 >& >e "o+r o: T&? #e&5 erre(A

1. I >o(7 >& >e re5o(e com& 75 & cor&cor &( o & m&+:&c+rer.

2. I >o(7 re5o(e com& 7&be o >e 3 cor&cor'5 &? 7mo5e( b

Sec7o 191 o: >e T&? "o(e 75e&( o: >e 3 5&e5 &? re5cr7be( 7 Sec7o18BmC 7 re&7o o Sec7o 194B?C bo> o: >e 5&me "o(eJ

3. I >o(7 >& >e re5o(e com& 75 5+bec o o >e 3come5&7 &? +(er Sec7o 19 o: >e T&? "o(e &( o o >e 3 &(;&ce5&e5 &? 7mo5e( b 5ec7o 183 BbC, 7 re&7o o 5ec7o 18BmC bo> o: >e 5&me"o(e, o 75 7mor&7o5 o: &r5 &( &cce55or7e5 o: &7r co(77o7 +75J

4. I o >o(7 >e com& 7&be o >e :r&+( 5+rc>&re +(er Sec7o 183o: >e T&? "o(e o 75 7mor&7o5 o: &r5 &( &cce55or7e5 o: &7r co(77o7+75, o=7>5&(7 >e :7(7 o: 5&7( co+r >& >e re5o(e com&:r&+(+e m75(ec&re( >e 5&7( 7mor&7o5J

. I >o(7 >e re5o(e com& 7&be :or P14,141.62 &5 come5&7 &?&( 2 5+rc>&re 75e&( o: P4,8.86 &5 (e:7c7ec &(;&ce 5&e5 &?,(e:7c7ec m&+:&c+rer5 &? &( 2 &( 5+rc>&re :or >e er7o( :rom *+e1, 1948 o December 31, 196.

T>e m&7 755+e re;o;e5 o >e @+e57o o: =>e>er or o E7eer7 75 &m&+:&c+rer o: &7r co(77o7 +75 +(er Sec7o 18BmC, s&pra, 7 re&7o o


42/52

Sec7o5 183BbC &( 194 o: >e "o(e, or & cor&cor +(er Sec7o 191 o: >e5&me "o(e.

T>e "omm7557oer coe(5 >& E7eer7 75 & m&+:&c+rer &( 5eer o: &7rco(77o7 +75 &( &r5 or &cce55or7e5 >ereo: &(, >ere:ore, 7 75 5+bec o

>e 3 &(;&ce 5&e5 &? re5cr7be( b Sec7o 18BmC o: >e T&? "o(e, 7re&7o o Sec7o 194 o: >e 5&me, =>7c> (e:7e5 & m&+:&c+rer &5 :oo=5A

Sec7o 194. K or(5 &( P>r&5e5 De:7e(. K I &7 >e ro;757o5 o: >75T7e, =or(5 &( >r&5e5 5>& be &Fe 7 >e 5e5e &( e?e57o 7(7c&e(beo=A

??? ??? ???

B?C M&+:&c+rer 7c+(e5 e;er er5o =>o b >57c& or c>em7c& roce55&er5 >e e?er7or e?+re or :orm or 7er 5+b5&ce o: & r&= m&er7& orm&+:&c+re( or &r7& m&+:&c+re( ro(+c5 7 5+c> m&er &5 o re&re 7:or & 5ec7& +5e or +5e5 o =>7c> 7 co+( o >&;e bee + 7 75 or77&

co(77o, or =>o b & 5+c> roce55 &er5 >e @+&7 o: & 5+c> m&er7& orm&+:&c+re( or &r7& m&+:&c+re( ro(+c 5o &5 o re(+ce 7 o m&rFe&be5>&e, or re&re 7 :or & o: >e +5e5 o: 7(+5r, or =>o b & 5+c> roce55comb7e5 & 5+c> r&= m&er7& or m&+:&c+re( or &r7& m&+:&c+re(ro(+c5 =7> o>er m&er7&5 or ro(+c5 o: >e 5&me or o: (7::ere F7(5 &( 75+c> m&er >& >e :775>e( ro(+c o: 5+c> roce55 o: m&+:&c+re c& be +o 5ec7& +5e or +5e5 o =>7c> 5+c> r&= m&er7& or m&+:&c+re( or &r7&m&+:&c+re( ro(+c5 7 >e7r or77& co(77o co+( o >&;e bee +, &(=>o 7 &((77o &er5 5+c> r&= m&er7& or m&+:&c+re( or &r7& m&+:&c+re(ro(+c5, or comb7e5 >e 5&me o ro(+ce 5+c> :775>e( ro(+c5 :or >e+ro5e o: >e7r 5&e or (75r7b+7o o o>er5 &( o :or >75 o= +5e orco5+m7o.

I &5=er o >e &bo;e coe7o, E7eer7 c&7m5 >& 7 75 o &m&+:&c+rer &( 5eer o: &7r-co(77o7 +75 &( 5&re &r5 or &cce55or7e5>ereo: 5+bec o &? +(er Sec7o 18BmC o: >e T&? "o(e, b+ & cor&core&e( 7 >e (e57, 5+ &( 75&&7o o: >e cer& e o: &7r-co(77o7 55em 5+bec o >e 3 &? 7mo5e( b Sec7o 191 o: >e 5&me"o(e, =>7c> 75 e55e7& & &? o >e 5&e o: 5er;7ce5 or &bor o: & cor&corr&>er >& o >e 5&e o: &r7ce5 5+bec o >e &? re:erre( o 7 Sec7o5 184,18 &( 186 o: >e "o(e.

