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Case Digest on Law on Sales

Quiroga vs. Parsons Hardware
38 Phil 501
August 1918
FACTS: Plaintiff Andres Quiroga and J. Parsons entered into a contract, where it was
stated among others that Quiroga grants in favor of Parsons the exclusive rights to
sell his beds in the Visayan Islands under some conditions. The defendant was
obliged under the contract to pay for the beds, at a discount of 25% as a
commission on the sales. The payment had to be made whether or not the
defendant was able to sell his beds. Quiroga contends that Parsons violated the
following obligations: not to sell beds at higher prices than those of the invoices, to
have an open establishment in Iloilo; to conduct the agency, to keep the beds on
public exhibition, and to pay for the advertisement expenses for the same, and to
order the beds by the dozen and in no other manner. He further alleged that
Parsons was his agent for the sale in Iloilo, and said obligations are implied in a
contract of commercial agency.
ISSUE: Whether or not this is a contract of sale or agency to sell.
RULING: The contract entered into by the parties is one of contract of sale. In the
contract in question, what was essential, as constituting the cause and subject
matter, is that Quiroga was to furnish Parsons with beds which the latter might
order, at the price stipulated, and that Parsons was to pay the price in the manner
stipulated. These features exclude the legal conception of an Agency or Order to
Sell, whereby the mandatory or agent received the thing to sell it, and does not pay
its price, but delivers to the principal the price he obtains from the sale of the thing
to a third person, and if he does not succeed in selling it, he returns it.

Case Digest on Law on Sales

Atkins Kroll & Co. vs. Cu Hian Tek
102 Phil 984
January 1958
FACTS: Petitioner Atkins Kroll & Co. sent a letter to respondent B. Cu Hian Tek
offering one thousand cartons of sardines. Hian Tek unconditionally accepted the
said offer through a letter delivered on, but Atkins failed to deliver the commodities
due to the shortage of catch of sardines by the packers in California. Hian Tek,
therefore, filed an action for damages in the CFI of Manila which granted the same
in his favor. Upon Atkins’ appeal, the Court of Appeals affirmed said decision but
reduced the damages representing unrealized profits. Atkins herein contends that
there was no such contract of sale but only an option to buy, which was not
enforceable for lack of consideration because it is provided under the 2nd
paragraph of Article 1479 of the New Civil Code that "an accepted unilatateral
promise to buy or to sell a determinate thing for a price certain is binding upon the
promisor if the promise is supported by a consideration distinct from the price.”
Atkins also insisted that the offer was a mere offer of option, because the "firm
offer" was a continuing offer to sell.
ISSUE: Whether or not there was a perfected contract of sale between the parties.
RULING: Yes, the Supreme Court held that there was a contract of sale between
the parties. Petitioner’s argument assumed that only a unilateral promise arose
when the respondent accepted the offer, which is incorrect because a bilateral
contract to sell and to buy was created upon respondent’s acceptance. In this case
at bar, however, upon respondent’s acceptance of herein petitioner's offer, a
bilateral promise to sell and to buy ensued, and the respondent had immediately
assumed the obligations of a purchaser.

000. Respondent spouses through counsel. and accepted the earnest deposit. In Navarro v. dismissed the complaint. Dauz wrote San Miguel informing the respondents ‘interest to buy the property and enclosed therein a check (P1. which was reversed by the CA. of which include two parcels of land. Sobrecarey. that they are returning the earnest deposit. Such offer was made to Atty.. Dauz. we laid down the rule that the manner of payment of the purchase price is an essential element before a valid and binding contract of sale can exist. otherwise there is no sale. c.00) as earnest deposit subject to certain conditions. to wit: (1) that they be given the exclusive option to purchase the property within 30 days from acceptance of the offer. Upon failure of respondents to pay despite the extension of time given. By agreement of the parties. the parties would negotiate the terms and conditions of the purchase. wrote Atty. Court of Appeals. Huang. (2) that during the option period. petitioner through its Pres & CEO Gonzales. agreement on the manner of payment goes into the price such that a disagreement on the manner of the . Trial court. wrote petitioner demanding the execution of a deed of conveyance in their favor. As held in Toyota Shaw Inc. RULING: No. the same is needed. hence. but the proof of the concurrence of all the essential elements of the contract of sale which establishes the existence of a perfected sale. Although the Civil Code does not expressly state that the minds of the parties must also meet on the terms of payment of the price. they agreed that respondents will be given 6 months within which to pay. Dauz on behalf of Sps. ISSUE: Whether or not all the essential elements existed for a perfected sale. upon motion. They attempted to return the earnest deposit but were refused by San Miguel. Respondent spouses filed a complaint for specific performance. it is not the giving of earnest money. signed the letter. Sugar producers Cooperative Marketing Association Inc. and (3) petitioner would secure the necessary approvals while respondents would handle the documentation. there was no perfected contract of sale. Huang 336 SCRA 737 FACTS: San Miguel Properties is engaged in the purchase and sale of real properties. In the present case. San Miguel Properties VP indicated his conformity to the offer.000.GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ San Miguel Properties vs. These properties were offered for sale. Atty. Sps.

