Ang Yu asuncion vs CA Facts: Ang Yu Asuncion and Keh Tiong, et al.

were lessees of residential and commercial spaces owned by defendants described as Nos. 630-638 Ongpin Street, Binondo, Manila; that they have occupied said spaces since 1935 and have been religiously paying the rental and complying with all the conditions of the lease contract; that on several occasions before October 9, 1986, defendants informed plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same; that during the negotiations, Bobby Cu Unjieng offered a price of P6-million while plaintiffs made a counter offer of P5-million; that plaintiffs thereafter asked the defendants to put their offer in writing to which request defendants acceded; that in reply to defendant's letter, plaintiffs wrote them on October 24, 1986 asking that they specify the terms and conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent another letter dated January 28, 1987 with the same request; that since defendants failed to specify the terms and conditions of the offer to sell and because of information received that defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them. RTC: Defendants' offer to sell was never accepted by the plaintiffs for the reason that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all. Nonetheless, the lower court ruled that should the defendants subsequently offer their property for sale at a price of P11-million or below, plaintiffs will have the right of first refusal. SC (1st appeal): There was no meeting of the minds between the parties concerning the sale of the property. Absent such requirement, the claim for specific performance will not lie. Appellants' demand for actual, moral and exemplary damages will likewise fail as there exists no justifiable ground for its award. Summary judgment for defendants was properly granted. Courts may render summary judgment when there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law (Garcia vs. Court of Appeals, 176 SCRA 815). All requisites obtaining, the decision of the court a quo is legally justifiable. On November 15, 1990, while CA-G.R. CV No. 21123 was pending consideration by this Court, the Cu Unjieng spouses executed a Deed of Sale (Annex D, Petition) transferring the property in question to herein petitioner Buen Realty and Development Corporation for 15 million pesos. As the new owners, Buen Realty wrote a letter to Ang Yu Asuncion asking to vacate the premises. Ang Yu in return refused and instead filed for a Writ of Execution of the order recognizing its Right of First Refusal, which the RTC granted. The CA, on appeal to it by private respondent, set aside and declared without force and effect the above questioned orders of the RTC hence this petition for review on certiorari Issues: WON the Writ of execution must be issued. WON the Right of First Refusal gives rise to any other kind of right. Held: We affirm the decision of the appellate court. Petition denied. The questioned writ of execution is in variance with the decision of the trial court as modified by this Court. As already stated, there was nothing in said decision 13 that decreed the execution of a deed of sale between the Cu Unjiengs and respondent lessees, or the fixing of the price of the sale, or the cancellation of title in the name of petitioner. Even on the premise that such right of first refusal has been decreed under a final judgment, like here, its breach cannot justify correspondingly an issuance of a writ of execution under a judgment that merely recognizes its existence, nor would it sanction an action for specific performance without thereby negating the indispensable element of consensuality in the perfection of contracts. 11 It is not to say, however, that the right of first refusal would be inconsequential for, such as already intimated above, an unjustified disregard thereof, given, for instance, the circumstances expressed in Article 19 12 of the Civil Code, can warrant a recovery for damages.