T>e &r+me5 o: bo> >e E7eer7 &( >e "omm7557oer c& :or &c&r7:7c&7o o: >e erm cor&cor &5 =e &5 >e (757c7o be=ee & cor&c o:

5&e &( cor&c :or :+r75>7 5er;7ce5, &bor &( m&er7&5. T>e (757c7obe=ee & cor&c o: 5&e &( oe :or =orF, &bor &( m&er7&5 75 e5e( b >e7@+7r =>e>er >e >7 r&5:erre( 75 oe o 7 e?75ece &( =>7c> e;er=o+( >&;e e?75e( b+ :or >e or(er o: >e &r (e57r7 o &c@+7re 7, or & >7=>7c> =o+( >&;e e?75e( &( >&5 bee >e 5+bec o: 5&e o 5ome o>erer5o5 e;e 7: >e or(er >&( o bee 7;e. 2I: >e &r7ce or(ere( b >e+rc>&5er 75 e?&c 5+c> &5 >e &77:: m&Fe5 &( Fee5 o >&( :or 5&e o&oe, &( o c>&e or mo(7:7c&7o o: 7 75 m&(e & (e:e(&'5 re@+e5, 7 75 &


43/52

cor&c o: 5&e, e;e >o+> 7 m& be e7re m&(e &:er, &( 7 co5e@+eceo:, >e (e:e(&5 or(er :or 7.3

O+r Ne= "7;7 "o(e, 7Fe=75e (757+75>e5 & cor&c o: 5&e :rom & cor&c :or &7ece o: =orF >+5A

#r. 146. # cor&c :or >e (e7;er & & cer&7 r7ce o: & &r7ce =>7c> >e;e(or 7 >e or(7&r co+r5e o: >75 b+57e55 m&+:&c+re5 or roc+re5 :or >eeer& m&rFe, =>e>er >e 5&me 75 o >&( & >e 7me or o, 75 & cor&c o:5&e, b+ 7: >e oo(5 &re o be m&+:&c+re( 5ec7& :or >e c+5omer &( +o>75 5ec7& or(er &( o :or >e eer& m&rFe, 7 75 & cor&c :or & 7ece o: =orF.

T>e =or( cor&cor >&5 come o be +5e( =7> 5ec7& re:erece o & er5o=>o, 7 >e +r5+7 o: >e 7(ee(e b+57e55, +(er&Fe5 o (o & 5ec7:7c obor 7ece o: =orF :or o>er er5o5, +57 >75 o= me&5 &( me>o(5 =7>o+5+bm77 >7m5e: o coro &5 o >e e (e&75. B#r&&5, #o&7o5 &(*+r75r+(ece o >e N&7o& Ier& Re;e+e "o(e, . 318, &r. 191 B2C, 19

E(.C T>e r+e e5 o: & cor&cor &5 =&5 >e( 7 >e c&5e5 o: L&(on Ste%edoring#o., %s. rinidad, 43, P>7. 83, 8-88, &( La #arlota S&gar #entral %s. rinidad,43, P>7. 816, 819, =o+( 5eem o be >& >e re(er5 5er;7ce 7 >e co+r5e o: &7(ee(e occ+&7o, rere5e7 >e =7 o: >75 emoer o &5 o >ere5+ o: >75 =orF, &( o &5 o >e me&5 b =>7c> 7 75 &ccom75>e(.

7> >e :oreo7 cr7er7& &5 +7(eo55, e 5>& o= e?&m7e =>e>erE7eer7 re& (7( m&+:&c+re &( 5e, &5 &ee( b >e "omm7557oer o>o( 7 7&be o >e &(;&ce 5&e5 &? +(er Sec7o 18BmC, or 7 o >&( 755er;7ce5 cor&ce( :or 75&&7o +ro5e5 o >o( 7 7&be +(er 5ec7o 198o: >e T&? "o(e.

I

#:er o7 o;er >e >ree ;o+me5 o: 5eor&>7c oe5 &( >e ;o+m7o+5recor( o: >e /IR &( >e "T# &5 =e &5 >e e?>7b75 5+bm7e( b bo> &r7e5,e :7( >& E7eer7 (7( o m&+:&c+re &7r co(77o7 +75 :or 5&e o >eeer& +b7c, b+ 7more( 5ome 7em5 B&5 re:r7er&7o comre55or5 7comee 5e, >e& e?c>&er5 or co75, .5.. . 39C =>7c> =ere +5e( 7 e?ec+7cor&c5 eere( 7o b 7. E7eer7, >ere:ore, +(erooF eo7&7o5 &(e?ec+7o o: 7(7;7(+& cor&c5 :or >e (e57, 5+ &( 75&&7o o: &7rco(77o7 +75 o: >e cer& e B.5.. . 2-36J E?>5. $, G, H, I, *,