No. 1996 FACTS: Almeda and Engineering signed a contract. RTC found that Engineering failed to install certain parts and accessories called for by the contract. Naturally. labor. Engineering contends that the contract was of sale and the claim is barred by prescription since the responsibility of a vendor for any hidden faults or defects in the thing sold runs only for 6 months. wherein Engineering undertook to fabricate. the price or compensation .” Its business and particular field of expertise is the fabrication and installation of such systems as ordered by customers and in accordance with the particular plans and specifications provided by the customers. 52267 January 24. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ ENGINEERING AND MACHINERY CORP.000. Almeda learned from the employees of NIDC of the defects of the airconditioning system of the building. WHEREFORE. the decision of the Court of Appeals is REVERSED and respondents’ complaint is DISMISSED. ISSUE: Whether or not the contract for the fabrication and installation of a central air-conditioning system in a building. furnish and install the air-conditioning system in the latter’s building in consideration of P210. one of “sale” or “for a piece of work”. tools and all services required in order to so fabricate and install said system.payment is tantamount to a failure to agree on the price. Petitioner was to furnish the materials. hence the prescription period was ten years. and deviated from the plans of the system. RULING: The contract in question is one for a piece of work.R. COURT OF APPEALS G. It is not petitioner’s line of business to manufacture air-conditioning systems to be sold “off-the-shelf. Almeda spent for the repair of the air conditioning system. thus reducing its operational effectiveness to achieve a fairly desirable room temperature. He now sues Engineering for the refund of the repair. Almeda contends that since it was a contract for a piece of work. who paid in full the contract price.00. The system was completed and accepted by private respondent. vs.

Soriano initially offered to sell palay grains produced in his farmland to NFA. On the same day and on the following day. IAC G. they are not considered sold. He filed a complaint for specific performance. Petitioners contend that the delivery was merely made for the purpose of offering it for sale because until the grains were re-bagged. Soriano delivered 630 cavans. the provincial manager in Tuguegarao. classified and weighed. When the latter accepted the offer by noting in Soriano's Farmer's Information Sheet a quota of 2. 74470 March 8. Soriano insisted that the palay grains be delivered and paid. When he demanded payment. classified and weighed. which were no re-bagged. Cabal was still investigating on information received that Soriano was not a bona fide farmer.R. he was told that payment will be held in abeyance since Mr. No. there was a perfected sale.for the system manufactured and installed will depend greatly on the particular plans and specifications agreed upon with the customers. there was already a meeting of the minds between the parties. RULING: Yes.640 cavans. and he was given a quota of 2. Instead of withdrawing the palay. The object of the contract. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ NATIONAL GRAINS AUTHORITY vs. 1989 FACTS: Private respondent Leon Soriano offered to sell palay grains to NFA through William Cabal. ISSUE: Whether there was a perfected sale. which is the maximum number of cavans he may sell to NFA. being the palay grains produced in Soriano's farmland and the NFA was to pay the .640 cavans. The documents submitted were processed.

without the need of a new contract between the parties. herein petitioners paid to the sellers the 1st: 25% of the purchases price as stated in a deed. all surnamed Buenaventura." In this case. 1993 FACTS: Ramon Buenaventura on his own behalf and as attorney-in-fact of Angeles. COURT OF APPEALS G. Therafter. From the moment the contract of sale is perfected. The fact that the exact number of cavans of palay to be delivered has not been determined does not affect the perfection of the contract. Consequently. Soriano can deliver so much of his produce as long as it does not exceed 2. there was no need for NFA and Soriano to enter into a new contract to determine the exact number of cavans of palay to be sold. Marcelino and Guadalupe Galang. Amparo.R. Private respondents failed to do so despite the willingness of petitioners to pay the 2nd: 25% of the purchase price. sold to Guadalupe and Marcelino Galang 2 parcels of land situated in Tagaytay City. Marcelino and Guadalupe Galang filed a complaint for specific performance with damages. . and Maria Luisa. ISSUE: Whether or not the encargado was a tenant. provided it is possible to determine the same. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ GALANG vs. 80645 August 3. No. they allegedly demanded from private respondents the removal of the encargado from the premises and the delivery of the owners duplicate certificate of the title. Article 1349 of the New Civil Code provides: "The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract.640 cavans. it is incumbent upon the parties to comply with their mutual obligations or "the parties may reciprocally demand performance" thereof. Corazon.same depending upon its quality.

No. the lower court was rash in holding that the encargado was a tenant of the land in question. upon warrant of a certified copy of the record of such delinquency. Petitioners are ordered to pay the full 75% balance. the encargado is staying in his own existing house thereon. and subject agricultural land is planted with coffee and other plants not only by the encargado but also by his deceased parents. The Court discerns no reversible error in the finding and conclusion of the trial court that the unnamed encargado on the lands in question is actually a tenant or agricultural lessee. inclusive. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ RESTITUTA vs. Upon the failure of the registered owner to redeem the parcels of land within the 1-year period prescribed by law. De Gordon.R. encargado was a tenant. Secondly. the taxes against said parcels of land remained unpaid. The petition is hereby granted and the decision of the CA is reversed and set aside. CA G. Vda. The City Treasurer of Quezon City. the .RULING: Yes. The certificate of sale executed by the City Treasurer was duly registered in the office of the Register of Deeds of Quezon City. Rather it was one alternative periods of payment of the 2nd installment given by the seller himself to the buyers. as succinctly point out by the court a quo. The court held that there is no basis for rescinding the contract because the removal of the encargado was not a condition precedent to the contract of sale. advertised for sale the parcels of land. 1981 FACTS: Two parcels of land belong to Restituta V. The bases of this ineluctable conclusion are not hard to so. L-37831 November 23. The public sale of the parcels of land was sold to Rosario Duazo. even granting that it was indeed a legal status of the encargado.