The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a "right of first refusal" in favor of petitioners. The consequence of such a declaration entails no more than what has heretofore been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private respondents to honor the right of first refusal, the remedy is not a writ of execution on the judgment, since there is none to execute, but an action for damages in a proper forum for the purpose. Daroy vs Atty. Abecia Facts: (1971) Atty. Abecia was the counsel of Daroy in an ejectment case in which they won. To satisfy the judgement of damages, one of the properties of their opposition was sold by the sheriff at an auction to Daroy as the highest bidder. (1984) Daroy filed a complaint against Atty. Abecia for falsification for allagedly forging his signature in order to transfer title to said property first to Jose Gangay and subsequently to Atty. Abcias wife, Nena Abecia. He contended that he only knew of such transfer on that year. Moreover, he filed a disbarment proceeding against Atty. Abecia for unethical conduct. Issue: WON the transfer was valid. WON the transfer of the property to Atty. Abecia a violation of the prohibition set forth in Art. 1491 of the NCC. Held: Evidence that Daroy has known of such transfer since 1971: 1. In the report of the sheriff who placed them in the actual possession of the land he had acquired through action, the sheriff referred to Nena Abecia as assignee of Daroy. 2. In a criminal action filed by the oppositors of Daroy in the ejectment case, Nena Abecia was impleaded as co-defendant on her capacity as assignee of Daroy. All these fact were never rebutted by Daroy. The parties were mistaken in thinking that respondent could not validly acquire the land. In Guevara v. Calalang, on facts similar to those in this case, we held that the prohibition in Art. 1491 does not apply to the sale of a parcel of land, acquired by a client to satisfy a judgment in his favor, to his attorney as long as the property was not the subject of the litigation. For indeed, while judges, prosecuting attorneys, and others connected with the administration of justice are prohibited from acquiring property or rights in litigation or levied upon in execution, the prohibition with respect to attorneys in the case extends only to property and rights which may be the object of any litigation in which they may take part by virtue of their profession. The point is, the parties in this case thought the transfer of the land to respondent Abecia was prohibited and so they contrived a way whereby the land would be sold to Jose Gangay, whose wife Anita is the sister of Mrs. Nena Abecia, and then Gangay would sell the land to Mrs. Abecia. As Jose Gangay stated in his affidavit of March 6, 1985. The sale of the land to Gangay may be fictitious and, therefore, void, but that complainant Regalado Daroy intended to convey the land ultimately to respondent Esteban Abecia appears to be the case. Francisco vs Herrera Facts: Eligio Herrera, Sr., the father of respondent, was the owner of two parcels of land, one consisting of 500 sq. m. and another consisting of 451 sq. m., covered by Tax Declaration (TD) Nos. 01-00495 and 01-00497, respectively. Both were located at Barangay San Andres, Cainta, Rizal.3

On January 3, 1991, petitioner bought from said landowner the first parcel, covered by TD No. 01-00495, for the price of P1,000,000, paid in installments from November 30, 1990 to August 10, 1991. On March 12, 1991, petitioner bought the second parcel covered by TD No. 01-00497, for P750,000. At first, the children of Eligio thought that the consideration paid for the lands were not sufficient, thus, they asked Francisco for an increase but Francisco refused. Then, they asserted that the contract of sale was void since their father was already suffering senile dementia when he sold the land to Francisco. Francisco contended that the contract was not void but rather voidable, susceptible of prescription. Issue: Won the sale is void or voidable. Held: Petition granted. The contract was voidable and thus susceptible of ratification. It was established that the vendor Eligio, Sr. entered into an agreement with petitioner, but that the formers capacity to consent was vitiated by senile dementia. Hence, we must rule that the assailed contracts are not void or inexistent per se; rather, these are contracts that are valid and binding unless annulled through a proper action filed in court seasonably. An annullable contract may be rendered perfectly valid by ratification, which can be express or implied. Implied ratification may take the form of accepting and retaining the benefits of a contract. 13 This is what happened in this case. Respondents contention that he merely received payments on behalf of his father merely to avoid their misuse and that he did not intend to concur with the contracts is unconvincing. If he was not agreeable with the contracts, he could have prevented petitioner from delivering the payments, or if this was impossible, he could have immediately instituted the action for reconveyance and have the payments consigned with the court. None of these happened. As found by the trial court and the Court of Appeals, upon learning of the sale, respondent negotiated for the increase of the purchase price while receiving the installment payments. It was only when respondent failed to convince petitioner to increase the price that the former instituted the complaint for reconveyance of the properties. Clearly, respondent was agreeable to the contracts, only he wanted to get more. Further, there is no showing that respondent returned the payments or made an offer to do so. This bolsters the view that indeed there was ratification. One cannot negotiate for an increase in the price in one breath and in the same breath contend that the contract of sale is void. Nor can we find for respondents argument that the contracts were void as Eligio, Sr., could not sell the lots in question as one of the properties had already been sold to him, while the other was the subject of a coownership among the heirs of the deceased wife of Eligio, Sr. Note that it was found by both the trial court and the Court of Appeals that Eligio, Sr., was the "declared owner" of said lots. This finding is conclusive on us. As declared owner of said parcels of land, it follows that Eligio, Sr., had the right to transfer the ownership thereof under the principle of jus disponendi. Dao Heng Bank Inc. (now BDO0 vs Spouses Laigo; Gr. No. 173856. Nov. 20, 2008. Facts: Spouses Laigo obtained a loan from Dao Heng Bank Inc. As a security 3 real estate mortgages were executed. As of 2000, the Laigos failed to pay on time so as a remedy, they verbally agreed to cede one of the mortgaged property to Dao Heng by way of dacion en pago (dation in payment). In August 2000, Dao Heng, thru a letter informed the Laigos that there total obligation amounts to 10.8 million. the Laigos took no action so their property was foreclosed. They now contend that the foreclosure was illegal since there was a verbal agreement for dacion en pago. Dao Heng however contends that the dacion en pago falls under the statute of fraud therefore it is not enforceable. The Laigos counter this by stating that the dacion is an exception since it is no longer executory but had undergone partial performance when the titles to the property were delivered to Dao Heng. Issue: 1. Is the dacion en pago covered by the Statues of Fraud?