0, L, &( MC, &F7 7o co57(er&7o 7 >e roce55 5+c> :&cor5 &5 >e&re& o: >e 5&ce o be &7r co(77oe(J >e +mber o: er5o5 occ+7 or=o+( be occ+7 >e rem75e5J >e +ro5e :or =>7c> >e ;&r7o+5 &7rco(77o7 &re&5 &re o be +5e(J &( >e 5o+rce5 o: >e& &7 or coo7 o&(o >e & 5+c> &5 5+ o&(, 7>7, &( o>er eecr7c& &7&ce5 =>7c> &reor m& be 7 >e &. B.5.. . 34, o. IC E7eer7 &5o e57:7e( (+r7 >e>e&r7 7 >e "o+r o: T&? #e&5 >& re&7;e o >e 75&&7o o: &7rco(77o7 55em, E7eer7 (e57e( &( e7eere( comee e&c>


44/52

&r7c+&r & &( >& o =o &5 =ere 7(e7c& b+ e&c> >&( o bee7eere( 5e&r&e.

#5 :o+( b >e o=er co+r, =>7c> :7(7 4e &(o K

E7eer7, 7 & +5>e, :&br7c&e5, &55embe5, 5+7e5 &( 75&5 7 >eb+7(75 o: 75 ;&r7o+5 c+5omer5 >e cer& e &7r co(77o7 55emJre&re5 >e &5 &( 5ec7:7c&7o5 >ere:or =>7c> &re (757c &( (7::ere :rome&c> o>erJ >e &7r co(77o7 +75 &( 5&re &r5 or &cce55or7e5 >ereo: +5e(b e77oer &re o >e =7(o= e o: &7r co(77oer =>7c> &re m&+:&c+re(,&55embe( &( ro(+ce( oc& :or 5&e o >e eer& m&rFeJ &( >e 7more(&7r co(77o7 +75 &( 5&re &r5 or &cce55or7e5 >ereo: &re 5+7e( &(75&e( b e77oer +o re;7o+5 or(er5 o: 75 c+5omer5 co:orm&b =7>>e7r ee(5 &( re@+7reme5.

T>e :&c5 &( c7rc+m5&ce5 &:ore@+oe( 5+or >e >eor >& E7eer7 75& cor&cor r&>er >& & m&+:&c+rer.

T>e "omm7557oer 7 >75 /r7e: &r+e5 >& 7 75 more 7 &ccor( =7> re&5o &(5o+( b+57e55 m&&eme o 5& >& &oe =>o (e57re5 o >&;e &7rco(77o7 +75 75&e( 7 >75 rem75e5 &( =>o 75 7 & o577o &( =77 o& >e r7ce c& or(er >e 5&me :rom >e com& BE7eer7C &(, >ere:ore,E7eer7 co+( >&;e m&55 ro(+ce( &( 5ocF7e( &7r co(77o7 +75 :or5&e o >e +b7c or o & c+5omer =7> eo+> moe o b+ >e 5&me. T>7575 +e&be 7 >e 7> o: >e :&c >& &7r co(77o7 +75, &cF&e(, or =>&=e Fo= &5 5e:-co&7e( &7r co(77o7 +75, &re (757c :rom >e cer&55em =>7c> E7eer7 (e& 7. To O+r m7(, >e (757c7o &5 e?&7e( bE7eer7, 7 75 /r7e:, @+o7 :rom booF5, 75 o & 7(e & o: =or(5 &5c&7me( b >e "omm7557oer, b+ & 577:7c& :&c =>7c> e +5 c&o 7ore.

#5 @+oe( b E7eer7 E@+7me S+ "o., :rom & E7eer7>&(booF b L.". Morro=, &( =>7c> e rero(+ce >ere+(er :or e&5re:ereceA

... >ere 75 & re& ;&r7e o: e@+7me 7 +5e o (o >75 ob Bo: &7r co(77o7C.Some (e;7ce5 &re (e57e( o 5er;e & 5ec7:7c e o: 5&ceJ o>er5 o er:orm &5ec7:7c :+c7oJ &( 57 o>er5 &5 comoe5 o be &55embe( 7o & &7or-m&(e 55em o :7 & &r7c+&r b+7(7. Geer&, >o=e;er, >e m& be ro+e(7o =o c&557:7c&7o5 K +7&r &( cer& 55em.

T>e +7&r e@+7me c&557:7c&7o 7c+(e5 >o5e (e575 5+c> &5 room &7rco(77oer, =>ere & o: >e :+c7o& comoe5 &re 7c+(e( 7 oe or =o

&cF&e5, &( 75&&7o 7;o;e5 o m&F7 5er;7ce coec7o 5+c> &5eecr7c7, =&er &( (r&75. "er&-5&7o 55em5, o:e re:erre( o &5 &7e(or b+7-+ 55em5, re@+7re >e 75&&7o o: comoe5 & (7::ere o75 7 &b+7(7 &( >e7r 7ercoec7o.

T>e room &7r co(77oer 75 & +7&r e@+7me (e57e( 5ec7:7c& :or & room or57m7&r 5m& 5&ce. I 75 +7@+e &mo &7r co(77o7 e@+7me 7 =o re5ec5AI 75 7 >e eecr7c& &7&ce c&557:7c&7o, &( 7 75 m&(e b & re& +mber o:m&+:&c+rer5.


