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1 BUENAVENTURA v CA (Sale is consensual
Defendant spouses Leonardo Joaquin and Feliciana Landrito are the parents of plaintiffs as well as the defendants herein all surnamed Joaquin. The married Joaquin children are joined in this action by their respective spouses. Sought to be declared null and void ab initio are certain deeds of sale of real property executed by defendant parents in favor of their co-defendant children. Petitioners claim that there was no actual valid consideration for the deeds of sale over the properties in litis, that assuming that there was a consideration in the sums reflected in the questioned deeds, the properties are more than three-fold times more valuable than the measly sums appearing therein, that the purported sale of the properties in lites was the result of a deliberate conspiracy designed to unjustly deprive the rest of the compulsory heirs of their legitime. The trial court and the court of appeals ruled in favor of the respondents. The supreme court affirmed the decision of the lower courts. Petitioners failed to show legal right to the properties. Petitioners' right to their parents' properties is merely inchoate or contingent and vests only upon their parents' death. While still living, the parents of the petitioners are free to dispose of their properties. Petitioners also assert that the respondents did not actually paid the prices stated in the deed. The SC found such argument untenable. A contract of sale is not a real contract, but a consensual contract. as a consensual contract, a contract o sale becomes a binding and valid contract upon the meeting of the minds as to price. If there is a meeting of the minds of the parties as the price, the contract of sale is valid, despite the manner of payment or even the breach of that manner of payment. If the real price is not stated in the contract, the contract should be reformed. If there is no meeting of minds of the parties as to price, because the price stipulated in the contract is simulated, then the contract is void. 2 ONG v CA (Bilateral and Reciprocal Facts: A) B) C) D) E) F) G) Issue: W/N the contract may be rescinded. Held: A) B) C) The contract entered into was a Contract to Sell and not a contract of sale What is applicable is Art 1191 and not 1383. In the former, rescission is a principal action which is based on breach, while in the latter, it is a subsidiary action. Reciprocal obligations are those which arise from the same cause, and in which each party is a debtor and a creditor of the other, such that the obligation of one is dependent upon the obligation of the other. They are to be performed simultaneously such that the performance of one is conditioned upon the simultaneous fulfillment of the other There was no novation in this case. Novation is not presumed. Ong mere;y sought to be “reimbursed”. NO novation. Payment of the purchase price is a positive suspensive condition Ong’s failure to pay brought about a situation which prevented the obligation of the Robles spouses to convey title from acquiring an obligatory force. Ong was in bad faith when he built the improvements Beron, Calinisan, Delgado, Del Socorro, Fernandez Legaspi, Lopez, Mendiola, Rivas, Sarenas Ong and the Robles spouses entered into an “Agreement of Purchase and Sale” on 2 parcels of land in Quezon for the sum of P2M. The parcels of land included a rice mill and a piggery. A portion of the P2M debt was already paid. To answer for his balance, Ong issued 4 post dates checks. All bounced. A portion of the of the debt was also supposed to be paid directly to BPI, the Robles’ bank, to answer for the Robles’ loan. When the bank threatened to foreclose the mortgage, the Robles’ sold 3 transformers located on the lands. The Robles spouses now want to rescind the contract of sale. RTC and CA set aside the “Agreement of Purchase and Sale” between Ong and the Robles spouses.
D) E) F) G) H)
SALES DIGESTS 2C 2005-2006
3 BUENAVENTURA v CA (Sale is Onerous
Facts: Defendant spouses Leonardo Joaquin and Feliciana Landrito are the parents of plaintiffs Consolacion, Nora, Emma and Natividad as well as of defendants Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino, all surnamed JOAQUIN. The married Joaquin children are joined in this action by their respective spouses. Petitioners assert that their respondent siblings did not actually pay the prices stated in the Deeds of Sale to their respondent father. Thus, petitioners ask the court to declare void certain Deeds of Sale of real property executed by defendant parents Leonardo Joaquin and Feliciana Landrito in favor of their co-defendant children and the corresponding certificates of title issued in their names. Petitioners also ask that assuming that there is consideration, the same is grossly inadequate as to invalidate the Deeds of Sale. Issues: 1. Whether the Deeds of Sale are void for lack of consideration. 2. Whether the Deeds of Sale are void for gross inadequacy of price. Held: 1. No. The deeds of sale are not void for lack of consideration. A contract of sale is not a real contract, but a consensual contract. As a consensual contract, a contract of sale becomes a binding and valid contract upon the meeting of the minds as to price. If there is a meeting of the minds of the parties as to the price, the contract of sale is valid, despite the manner of payment, or even the breach of that manner of payment. If the real price is not stated in the contract, then the contract of sale is valid but subject to reformation. If there is no meeting of the minds of the parties as to the price, because the price stipulated in the contract is simulated, then the contract is void. It is not the act of payment of price that determines the validity of a contract of sale. Payment of the price has nothing to do with the perfection of the contract. Payment of the price goes into the performance of the contract. Failure to pay the consideration is different from lack of consideration. The former results in a right to demand the fulfillment or cancellation of the obligation under an existing valid contract while the latter prevents the existence of a valid contract. Petitioners failed to show that the prices in the Deeds of Sale were absolutely simulated. To prove simulation, petitioners presented Emma Joaquin Valdoz’s testimony stating that their father, respondent Leonardo Joaquin, told her that he would transfer a lot to her through a deed of sale without need for her payment of the purchase price. The trial court did not find the allegation of absolute simulation of price credible. Petitioners’ failure to prove absolute simulation of price is magnified by their lack of knowledge of their respondent siblings’ financial capacity to buy the questioned lots. On the other hand, the Deeds of Sale which petitioners presented as evidence plainly showed the cost of each lot sold. Not only did respondents’ minds meet as to the purchase price, but the real price was also stated in the Deeds of Sale. As of the filing of the complaint, respondent siblings have also fully paid the price to their respondent father. 2. No. the deeds of sale are not void for gross inadequacy of price. Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil Code w/c would invalidate, or even affect the Deeds of Sale. In this case, the lower court found that the lots were sold for a valid consideration, and that the defendant children actually paid the purchase price stipulated in their respective Deeds of Sale. Actual payment of the purchase price by the buyer to the seller is a factual finding that is now conclusive upon the Supreme Court. 4 GAITE v FONACIER (Commutative nature of sale
Facts: Fonacier is the owner of 11 Iron Lode Mineral Claims in Camarines Norte. He appointed Gaite as Attorney-inFact giving him the authority to negotiate and enter into exploration contracts on royalty basis. Gaite assigned his rights to Larap Mining which he also owns. Gaite embarked upon the development and exploitation of the mines and was able to extract 24 metric tons. Fonacier revoked the authority given to Gaite for some reasons not stated. Gaite transferred the rights in the developed area in exchange of the amount 20 thousand pesos. Also, Gaite transferred the rights over the 24 metric tons in exchange of 75 thousand pesos. Fonacier gave 10 thousand pesos upon signing the agreement and the balance of 65 thousand pesos to be paid from the “first letter of covering the first shipment of iron ores and of the first amount derived from the local sale of iron ore made by the Larap Mines.” To secure the payment of the balance, Fonacier delivered surety bond but Gaite intimated that it’s not enough and required another. Fonacier
Beron, Calinisan, Delgado, Del Socorro, Fernandez Legaspi, Lopez, Mendiola, Rivas, Sarenas
SALES DIGESTS 2C 2005-2006
delivered another bond in the name of Far Eastern Surety. The bonds expired and no sale of ores happened. Gaite filed case for collection. Defense of Fonacier is that obligation is subject to condition. Issue: W/N it is subject to a condition. Held: No. The words express no contingency in the buyer’s obligation to pay. The balance “will be paid” out of the first letter of credit. There is no uncertainty that the payment will have to be made sooner or later. What is undetermined is the exact date at which it will be made. A contract of sale is normally commutative and onerous: not does each one of the parties assume a correlative obligation (the seller to deliver and transfer the ownership of the thing sold and the buyer to pay the price), but each party anticipates performance by the other from the very start. Assumin arguendo that there is doubt whether it is subject to a suspensive condition or a suspensive period, the scales favor of “the greatest reciprocity of interests”, since sale is essentially onerous. That greater reciprocity obtains if the buyer’s obligation is deemed to be actually existing, with only its maturity or demandability suspended. 5 ALCANTARA-DAUS v DE LEON (Sale is title not mode Fernandez) Facts: • Hermoso de Leon inherited from his father a certain piece of land by virtue of a deed of extra-judicial partition. • To arrange the documents for the properties of his parents, Hermoso engaged the services of Atty Juan • After the death of Atty Juan, documents surfaced revealing that the properties has been conveyed to Hermoso’s brothers and sisters and, Juan and his sisters though Hermoso did not intend such. • A deed of extra-judicial partition w/ quitclaim in favor of Rodolfo de Leon surfaced with Hermoso’s signature in it (which was actually forged) • Rodolfo sold the land to Aurora Alcantara. Hermoso questions the sale. • RTC ruled that Hermoso’s claim on the land is barred by laches since 18 years has passed since the land was sold. It also ruled that the deed of extra-judicial partition, being a notarial document, is presumed authentic. CA reversed. Issue: Was the sale of the land to Alcantara valid? Held: No. There was no valid delivery as Rodolfo is not the rightful owner of the land. A contract of sale is perfected by mere consent, upon meeting of the minds, on the offer and acceptance thereof based on subject matter, price and terms of payment. At this stage, seller’s ownership of the land is not an element in the perfection of the contract. However, this contract creates an obligation on the part of the seller to transfer ownership and to deliver the subject matter of the contract. It is during delivery that the law requires the seller to have the right to transfer ownership of the thing sold. It is through delivery or tradition that the buyer acquires the real rights of ownership over the thing sold. At the time of delivery, Rodolfo was not the owner of the land, thus the consummation of the contract and the consequent transfer would, then, depend on whether he subsequently acquired ownership of the land in accordance with Art 1434 of the Civil Code. But the extra-judicial partition was found to be forged hence there was no valid transfer of ownership—Rodolfo never became the owner of the land. Possession in good faith and acquisition by virtue of prescription cannot be sustained if it is in derogation of the rights of the registered owner. 6 CELESTINO CO. & CO. VS. COLLECTOR OF INTERNAL REVENUE (Contract for Piece-of-work Legaspi) Facts • From 1946 to 1951 Celestino Co. (Oriential Sash Factory) paid 7% tax on gross receipts of its sash, door and window factory in accordance with the sec. 186 of the National Revenue Code imposing taxes on sales of manufactured articles. • In 1952, it began to claim liability only to the contractors 3% tax under section 191. To support its contention, it presented duplicate copies of letters sketches of doors and windows and price quotations supposedly sent by the manager of the factory to customers who allegedly made special orders. • Celestino & Co. habitually makes sash, windows and doors as it has represented in its stationery and advertisements Beron, Calinisan, Delgado, Del Socorro, Fernandez Legaspi, Lopez, Mendiola, Rivas, Sarenas
The fact that the windows and doors are made by it only when customers place their orders and according to such form or combination as suit to the fancy of the purchasers does not alther the nature of the establishment. The supply of air conditioning units to the company’s various customers was specially made for each customer and installed in his building upon his special order. 1467 of NCC: in filling orders for windows and doors according to specifications. windows and doors and sells the goods to the public is a manufacturer. • It is not true that Celestino & Co. invokes Art. - 8 ENGINEERING V CA (Contract for a Piece of Work Mendiola) Facts: Pursuant to a contract. does nothing more than sell the goods that it mass produces or habitually makes. Fernandez Legaspi. It then cannot be said that Celestino & Co.587 as deficiency tax liabilities. Calinisan. Being a contractor. They were merely orders for work done in the ordinary course of the manufacturers business. they imported them and used them in the systems they were installing.141 as compensating tax and 25% surcharge. ENGINEERING EQUIPMENT AND SUPPLY COMPANY (Contract of sale distinguished from a contract for a piece of work Facts: Issue: Held: - Lopez) Engineering Equipment and Supply Company (Engineering) is engaged in the design and installation of central type air conditioning systems. Engineering undertook to fabricate. CIR investigated Engineering for tax evasion. which asks whether the thing transferred (in this case. Engineering is assessed Php 740. He is liable under section 191 of the National Revenue Code • Celestino & Co. and furnish the air-conditioning in Almeda’s building along Makati for 120. Engineering is a contractor since it renders service representing the will of his employer only as to the result of his work and not as to the means by which it is accomplished. Del Socorro. CTA ruled that Engineering is exempt from deficiency manufacturer’s sales tax because they are contractors. Both Engineering and CIR appealed to the SC. • A factory which habitually makes sash. Mendiola. W/n Engineering is a contractor and thus. This is in accord with the test for a contract for a piece of work. contends that it is a contract for a piece of work. Almeda. Engineering contended that the complaint must be dismissed because of the expiration of the 6month prescriptive period set (pursuant to Art. Sarenas . contracts for a piece of work. instead. They appealed to the Court of Tax Appeals. The company did not manufacture air conditioning units. install. It did not merely sell its services but also the materials ordinarily manufactured by it. The building was sold to and was occupied by NIDC. as such art. Rivas. it did not sell but merely contracted for particular pieces of work Issue w/n Celestino & Co. They should only be taxed for the use of imported goods and not the importation of goods because it has been proven that the air conditioning units were used for its construction business and were never resold.000. Engineering won’t be delivering air conditioning units. It also manufactures its products on a made to order basis. is a contractor (sells it services) or a manufacturer (sells its products) Ruling • Celestino & Co. Without the contract with a particular customer. Issue: was the complaint barred by prescription on the basis that it is a contract of sale? Beron. • The orders by the customers were not shown to be special that would require extraordinary service from Celestino & Co. Delgado. Engineering is a contractor.SALES DIGESTS 2C 2005-2006 Dean Villanueva to the public. Lopez. Engineering is only subject to the contractor’s tax and not to the advance sales tax. exempt from paying the deficiency manufacturer’s sales tax. It was then when Almeda learned from the NIDC employees that the air-conditioning was defective. • The Court of Tax Appeals held that Celestino & Co. They were assessed with Php 174. 1566 and 1567) regarding the responsibility of the vendor for any hidden defects of the thing sold. But the sale was rescinded in 1971. Almeda filed a case for damages w/ CFI alleging that the air-con did not comply with the plans and specifications. aircons) is one not in existence and which never would have existed but for the order of the party desiring to acquire it. is a manufacturer. It was finished in 1963. is a manufacturer. serves special customers only or confines its services to them alone. 7 CIR VS. on the other hand. On the complaint of a Juan de la Cruz. 186 should be applies • Celestino & Co.
Its business and field of expertise is the fabrication and installation of such systems as ordered by customers. and so the case of Arco vs. Fernandez Legaspi. 3 years later. in connection with a civil case that the Puyat’s were facing. There was not a single clause ion the contract which conveys the idea of an agency – ‘commission on sale’ means discount of the prices. but delivers to the principal the price he obtains from the sale of the thing to a third person. the action is not barred. and that Parsons was to pay the price in the manner stipulated. the 4-year prescriptive period shall apply. Del Socorro. The 6-month prescriptive period is only applied to implied warranties. According to Quiroga. of Richmond. Since only 8 years has passed. Puyat is guilty of fraud in concealing the true price • • • • Beron. Sarenas . the complaint is not really an enforcement of warranties against hidden defects but is one for breach of contract. Indiana. Mendiola. (Contract of Agency vs. They sought for reimbursement but failed. Rivas. he returns it to the principal. The price was $1700 and this was duly paid by Arco plus the commission. it would appear that the prescriptive period has lapsed in the case at bar.SALES DIGESTS 2C 2005-2006 Held: Dean Villanueva The contract is a contract for a piece of work because it is not in the usual line of business of Engineering to manufacture air-conditioning systems to be sold off-the-shelf. Puyat Teatro Arco was engaged in the business of operating cinematographs. Even if it was one of purchase and sale. 10 PUYAT V ARCO AMUSEMENT (Agency to Sell Sarenas) Facts: • • • • There was a previous case of Arco vs. Therefore. on the part of Parsons. In the absence of such period. the 10-year prescriptive period has not yet lapsed. RTC: no contract of agency between Quiroga nd Parsons. Contract of Sale Rivas) FACTS a contract between Quiroga and Parson was executed wherein Parsons has the exclusive right to sell Quiroga beds in the Visayas Islands with the following stipulations: o Parsons has to pay Quiroga within 60 days from the date of the shipment o A discount of 25% from the invoice price is Parson’s commission on sales o Parsons must order bed in dozens o Parsons may sell or establish branches of his agency for the sale of Quiroga beds upon the approval of Quiroga. Puyat was sentenced to pay the alleged overpayments in the sum of $1335. Later on another sale was made between the two for another set of equipment for the price of $1600. Therefore. so it approached Puyat. Arco learned that the equipment they purchased from Puyat were overpriced. If there is an express warranty. at the price stipulated. within 60 days from the date of shipment – CONTRACT OF SALE In a Contract of Sale. They agreed that Arco will pay Puyat the amount of the equipment. and. Arco wanted to equip its cinematograph with sound reproducing devices. the prescriptive period is 10 years because there is a written contract. USA. and if does not succeed in selling it. Puyat TC: contract between Arco and Puyat was one of outright purchase and sale Appelate Court: the relation between them was that of agent and principal. Delgado. to pay their price In a CONTRACT OF AGENCY. PARSONS HARDWARE CO. and does not pay its price. the prescriptive period is one specified. - ISSUE: W/N Parsons is a purchaser or an agent of Quiroga HELD: purchaser RATIO: since stipulated in the contract that Quiroga was to furnish Parsons with the beds which the latter might order. plus 10% commission and all other expenses. Calinisan. several provisions of the Contract of Agency was violated by Parsons.52 plus legal interest. ‘agency’ expresses that Parsons was the only one that could sell Quiroga beds in Visayas. It later changed its name to Arco Amusement Co. there was the obligation on the part of Quiroga to supply the beds. the agent received the thing to sell it. the rest of the stipulation are compatible with the contract of sale. However. therefore. There is proof that Engineering had failed to install items and parts and that some of the parts used were not in full accord with the contract specifications. Puyat is the exclusive agents in the Philippines for the Starr Piano Co. 9 QUIROGA VS. Lopez.