2. Is the foreclosure valid? Held: 1. There is no showing that the dacion en pago has been accepted by both parties. Since there is no mutual consent, there is no dacion Dacion en pago as a mode of extinguishing an existing obligation partakes of the nature of sale whereby property is alienated to the creditor in satisfaction of a debt in money. It is an objective novation of the obligation, hence, common consent of the parties is required in order to extinguish the obligation. Being likened to that of a contract of sale, dacion en pago is governed by the law on sales. The partial execution of a contract of sale takes the transaction out of the provisions of the Statute of Frauds so long as the essential requisites of consent of the contracting parties, object and cause of the obligation concur and are clearly established to be present. In the case at bar, the titles to the property were delivered as a security for the mortgage. 2. The foreclosure is valid. It is the proper remedy for securing payment for a mortgage. The law clearly provides that the debtor of a thing cannot compel the creditor to receive a different one, although the latter may be of the same value, or more valuable than that which is due (Article 1244, New Civil Code). The obligee is entitled to demand fulfillment of the obligation or performance as stipulated. The power to decide whether to foreclose on the mortgage is the sole prerogative of the mortgagee Engineering and Machinery Corp. vs CA; GR no. 52267; January 24, 1996 Facts: Engineering and Machinery Corp and Ponciano Ameda undertook a contract wherein the former will install air-conditioning at a price of 210K. It was completed in 1963. Later, Ponciano sold the building but retrieved it back in 1971, and then learned of defect in the air-conditioning system. Ponciano filed an action for damages against the installers since it could not maintain the desired temperature therefore falling short of agreed specifications. Engineering maintained that under Arts. 1566 and 1577, the prescriptive period for a vendors responsibility for hidden defects has set in. Ponciano maintains however that what was undertaken was not a contract of sale but a contract for a piece of work under Art 1713. Issues: 1. Is the installment of air-conditioning a contract of sale or a contract for a piece of work? 2. Is the action now for warranty against hidden defects or for a breach of contract? Held: 1. It is a contract for a piece of work. Clearly, the contract in question is one for a piece of work. It is not petitioners line of business to manufacture air-conditioning systems to be sold "off-the-shelf." 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. Naturally, the price or compensation for the system manufactured and installed will depend greatly on the particular plans and specifications agreed upon with the customers. 2. It is for a breach of contract. A scrutiny of the complaint filed in the trial court reveals that the original action is not really for enforcement of the warranties against hidden defects, but one for breach of the contract itself. It alleged that the petitioner, "in the installation of the air-conditioning system did not comply with the specifications provided" in the written agreement between the parties, "and an evaluation of the air-conditioning system as installed by the defendant showed the numerous defects and violations of the specifications of the agreement. The governing law is Article 1715. However, inasmuch as this provision does not contain a specific prescriptive period, the general law on prescription, which is Article 1144 of the Civil Code, will apply. Said provision states, inter alia, that actions "upon a written contract" prescribe in ten (10) years. Since the governing contract was executed on September 10, 1962 and the complaint was filed on May 8, 1971, it is clear that the action has not prescribed.