45/52

T>ere 75 &5o >e e57mo o: oe "&ro5 N&;&rro, & 7ce5e( Mec>&7c& &(Eecr7c& E7eer, =>o =&5 oce >e ">&7rm& o: >e /o&r( o: E?&m7er5 :orMec>&7c& E7eer5 &( =>o =&5 &ee( re5o57be :or >e re&r&7o o:>e re:r7er&7o &( &7r co(77o7 co(e o: >e "7 o: M&7&, =>o 5&7( >&>e cer& e &7r co(77o7 55em 75 & e7eer7 ob >& re@+7re5

&7 &( me7c+o+5 &o+ (+e o >e :&c >& +5+& &rc>7ec5 &557(e:77e 5&ce &( +5+& >e 5&ce5 >e &557 &re ;er 5m& &( o: ;&r7o+557e5. "o7+7 :+r>er, >e e57:7e(A

I (o' >7F I >&;e 5ee cer& e o: &7r co(77o7 m&c>7er room >& &ree?&c &7Fe bec&+5e & o+r b+7(75 >ere &re (e57e( b &rc>7ec5 (7557m7&ro e?757 b+7(75, &( +5+& >e (o' coor(7&e &( e >e &(;7ce o: &7rco(77o7 &( re:r7er&7 e7eer5 5o m+c> 5o >& =>e =e come o (e57,=e >&;e o m&Fe +5e o: >e &;&7&be 5&ce >& >e &re &5577 o +5 5o >& =e>&;e o (e57 >e (7::ere comoe &r5 o: >e &7r co(77o7 55em 75+c> & =& >& =7 be &ccommo(&e( 7 >e 5&ce &557e( &( &:er=&r(5 >e55em m& be co57(ere( &5 & (e:77e or7o o: >e b+7(7. ...

De:77e >ere 75 @+7e & b7 (7::erece 7 >e oer&7o bec&+5e >e =7(o= e&7r co(77oer 75 & 5or o: comrom75e. I :&c 7 c&o coro >+m7(7 o >e(e57re( e;eJ r&>er >e m&+:&c+rer5, b >7 &( m755, =ere &be o 5&75:>em5e;e5 >& >e (e57re( com:or =7>7 & room co+( be m&(e b & (e:77e5e7 o: >e m&c>7e &5 7 come5 :rom >e :&corJ =>ere&5 >e cer& e55em (e:77e re@+7re5 & 7e7e oer&or. B.5.. . 31-3, o. IIC

T>e o7, >ere:ore, 75 >75 K E7eer7 (e:77e (7( o &( =&5 o e&e(7 >e m&+:&c+re o: &7r co(77o7 +75 b+ >&( 75 5er;7ce5 cor&ce( :or>e 75&&7o o: & cer& 55em. T>e c&5e5 c7e( b >e "omm7557oerB#(;er757 #55oc7&e5, Ic. ;5. "oecor o: "+5om5, 9, P>7. 636J "ee57o "o "o. ;5. "oecor o: Ier& Re;e+e, 99 P>7. 841 &( M&7& Tr&(7 S+

"o. ;5. "7 o: M&7&, 6 O.G. 3629C, &re o 7 o7. Ne7>er &re >e &7c&bebec&+5e >e :&c5 7 & >e c&5e5 c7e( &re e7re (7::ere. T&Fe :or 75&ce >ec&5e o: "ee57o "o =>ere >75 "o+r >e( >e &?&er o be & m&+:&c+rerr&>er >& & cor&cor o: 5&5>, (oor5 &( =7(o=5 m&+:&c+re( 7 75 :&cor.I(ee(, :rom >e ;er 5&r, "ee57o "o 7e(e( 75e: o be & m&+:&c+rer o:(oor5, =7(o=5, 5&5>e5 ec. &5 7 (7( re75er & 5ec7& r&(e &me :or 75 5&5>b+57e55 &( or(ere( com& 5&7oer c&rr7 >e bo( r7 ORIENT#LS#SH $#"TOR B"ELESTINO "O #ND "OMP#N, PROP.C 926 R&o S., )+7&o,M&7&, Te. No. ec., M&+:&c+rer5 o: # 07(5 o: Door5, 7(o=5 ... . L7Fe=75e,"ee57o "o e;er + + & cor&cor'5 bo( &5 re@+7re( b #r7ce 129 o: >e"7;7 "o(e. #5o, &5 & eer& r+e, 5&5> :&cor7e5 rece7;e or(er5 :or (oor5 &(

=7(o=5 o: 5ec7& (e57 o 7 &r7c+&r c&5e5, b+ >e b+F o: >e7r 5&e5 75(er7;e( :rom re&(-m&(e (oor5 &( =7(o=5 o: 5&(&r( 57e5 :or >e &;er&e>ome, =>7c> 5&e5 =ere re:ece( 7 >e7r booF5 o: &cco+5 o&7P118,4.69 :or >e er7o( :rom *&+&r, 192 o Seember 3, 192, or :or &er7o( o: o 7e B9C mo>5. T>75 "o+r :o+( 5&7( 5+m (7::7c+ o >&;e bee(er7;e( :rom 75 :e= c+5omer5 =>o &ce( 5ec7& or(er5 :or >e5e 7em5.#7 >e &bo;e5&e( :&c5 o >e c&5e & b&r, e :o+( >em o >e7&o57e. E7eer7 &(;er75e( 75e: &5 E7eer7 E@+7me &( S+