11 KER & CO V LINGAD (Agency to Sell Beron) FACTS: Petitioner Ker would have us revers a decision of the CTA. Lo executed a “Deed of Assignment”. Lopez. It was shown that pettioner was assessed by then Commissioner of Internal Revenue tax as the commercial broker's percentage tax.. JRC refused to pay KJS since Lo also owed him money. There was request on the part of petitioner for the cancellation of such assessment. Lo was only able to pay 2 of the 10 installment payments.. Mendiola. Lo refuses to pay KJS since allegedly. Lo ordered scaffolding equipment from KJS to be paid on installment. o Puyat could not be an agent of Arco because it is known that Puyat is the agent of Starr Piano in the Philippines. ISSUE: Whether the relatioship thus created is one of vendor and vendee or of broker and principal. while the essence of an agency to sell is the delivery to an agent. is a building contractor. Such liability arose from a contract of petitioner with the United States Rubber Intl. his obligation is already extinguished when they executed the Deed of Assignment. Held: Beron. Calinisan. Sonny Lo. All goods on consignment shall remain the property of US Rubber utntil sold Ker. . which request was tunred down. all the goods held on consignment shall be held by petititoner for the account of the rubber company. doing business under the name San’s Enterprises. (Agency to Sell Calinisan) Facts: A) B) C) D) E) F) G) Issue: W/N Lo’s obligation is already extinguished. INC. If the transfer of title puts the transferee in the altitude or position of an owner and makes him liable to the trnasferor as a debtor for the agreed price. US Rubber shall from time to time consign to the petitioner products under the terms of this agreement in suh quantities as in the judgement of US Rubber. Sarenas KJS Eco-Framework (KJS)is engaged in the sale of steel scaffoldings. not as his property. unless excepted by the contract or by US Rubber and that upon termination of the Agreement.. Arco has accepted the price for the equipment. That the petititoner is by contractual stipulation an agent of US Rubber is borne out by the facts that petititoner can dispose of the products of US Rubber only to certain persons or entities and within stipulated limits. surhcarge and compromise penalty. holding it liable as a commercial broker uhder sec 194(t) of the NIRC. whereby he assigned to respondent his receivables from the Jomero Realty Corporation (JRC). the transaction is a sale. HELD: Though there was a denial in the agreement that the petitioner is in no way an agent nor legal representative of US Rubber.SALES DIGESTS 2C 2005-2006 Issue: • Held: • Dean Villanueva W/N the contract between the parties was one of purchase and sale and not one of agency Yes. Rivas. 12 LO V KJS ECO-FORMWORK SYSTEM PHIL. it is one of purchase and sale because: o The contract is the law between the parties. o The 10% commission that Puyat was to receive does not necessarily make the petitioner an agent as this provision is only an additional price which the respondent bound itself to pay. In the contract it was stipulated that the agreement does not constitute Ker the agent or legal representative of US Rubber for any purpose whatsoever. Fernandez Legaspi. Del Socorro. and not merely as an agent who must account for the prodeeds of the resale. Delgado. but as the property of the principal who remains the owner. the SC holds that the relationship is one of agency.
a lending investor. petitioner sold to her almost all the logs produced in one of his forest concession. He should be held liable to pay to KJS the amount of his indebtedness. but not for the solvency of the debtor. Later. the vendor or assignor is bound by certain warranties. Art 1628: The vendor in good faith shall be responsible for the existence and legality of the credit at the time of the sale. imposed a tax assessment on petitioner. the logs cut and removed by the petitioner from his concessions were sold to different persons in Manila through his agent. Aside from that the receipts show that two buses were delivered to the respondents for the purpose of selling it. Petitioner protested the assessment. either received by Osorio for petitioner or deposited by said agent in petitioner's current account with the bank. Lo should be deemed to have ensured the performance thereof in case the sake is later found to be inexistent. CO. 13 PHILIPPINE LAWIN BUS. which is in the nature of a sale of personal property. To secure the loan. Antonia R. SC upheld the CA. However. Before 1946. Medina as the petitioner's original sales taxable under the NIRC and. petitioner's wife. On the thesis that the sales made by petitioner to his wife were null and void pursuant to the provisions of Art. Mrs. Mariano Osorio.SALES DIGESTS 2C 2005-2006 A) Dean Villanueva B) C) D) E) No. The petitioner Lawin deemed lender as an agent hence negating the existence of dacion en pago since it requires the transfer of ownership. Receipts executed by the respondent’s representative do not indicate that lender adhered and agreed that the delivery of the buses of the petitioner would result in extinguishing the obligation. complete.8 million so the lender extended another loan worth P2 million evidenced by another PN. extended a loan to Philippine Lawin Bus Company in the amount of P8 million payable within one year evidenced by a promissory note. produced the effects of a dation in payment which may extinguish the obligation. b. He should make good his warranty. is bound to warrant the existence and legality of the credit at the time of the sale or assignment. In 1949. Lo. 14 MEDINA v CIR (Sale between spouses Facts: Del Socorro) In 1944. Mendiola. as in any other contract of sale. Del Socorro. Fernandez Legaspi. petitioner. Held: No. rendering it void pursuant to Art 1409 c. unless it should have been sold as doubtful. the spouses had neither property nor business of their own. 1490 of the Civil Code. dation ≈ sale It may well be that the assignment of credit. and absolute. Medina. started to engage in business as a lumber dealer. Since the balance of P16 million is unpaid. the Collector considered the sales made by Mrs. Mariano Osorio. a. Lawin opposed through an injunction claiming that foreclosure is a violation of its agreement with the lender on how to pay the balance. Lopez. Rivas. Lo violated the terms of the Deed of Assignment when he failed to execute and do all acts and deeds as shall be necessary to effectually enable the respondent to recover the collectibles assignment ≈ sale. sold in Manila the logs bought from her husband through the same agent. UNLESS it has been so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge. From 1946 to 1948. Lo failed to comply with his warranty under the Deed. a. Issue: Beron. V CA (Dacion en Pago Delgado) Facts: Advance Credit Corporation. therefore. however. RTC favored Lawin saying obligation is extinguished. Medina. Delgado. Lawin paid P1. The proceeds were. upon instructions from petitioner. By warranting the existence of the credit. and in 1954. CA reversed. acquired forest concessions. lender filed suit in court to compel Lawin to pay. Sarenas . in turn. and up to around 1952. petitioner Antonio Medina married Antonia Rodriguez.revealed for the first time the existence of an alleged premarital agreement of complete separation of properties between him and his wife. and contending that the assessment for the years 1946 to 1952 had already prescribed. The object of the deed did not exist at the time of the transaction. Issue: Whether there was a dacion en pago between the parties pon the surrender of the transfer of the mortgaged buses to the respondent. Calinisan. Lawin failed to pay the lender prompting for the foreclosure of the buses and proceeds of P2 million credited to the account of Lawin. as vendor or assignor.
16 RUBIAS v BATILLER (Status of such contracts Legaspi) Case Suit to recover the ownership and possession of certain portions of lots which Rubias bought from his father-in-law Francisco Militante Facts • Before the war with Japan. Held: By virtue of Art 158 of the Civil Code. then. Calinisan. the court said the sale of the land is valid but not the house for such is conjugal. Mercedes claims that the sale of Fernando to Daguines is null and void for said property is built with conjugal funds. the Court considered the sales between the spouses void as to be in violation of Art. the SC determined that at the time of their marriage. the law prohibits the spouses from selling property to each other subject to certain exceptions. 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. That sale was subversive of the stability of the family. and considered the sales by the wife to the public as the first and original sales subject to the sales tax. The contract of sale is null and void for being contrary to morals and public policy. Fernando. Fernando. Unable to take possession of the lot and house. However. Militante sold the subject land to Rubias. Rubias has no cause of action since they are in actual. Sarenas . the consent of the wife is needed for the validity of the sale.SALES DIGESTS 2C 2005-2006 Dean Villanueva Whether or not the sales by the petitioner to his wife could be considered as his original taxable sales under the NIRC. the spouses had no properties to have warranted them to execute a pre-nuptial agreement for a complete separation of property. which value would be reimbursed at the liquidation of the conjugal partnership. in this case. 15 CALIMLIM-CANULLAS V FORTUN (Sale between spouses Fernandez) Facts: • • • • • • Mercedes Calimlim-Canullas and Fernando Canullas are married and lives on the residential land in question. sold subject property with the house to Daguines. Mendiola. Held: Yes. Fernandez Legaspi. the records of the case were lost so Militante filed a petition for reconstitution which was dismissed • Militante appealed and pending the appeal. This was recorded in the Register of Deeds. Rivas. 1490. becomes a creditor of the conjugal partnership for the value of the lot. Aside from the fact that the record of the alleged pre-nuptial agreement were nonexistent. The properties being conjugal. a basic social institution that public policy protects. Militante file with CFI and application for the registration of title of the land. Upon reconsideration. both the land and the building belong to the conjugal partnership but the conjugal partnership is indebted to the husband for the value of the land. Del Socorro. Beron. Moreover. And these prohibitions apply to a couple living as husband and wife without the benefit of marriage. Rubias was also the counsel on record of Militante Issue w/n the contract of sale was void because it was made when Rubias was Militante’s counsel in the land registration case Ruling • Rubias cannot have any claim on the land which Militante allegedly owned since the latter’s application was denied by the CA. The spouse owning the lot. open and continuous possession of the lot since time immemorial. Lopez. They are taxable. Daguines filed a complaint for quieting of title and damages against Mercedes. Issue: Whether or not the construction of a conjugal house on the exclusive property of the husband ipso facto gave the land the character of conjugal property. The conversion from paraphernal to conjugal assets should be deemed to retroact to the time the conjugal buildings (the house) were first constructed thereon. Whether or not the sale of the lot together with the house and improvements thereon was valid under the surrounding circumstances. Fernando abandoned his family and lived with Corazon Daguines. • According to Batiller. CFI declared the sale valid where Daguines is entitled to the land and ½ of the house. Delgado. the application for registration was again dismissed. Militante had no authority to dispose the things sold.
Sarenas . Purchase by lawyer of property in litigation from his client is void and produces no legal effect. Nullity of such contracts is differentiated from that purchased by guardians. The trial court ruled that the contingent fee is not violative of Art. Contingency Fee Arrangements Mendiola) Facts: In her last will. Fernandez Legaspi. Art. Rubias claim still fails. filed a case for him to be declared owner of 40% of the property. Nullity of such contracts cannot be cured by ratification since the prohibition is grounded in public policy. Issue: W/n Socorro had a right to sell the lands. The court approved the partition. Florencio filed for a petition for the probate of the will. Fabillio averred that the 40% was unconscionable taking into consideration the length of the proceedings. The sale between him and Militante was prohibited by law. the lawyer shall have the option of either occupying or leasing to any party 40% of the house and lot. However. Murillo to recover the property. Footnote sa Phil Trust case: 1 Hindi ko alam kung ito pa rin yung article sa bagong Civil Code basta it prohibits the guardian from purchasing either in person or through the mediation of another the property of her ward. of benefit over the property. CA (Subject Matter of Sale Rivas) Facts: NDC. Mendiola. They agreed that Florencio shall give to Atty.) 19 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES VS. Although collusion was not established clearly between Socorro and Fidel Ramos. Trust Co. However. Florencio sought the assistance of Atty. Fidel Ramos is the brother-in-law of Socorro and the two sales were effected within a week of each other. Lopez. Florencio. 14591 is applicable in this case. AL. The court dismissed the case when Fabillio entered into a compromise agreement wherein Fabillio was declared as the lawful owner of the property. 40% of the money value of the property as a contingent fee in case of success. The latter then sells 4 parcels of the 17 to Emilio Cruz. Murillo is only entitled to 30k of attorney’s fees (taking into consideration the length of the services. 17 PHILIPPINE TRUST COMPANY VS.SALES DIGESTS 2C 2005-2006 • • • • Dean Villanueva Assuming that Militante acquired the property. (Guardians. Delgado. and that in case the house and lot is just occupied by Florencio. This ruling was affirmed by the CA. 1459 to apply. Held: SC reverses the ruling of RTC and CA. the 40% pertains to the value of the property. agents and administrators which can be cured by ratification. Atty. a house and lot. Clearly. it must be ruled against Murillo because he was the one who drafted the contract. Justina Fabillio bequeathed to her brother. It declared Murillo as owner of 40 of the property. Socorro sells the land to Fidel Ramos who subsequently resells the same lands to Socorro. Calinisan. Two years later. collusion must be established between the guardian and the buyer of the lots. Rivas. Phil.13 of the Canons of professional ethics impliedly sanctions these contingent fees. Del Socorro. a GOCC. SOCORRO ROLDAN. owns a 10 hectare property in Manila. questioned the 2 sales in the RTC which rule in favor of Socorro but granted Mariano right to repurchase the land. The payment of the contingent fee is not covered by the provision because the fee is not paid during the pendency of the litigation but only after judgment has been made. it is ambiguous. 1491. ET. No. Issue: was the contract for services violative of Art 1491 paragraph (5)? Held: The contract of services did not violate Art. Fabillio denied Atty. who acquired 17 parcels of land from his deceased father. 1491. Marcelo. 18 FABILLO v IAC (Attorneys. as regards the 40% share when Fabillio just occupies the property. Beron. RTC issued its decision upon a decision of the SC saying that for Art. the circumstances in the case dictate the application of Art. Ambiguous as it is. Agents & Administrators Lopez) Facts: Socorro Roldan becomes guardian of her step-son Mariano Bernardo. 1459.
Lot 1214 was later on divided.6 portion of the land belongs to Firestone and the remaining to PUP CA: upheld decision of RTC W/N Firestone can invoke its right of first refusal Yes! NDC cannot unilaterally rescind a right of first refusal that stand upon valuable consideration PUP’s contention that its being a ‘poor mans university’ is untenable. Mendiola.073 sq. Rivas. But right if first refusal of Firestone must be honored A contract with a right of first refusal. as defined in the Civil Code is a ‘catch all provision’ which effectively bring within its grasp a whole gamut of transfers whereby ownership is ceded for a consideration There is a perfected sale of the land between NDC and PUP. But the donation was later revoked by the parties because the land was inadequate for the development plan of the municipality. The requirement of the law that a sale must have for its object a determinate thing.km of lot 1214. is fulfilled as long as. Sarenas . Sale is valid. Del Socorro. One lot.km She donated to the Municipality of Iloilo 9k sq. The donated property included some parts of Lot 1214. Lopez. Petitioner asked for payment of the value of the lot but Iloilo did not pay (no money daw). Delgado.6 hectares of the land was made o For 10 years renewable for another 10 years o Allowed Firestone to construct warehouse and improvements on plant 2nd contract of lease was entered involving steel warehouse in Davao an extension on both lease was requested by Firestone a 3rd lease contract was executed with an express stipulation granting Firestone the first option to purchase the leased premises in the event that NDC decides to sell land 10 year lease contract was about to expire and Firestone asked NDC for an extension NDC did not acknowledge the request Firestone heard rumors that NDC planned to sell property to PUP Case for an action for specific performance was filed to compel NDC to sell land to Firestone RTC: 2. the object of the sale is capable of being determinate without the necessity of a new or further agreement between the parties. Paramount interest in education does not destroy the sanctity of a binding contract obligation Contract of Sale. Calinisan. que pasa?) to Iloilo for the purpose of the “Arellano Plan”. The remaining were sold to Remedios San Villanueva who transferred it to Pio San Melliza. The TCT that petitioner held had the annotation pertaining to the previous donation made by Juliana to Iloilo (without mention of any revocation) Iloilo City (successor of Municipality of Iloilo) donated the city hall site with the building to UP Iloilo. “Arellano Plan”. • 21 LONDRES VS. Fernandez Legaspi. at the time the contract is entered into.SALES DIGESTS 2C 2005-2006 - Dean Villanueva Issue: Held: - Lease contract with Firestone covering 2. UP acquired TCT over the lots in contention Petitioner filed for recover or compensation for its value against Iloilo City and UP Iloilo CFI: Juliana sold properties to Iloilo which meant that Iloilo was free to give to UP W/N the conveyance of Juliana to Iloilo included the lot being claimed by petitioner The instrument was for the sale of properties to Iloilo for the purpose of the “Arellano Plan” without stating the specific lots to be sold. lessor is under a legal duty to the lessee not to sell to anybody at any price until after he has made an offer to sell to the latter at a certain price and lessee failed to accept it Only if Firestone failed to exercise its right of first refusal will NDC be lawfully allowed to sell land to PUP 20 MELLIZA V. lot 1214 was 29. Petitioner’s contentions denied. Juliana later on sold some of the lots (instrument was in Spanish. CITY OF ILOILO (Determinate or Determinable Subject Matter Facts: • • • • • • • • • Issue: • Held: • • Sarenas) Juliana Melliza owned 3 parcels of land in Iloilo. CA (Determinate or Determinable Facts: Beron) Beron. UP fenced property.
Fernandez Legaspi. After undergoing the regular application process. to sell 600 piculs of 1st and 2nd class sugar to Yu Tek. or after more than 30 yrs. Baybay while lot 2034 is situated in Brgy. the copies kept by the records management archives still referred to "lot 2034". Consequently. Calinisan. The description states that the lot sold is located in Brgy. Contract was NOT A PERFECTED SALE. Lot 2034 was previously owned by Jose Alatavas and there is no convincing evidence showing that this lot was ever owned by Paulina nor by Filomena. Proof of conveyance of ownership is the fact that form the time of sale. The surivivng children of Filomena now claim ownership over the 2 lots. The descrition appearing in the absolute sale pertains to lot 1333 and not to lot 2034. it can never be a proper subject of the sale. Baybay. ownership passed to Filomena Vidal. Gonzales claims force majeure. there is no risk of it being lost. 22 YU TEK & CO. in the amount of P3T. Yu Tek then sues. he was given a quota (maximum) of 2. but a PROMISE TO SELL. After Paulina's death. Rivas. without designating any particular lot of sugar. Since it was generic. Lopez. therefore generic. private respondents have been in possession of lots 1320 and 1333. The cadastral lot number of the 2nd lot was altered to read lot 1333 when it was originally written as lot 2034. therefore. 1979. Leon Soriano offered to sell palay grains to the agency. via a contract. Petitioners claim that the absolute sale was tampered.640 cavans of palay. Mendiola. Del Socorro. There was no stipulation that the sugar was to be obtained exclusively from the crop. namely. The copies of the document in cusotdy of the notary public were not correspondingly corrected.SALES DIGESTS 2C 2005-2006 Dean Villanueva This case involves 2 parcels of land. Issue: Who owns the lots? Held: The SC ruled in favor of Consolacion Alovera and declared that the sale was valid. Lot 1333 is situated in Brgy. No specific lot of sugar segregated or designated to make subject matter specific. Soriano delivered Beron. privare respondent Consolacion Alovera claims that the said lots have been sold to her thru an absolute sale executed by Filomena. Gonzales did not fulfill his obligation to deliver sugar. Sarenas . On August 23 and 24. A contract whereby a party obligates himself to sell for a price certain specified quantity of sugar of a given quality. Roxas City. her daughter. since he was not able to produce any sugar at this plantation. is not perfected until the quantity agreed upon has been selected and is capable of being physically designated and distinguished from all other sugar. Delgado. They further claim that the Records Management and Archives Office kept an unaltered copy which shows that the objects of the sale were lots 1320 and 2034. Gonzales received payment. V GONZALES (Generic things as object of sale Facts: A) B) C) D) E) Issue: W/N Gonzales is liable on his obligation. On the other hand. Paulina Arcenas originally owned these parcels of land. 23 NATIONAL GRAINS AUTHORITY VS. IAC (Quantity of Subject Matter not Essential for Perfection Delgado) Facts: National Grains Authority (later National Food Authority) is a government agency which buys palay grains from qualified farmer. Culasi. A contract of sale is not perfected until the parties have agreed upon the price and the thing sold. Calinisan) Gonzales obliged himself. lots 1320 and 1333. The SC affirmed the decision of the lower courts finding that it was Filomena who erased "lot 2034" in the deed of sale and changed it to "lot 13333". Held: A) B) C) D) E) F) Gonzales is liable.
a binding contract of sale exited between the parties upon the issuance of the purchase order.buyer promised to submit the quantity per unit he wanted to order on December 28 or 29 ( a week after confirming the purchase on the price ) . if so. 24 JOHANNES SCHUBACK VS. seller sent a letter to buyer enclosing its offer on the items listed by buyer . 1318. quantity. Civil Code of the Philippines). description.the offer by seller was manifested on Dec 17. 1305. quantity. Fernandez Legaspi. The object of the contract. 24. 1981: seller submitted its formal offer containing the item number. doing business under the name Philippine SJ Industry Trading. and (3) cause of the obligation which is established (Art. the unit price and total to buyer. on the other hand. there was no perfection of contract since there was no meeting of the minds as to the price between the last week of December 1981 and the first week of January 1982 Issue: whether or not a contract of sale has been perfected between the parties.buyer purchased the items promising seller to open a letter of credit in favor of the latter .buyer: he did not make any valid Purchase Order and that there was no definite contract between him and seller . A contract. 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. 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.buyer failed to open letter of credit. Rivas. Article 1458 of the Civil Code of the Philippines defines sale as a contract whereby one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing. Delgado. Article 1349 of the New Civil Code provides: ". buyer informed seller of his desire to avail of the prices of the parts at that time and enclosed its Purchase Order dated Dec 14 1981 w/c contained the item number. when was it perfected? Held: . there was already a meeting of the minds between the parties. Sarenas . 1981.Dec. seller charged buyer for cancellation fees.. Mendiola. On December 24.buyer demanded reimbursement from seller .Dec. with respect to the other. .buyer sent to seller a list of parts he wanted to buy. part number.respondent Ramos San Jose(buyer).640 cavans. and the other party to pay therefore a price certain in money or its equivalent. part number and description . RTC favored him and was affirmed by the IAC. 1981 Beron. Hence. Soriano initially offered to sell palay grains produced in his farmland to NFA.SALES DIGESTS 2C 2005-2006 Dean Villanueva 630 cavans which were not bagged. being the palay grains produced in Soriano's farmland and the NFA was to pay the same depending upon its quality." In this case. The essential requisites of contracts are: (1) consent of the contracting parties. The fact that the quantity is not determinate shall not be an obstacle to the existence of the contract. Issue: W/N there was a sale? Held: The petition is not impressed with merit. 17. unit price and total to buyer .RTC: favored seller . to give something or to render some service (Art. part number.640 cavans. buyer submitted the quantities to buyer . classified and weighed. In the case at bar.CA: reversed RTC. is a meeting of minds between two (2) persons whereby one binds himself. classifying and weighing it.Dec. (2) object certain which is the subject matter of the contract. Civil Code of the Philippines. wanted to purchase bus spare parts from seller Johannes Schuback (seller) . Calinisan. . Lopez. 1981. 29. and not upon the confirmation of the buyer of the quantities covered by the order . without the need of a new contract between the parties. this petition with National Grains Authority arguing that there was no sale but only an offer by Soriano because it was not accepted by the agency as evidenced of not rebagging. Soriano filed case for specific performance. buyer informed seller of his desire to avail of the prices of the parts at that time and simultaneously enclosed its Purchase Order dated Dec 14. storage and interest charges . provided it is possible to determine the same. When Soriano demanded payment for the delivered palay. hence. When the latter accepted the offer by noting in Soriano's Farmer's Information Sheet a quota of 2. Del Socorro. description. Soriano can deliver so much of his produce as long as it does not exceed 2. CA (Quantity of Subject Matter not Essential for Perfection Del Socorro) Facts: . 1981 when seller submitted its proposal containing the item number. he was informed by the Provincial Manager William Cabal that his payment was held in abeyance because there was an investigation concerning him because of allegations that he is not a bona fide farmer and gets the palay from another person.