having found the sale to have been conducted “under the direction and supervision of the City Treasurer of Quezon City after the proper procedure and legal formalities had been duly accomplished. Emilio died intestate. CA G. assailing validity . While the price of P10.00 is less than the total assessed value of the land and the improvement thereon. Later on.800.580. The appellate court upheld the tax sale of the real properties at which Duazo acquired the same and her ownership upon Vda. RULING: No.500. Moises filed complaint.R.City Treasurer of Quezon City executed a final deed of sale of said lands and the improvements thereon. Said final deed of sale was also registered in the Office of the Register of Deeds of Quezon City. Coronet. Agustina is married to Ernesto Vasquez.500. No. Duazo filed a petition for consolidation of ownership.” The combined assessed value of the two parcels of land is P16.00. The residential house on the land is assessed at P45. 1989 FACTS: Spouses Emilio Jocson & Alejandra Poblete had 2 children: Moises Jocson & Agustina Jocson-Vasquez. The appellate court's decision. alleged gross inadequacy of the price is not material “when law gives the owner the right to redeem as when a sale is made at public auction.00. gross inadequacy of the purchase price is not sufficient ground to annul the public sale. said price cannot be considered so grossly inadequate as to be shocking to the conscience of the court. The present value of the residential house must be much less now considering the depreciation for over ten years. de Gordon’s failure to redeem the same. As the court held in Velasquez vs. ISSUE: Whether or not the price is grossly inadequate as to justify the setting aside of public sale. mere inadequacy of the price alone is not sufficient ground to annul the public sale. Alejandra died intestate. upon the theory that the lesser the price the easier it is for the owner to effect the redemption. L-55322 February 16. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ MOISES JOCSON vs.00. But the assessment was made in 1961. The price paid at the public sale is P10.

RTC decided in favor of petitioner. In fact. Gross inadequacy of price alone does not affect the contract except perhaps an indication of defect in consent (Civil Code Art. IAC G. 3) improbability of sale considering circumstances. Moises alleged that defendants were employed in their parents’ business and they must have used business earnings or simulated consideration in order to purchase the properties. prices were not simulated. RULING: No. ISSUE: Whether or not prices were simulated.of 3 documents executed by Emilio during his lifetime.R. Court of Appeals reversed the decision. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ FELIX DANGUILAN vs. No proof of defective consent. 1988 . No. designed to exclude Moises. He prays that it be declared null & void and that the properties involved be partitioned between him and his sister. Documents were simulated and fictitious because: 1) no proof that Agustina did pay for the properties 2) prices was grossly inadequate tantamount to lack of consideration at all. 1470). Besides the difference between market value and purchase price is understandable considering father’s filial love for her daughter. L-69970 November 28. purchase price was higher than assessed value.

This sale was supposedly entered into by her mother when she was just a kid. a residential lot and a farm lot. As to the argument that symbolic delivery was effected through the deed of sale. she transferred the same to Danguilan. She explained that she vacated the place because Melad asked her permission to cultivate the land as her tenant who would deliver pne half of the harvest to her. control over the thing sold is necessary and not just ownership and right of possession GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ . the Code imposes upon the vendor the obligation to deliver the thing sold and such is done when it is placed in the hands and possession of the vendee. In order that symbolic delivery may produce the effect of tradition. If she did have possession. She failed to show that she consummated the contract of sale by actual delivery of the properties to her and actual possession thereof in the concept of purchaser-owner. the record shows that the private respondent did not take possession of the disputed properties and indeed waited until to file the action for recovery of the lands from the petitioner. ISSUE: Whether or not the sale was consummated. and cultivating his land and with the understanding that he would bury him upon his death. Melad’s contends: based on a Deed of Sale signed by Domingo. who lived with them until he died. in exchange for taking care of the old man. Danguilan’s contends: Donations in 2 private instruments were made by Domingo to him and his wife (Domingo’s niece). by her own admission. the payment for such sale earned by her mother at the Tabacalera Factory. But she filed a complaint since the deliveries have stopped. Even assuming the validity of the deed of sale. RULING: No. Danguilan and Apolonia Melad both claim rights over the said lots. She also claimed that she was the illegitimate daughter of Melad. the sale was not consummated.FACTS: Domingo Melad owned 2 lots in Cagayan.

In the law on sales. Notwithstanding the court’s decision. but an action for damages in a proper forum for the purpose. petitioners never accepted the offer when they refused to make the terms and condition of the sale. plaintiffs were compelled to file the complaint to compel defendants to sell the property to them. Respondents accepted and asked petitioners to put in writing the terms and conditions but the latter never provided such. Respondents offered 6 million for the property but petitioners offered 5 miliion. Rose Cu Unjieng and Jose Tan in Binondo Manila. The petitioners have been granted off in the first place is just a mere ‘right of first refusal’. since there is none to execute. the remedy is not a writ of execution on the judgment. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales . ISSUE: Whether or not the petitioners can demand specific performance to the respondents to sell to them the property.ANG YU ASUNCION vs. it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. When defendants were about to sell the property. Needless to point out. COURT OF APPEALS 238 scra 602 FACTS: Petitioner Ang Yu Asuncion and Keh Tiong leased a property of respondents Bobby Cu Unjieng. respondent sold the property to Buen Realty and Development Corporation. Respondents informed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same. understood in its normal concept. Neither can the right of first refusal. Even if petitioners are aggrieved by the failure of private respondents to honor the right of first refusal. the so-called “right of first refusal” is an innovative juridical relation. respondents have the right to sell the property to other parties. RULING: No. Court recognizes the right of first refusal of the petitioner. As such. per se be brought within the purview of an option under the second paragraph of Article 1479.