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"om&, M&c>7er Mec>&7c& S+7e5, E7eer5, "or&cor5, 14 M&r@+e5(e "om7&5, M&7& BE?>. / &( 1 /IR rec. . 186C, &( o &5 m&+:&c+rer5.I 7Fe=75e &7( >e cor&cor5 &? o & >e cor&c5 :or >e (e57 &(co5r+c7o o: cer& 55em &5 e57:7e( o b Mr. Re P&rFer, 75 Pre57(e &(Geer& M&&er. B.5.. . 12, 13C S7m7&r, E7eer7 (7( o >&;e re&(-

m&(e &7r co(77o7 +75 :or 5&e b+ &5 er e57mo o: Mr. P&rFer +o7@+7r o: *+(e L+c7&o o: >e "T# K

) K #57(e :rom >e eer& comoe5, =>7c> o 7o &7r co(77o7 & or 55em o:>e cer& e =>7c> o+r com& +(er&Fe5, &( >e roce(+re :oo=e( b o+ 7ob&77 &( e?ec+7 cor&c5 =>7c> o+ >&;e &re&( e57:7e( o 7 re;7o+5 >e&r7,=o+( o+ 5& >& >e co;er7 cor&c5 :or >e5e (7::ere roec5 75e( ... re:erre( o7 >e 75, E?>. $ &re 7(e7c& 7 e;er re5ec I me& e;er & or 55em co;ere( b>e5e (7::ere cor&c5 &re 7(e7c& 7 5&(&r( 7 e;er re5ec, 5o >& o+ c&rero(+ce >em

# K No, 57r. T>e &re o & 5&(&r(. O >e cor&r, oe o: >em &re >e 5&me. E&c>oe m+5 be (e57e( &( co5r+ce( o mee >e &r7c+&r re@+7reme5, =>e>er >e&7c&7o 75 o be oer&e(. B.5.. . 11-12C

>& e co57(er &5 o & :o+r5 =7> >e c&5e & b&r 75 >e c&5e o: S.".Larence #o. %s. "cFarland, "omm7557oer o: Ier& Re;e+e o: >e S&e o:Tee55ee &( Mc"&e55, 3 S 2(, 1, 11, =>ere >e c&+5e re5e5 >e@+e57o o: =>e>er oe e&e( 7 >e b+57e55 o: cor&c7 :or >ee5&b75>me o: &7r co(77o7 55em 7 b+7(75, =>7c> =orF re@+7re5, 7&((77o o >e :+r75>7 o: & coo7 +7, >e coec7o o: 5+c> +7 =7>eecr7c& &( +mb7 :&c777e5 &( >e 75&&7o o: (+c5 =7>7 &( >ro+>=&5, ce775 &( :oor5 o co;e coo &7r o ;&r7o+5 &r5 o: >e b+7(7, 757&be :or 5&e or +5e &? &5 & cor&cor r&>er >& & re&7er o: &7be er5o&roer. #eee ooF >e Po577o >& &e& =&5 o e&e( 7 >eb+57e55 o: 5e7 &7r co(77o7 e@+7me &5 5+c> b+ 7 >e :+r75>7 o 75

c+5omer5 o: comee( &7r co(77o7 55em5 +r5+& o cor&c, =&5 &cor&cor e&e( 7 >e co5r+c7o or 7mro;eme o: re& roer, &( &55+c> =&5 7&be :or 5&e5 or +5e &? &5 >e co5+mer o: m&er7&5 &( e@+7me+5e( 7 >e co5+mm&7o o: cor&c5, 7rre5ec7;e o: >e &? 5&+5 o: 75cor&cor5. To r&5m7 >e =&rm or coo &7r o;er >e b+7(75, >e &e&75&e( 55em o: (+c5 r+7 :rom >e b&57c +75 >ro+> =&5, ce775 &(:oor5 o re75er5. T>e cor&c c&e( :or comee( &7r co(77o7 55em5=>7c> bec&me erm&e &r o: >e b+7(75 &( 7mro;eme5 o >e re&.T>e "o+r >e( >e &e& & cor&cor =>7c> +5e( >e m&er7&5 &( >ee@+7me +o >e ;&+e o: =>7c> >e &? >ere7 7mo5e( =&5 e;7e( 7 >eer:orm&ce o: 75 cor&c5 =7> 75 c+5omer5, &( >& >e c+5omer5 (7( o

+rc>&5e >e e@+7me &( >&;e >e 5&me 75&e(.