• Anacleto refused on the ground that they acquired the lands from DBP and he was misled by Conchita when he signed the contract with the right of repurchase.although said purchase order did not contain the quantity he wanted to order. Conchita contracted Anacleto Nool to redeem the parcels of land. When Gregorio died. 1981. • When they were in need of money they mortgaged the 2 parcels with The Development Bank of the Phils.the omission of buyer in opening a letter of credit in favor of seller does not prevent the perfection of the contract between the parties. quantity is immaterial in the perfection of a sales contract . CA ordered Celeste to return ½ of the land to the heirs plus rentals. Laches does not apply as the administrator immediately filed an action to recover possession and ownership of the property. it differs as to the date . intestate proceedings concerning the spouses’ estate were instituted. The acts of Virgilio can just be considered as acts that helped Hilaria manage the conjugal property.although the SC agrees w/ the RTC that there was a perfected contract of sale. Calinisan. As to Virgilio. who did not sign. the object of the contract being the spare parts and the consideration. Although the quantity to be ordered was made determinate only on Dec 29. As for the other half. buyer was already in the process of executing the agreement previously reached between the parties. but rather on Dec 24. In sale. • The right to redeem was not exercised by Conchita within the 1 year period. Celeste and heirs of spouses executed an amicable settlement where the former agreed to relinquish his rights over ½ of the subject land.at this stage. 1981. Sarenas . it is essential that the seller is the owner of the property he is selling.as of December 24. Delgado. An action for reversion for title was made. This sale was duly registered.at this stage. Virgilio. the absence of any of which will prevent the perfection of the contract from taking place 25 NOEL v CA (Seller’s Obligation to Transfer Ownership at the Time of Delivery Facts: • • • • • Fernandez) • Gregorio and Hilaria Nanaman have a number of properties. not on Dec 29. lived with them. 1981 and accepted by the buyer on Dec 24. Rivas. Another contract was entered giving Conchita the right to repurchase. son of Gregorio by another woman.SALES DIGESTS 2C 2005-2006 Dean Villanueva . 1981. Celeste is ordered to return one-half of the land and pay rentals for the occupation of the same portion from the year he occupied such until it is returned. Juan Nanaman. he is not qualified as an heir of Gregorio since he is an illegitimate child (the Civil Code then). Hilaria was just a trustee for the benefit of who may be legally entitled to it. buyer made good his promise to communicate the same on December 29. for the opening of a letter of credit is not to be deemed a suspensive condition .the opening of a letter of credit in favor of a buyer is only a mode of payment . Virgilio and Hilaria managed the properties. 1981. a meeting of the minds between buyer and seller has occurred. The transaction between Celeste and Hilaria (with Vrgilio) was indeed a sale and not just a mortgage. Lopez. the price stated in seller's offer dated Dec 17. However.what is imp’t is the meeting of the minds as to the object and cause . 26 NOOL v CA (Seller’s Obligation to Transfer Ownership at the Time of Delivery Legaspi) Facts • Conchita Nool bought from her brothers 2 parcels of land. Fernandez Legaspi. When Hilaria died. MRaffirmed trial court decision based on laches Issue: Can the property be recovered from Celeste? Held: Only ½. Noel was then ordered to recover the land from Celeste. Beron.7 ha land. .7 ha land was later sold to Celeste. . Trial court declared that action has prescribed. But this was later declared void when some of the heirs. Del Socorro.not among the essential requirements of a contract of sale. Conchita asked for the parcels of land. The ten-year prescriptive period has not lapse either. • The mortgage was foreclosed • Within the period of redemption.perfection took place. these essential elements had already concurred . Hilaria can only alienate ½ of the land—this being her undivided share of the land. 1981. questioned the agreement. and was later replaced by Edilberto Noel. brother of Gregorio. was appointed as special administrator. 1981 . Mendiola. • Since Anacleto failed to pay the total of the agreed purchase price. The 34. But Anacleto was able to buy from DBP who was then the absolute owner of the lands. One of which is a 34.
They further held that the action to annul the deeds of sale has already prescribed. The contract may be deemed inoperative since it contemplated of an impossible service • Since the contract of sale was inoperative. Out of love and affection. Rivas. Sarenas . Imelda counters by saying that the Quitclaim deed was void inasmuch as it is equivalent to a deed of donation. MAPALO (Price must be real Lopez) Facts: Miguel Mapalo and his wife. Because of this. Mendiola) - Issue: Held: - - 28 ONG v ONG (Price must be real Facts: Imelda Ong. In the Quitclaim Deed. The CA affirmed the judgment of the TC by saying that the inadequacy of the consideration is of no moment since it is the usual practice in deeds of conveyance to place a nominal amount although there is more valuable consideration given. Lopez. and interest in the ½ undivided portion of a parcel of land. Maximo. • The sellers can no longer deliver the object of the sale to the buyers as the buyers themselves have already acquired title and delivery thereof from the rightful owner. Conchita cannot redeem the lands from Anacleto base on the 2 contracts. This brings about a contract of sale where the price is simulated which is considered void by Art. They were deceived by Maximo and a notary public into signing an absolute deed of sale over the entire lot by pretending that the documents the spouses were signing was a deed of donation. then the action does not prescribe because the inexistence thereof is permanent and incurable. though. who was about to get married. Maximo was alleging that there was merely a fraudulent consideration (because of the stipulation in the first deed of sale) and that the contract was still voidable. Candida Quiba. thus they dismiss the complaint. executed a Quitclaim Deed in favor of Maruzzo who was a minor. Maximo. A void contract cannot give rise to a valid contract. Del Socorro. Furthermore. Judgment of CFI is reinstated. CFI rules for Miguel Mapalo annulling the deeds of sale. Miguel files a counterclaim and a separate case to annul the deeds of sale involved in this case. after proper registration. However. through Atty. The trial court ruled that the Quitclaim deed is a Deed of Sale and that Maruzzo is the rightful owner. filed a case for the recovery of the land that she allegedly bought and the nullification of the deed of donation in favor of Imelda’s son. The CA. Mendiola. 1471 (hindi na-mention yung article sa case). sells the entire land to the Narciso’s. which she could have not given due to her incapacity as a minor. SC acknowledged that the object of the contract of sale is present – land. The Narciso’s files a suit in CFI to be declared the owners of the entire lot. says that the spouses gave their consent to the sale but said consent is defective for being induced by fraud. Since the contract is void ab initio. Alfredo Ong. this is not applicable to the case at bar. They also acknowledged that there was consent in this case and that it was merely defective. they resolved to donate the eastern half of their land to Miguel’s brother. acceptance of which is required by Maruzzo. Calinisan. which was never paid. 27 MAPALO VS. Imelda Ong revoked the Deed and donated the whole property to her son. The SC. in consideration for Php 1 and other valuable considerations. the CA held that the deeds of sale are not void but are merely voidable. Imelda Ong transferred all her rights. Fernandez Legaspi. W/n the action of the spouses has already prescribed. Imelda argues that the consideration of Php 1 is no consideration at all to sustain that the deed of quitclaim is a deed of Sale. though. so is the right of repurchase. were illiterate farmers. The deed of sale contained a consideration of Php 500. Beron. title. W/n the deeds of sale are void or voidable. The SC. Delgado. took notice of the fact that there was no consideration in this case.SALES DIGESTS 2C 2005-2006 Issue w/n the 2 contracts (contract of sale and right to repurchase) are valid Dean Villanueva Ruling • The contract of sale was void • While the civil code allows a sale of future goods. on the other hand. pointed out that the stipulated consideration was not actually paid. Maruzzo.
Lopez. Even granting that the deed is a donation. Calinisan. salaping Pilipino.SALES DIGESTS 2C 2005-2006 Issue: Was there a contract of sale? Dean Villanueva Held: Although the cause is not stated in the contract. Josie had previously issued BP22 checks to Tan and is now owing him P4. real and effective price. RTC and CA: decided in favor of the respondents W/N the deeds of sale were void or inexistent ab initio or merely voidable Void ab initio! Contract that has no causa or consideration. merely voidable. such property would pass to the transferor’s heirs intestate and recoverable by them or by the administrator of the transferor’s estate. Rivas. Delgado. not fictitious. Mate later on agreed to the fictitious sale. Fernandez Legaspi. Naturally.500 is so insignificant as to amount to no price at all. Mate tried to look for Josie but was unable to locate her. Art 1458 states that sale be for a “price certain in money or its equivalent” requires that “equivalent” be something representative of money to the effect that services are not equivalent of money insofar as said requirement is concerned and that a contract is not a true sale where the price consists of services or prestations Services mentioned in the questioned deeds of sale are not only vague and uncertain but are unknown and not susceptible of determination without the necessity of a new agreement between the parties Sarenas) - - - 30 MATE v CA (Price must be real Facts: • • • • Josefina Rey (Josie) and Inocencio Tan went to the house of Fernando Mate. respondents were able t secure title over 3 of the 10 parcels of land Bagtas. CA (Price must be real Facts: Issue: Held: - Rivas) Parties to this case are the heirs of Hilario Mateum. and upon the latter’s death without testament. at mga naipaglingkod. Sarenas . Mate did not agree to the request. Mendiola. or which are absolutely simulated or fictitious. Beron. fraudulent or falsified or alternatively as donations Respondents denied that sale was fictitious. petitioners. Mate’s wife is the cousin of Josie. ipinaglilingkod sa aking kapanganakan” --. Del Socorro. 2 BPI postdated checks were issued by Josie to Mate covering the purchase price of the properties.500 On the strength of the deeds of sale. transferring 10 parcels of land in their favor The consideration stated in the deeds of sale is “ halagang ISANG PISO. it is presumed that it exists unless the debtor proves the contrary.the value of each land was assessed to be 10. Art. The visit was for the purpose of Josie asking the help of Mate.00 for the sale of thing worth 10. single and survived only by collateral relatives Mateum left no will. prescribes that the price must be real. The main consideration of the sale is the good things done by the respondents in his last illness. 29 BAGNAS VS. Josie reassured Mate that what they will be entering into is merely a simulated sale and that Josie will be redeeming the lots with her own money. or the causa is false or fictitious. To overcome this presumption of consideration. the property allegedly conveyed never really leaves the patrimony of the transferor.432. When Mate deposited said checks. no debts. and an estate of 25 parcels of land 10 of which are being contested in this case Private respondents registered to the Registry of Deeds 2 deeds of sale said to be executed by Mateum in their favor. Josie is requesting that Mate cede to Tan 3 lots in Tacloban to cover the debt. 741 of the Civil Code provides that the requirement of acceptance applies only to onerous and conditional donations where the donation may have to assume certain charges of burdens.067. The true price. means existent. the alleged lack of consideration must be shown by preponderance of evidence. asked the court to cancel the deeds of sale for they are fictitious. While not requiring that for the validity of a sale that the price be adequate. that which does not consist in an insignificant amount. Law now no longer deems contracts with a false cause. which is essential to the validity of sale. they were dishonored for being withdrawn against a closed account. but declares them void A price of P1. Bad faith and inadequacy of consideration do not render a conveyance inexistent for the conveyor’s liberality may be sufficient cause for a valid contract.
Josie was declared in default. The lower court denied motion for intervention. It intends to protect its interest and rights over some materials purportedly belonging to it. to be followed by P20T. Del Socorro. There was a consideration. Issue: W/n respondent Phil Resources can intervene or has legal interest to intervene. Greedy lang daw kasi si Mate. Mate filed a civil case against Josie and Tan for annulment of contract with damages. and therefore respondent has no legal interest to intervene is without merit. Mendiola. and that the balance of P70T would be paid in installments. don’t be greedy to the point of being stupid. Calinisan) Beron. Delgado. Deliveries were made but Apostol failed to pay .. It was Mate himself who drafted the contracts. B) Plaintiff Velasco is the lesee of the parcel of land. it cannot be invoked as want of consideration. the amortization of which would be agreed upon once the initial P30T was paid. alleging that there had been a perfected contract of sale whereby the defendant agreed to sell a parcel of land for P100T. Phil Resources demanded the return of the goods. it is no payment at all" The law provides for money or its 'equivalent'. Although the checks were dishonored. Moral of the story. Sarenas . the one who made it possible for the wrong to be done should be the one bearing the resulting loss. Fernandez Legaspi. Phil REsources seek to intervene in this civil case claiming that it has some goods deposited in a warehouse which goods were used by Apostol to settle his personal debts to Bureau of Prisons. what Mate could have done was to redeem his properties with his own money and then go after Josie. 32 VELASCO v CA (Manner of Payment Essential Facts: A) This case is about a specific performance suit filed by Velasco against the Magdalena Estate. but the defendant refused to accept the P20T. C) Velasco claims that they agreed that there was a downpayment of P10T. Equivalent therefore need not be in money. Acomplaint then was filed against Apostol.. 31 REPUBLIC V PHIL RESOURCES DEV (Must be in money or equivalent Beron) Facts: Defendant Apostol submitted the highest bid for purchase of 100 tons of Palawasn Almaciga and logs. There was a P1. but bureau refused. Calinisan. Rivas. Between two innocent parties. The assertion that the subject matter of original litigation is a sum of money and not the goods.SALES DIGESTS 2C 2005-2006 • • • Issue: • Held: • • • • • Dean Villanueva To protect his property. Government argues that "price = paid in terms of money and the supposed payment being in kind. Mate’s contention: sale is null and void for lack of consideration because no money changed hands when he signed the deed and the checks representing payment have been dishonored W/N the deed of sale is valid The deed of sale is valid. The filing of BP22 cases against Josie and Tan was a tacit admission by Mate that there indeed was consideration When Josie’s checks bounced. D) He claims that he already gave the P10T. Held: YES. Lopez. Tan won.4M check (to buy back the property) and the P420K check representing interest. The materials have been assessed and they have been assigned by Apostol as payment of his debts with the Bureau of Prisons.
SIHI denied request. Maglente paid downpayment of P100. 30). but offered to lease the property for a yr . Del Socorro. The lease contract also prohibits encumbrance without the lessor’s assent. CA affirmed. al. SIHI notified Carceller of the impending termination of lease. F) Velasco only gave him P10T of the agreed downpayment. 33 GABELO v CA (Formation of a Contract of Sale Delgado) Facts: Philippine Realty Corporation owns a land in Intramuros with an area of 675 square meters.SIHI owned 2 parcels of land in Cebu City . They added that the co-buyers of Maglente never occupied the land. Calinisan. asked Carceller to leave property . Issue: W/N the PRC can sell this to non-occupants other than Maglente.SIHI denied as period already lapsed.SALES DIGESTS 2C 2005-2006 Dean Villanueva E) Defendant claimed that Soccoro Velasco offered to buy the property. It was leased to Maglente for 3 years. Sarenas . B) The time within which the downpayment and installments were to be completed was not specified C) A definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding and enforceable contract of sale. at. Held: A) No contract of sale was perfected since there was no meeting of the minds with respect to the manner of payment. Maglente leased it to Gabelo. 18 .Carceller filed complaint for specific performance and damages Beron.15 . Fernandez Legaspi. no installments have been paid. Held: Yes. PRC is free to sell the land to whoever is interested. Lessee was given Right of First Refusal. The contract of sale having been perfected by the meeting of the minds of the buyers and the sellers binds them and they could no longer assert their claim.Jan. RTC frowned upon their arguments and ordered the execution of the contract to sell/contract of sale. and the defendant indicated his willingness to sell the lot fpr P30T downpayment. without the knowledge of the owner.Carceller and SIHI entered into a lease contract w/ option to purchase within the lease period (18 months) .3 wks before expiration of lease contract (Jan. a receipt was made in favor of her brother-in-law.000 for the entire amount of P1. but since it wasn't enough. Maglente was informed that the land will be sold and the latter manifested to exercise his priority to buy the land. Issue: W/N a contract of sale was perfected. D) The fact that P10T had been given does not mean that the contract was perfected. They filed case with the argument that they have a better right to the land because they were occupants. Mendiola. since both parties agreed that there were still essentiual matters that had to be agreed upon.Carceller requested for extension of 6 months. Lopez. the period wherein the option could be exercised . 34 CARCELLER v CA (option contract Lloyd) Facts: . Rivas.Feb. Petitioners were informed of the sale and that they were advised to vacate the premises.2M. The mere fact that the petitioners are actual occupants cannot compel PRC to enter into a contract with them. Delgado. The argument that the parties didn’t affix their signature is of no moment since there have been meeting of the minds and that is enough to constitute a valid contract. as he needed more time to raise the funds . and P70T to be paid on installments for 10 years at 9% interest per annum on June and December of every year until fully paid. it was merely accepted as a deposit.Carceller notified SIHI of its decision to exercise the option and made arrangements for downpayment .
within that period. the original farmers/tillers of the land individually executed Deeds of Assignment in which they assigned to Tayag their rights as tenants/tillers in consideration of a certain sum (Php 50/sqm).Option: a preparatory contract in w/c one party grants to the other. Tayag was not only granted an option but the exclusive right to buy the landholding. Mendiola. 18 delay is reasonable delay. Under the deeds of assignment. the farmers could not legally grant to Tayag the option. But the grantors were merely defendants-tenants and not the owners of the property. or in compliance with certain terms and conditions. it is not. not to enter into the principal contract with any other person during the period designated. CA favored Lacson and said that the Lacsons cannot be enjoined from alienating or encumbering their property especially so that they were not privies to the deeds. Rivas. and. the farmers wrote Tayag and informed him that they no longer wish to sell their rights to him. Later on. . The properties were tenanted agricultural lands. When Tayag and the tenants were about to meet regarding the implementation of their agreements. alleging primarily that the farmers had no right to deal with the Lacsons while their contract was subsisting. The amount is payable when the legal impediments to the sale of the property to Tayag no longer existed.SIHI to dispose of the property promptly .Carceller’s determination to buy it. It was also raised that the deeds were subject to a supervening event—the elimination of any legal impediment—before assignment can take place. Lacsons appealed and claimed that the Deeds of Assignment executed between the farmers and Tayag was contrary to PD 27 and RA 6658. Issue: (yung relevant na lang sa sales) Whether the agreements between Tayag and the farmers were perfected option contracts? Held: No they were not perfected option contracts. Tayag instituted action against the farmers and Lacsons. to enter into such contract w/ the one to whom the option was granted.SALES DIGESTS 2C 2005-2006 Dean Villanueva Issue: W/N Carceller may still exercise the option to purchase the leased property despite the alleged delay in notifying SIHI Held: YES. Lopez. Delgado. the power to decide. properly speaking. 36 LIMSON v CA (Option Contract Legaspi) 37 VILLAMOR v CA (Meaning of Consideration Lopez) Facts: Beron. hence it is null and void. treated as a contract. or which gives to the owner of the property the right to sell or demand a sale. Del Socorro. Instead. Not being the registered owners.as based upon the subsequent acts of the parties. if the latter should decide to use the option. Fernandez Legaspi. shown by: . whether or not to enter into a principal contract.Carceller’s Jan. much less the exclusive right to but the property.secured 8M loan to increase his chances of acquiring the property 35 TAYAG v LACSON (Option Contract Facts: • • Fernandez) • • • • Lacsons are the owners of 3 parcels of land in Pampanga. Until accepted. their intent is ascertained: .introduction of permanent improvements on the leased property . and that the Lacsons induced the farmers to abandon the contract between Tayag and said farmers. or under. . Tayag claims that the agreement between him and the farmers were perfected option contracts. Trial court ruled that Tayag was entitled to injunctive relief. for a fixed period and under specified conditions. .It binds the party who has given the option. To deny option would cause damage to petitioner. Calinisan.shown by SIHI’s agreement to enter first into a lease contract w/ option to repurchase w/ Carceller . More importantly. despite the request for extension of the lease contract .It is a separate agreement distinct from the contract w/c the parties may enter into upon the consummation of the option. It is a condition offered or contract by which the owner stipulates with another that the latter shall have the right to buy the property at a fixed price within a certain time. *An option is a contract by which the owner of the property agrees with another person that he shall have the right to buy his property at a fixed price within a certain time. Sarenas . 15 letter to SIHI was a notice of buyer’s intent to exercise the option. . the rights to the land were to be sold to the Lacsons.