Coronel et al vs CA GR no. 103577. Oct. 7, 1996 Facts: Ramona Alcatraz and Romulo Coronel had an agreement for a sale of land worth 1.24 million. Ramona gave a downpayment of 50k with the condition that upon receipt of the downpayment, the Coronels would cause the transfer of Ramonas name over the TCT of the land. The title of the land was in the name of Romulos father. Furthermore, upon transfer of Ramonas name, the Coronels would execute a deed of absolute sale in favor of Ramona, and that Ramona would pay the remaining balance of 1.9 million. The Coronels did transfer Ramonas name upon receipt of the downpayment but the Coronels later sold the land to Catalina Mabanag for the price of 1.5 million. The Coronels then rescinded the earlier contract of sale. Ramona filed specific performance against Coronel and caused the annotation of lis pendens at the back of TCT. Issues: 1. Is the agreement between Coronel and Ramona as evidenced by receipt of downpayment a contract to sell or contract of sale? 2. Is the contract of sale between Coronel and Catalina valid? Held: 1. The contract entered upon by Coronel and Ramona is a contract of sale and not a contract to sell. Check 1305, 1458, and 1479. The agreement could not have been a contract to sell because the sellers herein made no express reservation of ownership or title to the subject parcel of land. Furthermore, the circumstance which prevented the parties from entering into an absolute contract of sale pertained to the sellers themselves (the certificate of title was not in their names) and not the full payment of the purchase price. 2. The sale between Coronel and Catalina is void. Check Art. 1544- double sale. The governing principle is prius tempore, potior jure (first in time, stronger in right). Knowledge by the first buyer of the second sale cannot defeat the first buyers rights except when the second buyer first registers in good faith the second sale. Conversely, knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register, since knowledge taints his registration with bad faith. In a case of double sale, what finds relevance and materiality is not whether or not the second buyer in good faith but whether or not said second buyer registers such second sale in good faith, that is, without knowledge of any defect in the title of the property sold. Mabanag could not have in good faith, registered the sale entered into on February 18, 1985 because as early as February 22, 1985, a notice of lis pendens had been annotated on the transfer certificate of title in the names of petitioners Sps. Antonio vs CA Facts: Gilda Corpuz and Judie Corpuz are legally married spouses. They owned a parcel of land located in Koronadal, South Cotabato. The Corpuz couple sold of their land to spouses Antonio, who built their house on said half part of the property. When Gilda went to Manila to work, Judie, without the consent of his wife, sold the remaining half of their original property to Luzviminda Guiang by virtue of s Deed of Transfer of Rights. While in Manila, Gilda learned of the sale and gave her outright disapproval; still Judie went on with the sale. Gilda, upon coming back to Cotabato filed a case for declaration of nullity of the contract of sale. The buyer alleged that the sale was not void, but merely voidable. Issue: Whether the sale of the conjugal property without the consent of one of the spouses is void or voidable. Held: Void Said contract properly falls within the ambit of Article 124 of the Family Code, which was correctly applied by the lower court:

Art. 124. The administration and enjoyment of the conjugal partnerhip properly shall belong to both spouses jointly. In case of disgreement, the husband's decision shall prevail, subject recourse to the court by the wife for proper remedy, which must be availed of within five years from the date of the contract implementing such decision. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include the powers of disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. In sum, the nullity of the contract of sale is premised on the absence of private respondent's consent. To constitute a valid contract, the Civil Code requires the concurrence of the following elements: (1) cause, (2) object, and (3) consent, the last element being indubitably absent in the case at bar. Olaguer vs Purungganan Facts: Eduardo Olaguer is the Executive Vice-president of Bussinesday and President of Businessday Information Systems and Services and of Businessday Marketing Corporation. Moreover, he owned President of Businessday Information Systems and Services and of Businessday Marketing Corporation. Being an active Marcos oppositionist, he was afraid that in the event that he will be caught, detained, or forced to go underground, he will left his family without any means of support. He executed special powers of attorney, assigning Locsin and Joaquin as his attorneys-in-fact, and granted them the authority to sell and/or transfer his shares in Bussinessday in his absence. When Olaguer was arrested and detained for allegedly committing arson, LOcsin ordered Purungganan to cancel Olaguers shares and transfer those to his, Locsins, name. Locsin even sent his secretary, Fernando to Camp Crame to borrow from Olaguer the stock certificate and returned it with the word cancel written on it. During Olaguers detention, from 1980 to 1982, Businessday made regular deposits, each amounting to P10,000.00, to the Metropolitan Bank and Trust Company accounts of Manuel and Genaro Pantig, Olaguers inlaws. The deposits were made on every 15th and 30th of the month for the use of Olaguers family. When Olaguer was released, he questioned the transfer of his shares of stock to Locsin, alleging that the transfer was voidable since it was prohibited under the Civil Code. Issue: Whether the transfer of the shares of stocks of Olaguer to Locsins name was valid. Held: The transfer was valid. ART. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another: xxxx (2) Agents, the property whose administration or sale may have been entrusted to them, unless the consent of the principal has been given; x x x.