#7 >e :&c5 o: >e &:oreme7oe( c&5e o >e re5e c&5e, e 5ee >&>e 5+ o: &7r co(77o7 +75 o E7eer'5 ;&r7o+5 c+5omer5, =>e>er >e5&7( m&c>7er7e5 =ere 7 >&( or o, =&5 e5ec7& m&(e :or e&c> c+5omer&( 75&e( 7 >75 b+7(7 +o >75 5ec7& or(er. T>e &7r co(77o7 +7575&e( 7 & cer& e o: &7r co(77o7 55em =o+( o >&;e e?75e( b+:or >e or(er o: >e &r (e57r7 o &c@+7re 7 &( 7: 7 e?75e( =7>o+ >e 5ec7&


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or(er o: E7eer7'5 c+5omer, >e 5&7( &7r co(77o7 +75 =ere o7e(e( :or 5&e o >e eer& +b7c. T>ere:ore, e >&;e b+ o &::7rm >ecoc+57o o: >e "o+r o: T&? #e&5 >& E7eer7 75 & cor&cor r&>er>& & m&+:&c+rer, 5+bec o >e cor&cor5 &? re5cr7be( b Sec7o 191 o:>e "o(e &( o o >e &(;&ce 5&e5 &? 7mo5e( b Sec7o 18BmC 7 re&7o

o Sec7o 194 o: >e 5&me "o(e. S7ce 7 >&5 bee ro;e( o O+r 5&75:&c7o >&E7eer7 7more( &7r co(77o7 +75, &r5 or &cce55or7e5 >ereo: :or +5e7 75 co5r+c7o b+57e55 &( >e5e 7em5 =ere e;er 5o(, re5o(, b&rere( ore?c>&e(, E7eer7 5>o+( be >e( 7&be o & &?e5 re5cr7be( +(erSec7o 19o: >e "o(e. T>75 come5&7 &? 75 o & &? o >e 7mor&7o o:oo(5 b+ & &? o >e +5e o: 7more( oo(5 o 5+bec o 5&e5 &?.E7eer7, >ere:ore, 5>o+( be >e( 7&be o >e &me o: 3come5&7 &? 7 &ccor(&ce =7> Sec7o 19 o: >e T&? "o(e 7 re&7o oSec7o 18BmC o: >e 5&me, b+ =7>o+ >e m&rF + ro;7(e( 7 Sec7o183BbC.

II

e &Fe + e? >e 755+e o: :r&+(. T>e "omm7557oer c>&re( E7eer7 =7>m75(ec&r&7o o: >e 7more( &7r co(77o7 +75 &( &r5 or &cce55or7e5>ereo: 5o &5 o m&Fe >em 5+bec o & o=er r&e o: erce&e &? BC +(erSec7o 186 o: >e T&? "o(e, =>e >e &re &ee( 5+bec o & >7>er r&e o:&? B3C +(er 75 Sec7o 18BmC. T>75 c>&re o: :r&+( =&5 (e7e( bE7eer7 b+ >e "o+r o: T&? #e&5 7 75 (ec757o :o+( &(;er5e &(5&7(

... e &re &m co;7ce( :rom >e e;7(ece re5ee( b re5o(e >&e77oer (e7ber&e &( +ro5e m75(ec&re( 75 7mor&7o5. T>75 e;7(ece

co5755 o: eer5 =r7e b e77oer o 75 :ore7 5+7er5, 75r+c7 >em o>o= o 7;o7ce &( (e5cr7be >e &7r co(77o7 +75 or(ere( b e77oer. ... B.218 "T# rec.C

De57e >e &bo;e :7(75, >o=e;er, >e "o+r o: T&? #e&5 &b5o;e(E7eer7 :rom &7 >e 5+rc>&re re5cr7be b Sec7o 183B&C o: >eT&? "o(e b re&5o7 o+ &5 :oo=5A

T>e 7mo577o o: >e 5+rc>&re re5cr7be( b Sec7o 183B&C o: >e T&? "o(e75 b&5e( o =7:+ eec o :7e >e mo> re+r =7>7 2 (&5 &:er >e e( o:e&c> mo> or 7 c&5e & :&5e or :r&+(+e re+r 75 =7:+ m&(e, 7 c& re&(7be 5ee, >& e77oer c&o e& be >e( 5+bec o >e 5+rc>&re

7mo5e( b Sec7o 183B&C o: >e T&? "o(e. Ne7>er c& e77oer be >e( 5+beco >e 5+rc>&re +(er Sec7o 19 o: >e T&? "o(e (e&7 o come5&7&? bec&+5e >e ro;757o5 >ereo: (o o 7c+(e >e 5+rc>&re. >ere &&r7c+&r ro;757o o: >e T&? "o(e (oe5 o 7mo5e >e 5+rc>&re &5 :r&+(e& =e c&o e:orce & o-e?757 ro;757o o: &= o=7>5&(7 >e&55e55me o: re5o(e o >e cor&r. I5&ce5 o: >e e?c+57o 7 >e T&?"o(e o: >e 5+rc>&re &re >o5e (e&7 o &? o b&F5, &?e5 o rece75 o:75+r&ce com&7e5, &( :r&c>75e &?. Ho=e;er, 7: >e T&? "o(e 7mo5e5 >e 5+rc>&re &5 :r&+( e&, 7 e?re55 5o ro;7(e5 &5 7 >e c&5e5 o: 7come&?, e5&e &( 7>er7&ce &?e5, 7: &?e5, m77 &?, &m+5eme &? &( >e


48/52

mo> erce&e &?e5. #ccor(7, =e >o( >& e77oer 75 o 5+bec o>e 5+rc>&re (e57e >e e?75ece o: :r&+( 7 >e &b5ece o: e& b&575 o5+or >e 7mor&7o >ereo:. B. 228 "T# rec.C

e >&;e oe o;er >e e?>7b75 5+bm7e( b >e "omm7557oer e;7(ec7 :r&+(comm7e( b E7eer7 &( e rero(+ce 5ome o: >em >ere+(er :or c&r7.