pinagkasunduan din naman na sakaling magkaroon ng kakayahan ang Pinagsanglaan (Soriano) ay maaaring bilhin ng patuluyan ang lupang nasanglang ito kahit anong araw sa loob ng taning na dalawang taon ng sanglaan sa halagang Tatlong Libo at Siyam na Raan Piso (P3. Calinisan.00).900. In 1987. The option offered was accepted by the Villamors in the same instrument. It said that they (Reyes) sold the lot at a much higher price than the market value and that the only reason why the Villamors agreed to such was because they (Reyes) agreed to sell the land to the Villamors whenever the need arose for either of the parties. Angel O. 900. Reyes offered to repurchase the lot which was refused by the Villamors. lot in Caloocan.” On May 13. Macaria executed a deed of option in favor of the Villamors over the remaining portion of the lot. the deed of option was clear that the consideration for the said deed was the price paid by the Villamors for the lot “which was greatly higher than the actual reasonable prevailing price. sanctioned by Article 1479 of the Civil Code. Na. Rivas. (1971 – execution to 1987 – filing of the case). which renders the mortgagors' right to redeem defeasible at the election of the mortgagees. the essential reason which moves the contracting parties to enter into the contract. Villamors only demanded their right after 16 years form the execution of the deed of option. It is simply an option to buy.SALES DIGESTS 2C 2005-2006 - Dean Villanueva Issue: Held: - Macaria Reyes owned a 600 sq. Fernandez Legaspi. What was left to be done was for either party to demand from the other their respective undertakings under the contract. it carries the added special provision aforequoted.) The mortgagors' promise was in the nature of a continuing offer. the Villamors filed a case for specific performance to compel the Reyes’ to sell the other portion of the lot to them. m. m.510 a parcel of land in Nueva Ecija within 2 years from the date of the agreement Beron.” Here. gave rise to a perfected contract of purchase and sale. W/n the deed of option had a valid consideration. Because of this. Lopez. the deed of option was void. - - 38 SORIANO v BAUTISTA (Option Contract Mendiola) Facts: Spouses Basilio Bautista and Sofia de Rosas registered owners of a parcel of land. CA reversed saying that there was no consideration for the option to buy and thus. However. Ver wrote a letter to the spouses Bautista informing the said spouses that his clients Ruperto Soriano and Olimpia de Jesus have decided to buy the parcel of land in question pursuant to paragraph 5 of the document. In this case the spouses’ promise to sell is supported by the same consideration as that of the mortgage itself. RTC rule for Villamors saying that their right to buy is embodied in the written contract.800. should the option be exercised.” It can be said that the consideration is the difference between the purchase price (70) and the prevailing market price then (25 or 18) of the lots sold. which upon acceptance by the mortgagees. 39 SANCHEZ v RIGOS (Option contract Facts: • • Rivas) An option to Purchase agreement was entered into by Rigos and Sanchez Rigos agreed. The spouses in spite of the receipt of the letter refused to comply with the demand contained therein. 1n 1984. salaping Pilipino na pinagkaisahan. it can be said that there is a perfected contract of sale because of the meeting of the minds of the parties as to the subject matter and the price of the sale. Art. which is distinct from would support the sale (the additional amount of P3. the Villamors are precluded from demanding performance of the deed of option because they are bared by prescription. The spouses for and in consideration on the sum of P1. Sarenas . Held: While the transaction is undoubtedly a mortgage and contains the customary stipulation concerning redemption. In 1971. a certain Atty. Del Socorro. promised and committed to sell to Sanchez for 1.00. 1144 NCC says that actions upon a written contract must be brought within 10 years. She sold half of it to the Villamor spouses for Php70/sq. with the pertinent condition: "5. non-withdrawable during a period of two years. Issue: W/N Soriano and de Jesus are entitled to specific performance (by executing a deed of sale) considering that they had informed the spouses within the period. Here. 1958. The SC said that consideration is the “why of the contract. signed a document entitled "Kasulatan Ng Sanglaan" in favor of Ruperto Soriano and Olimpia de Jesus. Mendiola. An accepted unilateral 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. Delgado.
if however. The offer was disapproved and rejected by the board. didn’t have the authority to do so by himself. Lopez. Therefore the contract is not binding upon the corporation. This could be seen as a new contract that is different from the one contemplated in the letter offer. it constitutes a binding contract of sale eventhough the option was not supported by a cufficient consideration. the concurrence of the offer and the acceptance generates a contract os sale Provision of the same law must be reconciles.510 within the 2 year period but Rigos refused to execute the contract RTC: Rigos was ordered to enforce the contract Rigos: there is no valid contract of sale for there is no valuable consideration but only a unilateral promise to sell Article 1479 and not 1324 is the controlling doctrine since the case is about sale 1479 states that a promise must be supported by a consideration distinct from price Sachez was never able to establish the existence of a valuable consideration W/N there is avlid contract of sale Yes! if an option is given without a consideration. 23 days after the sigining of Yao Ka Sin of the letter. The Board though approved of sale to Yao Ka Sin of less bags of cement than what was initially offered. Fernandez Legaspi. Delgado. On the letter.SALES DIGESTS 2C 2005-2006 • • • • Dean Villanueva failure to comply with the conditions will automatically terminate the offer Sanchez was able to make several payments amounting to 1. Yao Ka Sin was asked to sign if he agrees with the offer in the letter. SC ruled that Yao Ka Sin Trading is not an entity that is capable of bringing suit under Art 44 of the Civil Code because it is of a single proprietorship. Article 1324 . It was an offer to sell several bags of cement. Rivas.on sales . Yao Ka Sin wrote several letters to Prime White for delivery of the number of bags of cement that was in the letter-offer. The letter-offer was disapproved because apparently the person who made the letter-offer was acting without authority. Yao Ka Sin signed as acceptance.general principles on contract .which makes the latter the exception to the former. Del Socorro. according to statutory construction. exceptions are not favored unless the intention to the contrary is clear. He had no powers to enter into contracts by himself without the approval of the Board. The subsequent delivery of less cement bags was accepted by Yao Ka Sin without any protest. Sarenas . Issue: • Held: • • • 40 YAO KA SIN v CA (Option Contract Sarenas) Facts: • • • Prime White Cement sent a letter to Yao Ka Sin Trading. Mendiola.is modified by Article 1479 . it is a mere offer of a contract of sale which is not binding until accepted. The person who entered into the contract. acceptance is made before a wothdrawal. Yao Ka Sin then filed for specific performance and damages against Prime White Cement Trial Court: Prime White should deliver the cement bags agreed upon in the letter offer and to pay damages CA: Trial court decision reversed W/N the letter-offer as accepted by Yao Ka Sin is a contract that binds Prime White Cement Before going to the merits. • • • • Issue: • Held: • • • 41 VAZQUEZ v CA (Option Contract Beron) 42 NIETES v CA (Option Contract Calinisan) Facts: Beron. Prime White replied that it has disapproved the letter offer that it made and will be only delivering less bags. Maglana. Although this is merely of a formal defect and it was too late to rule out the case due to this defect. the Board of Directors of Prime White Cement disapproved the initial offer that was made through the letter. The plaintiff should have been Yao Ka Sin himself. Calinisan.
Held: A) No need to pay the P100T first. Calinisan. Fernandez Legaspi. e. That the lessee agrees to help the lessor collect the back accounts of students incurred before the execution of the contract. Delgado. see p. Rivas. giving them priority to acquire it Beron. Lopez.seller Unjieng offered to sell the land to buyer Yu. the full purchase price must be paid before the option is exercised. so long as this is delivered to the owner of the property upon performance of the owner¡¯s part of the agreement. 1959: Petititioner Aquilino NIETES and Dr. 43 CARCELLER v CA (Rights in an Option - Delgado) the lapse of 18 days is neither “substantial” nor “fundamental” that would defeat the intention of the parties when they executed the lease contract with option to purchase. which he also withdrew. Issue: W/N the option price be paid first to exercise the option. found for Garcia on the basis that under the lease agreement. That the Lessor (Garcia) agrees to give the lessee an option to buy the land and the school building for a price of P100T within the period of the Contract of Lease d. B) Notice of the exercise of the option need not be coupled with actual payment of the price. 1961: Garcia wrote Nietes through his lawyer that he was rescinding the contract due to Nietes¯ non performance with the stipulations. Contract will commence in June 1960 and will TERMINATE in June 1965. But for the reasons. Nietes is not in delay. Lease for 5 years b. Del Socorro. F) August 2.SALES DIGESTS 2C 2005-2006 Dean Villanueva A) October 19. the refusal of the offeror to comply with the offeree can be enforced by an action of specific performance 44 ANG YU ASUNCION v CA (Rights in an Option Del Socorro) Facts: .buyer Yu were lessees of residential and commercial spaces owned by seller Bobby Cu Unjieng . 657) D) Nietes informed Garcia that he will exercise the option to buy. The acceptance or the substantial exercise must still be made within the option period to create a valid and binding contract of sale. Mendiola. Pablo GARCIA entered into a Contract of Lease with Option to Buy B) Lease is over the Angeles Educational Institute. 1965: Nietes deposited P84T with the bank. C) July 16. upon a Motion for Reconsideration. C) Unless Garcia makes available and actually delivered of the corresponding deed of sale. D) Rule in reciprocal obligations apply. Some terms are as follows: a. 1965: filed a case for specific performance against Garcia G) The CA. E) July 26. Sarenas . Rent per year is P5T c. SIHI really intended to dispose the properties in a desperate and urgent manner Carceller made considerable improvements and obtained a loan showing his undeniable intention to have accepted the option CLV: there was a substantial acceptance or exercise of the option. (Not an important detail.
Calinisan. It must be supported by consideration.while the object may be made determinate. The trial court dismissed the complaint. since there is none to execute .in this case. Del Socorro. 169-170 of book) 45 EQUATORIAL REALTY v MAYFAIR THEATER (Distinguishing Option from Right of First Refusal Facts: • • • • • • Fernandez) • Carmelo & Bauermann Inc. but a right of first refusal Option . Mayfair wrote to Carmelo and said that it has a 30-day exclusive option by virtue of the contract. A portion of said building was leased to Mayfair Theater. Hence the sale is rescissible. seller offered 6M whil buyer offered 5M . An accepted unilateral promise which specifies the thing to be sold and the price to be paid when coupled with a valuable consideration distinct and separate from the price is what may properly be termed as a perfected contract of option. Mayfair sent another letter informing that it is willing to buy the entire property.buyer asked seller to specify the terms and conditions of the offer. Mayfair instituted an action for specific performance (based on the lease contract).when buyer learned that seller was about to sell the property. 19 of the Civil Code . 1479 . Mayfair’s consent to the lease and to pay the price agreed upon. Carmelo then informed Mayfair that the property would be sold. but laws of general application and the pertinent provisions of the Civil Code on human conduct . and ordered Mayfair to vacate the property.Summary rules when period is granted to offeree (see pp. thus not binding on Carmelo. Delgado.prior to perfection of contract. but didn’t receive an answer from seller . it merely belongs to a class of preparatory juridical relations not governed by contracts.buyer asked seller to put their offer into writing.proper remedy is an action for damages based upon Art. An option is a contract granting a privilege to buy or sell within an agreed time and at a determined price. in case it desires to sell the same. the exercise of the right is dependent not only the grantor’s eventual intention to enter into a contract but also on the terms.during the negotiations. Equatorial was also in bad faith since it was aware of the lease contract and the existence of Mayfair’s right. Beron. An option clause or an option contract to be valid needs a determined or certain price. Thus. Mendiola. Fernandez Legaspi. the right of first refusal is an integral part of the lease contract—the consideration for the lease includes the consideration for the right of first refusal. The CA reversed and said that the paragraph in the lease contract is a right of first refusal and not an option contract. Mayfair is given 30-days exclusive option to purchase the same.requires the object and consideration to be certain Right of First Refusal . upheld the validity of the sale. Carmelo sold the property to Equatorial Realty. A separate consideration is not needed in a right of first refusal. is consideration of the lessor’s promise that it will give Mayfair the right to match the offered price and to buy the property at that price. Sarenas . Lopez. 4 years later. including the price.the breach of an action for the right of first refusal does not justify an action for specific performance or a writ of execution on the judgment. . Carmelo acted in bad faith by violating the right of first refusal—it did not afford Mayfair to negotiate—and by selling the property to Equatorial. what was given to buyer Yu was not an option. buyer filed complaint to compel seller to sell the property to them Issue: W/N buyer Yu may compel by specific performance seller Unjieng to sell the property to them. Held: No.SALES DIGESTS 2C 2005-2006 Dean Villanueva . Issue: Was the stipulation in the contract an Option or a Right of first refusal? Held: It was a Right of first refusal. It is a separate and distinct contract from that which the parties may enter into upon the consummation of the option. It reasoned that the option on the contract is not supported by any consideration. Rivas. A second leased contract covered another portion of the building.governed by Art. In this case. The contracts of lease provide that if Carmelo should desire to sell the property. seller did . owned a land with a building. w/c are yet to be firmed up later .
Anyway. Ayala offered to sell the land to the petitioners at the prevailing prices then. to sell the land to the Vasquez’s at the rate of prices in 1984. This was interpreted by the Vasquez’s that Ayala was supposed to finish the project after the said amount of time. which ruled in their favor. 46 PARAÑAQUE KINGS v CA (Distinguishing Option from Right of First Refusal Legaspi) Facts Catalina Santos is the owner of 8 parcels of land in Paranaque Chua was the first lessor of the property. This was because of a stipulation in the contract that Ayala intends to finish the project within 3 years. the 9M price given to Raymundo should have likewise been offered to Paranaque Only after the Paranaque fails to exercise its right of first priority under the same terms (9M price) and within the period contemplated could Santos validly offer to sell the property to a third person. It offered a right of first refusal to the Vasquez’s regarding 4 lots adjacent to the “Retained area” of the Vasquez’s. Fernandez Legaspi. Lopez. Rivas. This offer was rejected by the Vasquez’s saying that the price should be at the rate in 1984. again. there should be identity of terms and conditions to be offered to the buyer holding a right of first refusal Although the offer involving the 15M price was rejected by Paranaque.SALES DIGESTS 2C 2005-2006 Dean Villanueva As to the claim of impossibility of selling only a portion. Delgado. suits or proceedings with respect to the land. through specific performance. Sarenas . This right was subject to the warranty given by the Vasquez’s that Ayala would be free from any actions. Beron. through a subcontractor. Construction and Development Corp. This ended in Ayala paying the said amount. the stipulation should be given effect by including the indivisible appurtenances in the sale of the dominant portion under the right of first refusal. CA reversed the said ruling. under the same terms as offered to Paranaque. Ayala agreed to continue the development of the land. Calinisan. Santos repurchased the property from Raymundo after 12 days Santos then offered the property to Paranaque Kings for 15M Paranaque Kings refused to buy the property at the offered price since it was too high Santos then sold the property to Raymundo for 9M The facts show that there was collusion between Santos and Raymundo to make it appear that the value of the lot was higher than 5M Issue w/n a right of first refusal is enforceable in an action for specific performance Ruling The complaint sufficiently alleges a breach on the part of Santos Initially. common sense and fairness dictate that instead of nullifying the agreement on that basis. a suit was instituted by Lancer against Conduit and Ayala for certain sums unpaid. land in Ayala Alabang. it was Carmelo who fixed the limits of the property it was leasing out. After the completion of the subdivision in 1990. Mendiola. which contained everything above. He then assigned his rights to Bing (2nd lessee) who thereafter assigned his rights to Paranaque Kings One of the rights assigned was the right of first refusal as embodied in paragraph 9 of the lease contract Santos sold the land to Raymundo for 5M without offering the property to Paranaque Kings Realizing her mistake. Justice Vitug dissent: A right of first refusal cannot have the effect of a contract because by its very essence certain basic terms would have yet to be determined and fixed—the offer must be certain and acceptance absolute. SC says no and affirms the ruling of the CA. to Ayala Corp. Del Socorro. W/n Ayala can be compelled. Conduit’s main asset is a 49. which was then being developed into a subdivision by G. Santos sold the properties to Raymundo without even offering the same to Paranaque In order to have full compliance with the contractual right granting a party the first option to purchase. Vasquez’s file an action for specific performance in the RTC. After the execution of the MOA (1981).P.9 ha. Lancer General Builder Corp. 47 VAZQUEZ v AYALA CORP (Distinguishing Option from Right of First Refusal Facts: Lopez) - - Issue: Held: - Spouses Vasquez sold their stocks in Conduit Development Inc.
Mendiola) 48 PUP v CA (Distinguishing Option from Right of First Refusal *gagamitin ko na lang yung kay polay dati… - Issue: Held: - NDC. normally included in other contracts Gives the optionee a fixed period to exercise the Also gives a period (I think) option Must be supported by separate consideration No need Object must be determinate Object MIGHT be determinate Consent needed to perfect the contract of sale Same Price is determined Price is still to be fixed Binds party who gave the option to refrain from selling the land to another person before the period has expired In this case. owns a 10 hectare property in Manila.SALES DIGESTS 2C 2005-2006 - Dean Villanueva Ayala was not bound by the MOA to finish the project within 3 years. Del Socorro. But right if first refusal of Firestone must be honored A contract with a right of first refusal. Sarenas . stipulation was a right of first refusal because the price was not determined or determinate. Calinisan. Fernandez Legaspi. My attempt at simplifying the diff. Paramount interest in education does not destroy the sanctity of a binding contract obligation Contract of Sale. Even if it says that the lands would be sold at the prevailing market prices. Ayala cannot be compelled to sell at 1984 prices because Vasquez’s have already forgone their right of first refusal by rejecting the initial offer of Ayala to sell the land at 1990 prices. Price can only be determinable with respect to another object certain or if third persons are appointed to fix the price. Because of this. as defined in the Civil Code is a ‘catch all provision’ which effectively bring within its grasp a whole gamut of transfers whereby ownership is ceded for a consideration There is a perfected sale of the land between NDC and PUP.” Ayala could only sell the lands at that time since the subdivision was already finished. a GOCC. Plus. Lopez. Lease contract with Firestone covering 2. Vasquez’s right of 1 st refusal has already been respected by the offer made by Ayala to the Vasquez’s in 1990. lessor is under a legal duty to the lessee not to sell to anybody at any price until after he has made an offer to sell to the latter at a certain price and lessee failed to accept it Only if Firestone failed to exercise its right of first refusal will NDC be lawfully allowed to sell land to PUP Rivas) 49 VILLAMOR v CA (mutual promise to buy and sell Beron. Delgado.6 portion of the land belongs to Firestone and the remaining to PUP CA: upheld decision of RTC W/N Firestone can invoke its right of first refusal Yes! NDC cannot unilaterally rescind a right of first refusal that stand upon valuable consideration PUP’s contention that its being a ‘poor mans university’ is untenable. there was no separate consideration for said right. this does not make the price determinable. 255 of the case): Option Contract Right of First Refusal Preparatory contract to a contract of sale Not a separate contract. Rivas. The stipulation in the contract merely says that Ayala “intends” to finish the project in the said amount of time. between option contract and right of first refusal (for further info see p. Mendiola.6 hectares of the land was made o For 10 years renewable for another 10 years o Allowed Firestone to construct warehouse and improvements on plant 2nd contract of lease was entered involving steel warehouse in Davao an extension on both lease was requested by Firestone a 3rd lease contract was executed with an express stipulation granting Firestone the first option to purchase the leased premises in the event that NDC decides to sell land 10 year lease contract was about to expire and Firestone asked NDC for an extension NDC did not acknowledge the request Firestone heard rumors that NDC planned to sell property to PUP Case for an action for specific performance was filed to compel NDC to sell land to Firestone RTC: 2. This is in conformity with the stipulation in the contract that the parcels of land should be sold at the “prevailing market price at the time of the purchase.
From the facts. 51 VILLONCO v BORMAHECO (When Deviation Allowed Beron) Facts: The spouses Cervantes are the owners of lots which were mortgaged to PNB and on which the building. Cruz was the owner of a pair of emerald-cut diamond earrings. Francisco Cervantes is president of Bormaheco. They are bound by the contract unless there are reasons that warrant its nullification. Villamor filed a complain for specific performance RTC: ordered Macaria to sell the remaining land to Villamor CA: reversed RTC W/N the deed of option is valid as to the period stated YES! An option to buy and an option to sell was agreed upon Since the contract of sale is consensual and there is already meeting of the minds as to price and object. Fernandez Legaspi.SALES DIGESTS 2C 2005-2006 Dean Villanueva Facts: Issue: Held: - Macaria is the owner of a 600 square meter lot in Caloocan In 1971. Inc. 2 hours is already considered unreasonable delay. Inc. it is Fule himself who employed machinations. there was a meeting of the minds between Dr. From the facts. Sarenas . It was stated in the offer that the sale is to be consummated only after Cervantes shall have consummated a purchase of a lot located at Sta. Villonco assumed that the lots belonged to Bormaheco and that Cervantes was authorized to sell the said land. Inc. Cruz and the lawyer are entitled to be paid damages by Fule • CA: TC decision affirmed Issue: • Held: • • • W/N there was a valid sale between the parties The sale is valid. • Deeds of sale were executed and ownership of the land and jewelry changed hands. Dr. He misrepresented how much the property actually costs. A couter-offer was made by Villonco. Dr. 300 of which was sold to Villamor for P70 per square meter with an option to buy the remaining lot “whenever the need of such sale arises either on our (Macaria’s) part on the part of Villamor” 1978. This counter offer was accepted by Cervantes. Adjacent to these lots are the lot of Villonco Realty Company. Delgado. for the sale of the subject lots for P400 per sq meter. During these negotiations. Fule goes to the lawyer who assisted in the executing of the deeds and complains that the jewelry is fake. What was left to be done was for either party to demand from each other their respective undertaking Failure of the party to demand performance for an unreasonable length of time renders the contract ineffective 17 years is an unreasonable length of time - 50 FULE v CA (Perfection Sarenas) Facts: • Fule is the owner of a land in Tanay. Beron. Lopez. Cruz refuses. Del Socorro. Ana. are situated. • 2 hours after the changing of hands. Mendiola. machinery and equipment of Bormaheco. A check of P100. • TC: the sale was valid. Rivas. Fule wants land to be returned. • Fule offered a barter between the property and the jewelry. Fule is alleging that there was fraud amounting to vitiation of consent.000 as deposit in accordance with the agreement of the parties was delivered to Bormaheco. • Dr. there is already a perfected contract of sale. This is untenable. Calinisan. Cruz and Fule. A contract of sale is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price. There were negotiations regarding the sale of the lots of Cervantes. Fule was interested with this jewelry. An offer was made by Cervantes thru Bormaheco.