Notwithstanding Mayfair’s intention. RULING: No. With regard to the impossibility of performance. Court held that Mayfair may not have the option to buy the property. (Promise to lease in return of the right to first refusal). Mayfair made known its interest to buy the property but only to the extent of the leased premises. the sale of the property to Equatorial is not valid. has no applicability in the instant case. the lessee shall be given 30-days exclusive option to purchase the same. The sale of the property should be rescinded because Mayfair has the right of first refusal.____________________________________________________________________________________ _ EQUATORIAL REALTY vs. MAYFAIR 264 scra 482 FACTS: Petitioner Carmelo and Bauermann Inc. Both Equatorial and Carmelo are in bad faith because they knew of the stipulation in the contract regarding the right of first refusal. the obligation or promise of each party is the consideration for that of the other. The consideration is built in the reciprocal obligation of the parties. . Carmelo sold the property to Equatorial. only Carmelo can be blamed for not including the entire property in the right of first refusal. not only the leased area but the entire property. Carmelo informed Mayfair that it will sell the property to Equatorial. The stipulation is a not an option contract but a right of first refusal and as such the requirement of a separate consideration for the option. leased its parcel of land with 2storey building to respondent Mayfair Theater Inc. ISSUE: Whether or not the sale of the property to Equatorial is valid. In reciprocal contract. They entered a contract which provides that if the lessor should desire to sell the leased premises.

Negros Occidental while being driven by a certain Zacarias Payba. and Nepales filed an action for specific performance with damages in the RTC of Himamaylan. The unit was a total wreck. Inc. The record shows.00 price payable by means of a Letter of Guaranty from the Development Bank of the Philippines (DBP). however.500. 1991 FACTS: Private respondent Alberto Nepales bought from the Norkis Distributors. As the price of the motorcycle later increased to P7. a brand new Yamaha Wonderbike motorcycle. It was registered under Alberto Nepales’ name in the Land Transportation Commission. CA G. Nepales paid the difference of P328 and demanded the delivery of the motorcycle. Negros Occidental. The motorcycle was delivered to a certain Julian Nepales who was allegedly the agent of Alberto Nepales but the latter denies it. 91029 February 7.R. The Branch Manager Avelino Labajo agreed to accept the P7. RULING: Affirming the decision of the Court of Appeals. and Nepales signed the same to conform to the terms of the sale. and upon the issuance of the official receipt. was returned. upon the registration of the unit in Nepales’ name. 1980. Hence. Kabankalan. ISSUE: Who should bear the risk of loss.828 in March. while the unit remained in Norkis' possession.GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ NORKIS DISTRIBUTORS vs. Negros Occidental Branch. hence. he executed a chattel mortgage on the motorcycle in favor of DBP. The Court of Appeals correctly ruled that the purpose of the execution of the sales . which was then on display in the Norkis showroom.00 a day until payment of the present value of the damaged vehicle. The motorcycle met an accident at Binalbagan. Norkis answered that the motorcycle had already been delivered to private respondent before the accident. Norkis failed to deliver the unit. DBP released the proceeds of private respondent's motorcycle loan to Norkis in the total sum of P7. he should bear the risk of loss or damage as owner of the unit. The lower court ruled in favor of Nepales.500. the things sold remain at seller's risk until the ownership thereof is transferred to the buyer." is applicable in the case at bar for there was neither an actual nor constructive delivery of the thing sold." Norkis concedes that there was no "actual" delivery of the vehicle. Labajo issued the Norkis Sales Invoice perfecting the contract of sale. and stored inside Norkis' warehouse. the Supreme Court reiterated that Article 1496 of the Civil Code which provides that "in the absence of an express assumption of risk by the buyer. but insists that there was constructive delivery of the unit upon the issuance of the sales invoice. and the Court of Appeals affirmed the decision but deleted the award of damages "in the amount of P50. and as security for the loan. credit was extended to Nepales. No. that Alberto and Julian Nepales presented the unit to DBP's Appraiser-Investigator Ernesto Arriesta at the DBP offices in Kabankalan.