#5 e&r &5 M&rc> 18, 193, E7eer7 7 & eer o: e;e (&e =roe o Tr&e "o.BE?>. 3-0 . 12-1, /IR rec.C %i(:

o+r 7;o7ce5 5>o+( be m&(e 7 >e &me o: M&(r7& "o., Ic., M&7&,P>777e5, co E7eer7 E@+7me S+ "o., M&7&, P>777e5 K:or=&r(7 & corre5o(ece &( 5>77 &er5 cocer7 >75 or(er o +5o &( o o >e c+5omer.

>e 7;o7c7, o+r 7;o7ce5 5>o+( be e?&c &5 (e&7e( 7 >e c+5omer'5Leer Or(er (&e( M&rc> 14>, 193 &&c>e(. T>75 75 7 &ccor(&ce =7> >eP>777e 7mor 7ce5e5 r&e( o M&(r7& "o., Ic. &( 5+c> (e&75 m+5

o be 5>o= o & &er5 &( 5>77 (oc+me5 :or >75 5>7me. omention of ords air conditioning e'&ipment sho&ld /e made on an shippingdoc&ments as ell as on the cases. Pe&5e 7;e >75 m&er o+r c&re:+ &e7o,o>er=75e re& (7::7c+7e5 =7 be eco+ere( =7> >e P>777e /+re&+ o:"+5om5 =>e ce&r7 >e 5>7me o 75 &rr7;& 7 M&7&. # 7;o7ce5 &(c&5e5 5>o+( be m&rFe( THIS E)!IPMENT $OR RI%#L "EMENT "O.

T>e 5&me 75r+c7o =&5 m&(e o #cme I(+5r7e5, Ic., S& $r&c75co,"&7:or7& 7 & eer (&e( M&rc> 19, 193 BE?>. 3-*-1 . 1-11, /IR rec.C

O #r7 6, 193, E7eer7 =roe o O=e5-"or7 $7ber&55 "or., Ne=orF, !.S.#. BE?>. 3-1 . 14-149, /IR rec.C &5o eo77 >e &er :rom

me7o7 or re:err7 o >e erm '&7r co(77o7' &( o (e5cr7be >e oo(5 oor(er &5 $7ber&55 7e &( 7e :77 75+&7o 75e&(. L7Fe=75e o #r7 3,193, E7eer7 >re&ee( o (75co7+e >e :or=&r(7 5er;7ce o: !7;er5&Tr&5co7e& "oror&7o =>e 7 =roe Tr&e "o. BE?>. 3-H . 146, /IRrec.CA

I =7 be oe( >& >e !7;er5& Tr&5co7e& "oror&7o 75 o :oo=7>ro+> o >e 75r+c7o5 =>7c> >&;e bee co;ere( b >e &bo;ecorre5o(ece, &( =>7c> 7(7c&e5 >e ece557 o: (75co7+7 >e +5e o: >eerm #7r co(77o7 M&c>7er or #7r "ooer5. O+r 75r+c7o5 cocer7 >75eer& 57+&7o >&;e bee 5e o o+ 7 &me 7me o >&;e &;o7(e( >75 error 7erm7oo, &( =e =7 &5F >& o rece7 o: >75 eer >& o+ &&7 =r7e o

!7;er5& Tr&5co7e& "or. &( 7:orm >em >&, 7: 7 >e :++re, >e &re+&be o cooer&e =7> +5 o >75 re@+7reme, =e =7 >ere&:er be +&be o+77e >e7r :or=&r(7 5er;7ce. Pe&5e 7:orm >em >& =e =7 o oer&e &o>er:&7+re o :oo= o+r re@+7reme5.

#( o *+ 1, 193 BE?>- 3- . 14, /IR rec.C E7eer7 =roe Tr&e "o.&o>er eer, %i(:


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I >e &5, =e >&;e &=&5 &7( >e &7r co(77o7 &? o c7m&e c>&er5 &(>& m&rF 75 reco7e( 7 >e P>777e5, &5 &7r co(77o7 e@+7me. T>75m&er o: &;o7(7 & 7e-7 o &7r co(77o7 75 ;er 7mor& o +5, &( =e &re&5F7 >& :rom >ereo >& =>oe;er &Fe5 c&re o: >e roce557 o: o+r or(er5 bec&re:+ 75r+ce( 5o &5 o &;o7( &&7 +57 >e erm "7m&e c>&er5 or 7& =& re:err7 o >e e@+7me &5 &7r co(77o7.