Mendiola. Delgado. Seven then decided to redeem the property at the simulated price.000 shows that the sale was conditionally consummated or partly executed subject to the purchase of the Sta. Before the 7th co-owner executed a SPA. is satisfied by the 2 letters sent by another co-owner to 7. Cervantes returned the P100. there is no certainty yet for the acquisition of the property in Sta. 52 SPOUSES DOROMAL v CA (Earnest Money Calinisan) Facts: A) B) C) The property in litigation was co-owned by 7 persons. The contention of Cervantes that there was no perfection on the ground that there was a qualification on the acceptance of the counter offer of Villonco is without merit. the prospective buyer. Issue: Whether or not there was a perfected contract of sale. Calinisan.000. which of course. the SPAs hadnot even been received by the representative of the co-ownership.). Fernandez Legaspi. and that earnest money had been paid and the second stating that the price was 4/sqm. with a simulated price appearing on the deed of sale. Bormaheco’s acceptance of Villonco’s counter offer proves that there was ameeting of the minds upon the subject matter and consideration for the sale. paid P5T as “earnest money. Lopez.SALES DIGESTS 2C 2005-2006 Dean Villanueva Unexpectedly. Villonco filed a complaint. 26 days after signing the contract of sale. Del Socorro. For example. Sarenas . Held: Yes. The seller is Segundo Dalion and wife and the buyer is Ruperto Sabesaje. 53 DALION v CA (Form of Sales Delgado) Facts: Subject of this case is a lot in Sogod. The notice. Buyer sued to recover the ownership of the land evidenced by a private document of absolute sale. Southern Leyte. D) E) F) Issue: Whether the letters were notice of the sale. buyer did not consent to. (kneclaim ni Cervantes na nag counter offer sya dun sa counter offer ni Villonco kaya wala daw contranct pero ung counter offer naman nya in-accept ni Villonco as indicated by his act of depositing the P100. The seller denies this claiming that it is fictitious and that his signature was forged. The so called “earnest money” was more in the concept understood under the old code – that the buyer would not back out. When they were written.000 signifies that he accepted this supposed qualifications made by Cervantes.” The 7th co-owner decided not to sell and so only 6/7 of the property was sold to buyer. Held: A) B) C) Neither of the letters were evidence of a consummated sale. Even assuming that such contention is correct.000 with interest. Seller denied allegation that Beron. He claimed that despite the lapse of 45 days from the time offer was made. Jr.) The truth is that the alleged changes or qualifications in the revised counter offer are not material or are mere clarifications of what the parties previously agreed upon. Bormaeco’s acceptance of the part payment of P100. Cervantes alleged insertion of the letters PA after the word interest could not be categorized as a major alteration of the counter offer made by Villonco. Ana (eto ung condition dun sa offer ni Cervantes na nasa 3rd par. the fact still remains that Villonco by his act of depositing P100. Rivas. Buyer now claims that 7 failed to exercise the right of redemption within 30 days from notice of the sale. Six of them decided to sell their shares and executed SPAs to that effect. the first stating that the price was 5/sq. Ana property. This condition was satisfied as Bormaheco’s bid was accepted and a deed of sale was already signed. Doromal. That P5T had been paid does not signify consummation of the contract. buyer claims.
and did not thus convey title or right to the lot in question since "acts and contracts which have for their object the creation. NCC). Sarenas . NCC). and the vendor may require the vendee to pay the thing sold (Art. As regards petitioners' contention that the proper action should have been one for specific performance.however. and a Deed] confirming the sale executed by Ramon. Rivas. transmission. 1357). 709. if it is not embodied in a public instrument and recorded in the Registry of Property (Art. allegedly because it had been lost Issue: W/N Secuya’s have sufficiently proved that they are the rightful successors-in-interest of Sabellona so that they have the requisite title pursue an action of quieting title Held: NO. Held: NO. Mendiola. . Secuya’s have not proven they are Sabellona’s successor-in-interest. Dalmacio Secuya . Thus delivery of a parcel of land may be done by placing the vendee in control and possession of the land (real) or by embodying the sale in a public instrument (constructive). which would have been the best evidence of the transaction.land dispute between Secuya’s and Selma . which means that the sale is perfected by mere consent. Delgado.Secuya’s allege that the title issued to Selma is a cloud on their titles as owners and possessors of the lot. Calinisan. it cannot be considered binding on third persons. As earlier stated. This argument is misplaced. petitioners instead presented the testimony of Miguel Secuya. NCC). modification or extinction of real rights over immovable property must appear in a public instrument" (Art. the vendee may compel transfer of ownership of the object of the sale. The trial court thus rightly and legally ordered Dalion to deliver to Sabesaje the parcel of land and to execute corresponding formal deed of conveyance in a public document. was never presented in court. he was not presented in court. Addendum: . His defense of forgery was overturned by witnesses and comparisons of his signatures finding out to be his. 54 SECUYA v VDA DE SELMA (Form of sales—non-applicability of rule to 3rd parties Del Socorro) Facts: . the parties may reciprocally demand performance (Art. and to observe a particular form. Issue: W/N the case of the private respondent has merit. Lopez. when the sale is made through a public instrument. such document. Art. an alleged heir of Sabellona Held: The testimony of Miguel was a bare assertion that the sale had indeed taken place and that the document evidencing it had been destroyed. they have no title to file an action to quiet title over the land . Delivery may either be actual (real) or constructive. Civil Code). par 1. not for validity or enforceability. if warranted. i. A contract of sale is a consensual contract. 1358 on the necessity of a public document is only for convenience. 1458. Moreover. CA affirmed. Fernandez Legaspi. 1475. the execution thereof is equivalent to the delivery of the thing. (Art. one of the petitioners.SALES DIGESTS 2C 2005-2006 Dean Villanueva the reason why he is still in possession of the land is because he pleaded to the buyer to cultivate it because he has no other means of livelihood. RTC granted the claim of buyers. 55 FIRME v BUKAL ENTERPRISES Beron. Upon perfection of the contract..Secuya’s insist that Sabellona sold the disputed property to Dalmacio and that the sale was embodied in a private document . His status as heir of Paciencia was not affirmatively established. 1358. NCC. It is not a requirement for the validity of a contract of sale of a parcel of land that this be embodied in a public instrument. Under Art. Del Socorro.e. The provision of Art. 1475 of the Civil Code gives the parties to a perfected contract of sale the right to reciprocally demand performance.To prove the alleged sale of the disputed property to Dalmacio.Secuya’s base their ownership on the agreement of partition and the deed of confirmation of sales (what is relevant to sales) executed by Paciencia Sabellona to their predecessor in interest. 1498. Assuming authenticity of his signature and the genuineness of the document.while the Deed executed by Ramon ratified the transaction. We believe that the suit for recovery of ownership is proper. its probative value is doubtful.While a sale of a piece of land appearing in a private deed is binding between the parties. No particular form is required for its validity. hence they have a cause of action for quieting title to the land . Dalion nonetheless still impugns the validity of the sale on the ground that the same is embodied in a private document.
As the issue on the Statute of Frauds…Statute of Frauds not applicable It was decreed by the CA that since there was partial performance of the contract of sale. It claimed the following: that the spouses agreed to the 2nd draft of the deed of sale made by Aviles.. HOWEVER. The drafts (1st and 2nd) of the Deed of Sale contained the same provisions and were left unsigned. Bukal filed a complaint alleging that the spouses reneged in its promise to sell the property. this is erroneous. Firme said that they rejected the 3rd Draft of the deed of sale made by Aviles. Neither was there a Board Resolution authorizing Aviles to negotiate.SALES DIGESTS 2C 2005-2006 (Statute of Frauds Facts: • • • Fernandez) Dean Villanueva • • • Spouses Firme own a land in which Bukal Enterprises is interested in buying. The trial court said that there was no perfected contract as there was no consent of the spouses Firme to the sale. hence there is no application of the principle under the Statute of Frauds. that it already spent for the relocation of the squatters and has introduced improvements on the property. the oral contract is out of the scope of the Statue of Frauds already (simply put. That they were surprised to see their property fenced by hollow blocks and that they demanded for the removal of the same. it was taken out of the Statute of Frauds—there being partial performance—hence it is enforceable. Calinisan. Fernandez Legaspi. Bukal claims that there was a perfected contract of sale between it and the spouses. During the trial. Lopez. The conclusion made by the CA was based on the wrong assumption that there was a perfected contract of sale. Rivas. On the other other hand. Ong and company were surprised to see that the payment of the balance price is within 30 days instead of 90 days respondents found variance between the terms of payment and what they had in mind Accdo to Yuvienco: there was no absolute acceptance Issue w/n the facts adequately show the existence of a perfected contract of sale thereby giving Yao and company a cause for specific performance Ruling In any sale of real property with installments the Statute of Frauds read together with the perfection requirements of the civil code must be applied such that payment on installments of the sale must be in the requisite note or memorandum Beron. contract can be enforceable) to have the alleged oral contract of sale be declared enforceable. VP of Bukal (De Castro) authorized Aviles to negotiate with the spouses regarding the purchase. Hence. Moreover. consideration. Del Socorro. The CA reversed and said that there was a perfected contract. De Castro’s testimony (for Bukal) was inconsistent and it appeared that the testimony of Firme was more credible. that there were witnesses who attested to the efforts made by Bukal in order to comply with the wishes of the owner. Delgado. (this is what’s important under the outline) Note that the CA said that though contract was oral. During trial. Issue: Was there a perfected contract of sale between Bukal and the spouses? (what’s important) Is the Statute of Frauds applicable to the alleged contract of sale? Held: None. It was also shown that Aviles was very much aware that Firme refused to sell the property. there was no concurrence of the offer and acceptance on subject matter. Firme claimed that it actually refused to sell the property. it cannot claim reimbursement for such improvements 56 YUVIENGCO v DACUYCUY (Memorandum Legaspi) Facts Yuvienco through Atty Gamboa(seller) offered to sell to Yao King Ong a land and building Yao replied agreeing to buy the property and ordered Yuvienco to proceed to Tacloban to negotiate the details Atty Gamboa wired Yao accepting the proposal and arrived tuesday morning with the contract When Atty Gamboa arrived in Tacloban with the contract. it was not a builder in good faith. Bukal cannot hide under the benefit afforded by the Statute of Frauds (that when there is partial performance. such defect was ratified already.. Despite the improvements introduced by Bukal on the property. Mendiola. It is clear that there was no perfected contract of sale. there was no approval of the Board of Directors of Bukal on the purchase of the property.Bukal claims that the contract can be enforced even if it is not in writing). A review of the evidence presented clearly showed that Firme did not consent to any sale. Hence. Sarenas . and terms of payment. It further said that if there was any defect in the authority of Aviles to negotiate and purchase the property.
The Court took notice of certain documents upon which the earlier decision was based: o Exh A – Deed of Trust by Phil. Rivas.000/ sq. not necessarily in one document. Fernandez Legaspi.000. SC says that in the instant case. Lopez. The latter agrees to buy the property. there was still a meeting of the minds because said proposal was subject to the understanding that if the proposal is rejected. that should the term payment be disapproved. Remnants to BPI o Exh. on terms o Exh. Lim and Limketkai of the petitioner-company go to the office of BPI to finalize the agreement. Issue: Same Held: SC reversed their earlier ruling. Lim then tenders full payment to Albano. They met with Aromin and Albano. C – Letter allowing Revilla and Lim to inspect the property o Exh. Held: SC says there was a perfected contract of sale. BPI then authorizes Pedro Revilla to sell the contested lot at 1. Here. and I. Delgado. that he has found a buyer. Here. D – Letter of Revilla to BPI informing the latter that he has found a buyer o Exh. W/n the sale violates the Statute of Frauds. once the contract has been perfected. constituted BPI as its trustee to manage its properties. the latter was included in the suit. CA reversed. m. Petitioner found out that its offer to pay had been frozen.000/sq. Art. E. the said provision admits an exception when the agreement is set forth in some written note or memorandum. E – Written proposal of Lim to buy at 1. There were different letters sent that contain the assent of Limketkai to buy the property in question. G. They reiterated that the terms of payment is an essential element of the price. BPI informed the court that the land has been sold to National Bookstore. The latter informed the former that he was not anymore authorized to sell the property. I – Letter of petitioner to BPI claiming that there is a perfected contract of sale. officers of BPI. BPI said that there was no harm in asking and said proposal of Lim was referred to a trust committee. it does not affect the fact that a contract of sale has already been perfected. B – Letter of Authority from BPI to Revilla o Exh. 1403 (2e) renders a contract of sale of real property unenforceable if it is not in a written instrument. the contracting parties may compel each other to observe that form. o Esh. Limketkai would have to pay the full amount in cash. F – BPI’s letter refusing the proposal o Exh. Issue: W/n there was a perfected contract of sale between Limketkai and BPI. There must be a meeting of the minds as to the terms in order to perfect a contract of sale. Revilla contacts Alfonso Lim of Limketkai. which amounts to a rejection of the original offer. They finally agreed on 1. petitioner files a case for specific performance. BPI was authorized to sell the land. Inc. But.m. Lim asked that the price be reduced to 900 but Albano stated that the price be 1. There is a patent absence of any deed of sale. SC held that petitioner’s evidence failed to hurdle the requirements of the Statute of Frauds. vs. which were the documents alleged to be the Beron. CA (Statute of Frauds is met when the contract is in a separate written memorandum Lopez) Limketkai 2 Facts: This is the motion for reconsideration of the earlier decision. there was no such meeting of the minds. Exh. G – Letter of Lim that they are willing to buy in cash o Exh. Del Socorro. Plus.SALES DIGESTS 2C 2005-2006 Dean Villanueva 57 LIMKETKAI SONS v CA (1 and 2) (Statute of Frauds is met when the contract is in a separate written memorandum Lopez) Limketkai 1 Facts: Philippine Remnants Co. m. RTC for Limketkai. Lim’s proposal to pay in different terms constituted a counter-offer. A sale is valid regardless of the form it may have been entered into. H – BPI’s rejection of the last letter. Limketkai Sons Milling Inc. SC held that the Statue of Frauds has been met. Sarenas . It was the understanding. The memorandum may be found in several writings. Even if the deed of sale was not signed nor notarized. Mendiola. there were separate memorandums where the agreement can be found. however. Lim asked if they could pay on terms.000/sq. Revilla informs BPI.100. If the law requires a definite form for a contract. then the price shall be paid in cash. Lim’s request is not considered a counter-offer. Thus. Calinisan. through letter. Thus.) Even if Lim proposed to pay in different terms. The Court found that there was a meeting of the minds between the parties as to the subject matter (the land) and as to the price (1. Despite the agreement.
Delgado. when taken together. Lopez. portion to Ortega. the siblings appeared questioning the partition claiming that the land was sold by Cecilio to their parents but the transaction was purely verbal RTC: dismissed the complaint of the siblings for they failed to present evidence of the alleged sale CA: reversed the RTC saying that the Statute of Fraud is only applicable on executory contracts and not on partially executed or executed contracts W/N the sale can be proven orally NO! The rule of thumb is that a sale of land. In that agreement. built a house. Dissent: Basically. Sarenas . (Although each act is not partial performance when taken alone. payment of taxes. The existence of partial performance effectively removes the contract form the Statute of Frauds. She went back to her house after the liberation at the time when the administration of the lots was designated to the Rural Progress Administration. according to Leonardo. making improvements. He says that this is because there was a waiver of the defense of the Statute of Frauds when the counsel of BPI cross-examined the witnesses of the petitioner. the existence of the contract of sale made by Cecilio with his siblings cannot be proved Also. the Torrens Title in the possession of the children of Cecilio carries more weight as proof of ownership than the survey or subdivision plan in the name of the siblings Sarenas) - 60 ALFREDO v BORRAS (Acceptance of Benefits under 1405 Facts: • • Alfredo spouses owned a land that was mortgaged to DBP in consideration of a loan. Issue: W/N there was partial performance so as to remove the oral contract form the Statute of Frauds. the person against whom the claim is sought can not present any proof of such sale and has no means to enforce the contract Under Article1403. relinquishment of rights. Rivas. Fernandez Legaspi. once consummated. Melo. Leonardo also claimed ownership of the lot by alleging an agreement with Ortega. She asserted her right to the lot. reiterates the earlier case. The Borrases were to pay the DBP loan and the balance to be paid to the Alfredos. constitute partial performance. and that if Leonardo got title to the lot. 58 ORTEGA v LEONARDO (Partial Execution Mendiola) Facts: Ortega was the owner of a house in manila before it was destroyed in the WW2. Ortega’s act of possession. Mendiola. in the end that a third party disputes the ownership of the property. 59 CLAUDEL v CA (Partial Execution Facts: Issue: Held: - Rivas) Cecilio was the registered owner of a parcel of land in Rizal until his death 2 branches of Cecilio’s family contested ownership over the land: the children and siblings of Cecilio the children of Cecilio partitioned the land among themselves 4 years later. Held: Ortega wins. However. Calinisan. were not subscribed by BPI. siya kasi yung ponente nun. Not even tender of payment is partial performance. Ortega sued for specific performance. Leonardo refused to accept the payment of Ortega.SALES DIGESTS 2C 2005-2006 Dean Villanueva “memorandum” embodying the agreement of sale. Ortega accepted that agreement. However. m. Del Socorro. Reiterates that the oral evidence presented by the petitioners in the lower court can be accepted to prove the contract of sale in contravention of the Statue of Frauds. Beron. he would sell a 55 sq. the land was sold to the Borrases for P15k. To consider them sufficient compliance with the Statute of Frauds is to betray the avowed purpose of the law to prevent fraud and perjury in the enforcement of obligations. Ortega had the lot surveyed and subdivided. Ortega will desist on claiming.) Only when these acts are taken together can there be partial performance. provided that Ortega caused the survey and subdivision of the lot. rendition of services. is valid regardless of the form it may have been entered. To pay for the loan.