thus prompting petitioner's Legal Department to send demand letters to respondent corporation. In the light of these principles. Considering however. Jr. we hold that the transaction between respondent and petitioner constituted an absolute sale. this was not done and so petitioner demanded payment for the such bags. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ INDUSTRIAL TEXTILES vs. but only to comply with the requirements of the DBP for processing private respondent's motorcycle loan. however. On the other hand. Panganiban agreed to use the plastic cement bags. The trial court sentencing the defendant to pay. respondent. petitioner maintained that it was respondent's obligation to return the bags to them.invoice and the registration of the vehicle in the name of Alberto Nepales with the Land Registration Commission was not to transfer the ownership and dominion over the motorcycle to him. President of respondent corporation. ISSUE: Whether or not respondent may be held liable for the plastic bags which were not actually used for packing cement as originally intended.. . denied full responsibility. third. Accordingly. the buyer cannot accept part and reject the rest of the goods since this falls outside the normal intent of the parties in the "on approval" situation. Respondent corporation's appeal was upheld by the appellate court when it reversed the trial court's decision and dismissed the case with costs against petitioner. if the purchaser desired to incorporate a stipulation securing to him the right of return. Respondent admitted its liability for the covered by the first purchase order. Finally. he should have done so at the time the contract was made. Consequently. Apparently. and fourth purchase orders. respondent is liable for the plastic bags delivered to it by petitioner. the conditions which allegedly govern the transaction according to respondent may not be considered. Thereafter. Petitioner delivered orders consecutively. RULING: Yes. a Vice-President of petitioner Industrial Textile Manufacturing Company of the Philippines asked Lauro Panganiban. petitioner was asked to take back the unused plastic bags. With respect to the second. that the bags were in the cement factory of respondent's supplier. if he would like to cooperate in an experiment to develop plastic cement bags. The circumstances in the case itself more than amply rebut the disputable presumption of delivery upon which Norkis anchors its defense to Nepales' action. other payments were made. The trial court correctly observed that such conditions should have been distinctly specified in the purchase orders and respondent's failure to do so is fatal to its cause. LPJ ENTERPRISE 217 SCRA 322 FACTS: Cesar Campos.

the provincial sheriff levied upon and sold in public auction the subject land that was previously sold to Palileo. Pursuant to this. 1993 FACTS: Spouses Castro sold a parcel of unregistered coconut land in Surigao del Norte to Manuelito Palileo. It was explained that this is because the purchaser of unregistered land at a sheriffs execution sale only steps into the shoes of the judgment debtor. and merely acquires the latter's interest in the property sold as of the time the property was levied upon. MANUELITO PALILEO G. the execution sale of the unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale. As such. a deed of final sale was also executed in their favor and both deeds was registered to the Registry of Deeds Under Act. Meanwhile. Article 1544 of the Civil Code has no application to land not registered under the Torrens system.GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ RADIOWEALTH FINANCE COMPANY vs. NO 83432 August 20. A certificate of sale was issued in favor of Radiowealth being the lone bidder and after the expiration of the period of redemption.R. a judgment over a civil case was rendered against Enrique Castro ordering him to pay 22 thousand to Radiowealth Finance Co. ISSUE: Whether or not the sale in public auction is valid. .3344 mere registration of a sale in one’s favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded. The sale is evidenced by a notarized deed of sale and Palileo exercised acts of ownership through his mother and also paid real estate taxes.

CABANA 29 SCRA 656 June 22. being the first to register the land creates right as against the first buyer. But since the subject land is an unregistered land. ISSUE: Whether or not. 1984 FACTS: Defendant Leodegaria Cabana sold a parcel of land with right of repurchase to defendants-spouses Teofilo Legaspi and Iluminada Cabana. deposited with the PNB. . as he was informed in the Office of the Register of Deed of Quezon. defendant sold the same property to plaintiff Abelardo Cruz and the latter was able to register it in his name. While the title was registered in plaintiff-appellant Cruz’s name. Upon request of Leodegaria Cabana. Said land was not repurchased and in the meantime. 1544 had been applied. A document stipulated that the land can be repurchased by the vendor within one year. Said title was forthwith. the sale in public auction is not valid. the second buyer Cruz. he knew of the sale of the land to defendants spouses Legaspi.RULING: No. If Art. However. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ CRUZ vs. a different rule should apply. notwithstanding his knowledge of the previous sale. the title of the land was lent to her in order to mortgage the property to the Philippine National Bank. however. Defendant Leodegaria Cabana sold the land by way of absolute sale to the defendants-spouses. the judgment should be rendered in favor of Radiowealth being the one who registered the land first. said defendants-spouses took possession of the land.

he must show that he acted in good faith throughout from the time of acquisition until the title is transferred to him by registration or failing registration. She claimed that she bought the subject land from Ildefonso. that when petitioner Cruz succeeded in registering the later sale in his favor. Ireneo Moya. They could not register the absolute deed of sale in their favor and obtain the corresponding transfer certificate of title because at that time the seller’s duplicate certificate was still with the bank. by delivery of possession. Subsequently. since such knowledge taints his prior registration with bad faith. he knew and he was informed of the prior sale in favor of respondents spouses. Jaime Nacion and Domingo .RULING: No. The knowledge of the first sale Abelardo Cruz had gained defeats his rights even if he is first to register the second sale. Respondent appellate court correctly held that such knowledge of a prior transfer of a registered property by a subsequent purchaser makes him a purchaser in bad faith and his knowledge of such transfer vitiates his title acquired. the great granddaughter of Ildefonso. This is the exacted by Article 1544 of the Civil Code. was issued by the Register of Deeds an Original Certificate of Title of the subject land. The controversy arose when petitioner Juanita Naval. by virtue of the latter instrument of conveyance which creates no right as against the first purchaser. All buyers occupied the portion they bought. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ NAVAL VS CA 483 SCRA 102 FACTS: Ildefonso A. Jaime Nacion. and paid the taxes due thereto. The second buyer must show continuing good faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration as provided by law. Galarosa. But there is no question and the lower courts so found conclusively as a matter of fact. The sale was recorded in the Registry of Property of the Registry of Deeds. built improvements thereon. Petitioner filed a complaint for recovery of possession against Bartolome Aguirre. Before the second buyer can obtain priority over the first. Naval sold a parcel of land to Gregorio B. Gregorio sold portions of the land to respondents Conrado Rodrigo Balilla. said respondent spouses were likewise the first to register the sale with the right of repurchase in their favor under the Register of Deeds. and spouses Ireneo and Ester Moya and Juanito Camalla. Conrado Balila.