#( 7 re5o5e o >e &:ore@+oe( eer, Tr&e "o. =roe o *+ 3, 193,5+e57 & 5o+7o, %i(:

e :ee >& =e c& rob&b 5o;e & >e robem5 b :oo=7 >e roce(+reo+7e( 7 o+r eer o: M&rc> 2, 193 =>ere7 o+ 5&e( >& 7 & :++re ob5o+ =o+( eco5e >oo5&7c co7e5 o: o+r 7mor 7ce5e 5o >& =e m7>m&Fe + =o 5e5 o: 7;o7ce5A oe 5e (e5cr7b7 e@+7me or(ere( 57m&ccor(7 o >e =& >& >e &re 75e( o >e 7mor 7ce5e &( &o>er&ccor(7 o o+r or(7&r re+&r me>o(5 o: or(er =r7e-+. e =o+( >e7c+(e >e 5e m&(e + &ccor(7 o >e 7mor 7ce5e 7 >e 5>77 bo?e5>em5e;e5 &( +5e >o5e 7em5 &5 o+r &c+& 5>77 (oc+me5 &( 7;o7ce5,&( =e =7 5e( >e o>er re+&r 7;o7ce o o+, b 5e&r&e corre5o(ece.

BE?>- No. 3-$-1, . 144 /IR rec.C

#o>er 7ere57 eer o: E7eer7 75 oe (&e( #++5 2, 19 BE?>. 3-". 141 /IR rec.C

I >e roce55 o: ce&r7 >e 5>7me :rom >e 7er5, oe o: >e "+5om575ecor5 re@+e5e( o 5ee >e &cF7 75. !o re5e7 >e &cF7 75, 7=&5 (75co;ere( >& >e 5&me =&5 re&re( o & co o: o+r eer>e&( =>7c>7(7c&e( >& >e Tr&e "o. m&+:&c+re( &7r co(77o7, >e&7 &( >e&r&5:er e@+7me. #ccor(7, >e 75ecor5 7575e( >& >75 e@+7me =&5be7 7more( :or &7r co(77o7 +ro5e5. o date, e ha%e not /een a/le toclear the shipment and it is possi/le that e ill /e re'&ired to pa hea% ta0es on

e'&ipment.

he p&rpose of this letter is to re'&est that in the f&t&re, no doc&ments of an *indsho&ld /e sent ith the order that indicate in an a that the e'&ipment co&ld

possi/l /e &sed for air conditioning.

I 75 re&7e( >& >75 & bro&( re@+e5 &( :&7r (7::7c+ o &ccom75> &(&(m775er, b+ =e be7e;e =7> roer c&+7o 7 c& be e?ec+e(. o+rcooer&7o &( co5e 5+er;757o cocer7 >e5e m&er5 =7 be &rec7&e(.BEm>&575 5+7e(C

T>e &:ore@+oe( comm+7c&7o5 &re 5ro 7(7c&7;e o: >e :r&+(+e 7eo: E7eer7 o m75(ec&re 75 7mor&7o o: &7r co(77o7 +75 &( 5&re&r5 or &cce55or7e5 >ereo: o e;&(e &me o: >e 3 &?. #( 57ce >ecomm7557o o: :r&+( 75 &oe>er oo &r7, e c&o &ree =7> >e "o+r o:T&? #e&5 7 &b5o;7 E7eer7 :rom >e :r&+( 5+rc>&re, o>er=75ee =7 be 7;7 rem7+m o & &7 7oer&be &c o: &? e;&57o. #5 &5&e( b >e So7c7or Geer&, o= *+57ce, #o7o P. /&rre(oA '>75c7rc+m5&ce =7 o :ree 7 :rom >e 5+rc>&re bec&+5e 7 & c&5e =>e>er7 75 5+bec o &(;&ce 5&e5 &? or come5&7 &?, 7 75 re@+7re( b &= or+ (ec&re 75 7mor&7o 7 >e 7mor er7e5 &( 7er& re;e+e


50/52

(ec&r&7o5 be:ore >e 7mor&7o5 m&be ree&5e( :rom c+5om5 c+5o(. T>e5&7( er7e5 &re >e ;er (oc+me5 =>ere >e &+re, @+&7 &( ;&+e o: >e7more( oo(5 (ec&re( &( =>ere >e c+5om5 (+7e5, 7er& re;e+e &?e5,&( o>er :ee5 or c>&re5 7c7(e o >e 7mor&7o &re com+e(. T>e5eer7e5, >ere:ore, 5er;e >e 5&me +ro5e &5 >e re+r5 re@+7re( b Sec7o

183B&C o: >e "o(e.'

#e >e 2 (e7@+ec 5+rc>&re, e :+ &ree o >e r+7 m&(e b >e"o+r o: T&? #e&5 &( >o( E7eer7 7&be :or >e 5&me. #5 >e( b >eo=er co+rA

# :7r5 b+5> 7 =o+( 5eem >& >e coe7o o: e77oer >& 7 75 o 5+bec o>e (e7@+ec, 5+rc>&re o: 2 75 5o+(, ;&7( &( e&be. Ho=e;er, & 5er7o+55+( &( cr77c& &&575 o: >e >75or7c& ro;757o5 o: Sec7o 19 o: >e T&?"o(e (e&7 o come5&7 &? 7 re&7o o Sec7o 183B&C o: >e 5&me "o(e,=7 5>o= >& >e coe7o o: e77oer 75 =7>o+ mer7. T>e or77& e? o:Sec7o 19

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