(The complete document is on p322) Sosa wanted to use it for his balikbayan guest. refuses to vacate the house and lot. a printed Vehicle Sales Proposal. Mendiola. in the interest of substantial justice.” (ah. Delgado.. Borrases sued Alfredos for specific performance TC and CA sided with the Borrases W/N there was a valid contract of sale between the parties The sale is valid and enforceable. Beron. Sarenas . It was a perfected contract because there was consent between the parties on the object certain and on the cause of the obligation.parang si Ralph talaga…) Sosa first demanded for a refund. Fernandez Legaspi. The Alfredos introduced the Borrases to the tenant of the land. CA: the incation of Soliva for almost 16 yrs had barred her action to recover the disputed property. it cannot be the evidence of a Contract of Sale.SALES DIGESTS 2C 2005-2006 • • • • Issue: • Held: • • • • Dean Villanueva After the payment of everything. Held: A) Where the receipt indicated a down payment of P100T but did not indicate what it was for. Issue: W/N a Contract of Sale actually took place. Del Socorro. The widow. He failed to get it since “nasulot ang unit ng ibang malakas. The supreme court affirmed the decision of the lower courts that laches has set in. After a downpayment of P100T. The object of the sale is the land and the price certain is P15k The contract of sale was also consummated because the sellers and buyers have performed their respective obligations Ownership of the thing sold is transferred to the vendee upon its actual or constructive delivery. and pursuant to the equitable principle proscribing unjust enrichment. Sosa waited for his Lite Ace on the agreed date. Apparently the Alfredos sold the land to another set of people. then asked for P1M damages. They will go to Marinduque for SOSA’s birthday. Several years later. Calinisan. Held: Yes. Lopez. 61 SOLIVA v ESTATE of VILLALBA (Waiver Beron) Facts: Marcelo Villalba asked Soliva’s permission to occupy her house and then promised to buy the house and lot. the Borrases were surprised when several people came into the property to cut trees. Toyota and Sosa signed another document. she is entitled to receive the unpaid balance of the purchase price plus legal interest thereon 62 TOYOTA SHAW v CA (Rulings on Receipts and other Documentary evidence of Sale Facts A) B) C) D) E) F) Calinisan) Luna SOSA and Popong BERNARDO (Toyota Sales Represenatative) entered into a document (an “Agreement”) signed by Bernardo. Marcelo died without having completely paid the consideration promised. now defendant. It was for the a yellow Lite Ace (dapat Fortuner na lang parang si Ralph). Rivas. The inaction of Soliva for 16yrs has barred their action for recovery of the said land or the consideration for the properties. However. Issue: W/n Soliva can still collect from Villalba the consideration for the sale of the house and lot. the OCT was delivered to the Borrases.
applying Arts. The buyer made several demands to Xentrex to fulfill its obligation but to no avail.it is only prima facie proof of delivery.respondents (the 2 brothers and a sister of Salvador) filed for reconveyance of property . Mendiola. mother and Salvador died . the buyer must be placed in control of the thing sold . Fernandez Legaspi. there is no delivery .in this case.presumptive delivery can be negated by the failure of the vendee to take actual possession of the land sold .despite the deed of sale. and its acceptance by the vendee . Rosalia (mother) still continued to lease and receive rentals from the apartment . the vendee may compel transfer of ownership of the object of the sale. for the execution of a public instrument to effect delivery. they did not delivery the possession and ownership of the property to their 2 children . Rivas. control Del Socorro) Facts: .such deeds were executed to accommodate Salvador in generating funds for his business ventures and providing him w/ greater business flexibility .mother and father sold the land to their 2 children.because tenant refused to pay.the original sellers retained their control and possession . No particular form is required for its validity. although mother and father Santos executed a deed of sale. Upon perfection of the contract.e. the parties may reciprocally demand performance (Art. NCC). Held: No. The amount is P494T and the buyers made a deposit of 50T. . the critical factor w/c gives legal effect to delivery is the actual intention of the vendor to delivery.mother and father Santos owned a parcel of land and on it was an apartment administered by mother Santos (Rosalia) .in Norkis vs. Lopez. i. Salvador became the owner of the property by virtue of the 2 deeds of sale executed in his favor Issue: W/N a sale through a public instrument tantamount to delivery of the thing sold. which means that the sale is perfected by mere consent. as found by the lower courts. w/c may be rebutted by clear and convincing evidence .widow Zenaida contends that her deceased husband is the owner of the property . A contract of sale is a consensual contract. petitioner Zenaida Santos demanded the rent from a tenant of Rosalia . and the vendor may require the vendee to pay the thing sold (Art.w/o such intention. 1458. 1475. Salvador was never placed in control of the property .such deed of sales was merely to accommodate Salvador in generating funds for his business ventures and providing him w/ greater business flexibility 65 ADDISON v FELIX Beron. CA.father.SALES DIGESTS 2C 2005-2006 B) Dean Villanueva The document only had an acknowledgement of receipt of P100T but there was no indication as to an agreement on the manner of payment of the balance. Sarenas . Issue: W/N there was a perfected contract of Sale Held: YES. 1477 and 1498 to the case. Salvador and Rosa . Del Socorro.the Civil Code does not provide that the execution of a deed of sale is a conclusive presumption of delivery of possession . There was a perfected contract of sale evidenced by the acceptance of the P50T initial deposit and by pulling out a unit of the said car. there was no real transfer of ownership . Salvador did not become the owner of the land.in this case. The balance is supposed to be paid by financing but because of the slow process.applying Danguilan vs. 64 SANTOS v SANTOS (presumption of delivery by public instrument.widow of Salvador.therefore. NCC). A definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale 63 XENTREX v CA (Ruling on Receipts and other Documentary evidence of Sale Delgado) Facts: Subject of the case is the sale of a car Nissan Sentra Super Saloon A/T (dapat nag-Sorento nalang sila tulad ni Bry) executed by the Samsons (buyer) and Xentrex (seller). RTC favored the buyer affirmed by the CA.Rosa sold her share to Salvador . the buyer decided to pay it by issuing a check worth P250T only to find out it was sold to another person.they contend that the alleged deeds of sale were simulated for lack of consideration .. Delgado. she filed an ejectment suit against him . Calinisan. IAC.
Del Socorro. The sale agreement also stipulated that the purchaser was to deliver to the vendor 25% of the value of the products that she might obtain from the lands from the moment she takes possession of the same until the Torrens certificate is issued in her favor. and that at the moment of the sale. and the buyer could have demand. Buyer (why not use buyer and seller?! hehe) was also given a right to rescind the contract within one year from the date of the certificate of title. will produce the same legal effect as actual delivery. That is—the seller. Delgado. The seller has the duty to deliver the thing sold. not because of the contractual provision. by execution of a public document. As a defense. If at the time of constructive delivery. if he wanted to. She also said that she was the illegitimate daughter of Domingo Melad. Issue: Whether or not rescission was proper? (not on the sole ground of buyer’s right to rescind. Mendiola. in which case the seller is to return all the sums paid. the vendee may elect to rescind the contract) CLV: So. Lopez. the seller filed a suit to compel buyer to pay the 1st installment. the subject matter is not within the control and possession of the seller. Addison sold 4 parcels of land to Felix. While it is true that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract. This itself was a suspicious circumstance. Calinisan. to get the possession or control of the thing itself. She agreed on the condition that Danguilan would deliver part of the harvest to her. Rivas. (please see page 30) Beron. The purchase price was to be paid in installments.SALES DIGESTS 2C 2005-2006 (Constructive Delivery as to Immovables through a public instrument Facts: • Dean Villanueva Fernandez) • • • • • Through a public instrument. if he wanted to. Seller filed a suit to obtain possession of the lands but this was dismissed for failure to present the required plans. So walang possession si seller. • The delivery of the harvest stopped so she filed a complaint against Danguilan. what’s the value of ADDISON again?? You: It provides for the 2nd requisite on how a constructive delivery. It was stated in the evidence that seller and a representative of the buyer went to the location of the lands for the purpose of designating and delivering the lands sold. Danguilan's contentions • Danguilan was the husband of Domingo's neice. then he deprived the buyer of the ability to take in the same advantage as actual delivery. She also sought to rescind the sale. material delivery could have been made (ownership and right of possession not enough). Fernandez Legaspi. appeal si seller. The property was sold for 80 pesos. Natural. such symbolic delivery will only produce the effect of tradition if the seller has CONTROL over the thing. must have had the capacity. Domingo Melad signed a private instrument which he gave the land to Danguilan on the condition that Danguilang would take care of Domingo and arrange for his burial. CLV: Right! 66 DANGUILAN v IAC (Constructive delivery as to immovables Legaspi) Facts both Danguilan and Apolonia Melda are claiming for the same parcel of land previously owned by Domingo Melad Apolonia Melad filed a complaint against Danguilan for the recovery of a lot which she claims she purchased from Domingo Melad Apolonia's contentions • Apolonia presented a deed of sale. Previously. But only 2 lands were designated—2/3 of which were found to be in the possession of a certain Villafuerte. Later on. Sarenas . Issue w/n Apolonia as "owner" of the property has the right to recover the lot from Danguilan w/n the sale between Apolonia and Melad was consummated Ruling The deed of sale shown by Apolonia was executed when she was only 3 years old and the consideration was supposedly paid by her mother. at the time of the execution of the public instrument. She claims that the amount was earned by her mother as a worker at the Tabacalera factory. TC decreed rescission of the sale on the sole ground of the right of the buyer to rescind. Rescission is warranted. buyer said that the seller failed to deliver the lands to her. but by virtue of law (if vendor fails to deliver the thing sold. but on the question of WHETHER THERE WAS DELIVERY?) Held: Rescission is proper as seller did not deliver the thing sold. • Apolonia moved out of the farm only when Danguilan approached her and asked permission to cultivate the land and stay therein.
Mere delivery of movable property may be made by consent or agreement of the parties. which is under the jurisdiction of the Justice of the Peace. W/n the aforesaid action is for forcible entry and therefore not cognizable by the CFI.” Sabi ni Sir. if the thing cannot be transferred to the buyer. Rivas) 69 POWER COMMERCIAL v CA (When buyer assumes the risk of ownership and possession Facts: Beron. This was for lack of jurisdiction because the CFI held that the action brought by the plaintiffs is one for forcible entry. it was shown by evidence that Danguilan did take care of Domingo and arranged for his burial. Plaintiffs filed a case in CFI against the Bocar’s (for the illegal possession of the land) and the Villablanca’s (for warranty clause in deed of sale). Issue: W/N the execution by Gelac is valid. Rivas. since the consummation of the sale depended upon the clearance of the check issued for the payment of the tractor. Held: The mortgagor (brother-seller) does not lose ownership of the property that he has given as a chattel mortgage. In addition. the record shows that Melad did not take possession of the properties. HE has the right to sell it provided that the consent of the mortgagee (Libra) was acquired (which in fact was given).SALES DIGESTS 2C 2005-2006 Dean Villanueva Even assuming the validity of the sale. The case filed by the plaintiffs was for recovery of possession against the Bocar’s and for return of the price paid and damages from the Villablanca’s (by virtue of the latter’s warranty against eviction or loss of ownership) (Sabi sa book ni Sir). In this case. Jr. whether it was forcible entry or not. threat. Sarenas . He who is in possession is presumed to be the owner of the land. the decision would be in favor of Danguilan. it can be implied that for a deed of sale in a public instrument to be considered as constructive delivery. There was no constructive delivery because it is necessary that the vendor should have control of the subject matter at the moment its material delivery could have been made. Defendants filed a motion to dismiss which was granted. 67 PASAGUI v VILLABLANCA (Constructive delivery via deed of sale in a public instrument – Lopez) Facts: Issue: Held: Calixto Pasagui and Fausta Mosar bought a parcel of agricultural land from the Villablancas. v CA (Constructive Delivery Facts: A brother bought a tractor from another brother through a deed of absolute sale. or if the buyer already had it in his possession. That purchase of the tractor was with the consent of Libra who insisted that the check for the mortgage debt clear first before delivery to the buyer. However. This is also one of the requisites for an action for forcible entry. the conditions of the donation were fulfilled. Delgado. She failed to show that she consummated the contract of sale by actual delivery of the properties and her actual possession in the concept of purchase owner. This tractor was subject to a mortgage to Libra from whom the brother-seller obtained the funds to but the tractor. implied lang ung doctrine sa case because the case is not actually about constructive delivery. intimidation. Lopez. Libra insists that at the execution of the deed. The case actually says that “The presumptive delivery only holds true when there is no impediment that may prevent the passing of property from the hands of the vendor into those of the vendee. there was constructive delivery upon the execution of the public instrument and upon the consent or agreement of the parties. Calinisan. Mendiola) - 68 and 70 DY. Fernandez Legaspi. considering that the tractor had been sold to the brother-buyer.In this case. The sale was in a deed of sale that was notarized and registered in the Register of Deeds. the tractor was executed by Gelac in a separate case involving the brother-seller. strategy or stealth. actual physical delivery cannot be made. The action was not for forcible entry. At the time of the execution. Also. Hence. after the sale. which is one of the requisites for an action for forcible entry. for the purposes of sale. There was no prior possession of the parcel of land by the plaintiffs. it was about what action was filed. 3 mos. Both evidences being weak. However. there was no allegation that the taking of the property by the Bocar’s was effected through force. Bocar’s occupied the land bought by the plaintiffs. there was no constructive delivery. Mendiola. the tractor was in the possession of Libra. Del Socorro. the property must be under the control of the seller. And harvested the coconut thereon.
it is not a sufficient groung to rescind the contract the contention of PCIC that the control of the land was not transferred to them was untenable. Sarenas . Rivas. The buyer may therefore rescind the contract of sale because of a breach in substantial particulars going to the essence of the contract. prior physical delivery or possession is not legally required and the execution of the deed of sale is deemed equivalent to delivery • • 71 BEHN MAYER v YANGCO (FOB sales and CIF sales Sarenas) *weird yung way na sinulat yung kaso Facts: • Subject matter & consideration: 80 drums Caustic Soda 76% ‘Carabao’ brank o Merchandise was shipped from New York o Ship was detained in Penang. Manila. * NACOCO was abolished and went into liquidation. Hence. Fernandez Legaspi. Beron. Del Socorro.72 short tons.154. absent the stipulation. the filing of the ejectment suit subsequently done by PCIC signified that it was the new owners of the land. * Gen Foods demanded from NACOCO the refund of $24. this complaint. • • Issue: • Held: • 72 GENERAL FOODS v NACOCO (CIF sales Beron) Facts: * NACOCO sold to Gen Foods 1500 long tons of copra at $164 per ton of @000 puonds per ton. Delgado. effects the transfer of ownership through the execution of a public document if the parties intended to impose on the Quiambaos the obligation to eject the tenants from the lot sold. but the expense of freight and insurance to be paid by the seller o delivery was to made at Manila Time of delivery: embarque: March 1916 o It was in fact shipped from New York on April 12. 71 drums confiscated o Defendant refused to accept the remaining 9 drums o Note: the specific merchandise was never tendered Place of delivery: contract provided for “c.f. pagadero against delivery of documents” o c. * Upon arrival in NY. Mendiola. it should have included in the contract a provision similar to that.59(amount withdrawn by NACOCO from Gen Foods' letter of credit). CIF.1916 W/N the contract can be rescinded Yes! The warranty of the seller to the buyer has not been complied with. which refused to pay. * Gen Foods submitted its claim to Board of Liquidators. NACOC thru its off0cer-incharge acknowledged the deficiency. Calinisan. the net cargo was reweighed by Gen Foods and was found to weigh only 898.SALES DIGESTS 2C 2005-2006 • • • • • • • • • • • • Issue: • Held: • • • Dean Villanueva PCIC bought a parcel of land from the spouses Quiambao in their agreement. – costs. it is stipulated that 108. and freight.i. insurance. Lopez. They signify that the price fixed covers not only the cost of the goods.f. New York.000 down payment balance upon the execution of the deed PCIC to assume the mortgage payment a second mortgage was entered into by the spouses which was paid by the spuoses themselves PCIC made several payments of the mortgage to PNB PCIC asked PNB to trasfer the title of the land in their name because they cannot eject the occupants of the land without it PNB refused because the mortgage was not yet paid in full PCIC asked for the rescission of the contract and asked the court to order PNB to return the payment it made for the mortgage of the property RTC: ordered the rescission of the contract and the return of the money CA: reversed the decision of the RTC W/N the failure of the Quianbaos to eject the occupants of the land is a sufficient groung for the rescission of the contract no! Symbolic delivery as a specie of constructive delivery.i.
But the Court discussed the difference between Sale on Return and Sale on Acceptance: “ Note that Vallarta changed the ruby ring because it was not acceptable to her. modify a CIF contract and throw the risk upon the seller until arrival in the port of destination. exchanged one item with another. On December 20. so long as the perfection and consummation of series of transactions are done outside Philippine territorial jurisdiction. the transaction entered into by Cruz and Vallarta was not a "sale or return. On November 20. and issued post-dated check in the amount of P5. Pacific Star Lines [80 SCRA 835 (1970] and in Universal Shipping Lines. Properly." Rather. Trial. so may implied na modification on the CIF agreement." or "sale on Beron. buyer-accused.the sale was consummated. he does this for the benefit of the buyer. the same time that the check was issued. 73 BEHN MAYER v YANGCO (refer to case 67) 74 PACIFIC VEGETABLES v SINGZON [ CIF Sales (Calinisan) (taken from Commercial Law by Dean Sundiang (San Beda)) ] RC note: I cannot find the case. it was a "sale on approval" (also called "sale on acceptance. In the instant case. Thus. Likewise. she decided to buy some items. Cruz presented the check to the bank for payment but was dishonored because the accounts of Vallarta already close. Thus. there is equally no question that the parties may be express stipulation or impliedly (by making the buyer's obligation depend on arrival and inspection of the goods). ISSUE: W/n the delivery by NACOCO to the carrier amounts to delivery to Gen Foods. 1968 was only for the purpose of enabling Vallarta to select what jewelry she wanted. vs. the price to be paid for the jewelry was finally agreed upon only in December 1968. the court took into consideration that the price agreed upon was to be based on 'net landed weights' (ibig sabihin ung weight pagdating sa port ng NY. Mendiola. Held: Still guilty of estafa because of the presence of intent to defraud and failed to put-up funds 3 days after the notice of dishonor. even if the products themselves should be manufactured or processed in the Philippines. Calinisan. seller (private offended party) is the owner of several jewelries. Del Socorro. CA Affirmed. Delgado. Issue: (buyer Vallarta) I’m not guilty of estafa because it was not issued (December 20) for a pre-existing obligation since on November 20 there was still no “meeting of the minds” being a “sale on acceptance” not a sale on return. Singson (April 1955).. insists that the contract in question was an ordinary CIF agreement wherein delivery to carrier is delivery to buyer. However. the Supreme Court held that a foreign corporation was not doing business in the Philippines when it entered into a contract with a domestic corporation providing for the delivery and payment of copra from the Philippines where the said contract was negotiated. Lopez.SALES DIGESTS 2C 2005-2006 Dean Villanueva * Defendant NACOCO. kung . and that the shipment having been delivered to the buyer and the latter having paid its price. vs. or Satisfaction Delgado) Facts: Rosalinda Cruz. The delivery made on November 20. HELD: NO. even if the twin characterization tests of Mentholatum obtained in the case. In Pacific Vegetable Oil Corp. perfected and performed in the United States. Rivas. Cruz filed estafa case in RTC and buyer was convicted thereof. Inc. NACOCO).. she entrusted her these (7 pieces) to her long time friend Victoria Vallarta. IAC (188 SCRA 170 (1970)] 75 VALLARTA v CA (Sale on Approval. I have placed this instead. Explain the Contract Test of "doing business" in the Philippines. delivery to the buyer is complete upon delivery of the goods to the carrier and tender of the shipping and documents required by the contract and the insurance policy taken in the buyer's behalf. Although it is the seller who may make arrangement for the insurance coverage and freightage of the goods. then. There is no question that under an ordinary CIF agreement. The Pacific Vegetable Oil doctrine had a follow up in Aetna Casualty & Surety Co. in lieu of the digest. Fernandez Legaspi.000.may mawala during the shipment. the same would not constitute doing business in the Philippines. and chose another ring. Sarenas . there was a meeting of the minds between the parties as to the object of the contract and the consideration therefore only in December 1968. vs. This is better than nothing. it will be for the account of the seller. Cruz appraised Vallarta of the dishonor and the latter promised to give another check but later would start to avoid seller." "sale on trial.
SALES DIGESTS 2C 2005-2006
satisfaction" [CIVIL CODE, art. 1502]). In a "sale or return," the ownership passes to the buyer on delivery (CIVIL CODE, art. 1502). (The subsequent return of the goods reverts ownership in the seller [CIVIL CODE, art. 1502]). Delivery, or tradition, as a mode of acquiring ownership must be in consequence of a contract (CIVIL CODE, art, 712], e.g. sale. If there was no meeting of the minds on November 20, 1968, then, as of that date, there was yet no contract of sale which could be the basis of delivery or tradition. Thus, the delivery made on November 20, 1968 was not a delivery for purposes of transferring ownership — the prestation incumbent on the vendor. If ownership over the jewelry was not transmitted on that date, then it could have been transmitted only in December 1968, the date when the check was issued. In which case, it was a "sale on approval" since ownership passed to the buyer. Vallarta, only when she signified her approval or acceptance to the seller, Cruz, and the price was agreed upon.” 76 MENDOZA v DAVID (Sale by Description
Facts: - Mendoza alleged that she ordered three sets of furniture from David and paid an initial deposit - Mendoza and David agreed on the specifications of the dining set, sofa set and tea set including the material and quality - Mendoza cancelled some of the furniture she ordered and David agreed to the cancellation - Mendoza paid an additional deposit - when David delivered the dining set to Mendoza, the latter rejected the set because of inferior material and poor quality. Mendoza likewise rejected the sala set and the tea set for the same reason - when Mendoza requested a refund of her total deposit of P80T, David refused - Mendoza filed a complaint for collection of money with damages - David alleges that the three sets of furniture were “made to order” in accordance with the usual practice of furniture stores - however, Mendoza insists that the transaction was a sale by sample or description which can be rescinded as provided under Article 1481 Issue: Sale by sample or description (as contended by buyer Mendoza) OR made to order sale (as contended by seller David)? Held: The transaction in this case was a “made to order” agreement. Nothing shows that the intent of the parties was for a sale by sample or description. - Whether a sale is by sample or description depends upon the intention of the parties. Other than Mendoza’s bare allegations that the transaction was a sale by sample or description, Mendoza failed to produce evidence to substantiate her claim. - The sale of furniture in this case is not a sale by sample. The term sale by sample does not include an agreement to manufacture goods to correspond with the pattern. - In this case, the three sets of furniture were manufactured according to the specifications provided by the buyer. Mendoza did not order the exact replica of the furniture displayed in David’s shop but made her own specifications on the measurement, material and quality of the furniture she ordered. - Neither is the transaction a sale by description. - Mendoza did not rely on any description made by David when she ordered the furniture. Mendoza inspected the furniture displayed in David’s furniture shop and made her own specifications on the three sets of furniture she ordered. Additional notes: Sale by Sample: when a small quantity is exhibited by the seller as a fair specimen of the bulk, which is not present and there is no opportunity to inspect or examine the same. to constitute a sale by sample, the parties must treat the sample as the standard of quality and that they contracted with reference to the sample with the understanding that the product to be delivered would correspond with the sample. there is an implied warranty that the goods shall be free from any defect which is not apparent on reasonable examination of the sample and which would render the goods unmerchantable Sale by Description: where “a seller sells things as being of a particular kind, the buyer not knowing whether the seller’s representations are true or false, but relying on them as true - where the buyer has not seen the article sold and relies on the description given to him by the seller, or has seen the goods, but the want of identity is not apparent on inspection - a seller’s description of the goods which is made part of the basis of the transaction creates a warranty that the goods will conform to that description; where the goods are bought by description from a seller who deals in the goods of that description, there is an implied warranty that the goods are of merchantable quality 77 and 78 STA ANA v HERNANDEZ (Sale per Unit or Number and Sale for a lump sum Fernandez) Beron, Calinisan, Delgado, Del Socorro, Fernandez Legaspi, Lopez, Mendiola, Rivas, Sarenas
SALES DIGESTS 2C 2005-2006
Facts: • •
Sta. Ana spouses sold 2 separate portions (one for 12,500 sqm “more or less” and the other for 26,500 sqm “more or less”) of their land to Hernandez for a sum of 11k. O, mag-seller buyer tayo ulit.. After the sale, the sellers prepared a subdivision plan. But the buyer, and other previouse buyers, did not conform to the plan and refused to execute an agreement of subdivision and partition. The sellers later found that the buyer was occupying an excess of 17,000 sqm in area, of what was bought. So seller filed a suit. Seller claims that the measurement stipulated should be followed. Buyer claims that the boundaries stipulated should prevail. TC ordered buyer to vacate the area. CA reversed on the ground that the boundary stipulated prevails.