still have superior right over the disputed property. that their seller did not own the property at the time of the sale. the appellate court reversed the decision of the RTC. in favor of plaintiff Juanita Naval.. to Adelfa Properties. since Ildefonso no longer owned the subject land at the time of the sale to the petitioner. the case was dismissed. Jaime Nacion and Ester Moya. the facts would nonetheless show that respondents and their predecessors-in-interest registered first the source of their ownership and possession.e. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ ADELFA PROPERTIES INC VS CA.e.” respondents are entitled to the ownership and possession of the subject land. the petition is DENIED. Finding the prior registration of the deed of sale between Ildefonso and Gregorio with the Register of Deeds as a constructive notice to subsequent buyers. Respondents thereafter elevated the case to the Court of Appeals. petitioners as subsequent buyers thereof did so at their peril. Even if we apply Article 1544. However. Conrado Balila. RULING: Respondents.” Since the properties in question are unregistered lands. i. without notice that some other person has a right to or interest in the property. even if petitioner argues that she purchased and registered the subject land in good faith and without knowledge of any adverse claim thereto. Jose and Dominador Jimenez sold their share consisting of 1/2 of said parcel of land. he had nothing to sell and the latter did not acquire any right to it. the 1969 deed of sale. Forferia Aguirre. potiorjure. were the registered co-owners of a parcel of land. Jose and Dominador Jimenez. and possessed the subject land at the earliest time. Supreme Court held in Rayos v.. WHEREFORE. in view of the foregoing. Salud Jimenez and their brothers. would not protect them if it turns out. was adjudicated to Jose and . specifically the eastern portion thereof. After trial. 111238 January 25. the MCTC rendered its decision. 1995 FACTS: Rosario Jimenez-Castaneda. In the case at bar. Applying the doctrine of “priority in time. No. Petitioner re-filed the complaint for recovery of possession with damages before the MCTC against Juanita Camalla. wherein the eastern portion of the subject lot. a “Confirmatory Extrajudicial Partition Agreement” was executed by the Jimenez’s.” Subsequently. Diosdado Balila. as it actually did in this case. Reyes “The issue of good faith or bad faith of the buyer is relevant only where the subject of the sale is registered land and the purchaser is buying the same from the registered owner whose title to the land is clean x x x in such case the purchaser who relies on the clean title of the registered owner is protected if he is a purchaser in good faith for value. ROSARIO JIMENEZ CASTANEDA AND SALUD JIMENEZ G. i.R. Their claim of having bought the land in good faith. priority in rights” or “prius tempore. ISSUE: Who have the superior right over the parcel of land sold.Nacion.

praying. Before Adelfa Properties could make payment. whereas in a contract to sell. Option Contract or Contract to Sell. among others. Rosario and Salud Jimenez filed Civil Case in the RTC for annulment of contract with damages. judging from the subsequent acts of the parties which will hereinafter be discussed. Hence. Adelfa Properties was willing to pay the purchase price. RULING: The alleged option contract is a contract to sell. all the words not just a particular word or two. Jose and Dominador Jimenez. The distinction between the two is important for in contract of sale. and that the annotation of the option contract on TCT be cancelled. and words in context not words standing alone. the title of a contract does not necessarily determine its true nature. as may be gleaned from Adelfa Properties’ letter wherein it informed the vendors that it “is now ready and willing to pay you simultaneously with the execution of the corresponding deed of absolute sale. it received summons. In addition. ISSUE: Whether or not the contract is a Contract of Sale. that Adelfa Properties be ordered to return the owner’s duplicate certificate of title. Adelfa Properties expressed interest in buying the western portion of the property from Rosario and Salud. that the exclusive option to purchase be declared null and void. it is undeniable that the intention of the parties was to enter into a contract to sell. In a contract of sale. a deed of sale is considered absolute in nature where there is neither a stipulation in the deed that title to the property sold is reserved in the seller until the full payment of the price. Jimenez’ counsel sent a letter to Adelfa Properties enclosing therein a check for representing the refund of 50% of the option money paid under the exclusive option to purchase.” The important task in contract interpretation is always the ascertainment of the intention of the contracting parties and that task is to be discharged by looking to the words they used to project that intention in their contract. together with a copy of a complaint filed by the nephews and nieces of Rosario and Salud against the latter. title is retained by the vendor until the full payment of the price Thus.Dominador Jimenez. Rosario and Salud sent Francisca Jimenez to see Atty. This was ignored by Rosario and Salud. in his capacity as Adelfa Properties’ counsel. Moreover. and Adelfa Properties in the RTC. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales . whereas in a contract to sell. the fact that the document under discussions entitled “Exclusive Option to Purchase” is not controlling where the text thereof shows that it is a contract to sell. for annulment of the deed of sale in favor of Household Corporation and recovery of ownership of the property. nor one giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded. by agreement the ownership is reserved in the vendor and is not to pass until the full payment of the price. and to inform the latter that they were cancelling the transaction. the title passes to the vendee upon the delivery of the thing sold. rather than a contract of sale. Thereafter. and he requested that the corresponding deed of absolute sale be executed. while the western portion was allocated to Rosario and Salud Jimenez. That the parties really intended to execute a contract to sell is bolstered by the fact that the deed of absolute sale would have been issued only upon the payment of the balance of the purchase price. Bernardo.