It is, indeed, a familiar and universally recognized doctrine that a person who undertakes to act as agent for another cannot be permitted to deal in the agency matter on his own account and for his own benefit without the consent of his principal, freely given, with full knowledge of every detail known to the agent which might affect the transaction. The prohibition against agents purchasing property in their hands for sale or management is, however, clearly, not absolute. It does not apply where the principal consents to the sale of the property in the hands of the agent or administrator. In the present case, the parties have conflicting allegations. While respondent Locsin averred that petitioner had permitted him to purchase petitioners shares, petitioner vehemently denies having known of the transaction. However, records show that petitioners position is less credible than that taken by respondent Locsin given petitioners contemporaneous and subsequent acts. In 1980, when Fernando returned a stock certificate she borrowed from the petitioner, it was marked "cancelled." Although the petitioner alleged that he was furious when he saw the word cancelled, he had not demanded the issuance of a new certificate in his name. Instead of having been put on his guard, petitioner remained silent over this obvious red flag and continued receiving, through his wife, payments which totalled to the aggregate amount of the shares of stock valued at par. When the payments stopped, no demand was made by either petitioner or his wife for further payments. From the foregoing, it is clear that petitioner knew of the transaction, agreed to the purchase price of P600,000.00 for the shares of stock, and had in fact facilitated the implementation of the terms of the payment by providing respondent Locsin, through petitioners wife, with the information on the bank accounts of his inlaws. Petitioners wife and his son even provided receipts for the payments that were made to them by respondent Locsin, a practice that bespeaks of an onerous transaction and not an act of gratuity. Ching vs Goyanko Facts: Joseph Goyanko and Epifania dela Cruz were lawfully married and had children - respondents Joseph, Jr., Evelyn, Jerry, Imelda, Julius, Mary Ellen and Jess, all surnamed Goyanko. The spouses acquired a property in Cebu but since they were Chinese, the property was in the name of their aunt Sulpicia. On May 1, 1993, Sulpicia executed a deed of sale over the property in favor of respondents father Goyanko. In turn, Goyanko executed on October 12, 1993 a deed of sale over the property in favor of his common-law-wifeherein petitioner Maria B. Ching. Transfer Certificate of Title (TCT) No. 138405 was thus issued in petitioners name. When Joseph died, his children found out that the property was already in the name of Ching, they filed a complaint for recovery of property and damages against petitioner, praying for the nullification of the deed of sale and of TCT No. 138405 and the issuance of a new one in favor of their father Goyanko. Issue: Whether the transfer of the property to Maria Ching, concudine of Joseph Goyanko, was valid. Held: NO, it was void. The proscription against sale of property between spouses applies even to common law relationships. The SC found that the contract of sale was null and void for being contrary to morals and public policy. The sale was made by a husband in favor of a concubine after he had abandoned his family and left the conjugal home where his wife and children lived and from whence they derived their support. The sale was subversive of the stability of the family, a basic social institution which public policy cherishes and protects.

Additionally, the law emphatically prohibits the spouses from selling property to each other subject to certain exceptions. Similarly, donations between spouses during marriage are prohibited. And this is so because if transfers or conveyances between spouses were allowed during marriage, that would destroy the system of conjugal partnership, a basic policy in civil law. It was also designed to prevent the exercise of undue influence by one spouse over the other, as well as to protect the institution of marriage, which is the cornerstone of family law. The prohibitions apply to a couple living as husband and wife without benefit of marriage, otherwise, the condition of those who incurred guilt would turn out to be better than those in legal union. Those provisions are dictated by public interest and their criterion must be imposed upon the will of the parties.