Issue: Whether the sale is for two lots without clear boundaries but with exact areas for a certain rate, or for two portions with not definite areas but with definite boundaries for a lump sum? Held: It was for a lump sum, the boundaries prevail. The sale actually involves a definite and identified tract, a corpus certum, that obligated the vendors to deliver to the buyer all the land within the boundaries, irrespective of whether its real area should be greater or smaller than what is recited in the deed. To hold the buyer to no more than the area recited in the deed, it must be made clear that the sale was made by unit of measure at a definite price for each unit. As between the absence of a recital of a given price per unit of measurement and the specification of the total area sold, the former must prevail and determines the applicability of the norms concerning sales for a lump sum. So what’s the value of Santa Mr/Ms. __________? Again, it told us (actually drawn from Supreme Court of Spain) that as between the absence of a recital of a given price per unit of measurement, and the specification of the total area sold, the former must prevail and determines the applicability of the norms concerning sales for a lump sum. In the absence of stipulation on a price per unit/measure, the rules on sale for a lump sum applies. 79 ROBLE v ARBASA (Sale for a lump sum Legaspi)
Facts • spouses Arbasa purchased from Fidela Roble a unregistered parcel of land • According to the Deed of sale, the land had a total of 240 sqm • However, due to persistent efforts in reclaiming a portion of the sea, the land increased to 884 sqm • since then the spuses were in in continous possession of the entire parcel of land • Adelaida Arbasa tolerated her sister's (Fidela Roble) stay in the house, Veronica and Lilibeth Roble (nieces) stayed with Fidela • Shortly after Fidela's death, Veronica and Lilibeth Roble claimed a portion of the land with an area of 664 sqm • According to the Roble's the two lots located at the southern protion of the lot were owned by Fidela and Gualberto Roble • What was only conveyed to the spouses Arbasa was the 240 sqm stipulated in the deed Issue w/n the deed of sale executed conveyed the entire 884 sqm or it covered only the 240 sqm located at the northern portion of the property Ruling The sale between Arbasa and Roble was a sale for lump sum In the sale of real estate made for a luimp sum, there shall be no increase or decrease of the price although there be a greater of lesser area or number than stated in the contract The obligation of the vendor is to deliver everything within the boundaries However, when the land sold is with the descruption "more or less" with reference to its area, it covers only a reasonable excess or deficiency An area of 644 sqm is not a reasonable excess Also, at the time of the sale, the only existing land was the 240 sqm
80 CARBONELL v CA (Double Sales
Beron, Calinisan, Delgado, Del Socorro, Fernandez Legaspi, Lopez, Mendiola, Rivas, Sarenas
SALES DIGESTS 2C 2005-2006 Facts: -
Issue: Held: -
Jose Poncio owned a parcel of land in Batanes which he mortgaged to Republic Savings Bank for the sum of 1,500. Poncio was having trouble meeting the installments due on the mortgage so he offered the land for sale to Rosario Carbonell. After negotiations, Carbonell accepted the offer and assumed the mortgage on the land. They executed a document which allows Poncio to stay in the land for 1 year after the sale. Carbonell asked a lawyer to make a deed of sale but when the lawyer went to Poncio, the latter informed the lawyer that the land has already been sold to Emma Infante. Infante started to build a wall around the property. What Carbonell did was to file an adverse claim on the land. This was registered on Feb. 8, 1955. Subsequently, Infante had the deed of sale between her and Poncio registered on Feb. 12, 1955. Who has a better right to the land. Carbonell has a better right. According to the 2nd paragraph of Art. 1544, in double sale, ownership belongs to the first person his claim in good faith. Here, Carbonell was the first to “register” her claim on the lot. An adverse claim is equivalent to registration. Plus, Carbonell registered such claim in good faith. She had no knowledge of the second sale to Poncio. In fact, such second sale cannot affect the fact that she was the first to buy the land (maganda ung analogy ni CLV dito sa book). Despite knowing of the second sale, Carbonell is still deemed to be a buyer in good faith because there was no such second sale at the time of the first sale. The case also discussed how Infante is considered to be in bad faith. The court took note that Infante refused to meet with Carbonell to discuss their adverse claims even though they were just neighbors. Also, Infante failed to inspect the land prior to her registering it. She should have gone beyond the title when she found out that the mortgage passbook of Poncio is already with Carbonell. Thus, even if Infante was the first to actually register her deed of sale, she cannot be considered in good faith so Art. 1544 does not apply. Mendiola)
81 NAAWAN COMMUNITY v CA (Main Rule: Prius Tempore, Potior Jure …wala sa pile… 82 CHENG v GENATO (Requisites for Double Sales Facts: Rivas)
Genato is the owner of two parcels of land Genato and Da Jose executed a contract to sell for the two parcels of land for the price of P80 per square meter. Contract was in a public document and duly annotated a the back of the title It was stipulated that a down payment of P50,000 be paid at the execution of the contract and the remaining P950,000 after 30 days after Da Jose confirmed the authenticity of the documents. Only after full payment will possession of the property be transferred Da Jose spouses asked for a 30 day extension Pending the effectivity of the extension period, Genato executed an Affidavit to Annul the Contract to Sell but this was not annotated in the title Cheng approached Genato and expressed interest in buying the lands After Genato informed Cheng of the true status of the lands because of his pending agreement with Da Jose, Cheng went ahead with the deal and issued a check for P50,000. Genato assured Cheng that his previous contract with Da Jose will be annulled Genato thereafter went to the Office of the Registry of Dees to register the Affidavit to Annul the Contract to Sell By coincidence, Genato and Da Jose met there and they had an agreement to continue their Contract to Sell. Genato did not register his Affidavit Genato advised Cheng of his decision to continue his contract with Da Jose and returned the check issued by Cheng but Cheng refused to accept that check and insisted that he and Genato had a perfected contract to sell Cheng: asked for Genato’s specific performance and argued that his payment of P50,000 is an earnest money signifying a perfected contract to sell Genato: payment is merely an option payment and that his agreement with Cheng is subject to a suspensive condition that his prior contract with Da Jose be cancelled Da Jose: he has superior right over Cheng and that Cheng is also a buyer in bad faith RTC: ordered Genato to continue the contract to sell with Cheng CA: reversed the decision of the RTC because the first contract with Da Jose was not validly rescinded
Issue: W/N there was a valid subsequent contract to sell with Cheng Beron, Calinisan, Delgado, Del Socorro, Fernandez Legaspi, Lopez, Mendiola, Rivas, Sarenas
Registration alone without good faith is not sufficient. Cheng is not a buyer in good faith. It was denied due to some defect in the description of the property Nov 26 – Si Mendoza nanaman nagregister. Faustino. stronger in right).000 downpayment and the balance payable after ejectment of occupants thereof. This was opposed by Kalaw. especially where the condition has not been performed or complied with As to the 30 day preventative precautionary notice.SALES DIGESTS 2C 2005-2006 Dean Villanueva Held: - - - - None! Since there was a valid contract to sell with Genato and the Da Jose. In spite of the prior sale to Faustino and Adalin. Delgado. it is still void since it is subject to a suspensive condition. Several conferences were conducted with ultimately gave rise to a 'conditional sale' as alleged by parties thereto (seller. Mendiola. Adalin). Siyempre ayaw ni Mendoza. sellers decided to back out from said sale and return the downpayment made by the buyers. it did not take effect because the condition was never met. even if non-payment will be considered a ground for rescission. ISSUE: What is the true nature of the sale? Beron. Calinisan. it only protects the interests and rights of the person who secures it against those who acquire an interest in the property subsequent thereto and only for 30 days. The tenants then offered to purchase the commercial building by offering P600k per door. can hardly be said to be a sale of property. Article 1544 of the Civil Code on Double Sales is applicable in this case because of the principle of PRIMUS TEMPORE. Also. It cannot affect the rights or interests of persons who acquired an interest in the property theretofore (before or up to that time) Mendoza acquired the absolute deed and entered into possession before the preventive notice was filed Beron) • 84 ADALIN v CA (Doctrine on Conditional Sales Facts: Palanca with her brothers/sisters (herein sellers) owned a parcel of land on which a 5-door one-storey builcing is constructed and leased to Adalin (petitioner) and tp 3 other tenants. “ako ang owner!” sabi niya Nov 17 – Kalaw tried to register his title. the latter’s non-payment to the partial amount does not ipso facto avoid the said contract. Del Socorro. 1919 / conditional sale 2nd buyer – Mendoza / Nov 8. before the performance of the condition. Fernandez Legaspi. his right is still inferior to that of Da Jose. 1919 / absolute sale Nov 12 – Mendoza entered and took actual possession of the land. Even if he was able to register the transaction before Da Jose did. Even assuming that the contract is a conditional contract to sell. Sellers commissioned one named Bautista to look for and negotiate with prospective buyers. Bautista offered the property for sale to Faustino Yu (president-manager of Imperial Hotel) and FAustino agreed to buy. The contract to sell between Genato and Da Jose was not only first in time but it was also registered long before Cheng proposed to buy the lands. Acomplint was then filed against the 3 other tenants for unlawful detainer. Rivas. Sarenas . PORTIOR JURE (first in time. Also. Trial Court: Mendoza owns the land Who is the owner in due course Mendoza owns the land kasi ayaw ng SC sa mukha ni Kalaw A conditional sale. a representative of Kalaw (malamang goon ni Kalaw ‘to) claimed and attempted to take possession. He has knowledge of the first transaction between Genato and Da Jose. Their contract is really a contract to sell. Lopez. Petitioner Adalin also agreed to buy 1-door. with P300. Genato’s failure to give notice to Da Jose of his descission to annul the contract will render his decision to annul the contract void Cheng’s contention that the contract between him and Genato is a conditional contract to sell is also untenable. Sarenas) 83 MENDOZA v KALAW (Doctrine on Conditional Sales Facts: • • • • • • • • Issue: • Held: • • • Seller – Federico Cañete 1st buyer – Kalaw / Sept 24. fenced it and cleaned it (excited siguro) After fencing and cleaning.
Sarenas .1m to be made upon delivery of the property. he must make good on his promise to go on with the sale. Calinisan. Seller cannot claim that even if the condition happened. Held: Alcaraz has a better right. the clerk of court can sign for the reneging seller). The choice of whom to sell the property. Mabanag registered the purchase (adverse claim). the sale was subject to the condition that Coronel title the lot in his name. The difference between a TO and an OF is that in a TO. Lopez. Mabanag registered the deed of absolute sale and obtained TCT. though subject to a condition – that the property be titled in the seller’s name. despite its being subject to a condition. Since there were two sales. upon the happening of the condition. before applying the provision on double sales had to determine whether there were indeed two sales. 85 CORONEL v CA (Doctrine on Conditional Sales Facts: Calinisan) Coronel and Alcaraz entered into a contract of sale over a house and lot. Coronel. the obligaion of sellers to eject and buyers to pay. In an OF. When the condition happened. At the time the contract was entered into. Though MAbanag registered her purchase. The court. she was not in good faith (lis pendens) and her registration has no effect. Delgado. The sale was to – conditioned on the cancellation of sale 1. instead of delivering the property. Fernandez Legaspi. But the sale is conditional only in as much as there remained yet to be fulfilled. its effects retroacted to the date of the constitution of the obligation.5m. ownership is deemed automatically vested in the buyer.SALES DIGESTS 2C 2005-2006 Dean Villanueva HELD: The contract was a definitive and absolute sale. the provision on double sales can apply. In this case. but not before Alcaraz had a notice of lis pendens annotated on the title. Issue: W/N Alcaraz or Mabanag had the better right. the sale becomes absolute and the seller can be compelled to execute the relevant documents (or as mentioned in class. however had already been made by sellers and is thus no longer subject to any condition. the lot was titled in the name of Coronel’s father. a contract of sale or a contract to sell? It was a contract of sale. upon which. 86 CHENG v GENATO (Doctrine on Conditional Sales 87 CHENG v GENATO (Meaning of Registration Delgado) Del Socorro) Beron. Alcaraz then filed for specific performance. A P50T down payment was made with the balance of 1. ownership is expressly reserved by the seller until the happening of the condition. In fact. hence. Palanca clearly showed an intelligent appreciation of the nature of the transaction that she had entered into: that she had already sold the property to Faustino and Adalin and that the payment of balance ios subject to the condition that she would evict tenants. Del Socorro. Was the sale to Alcaraz. there was still need for him to make good on his promise to transfer ownership because the contract was one of sale and not to sell. Rivas. the seller has no more title to sell the thing to another buyer. sold the same to Mabanag for 1. The sale is deemed to have been absolute on the date the contract was entered into. After the condition happened. Mendiola. if there had been previous delivery.
Cheng filed an action for specific performance to compel Genato to consummate their contract w/c was already perfected Issue: Who has a better right to the land? Held: The Da Jose spouses have a better right to the land. The same property was later sold to Cruz by the same Leodegaria. Lopez. Registration of the deed of sale was not accomplished because the buyers could not present the owner’s duplicate of title as they were on the bank (subject of a mortgage). that the prior sale to Da Jose’s be rescinded 3.when Genato went to the RD to have the affidavit registered. 1544 is not applicable . Genato executed an affidavit to annul the contract to sell because the Da Jose’s breached their contract . portior jure (first in time. 2nd buyer in good faith (ignorance of 1st sale and of 1st buyer’s rights) from time of acquisition of title is transferred to him by registration. 2nd buyer continues good faith until his contract ripens into full ownership through prior registration .SALES DIGESTS 2C 2005-2006 Dean Villanueva Facts: .pending expiry of the period and w/o notice to the Da Jose’s.not only was the sale to Da Jose’s first in time. requisites for the 2nd buyer to displace the 1st buyer: a. Moreover.stipulated therein that P50T as downpayment. therefore. so issued P50T check to Genato upon the assurance of the latter that the previous contract would be annulled. who refused to receive it . Calinisan. 1544 does not apply w/c has the ff.this principle only applies when the special rules provided in 1544 do not fit in the specific circumstances .both parties decided to continue w/ their contract .Cheng was never in good faith because he knew of the sale Da Jose’s won not because of 1544. w/c is primus tempore. he was informed that the same land was sold to Legaspi and Cabana. by delivery of possession b. 1.at the time of Cheng’s complaint for specific performance.contract was in a public instruments and was dully annotated at the back of the 2 certificates of title .Cheng was interested in buying the lands. the Da Jose requested and was granted an extension of another 30 days . stronger in right) . Rivas. The first buyers contend that they were the rightful owners of the land. Fernandez Legaspi. Seller never repurchased the land sold. Cruz was able to register the land in his name. Thus. Genato issued a written receipt . it was also registered long before Cheng’s intrusion as a second buyer . except if Cheng registers ahead of them in good faith . the Da Jose’s already paid in full. There was no valid rescission of the Da Jose’s contract to sell. same seller .at the expiration period. Sarenas . the subsequent sale to Cheng did not acquired obligatory force. requisites: a. to spouses Teofilo Legaspi and Iluminada Cabana. 2 buyers represent conflicting interests c. the suspensive condition of full payment not having occurred yet. the P950T balance shall be paid .the knowledge gained by the Da Jose’s regarding the subsequent contract does not defeat their rights. Art.seller Genato entered into a contract to sell w/ Da Jose spouses for 2 parcels of land . the Da Jose’s did not default as the 30 day extension period had not yet expired. 2.still the governing principle of 1544 should apply in this case. whereupon the spouses only came to know what Genato was about to do . 2 sales pertaining to the same subject matter b. Del Socorro. priority in right . Cruz claims that he was the first one to register it. he met the Da Jose’s. or failing registration. they have a better right 88 CRUZ v CABANA (Knowledge of the first unregistered sale by the 2nd buyer is equivalent to registration in favor of the 1st buyer Fernandez) Facts: • Leodegaria Cabana sold a land.since the transfer of ownership of the sales has not been consummated.under 1544. The 2nd contract being a contract to sell. but becase of 1st in time. There can be no rescission of an obligation that is still inexistent.the affidavit was not annotated on the TCT’s . Nevertheless. and 30 days after execution and only after verifying the truth and authenticity of the documents by Da Jose. Mendiola. Delgado. since it also depended on a suspensive condition. with right to repurchase. When the former tried to register. • • Issue: Is Cruz protected by Art 1544 as he was the first one who registered the property? Held: Beron.Genato then returned the 50T check to Cheng.
This agreement was not also annotated. There is no question that the spouses Legaspi and Cabana were the first buyers and the only ones in possession of the subject property. a new owner’s copy of the title was issued to Cabautan. Meanwhile. but the sale was unregistered. A purchaser in good faith is a person who buys the property without notice that another person has an interest in the property. Plus. he had knowledge (as he was informed) of the prior sale in favor of the spouses. Rivas. Held: Yes. W/N Cabautan is in good faith. filed a case in the RTC for the issuance of title over several parcels of land. Again. because Cruz was not in good faith. Lopez. There being the absence of good faith.SALES DIGESTS 2C 2005-2006 Dean Villanueva No. the first unregistered sale prevails over the registered second sale. TCT’s were issued in Mapa’s favor but these were in conflict with other existing certificates of title. The TCT does not show any annotation of any sale. Mapa assigned the lands to Palmera Agricultural Realty Development Corporation. When the property was registered in the Torrens system. Sarenas . 91 AGRICULTURAL and HOME EXTENSION v CA (Who is purchaser in good faith Mendiola) Facts: Spouses Diaz sold a parcel of land to Gundaran. First buyers were not able to present the duplicate certificate because they were still with the bank. Mendiola. Gundaran and Agricultural and Home Extension entered into a JVA for the subdivision and development of the purchased land. the Court said that the certificates of title have already become stale because 10 years has already lapsed since their issue. Delgado. When two certificates of title are issued to different persons covering the sale land. Held: The second sale to Cabautan prevails over the first sale to Gundaran. Issue: W/N Gundaran has a right to the property. or adverse claim on the property. resulting in the filing of several actions with the RTC. all the notices of lis pendens on the title were cancelled and the deed of sale to Cabautan was recorded. For the second buyer to obtain priority over the first buyer. lien. whole or in part. because the second was registered. or failing registration. By the order of the court. The owner’s duplicate was given to Gundaran. Issue: W/n the TCT’s were null and void. Calinisan. the spouses sold the property to Cabautan. predecessor-in-interest of Jesus Liao. which sold the land to Liao the RTC’s all agreed that the TCT’s in favor of Mapa were null and void. 89 TAÑEDO v CA (Registration in Good Faith always pre-empts possession in GF 90 LIAO v CA (Registration in Good Faith always pre-empts possession in GF Facts: Legaspi) Lopez) Estrella Mapa. This was affirmed by the CA. Mapa alleges that several certificates of sale were issued to one Vicente Salgado and that the latter assigned them to her. he must show that he acted in good faith throughout from the time of acquisition until title is transferred to him by registration. Such a purchaser pays in full at the time of purchase before he had notice of the claim or interest of some other person in the property. due to existing notice of lis pendens on the title. The sales to Mapa were considered as having no effect because the lots were owned by the government at that time. the earlier in date must prevail. by delivery of possession. or encumbrance. the registration is the operative act to Beron. 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 by virtue of the latter instrument of conveyance which creates no right as against the first purchaser. Also. they were void. Del Socorro. Fernandez Legaspi. And when Cruz was able to register the land in his favor. Gundaran claims reconveyance. The RTC granted Mapa’s action.