where such rights are expressly provided for. RULING: It is a contract to sell. that Myers Company. whereby the former sold the same to the latter this price was paid upon the execution of the said contract and the parties agreed that the balance was to be paid in monthly installments until the same was fully paid.. not of sale. Myers duly appealed to this Court. Maritime failed to pay. 1978 FACTS: Myers Building Co. refuse conveyance and retain the sums or installments already received. to extrajudicially terminate the operation of the contract. L-25885 November 16. became entitled to terminate the contract.. contract of sale was not perfected. cannot cancel the contract entered into by them for the conditional sale of the properties in question extrajudicially and (2) that it had not failed to pay the monthly installments due under the contract and. Inc... the building from its lessee.R. ISSUE: Whether or not the contract between the parties is of a contract of sale or contract to sell. . committed a breach of the sale contract. from and after the breach. The trial court found the position of Schedler indefensible. and collect the rentals of. now contends (1) that the Myers Building Co. Myers reserved the right to cancel contract in case of Maritime’s failure to pay installments. is not guilty of having violated the same. The distinction between contracts of sale and contract to sell with reserved title has been recognized by this Court in repeated decisions upholding the power of promisors under contracts to sell in case of failure of the other party to complete payment. owner of three parcels of land. Inc.. and that Maritime. hence. together with the improvements thereon. as well as to repossess.. Myers cancelled the contract. When payment was not made. to forfeit the installments paid. as in this case. entered into a contract entitled "Deed of Conditional Sale" in favor of Maritime Building Co. Luzon Brokerage Co.____________________________________________________________________________________ _ LUZON BROKERAGE VS MARITIME G. by its failure to pay. therefore. Inc. No. The Maritime Building Co. Inc. .

the rescission of the deed of sale. The trial court ruled in favor of the respondent and thus. the Supreme Court ruled that Rosa Diana committed a breach of contract by submitting a building plan to Ayala complying with the DR and submitting a different building plan to the building administrator of .” was being constructed. the vendees sold the lot to the respondent. The appellate court upheld the RD’s ruling stating that the case before the trial court is a personal action for the cause of action arises from the alleged violation of the DR. RULING: Yes. Rosa Diana was able to complete the construction of “The Peak. While the building. Rosa Diana submitted a building plan to Ayala complying with the DR but it also passed a different building plan to the building administrator of Makati. Ayala discriminately chose which obligor would be made to follow certain conditions. Ayala filed before the Register of Deeds (RD) of Makati a cause of annotation lis pendens. The deed of sale had some encumbrances contained in the Special Conditions of Sale (SCS) and Deed of Restrictions (DR).GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ AYALA vs. which did not comply with the stipulations in the DR. The stipulations in the SCS are: a building proposal must be submitted to Ayala which must be in accordance with the DR.” Undeterred. Ayala filed a case praying that: 1) Rosa Diana. which should be followed by the vendees. ISSUE: Whether or not Rosa Diana committed a breach of contract. However. the CA affirmed the lower court’s ruling. or 2) on the alternative. The trial court sustained the respondent’s point saying that Ayala was guilty of abandonment and/or estoppels due to its failure to enforce the terms of the DR a n d S C S against Sy and Kieng. which is not fair and legal. Respondent Company agreed to abode by the SCS and the DR stipulations. However. On appeal. Hence. the construction of the building must be completed. failed to build a building but nonetheless with the permission of Ayala. “The Peak. and that there will be no resale of the lot. ROSA DIANA REALTY 346 SCRA 663 FACTS: Appellant-petitioner entered into a transaction with Manuel Sy and Sy Ka Kieng where former sold a lot. be compelled to comply with the DR and build the building in accordance with the building plan submitted to Ayala. Sy and Kieng. RD refused to grant Ayala such registration for in the lower court. Rosa Diana Realty. the Land Registration Authority (LRA) reversed RD’s ruling. The DR specified the limits in height and floor area of the building to be constructed. the case is of personal action for a specific performance and/or rescission. this petition. Prior to the construction.

Lucila Dableo delivered to them the reconstituted owner's duplicate. ISSUE: Whether or not the sale to petitioner Astorgas or the sale of respondent Monaño should prevail. It was registered only in 1968. Thus. CA 133 SCRA 748 FACTS: Lucila Dableo. they must complied with in good faith. the trial court set aside its decision and ordered Montaño to implead Dableo. good customs. the ownership shall be transferred to the person who may have first taken possession thereof in good faith. ordered the Astorgas and Dableo to vacate. RULING: The sale by Lucila Dableo to the Astorga spouses should prevail because the Astorga spouses acquired ownership over the disputed lot since they were the first to register in good faith their sale in the registry of property. Montaño filed an action for forcible entry in the city court gainst the Astorga spouses. The complaint was amended. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ ASTORGA vs. the spouses Concepcion Abaluyan and Froilan Montaño allegedly bought from the spouses Lucila Dableo and Vicente Esperas Montaño was a compadre of Lucila. Montaño appealed to the Court of First Instance which affirmed the dismissal. a widow. 1957. or more than eleven years after it was notarized. Dableo was declared in default. which did not comply with the stipulations in the DR. public order or public policy. On the other hand. He dismissed the case because he found that the Astorga spouses had prior possession of the lot and that Montaño never had possession thereof. the assailed decision of the Court of Appeals is reversed and set aside. The Astorgas appealed to the Court of Appeals. After hearing. City Judge concluded that the Astorga spouses are the owners of lot. Under article 1544 of the Civil Code Article 1544: If the same things should have been sold to different vendees. Contractual Obligations between parties have the force of law between them and absent any allegation that the same are contrary to law. The delay was not explained. morals. The Astorga spouses took possession of the lot. if it should be movable property. The deed was notarized only on February 21. Montaño was placed in possession of the lot. sold a lot to the spouses Concordia Astorga and Francisco Astorga The sale was not registered immediately because the owner's duplicate was in Lucila's possession was lost.Makati. On motion for reconsideration. Should it be . The sale to the Astorgas was registered and was issued to them.

he still can’t find a place to move. Poncio. Both parties settled the arrears of the mortgaged. Atty. Petitioner’s claim was unenforceable for lack of written document. Petitioner only have P200. alleging that the sale between Poncio and Infante be declared null and void. Which Poncio. to which he cannot withdraw even if he goes to jail. With the information that the land was not yet registered. Atty. to the person who presents the oldest title.immovable property. Subsequently. Petitioner filed a second complaint. Garcia in favor of the petitioner prepared an adverse claim over the property. Petitioner and another Respondent (Infante) offered to buy the land owned by Poncio. The lot was fenced by Infante. Trial Court ruled that the second sale was null and void. the said adverse claim was noted in the Transfer Certificate of Title. Poncio had told Carbonell that the former can no longer pursue with the sale for he had given the land to Infante. the ownership shall pertain to the person who in good faith was first in possession. Respondent’s allegation was that. admittedly sold the land to Infante when she improved her offer. and in the absence thereof. However. GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ Carbonel vs CA 89 SCRA 99 FACTS: Petitioner Carbonell lives in an adjoining lot owned by Respondent Poncio. Jose Garcia advised her to present an adverse claim over the land in question with the Office of the Register of Deeds of Rizal. that he shall pay rent in favor of the petitioner. after . in his failure to pay the mortgaged agreed for the petitioner to buy the land including his house on the condition that from the purchase price would come the money to be paid to the bank. the ownership shall belong to the person acquiring it who in good faith recorded it in the Registry of Property. However. Whereby upon registration of the same by Infante. Poncio may still occupy the land sold by him to the petitioner and if after a year. Respondent then withdrew the deficit amount and was reimbursed by Carbonell the following day. provided there is good faith. Should there be no inscription. The parties executed a document stipulating that. latter’s lot is mortgaged in favor of Republic Savings Bank.00 as per respondent’s information that he only owes the same to the bank.

GEM ROSE ORTIZ ALLAN Case Digest on Law on Sales ____________________________________________________________________________________ _ Campillo vs CA G. Should there be no inscription. De Vera’s 3 parcels of land. petitioner has the superior right over the property.R. On the other hand. which is decisive of this case. CA ruled in favor of petitioner. De Vera sold the lands to Simplicio Santos. ISSUE: Who has better right over the property: Santos who first bought it without registering it or Campillo who subsequently purchased it at a public auction and have it registered under his name. and. Campillo acquired the land and he was able to have the lands be registered under his name. provided there is good faith. Article 1544. Trial Court reversed it’s decision ruling that the claim of the respondents were greater than that of the petitioner. Carbonell's good faith did not cease after Poncio told her of his second sale of the same lot to Infante. de Vera was indebted to Campillo. in the absence thereof. No. she was the only buyer thereof and the title of Poncio was still in his name solely encumbered by bank mortgage duly annotated thereon. alleging that it has a superior right over the respondent. When Carbonell bought the lot from recites: If the same thing should have been sold to different vendees. 56483 May 29. the ownership shall be transferred to the person who may have first taken possession thereof in good faith. Her good faith subsisted and continued to exist when she recorded her adverse claim prior to the registration of Infantes's deed of sale. the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. the ownership shall pertain to the person who in good faith was first in the possession. Manila. RULING: Yes. After a motion for reconsideration CA reversed its decision. Santos however did not register the sale in the Registry of Deeds. Should it be immovable property. New Civil Code. Hence. Carbonell's prior purchase of the land was made in good faith. to the person who presents the oldest title. 1984 FACTS: Tomas de Vera was the owner of two parcels of land in Tondo. if it should movable property. including those sold to Santos were levied in 1962 in favor of Campillo. which means that the land was still under de Vera’s name. Campillo obtained a judgment for sum of money. ISSUE: Whether or not Petitioner has the superior right over the property. . Carbonell was not aware and she could not have been aware of any sale of Infante as there was no such sale to Infante then.

RULING: Campillo has the right over the said properties. Campillo is a purchaser in good faith as he was not aware of any previous sale for Santos never caused the annotation of the sale. This must be so in order to preserve the efficacy and conclusiveness of the certificate of title which is sanctified under our Torrens system of land registration. Santos purchase of the two parcels of land may be valid but it is not enforceable against third persons for he failed to have it registered. . It is settled in this jurisdiction that a sale of real estate. becomes legally effective against third persons only from the date of its registration. The purchaser Campillo in the execution sale of the registered land in suit. acquires such right and interest as appears in the certificate of title unaffected by prior lien or encumbrances not noted therein. whether made as a result of a private transaction or of a foreclosure or execution sale.