While under the invoked Art 1544 registration in good faith prevails over possession in event of a double sale by the vendor of th same piece of land to different vendees. Lopez. exclusive and continuous possession thereof as owner o If registered land – Dagupan Trading has better right. Calinisan. Fernandez Legaspi. the notices of lis pendens were cancelled by virtue of court orders. A person dealing with a registered land is only charged with notice of the burdens on the prop7erty that are noted in the certificate of title. And what is the right that he has? Nothing. Delgado. The reason is that the purchaser of unregistered land at a sheriff's execution sale only steps into the shoes of the judgement debtor and merely acquires the latter's interest in the property sold as of th time the property was levied upon. Registration of the deed of sale is the operative act that gives validity to the transfer Real situation – sale to Macam was before the land was registered. gusto lang nila idiscuss) o If property was unregistered land – Macam has better right because his claim is based on a prior sale coupled with public. 92 NAAWAN COMMUNITY v CA (When Unregistered Land Rivas) …wala sa pile… 93 DAGUPAN TRADING v MACAM (When Unregistered Land Sarenas) Facts: • • Previous Owner of Property – Sammy Maron w/ 7 brothers & sisters 1st Buyer – Rustico Macam o bought land while the application of Maron for registration was still pending o only the 1/8th share of Sammy Maron to the land was bought nd 2 Buyer – Dagupan Trading o by virtue of final judgment and levy upon the share of Sammy Maron to the land Where is the love? Who has better right to the 1/8th share of Sammy Maron Di nga. The deed of sale was never registered in the Office of the Register of Deeds. Let’s try to draw a picture. Cabautan therefore acquired the land free from any liens or encumbrances. (sec 35 of rule 39 of the revised rules of court) Beron. Sale to Macam was not registered but levy in execution and provisional certificate of sale to Dagupan was registered. interest and claim of the judgment debtor to the property as of the time of the levy” In other words. ISSUE: Who has the better title over the land? HELD: Carumba. Significantly. Del Socorro. A complaint for a sum of money was filed by BAlbuena against Amado Canuto (seller) and a decision was rendered in favor of Balbuena.SALES DIGESTS 2C 2005-2006 Dean Villanueva convey the land. even if Balbuena was ignorant of the prior sale made by his judgement debtor in favor of Carumba. Sarenas . Rule 39 of the Rules of Court applies o The purchaser of land sold in an execution sale “shall be substituted to and acquire all the right.said article is of no appliation to the case at bar. He already sold his ownership over the property to Macam. while the sale to Dagupan was after land has been registered o Section 35. title. Beron) • Issue: • • Held: • • • • • • 94 CARUMBA v CA (When Unregistered Land FACTS: Sposes Canuto and Ibasco sold an unregistered parcel af land to sposes Amado Carumaba and benita Canuto. at the time of execution Dagupan merely stepped into the shoes of Maron as to the right he has over the property. where is the love? Macam owns the land Tricky ‘tong held ha. Mendiola. 3 days after the execution of the deed of sale in favor Cabautan. Rivas. Ex-offico sheriff issued a Definite Deed of Sale of the property in question in favor of Santiago Balbuena. Hypothetical situations: “IF” lang (bibo yung SC. which instrument of sale was registered before the Office of the Register of Deeds.
this land is unregistered and under Act. 3344. 1091 to his daughter Juliana P. the whole estate of the decedent is. Later. If the property had been registered land. The execution was not valid because the property no longer belonged to Castro. Issue: W/N the sale of Donato to his daughter is valid. Radiowealth. This was put in a notarized deed of absolute sale. judgment was rendered against Castro in a proceeding and his property was levied and sold at public auction to Radiowealth. or a second buyer. 1974 Lot No. registration of instruments affecting unregistered lands is without prejudice to a third party with a better right. Radiowealth’s registration of its right would have given it a better right. 95 RADIOWEALTH v PALILEO (When Unregistered Land Facts: • • • • • • Calinisan) Castro sold an unregistered parcel of land to Palileo. Article 1544 does not apply to unregistered lands. From the time of the death of Agatona Sagario Paulmitan to the subsequent passing away of her son Pascual in 1953. owns two parcels of land in Negros Occidental. co-owners of the estate left by their mother as no partition was ever made When Donato Paulmitan sold on May 28. the judgement debtor no longer had dominical interest nor any real right over the land that could pass to the purhcaser at the execution sale. After the redemption period. he could only sell that portion which may be allotted to him upon termination of the coownership. Palileo filed an action for quieting of title which was granted and affirmed. • 96 PAULMITAN v CA (Seller Not Owner at Delivery Delgado) Facts: Agatona Sagario Paulmitan. Sarenas . before its partition. Fanesa. After the sale to Palileo. Issue: Who has a better right over the unregistered land: Palileo. Donato extra-judicially adjudicate the said lands to himself without the consent of the heirs of Pascual. therefore. she begot two sons. From her marriage to Ciriaco Paulmitan. The second parcel of land was sold on a public auction for the payment of real estate taxes and was later redeemed by Juliana and declared to her name. Delgado. Fernandez Legaspi. Held: Valid as to the 1/2 portion. The sale did not prejudice the rights of respondents to one half (1/2) undivided share of the land which they inherited from their father.SALES DIGESTS 2C 2005-2006 Dean Villanueva When the levy was made by the Sheriff. It did not vest ownership in the entire land with the buyer but transferred only the seller's pro-indiviso share in the property and consequently made the buyer a co-owner of the land until it is Beron. the heirs of Pascual filed case in the lower court. Palileo took possession and paid taxes. Del Socorro. a first buyer possessor. owned in common by such heirs. However. A purchaser at an execution sale merely steps into the shoes of the judgment debtor and acquires the latter’s interest in the property sold as of the time the property was levied. the estate remained unpartitioned. Rivas. who registered the sale. therefore. subject to the payment of debts of the deceased. Later. the judgment debtor." Donato and Pascual Paulmitan were. Mendiola. Held: • • • • Palileo has the better right. Lopez. Article 1078 of the Civil Code provides: "Where there are two or more heirs. Calinisan. he was only a co-owner with respondents and as such. a deed of final sale was executed and this was registered with the Register of Deeds. whop died in 1953. RTC and CA for the Pascual heirs. Donato and Pascual (died also in 1953 after her mother's death). He sald the first parcel to her daughter Juliana.
Fanesa.the other co-owners-children. Santiago also inherited from his mother (Lot 4) Santiago apportioned all of his properties among Aleja's children in the Philippines After Santiago's death. Lorenzo. Nevertheless. the deed in her favor was inoperative to convey the 1/3 lot since Seller is only a co-owner with Lorenzo and Ricardo. petitioner Juliana P. Buyer 1’s contention: Initially. together w/ the buildings on the land. Aleja then married Santiago Almendra. Buyer 1 became the actual owner of the 1/3 (southeastern portion) of the lot by virtue of Art 1434. Nothing in the deed proves such. thus making her the co-owner of the land in question with the respondents.the sellers only owned 7/12 of the lot .buyer Yap would not have entered into the contract except to acquire all of the properties purchased by him . it does not mean that she intended to sell her 1/3 undivided share. filed for annulment of the sale and for its rescission . Buyer 1 now files an action for legal redemption on the ground that he is a co-owner of the lot sold by Seller to Buyer 2. during said marriage they acquired a parcel of land (Lot 1) After Book's death. VOID sale.the school properties were owned by Mindanao Academy b. Issue: Can Buyer 1 redeem the 2/3 lot sold to Buyer 2 as a co-owner (with Seller) of the same land? Held: No. the prestation involved in the sale was indivisible. Mendiola. The deed of sale to Buyer 1 clearly specified the object sold (southeastern third portion of the lot). Dean Villanueva Applying this principle to the case at bar. But when Seller acquired the remaining 2/3 interest (prior to the sale to buyer 2). Aleja sold to Angeles Amendra her share in the conjugal property She indicated in the deed of sale that she was selling the hilly portion of lot 2 Beron. Thus.SALES DIGESTS 2C 2005-2006 partitioned. Crispina (Seller) sold 1/3 of the lot to Estoque (Buyer 1) as evidenced by a deed of sale.the trial court held that the sale was void . and Ricardo inherited a piece of land (lot 802) from their parents. Buyer 1 never acquired an undivided interest in lot 802. Granting that seller could not have sold this particular portion. incapable of partial annulment . Delgado. the sale by petitioner Donato Paulmitan of the land to his daughter.it was unnecessary for the trial court to rule on the question of rescission since the sale is already void because: a. Rivas. 99 ALMENDRA v IAC (Sale by Co-Owners Legaspi) Facts Aleja Ceno was 1st married to Juanso Book. the 2/3 lot sold to Buyer 2 can be redeemed by her (Buyer 1) as co-owner. Seller sold 2/3 of the lot to Pajimula (Buyer 2). laboratory equipt’s books. Sarenas . did not give to the latter ownership over the entire land but merely transferred to her the one half (1/2) undivided share of her father. hence. Lopez. Calinisan. Hence. Del Socorro.widow Rosenda together w/ her 2 children sold school properties to buyer Yap. the contract purported to sell properties of which the sellers were not the only owners .since the purported transfer of ownership over the school properties sold to buyer Yap is void. furniture and fixtures established by Mindanao Academy and Misamis Academy . he never became the owner 98 ESTOQUE v PAJIMULA (Sale by Co-Owners Facts: • • • • • Fernandez) Crispina. upon learning the sale. she became a co-owner of the entire lot with Seller. Fernandez Legaspi. Later on. . During their marriage they acquired a parcel of land (Lot 2) Aleja inherited land from her father (Lot 3). her first cousins. 97 MINDANAO v YAP (Sale by Co-Owners Del Socorro) Facts: .Yap appeals the decision of the trial court Issue: W/N the sale to Yap by a co-owner of the property owned in common w/o the consent of the other co-owners is void. there was a civil case that resulted to a partition of the properties. Held: Yes. only an undivided 1/3 interest was sold.
Article 1434 of the Civil Code which says that "[w]hen a person who is not the owner of a thing sells or alienates and delivers it.50 for license fees. All she has was an ideal proportionate share. Fairs. the action they brought against the Gabars was actually one to quiet their title. Del Socorro.000 to Josefina as downpayment on Jan. The land has already been delivered to the Buctons. Buctons now want a separate title for their half of the land but Gabars refuse because they say that the whole land is mortgaged to PNB. Delgado. She could not have sold the hilly portion specified in the deed of sale. Calinisan. Thus. 1946. Buctons therefore became owners of the one-half portion of the lot in question. CA reversed saying that the action of the Buctons have already prescribed. Prior to partition. Delia and Bernardina dile a complaint against the buyers for the annulment of the deeds of sale. or Markets Mendiola) Facts: Bagsuk Lumber made several sales of lumber to firms. private respondents were not yet the owners of the lot. Margarito. Thus.SALES DIGESTS 2C 2005-2006 Dean Villanueva Aleja sold to her son Roman Almendra parcels of land When Aleja died. Thus. Sarenas . In Jan. which does not prescribe. Thus. Aleja could not have sold the whole lot because she only has a right to exercise ownership over the portion adjudicated to her. thus they are already the owners thereof. 1947. Nicanora paid 1. Aleja could not claim title to any definite portion of the property. the payments made by Nicanora (meron pang 400 in 1948 and 100 in 1951) resulted in the full payment of the purchase price and the consequential acquisition by petitioners of ownership over one-half of the lot. There was a contract of sale between Nicanora Bucton and Josefina Gabar where the latter obliged herself to give Bucton half of the land. 1946. they became such owners on January 24. having no lumber yard nor kept a store where logs could be sold. SC says yes. Although at the time said petitioner paid P1. Thus. Beron. 1947. RTC ruled in favor of the Buctons. The Office of the Treasurer of the City of Manila sent a demand to the Company for the payment of the amount of P554. they brought the present action.000 and has constructed improvements on it (an apartment). when a deed of sale was executed in their favor by the Villarin spouses. According to Bagsuk. Bagsuk refused to pay the amount asked by the Treasurer. Rivas. on the ground that the firm was found to be engaged in the sales of timber products without first securing a permit and license mandated by City Ordinances. W/n the Buctons have a claim on half of the land owned by the Gabars. partition of the properties and accounting of the produce Issue w/n the sale between aleha and her children wer valie Ruling The sale to Angeles of the half portion of the conjugal property may only be considered a valid sale of Aleja's interest therein. The Buctons possessed the land from the payment of the 1. Josefina Gabar orally agreed with Nicanora Bucton that the former would sell half of the land to the latter. such title passes by operation of law to the buyer or grantee. it was a producer selling unprocessed logs." is applicable. 100 BUCTON v GABAR (Estoppel by True Owner Facts: Lopez) Issue: Held: - Spouses Gabar bought a parcel of land from Villarin. Despite demands. Mendiola.000 as part payment of the purchase price on January 19. Villarin executed a deed of absolute sale to Gabar and a TCT was issued to Gabar. and later the seller or grantor acquires title thereto. The sale of lot 3 was valid becuase it was Aleja's paraphernal property Regarding the sale of the lot which was subdivided in a civil case. - 101 CITY OF MANILA v BUGSUK (Sale in Merchants Stores. Fernandez Legaspi. Lopez.
Where the rights and interest of a vendor comes into clash with that of an innocent purchaser for value. the existence of Bagsuk’s office in Binondo is proof that he is a dealer. The making of payment thereto at a principal office does not transform the office into a store. or Markets Facts: Rivas) On July 1. the latter must be protected SBC’s - recourse to seek damages from Lopez Sarenas) 103 EDCA v SANTOS (Sale by One Having Voidable Title Facts: • • • • Issue: • Held: • • • A person who represented himself as one Professor Jose Cruz ordered 406 books from EDCA. therefore. The City of Manila contends that the term dealer includes one who carries on a business of selling goods at a store or warehouse. ownership still passed. Rivas. Del Socorro. Who owns the books? Art 559 of the CC provides that possession of movable property acquired in good faith is equivalent to title. Lopez.700 Only P500 was paid balance to be paid in installment. Lopez is also not allowed to remove the refrigerator from his address without the consent of the SBC On July 2. Cruz was later on arrested. Mendiola.700 EDCA came across information that this Cruz is a con man. Sun Brother’s Con [SBC] delivered to Lopez 1 Admiral refrigerator under a Conditional Sale Agreement for P1. Cruz acquired ownership over the books which he could then validly transfer to Santos. Lopez sold the refrigerator JV Trading owned by Velasco for P850 by misrepresenting himself as Lim and the absolute owner of the refrigerator. Cruz paid P8. Sarenas . or markets. Fernandez Legaspi. 102 SUN BROS v VELASCO (Sale in Merchants Stores. but does not act as a dealer. A store is a place where goods are kept for sale. in accordance with the Code of Commerce and special laws JV Trading is a merchant store. ownership shall pass to the buyer upon delivery of the thing sold even if the purchase price has not been paid yet. Fairs. The reason: the element that there must also be goods stored therein or on display is missing.995 by issuing a personal check. without the knowledge if SBC. The books in possession of Santos were seized without warrant. Delgado. or where goods are deposited and sold by one engaged in buying and selling them. still without the knowledge of SBC. Calinisan. Cruz later on sold 120 of the books to Leonor Santos for P1. subject to the payment of the license tax and permit fees in question. hence. Velasco was able to sell the refrigerator to Co Kang Chiu after displaying the refrigerator in his store for P985 SBC filed a petition for replevin against Lopez and Chiu RTC: Chiu is not the owner of the refrigerator but SBC Issue: W/N SBC or Chiu is the real owner of the refrigerator Held: Chiu is the real owner General rule that goods sold by a person who is not the real owner thereof and who does not sell them under authority or consent of the owner. Santos does not need to establish their ownership by showing a receipt to prove that they bought it. Held: Bagsuk is not a dealer of lumber.SALES DIGESTS 2C 2005-2006 Dean Villanueva Issue: W/N Bagsuk Lumber is a dealer of timber and. Although the con man paid through a false check. Absent stipulation. Actual delivery being made to Cruz. Beron. But Bagsuk does not qualify as a dealer for it is undeniable that what Bagsuk sold was its own produce. The office of Bagsuk only serves to facilitate the transactions relative to the sale of its produce. July 3. A dealer is one who buys and sells again. buyer acquires no better title to the goods than the seller had Exception is when purchase is made in a merchant’s store or in fairs.
Delgado. Feist induced her to part with it is illegal and is punished by law. it would seem that she was unlawfully deprived thereof.SALES DIGESTS 2C 2005-2006 • Dean Villanueva Santos first made sure that Cruz was the owner of the books. De Dios. it is susceptible of either ratification or annulment. went to SAntos who.). Merella was able to sell the car to plaintiff Aznar who was in good faith and for value. Certainly. the plaintiff Tagatac sued to recover the vehicle from Jimenez on the ground that she had been unlawfully deprived of it by reason of Feist's deception. the action to annul it is extinguished (Article 1392. plaintiff-appellant was "illegally deprived" of her car.C. At first blush. N. and wihtout notice of defect appertaining to the vendor's title. Fernandez Legaspi. Cruz showed her the invoice given by EDCA. the Court of Appeals held: The point of inquiry is whether plaintiff-appellant Trinidad C. Calinisan. Santos' son was made to wait at the sala of the alleged house of Merella's sister while De Dios was to talk to the sister. Beron. as in the present case. Mendiola. 104 AZNAR VS. seller Merella has no title at all. The following day.). Santos went back to residence of Merella. Del Socorro. considering that she was induced to part with it by reason of the chicanery practiced on her by Warner L. In ruling for Jimenez. . who sold it to Jimenez. But does this "unlawful deprivation" come within the scope of Article 559 of the New Civil Code? xxx xxx xxx . Vicente Merella's nephew. If the contract is ratified.. this is not applicable where. Feist. Sarenas . if the contract is annulled.C. De Dios together with Santos' son and an unidentified person went to Merella's sister to get the P2000 balance. 105 TAGATAC v JIMENEZ (Sale by One Having Voidable Title Facts: • • • Calinisan) Tagatac sold her car to Feist. Santos is in good faith. The sale was registered. which showed that Cruz indeed was the owner. De Dios never came back. ISSUE: Who has a better right over the car? Santos or Aznar? HELD: Teodoro Santos. When the payment check issued to Tagatac by Feist was dishonored. The fraud and deceit practiced by Warner L. and the necessary documents presented to Merella who refused to pay the whole amoount claiming he was short by P2000. N.C. "When buyer has a voidable title. Being a voidable contract. swindling. Lopez.C. N. Santos' son went to Merella. In a manner of speaking.) and the contract is cleansed from all its defects (Article 1396. but the latter is already gone. is an illegal method of deprivation of property.C." however. however was out during that day and only Santos' son was present. for the way by which Warner L. like robbery. but this title had not been voided at the time of sale. Issue: W/N Jimenez has a better right to the car. YANPDIANCO (Sale by One having Voidable Title Beron) Facts: Tedoro Santos advertised in 2 papers the sale of his car. Merella agreed to buy the car on the understanding that the price would be paid only after the car had been registered in his name. Rivas.). Feist earmarks this sale as a voidable contract (Article 1390 N.. Tagatac has been unlawfully deprived of her car. .C. the contracting parties are restored to their respective situations before the contract and mutual restitution follows as a consequence (Article 1398. the buyer acquiers good title.C. who sold it to Sanchez.C.
but such stipulation cannot make the seller liable in case of loss not only because such was agreed merely to secure the performance by the buyer of his obligation but in the very contract it was expressly agreed that "the loss or damage to the books after delivery to the buyer shall be borne by the buyer. his title thereto had not been avoided and he therefore conferred a good title on the latter. the contract of sale remains valid and binding. Mendiola. in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance by the buyer of his obligations under the contract. After making initial payment.although the rule that the loss of the object of the contract of sale is borne by the owner.buyer Tabora bought from seller Lawyer’s Coop law books . balance was still to be paid . and the obligor bound himself to assume the loss after the delivery of the goods to him . the goods are at the buyer's risk from the time of such delivery. including the books . There being no proof on record that Felix Sanchez acted in bad faith.stated in the contract of sale that “title to and ownership of the books shall remain w/ the seller until the purchase price shall have been fully paid. but is pecuniary in nature. either that of annulment or of ratification. fully paid. . • 106 ROMAN v GRIMALT (Effect of Loss before perfection Delgado) 107 LAWYER’s COOP v TABORA (Effect of Loss after delivery Del Socorro) Facts: .the rule that the happening of a fortuitous event exempts the obligor from liability does not apply here because this rule only holds true when the obligation consists in the delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous event .” . Delgado.although the contract states that the ownership of the books shall remain with it until the purchase price shall have been.the obligor agreed to assume any risk concerning the goods from the time of their delivery.6k remained. it is safe to assume that he acted in good faith. As security. the obligation does not refer to a determinate thing.partial payment was paid. such rule is not applicable here because the law and the contract entered into on the matter argue against it . Lopez. the car was mortgaged. When Trinidad C." . the title that Feist acquired was defective and voidable. Rivas.Tabora contends that he is exempted from paying the remaining balance because of force majeure Issue: W/N buyer still had to pay although the books had already been burned. But at the time he sold the car to Felix Sanchez.after the books have already been delivered." . the title to the car passed to Feist. A balance of 1. provided he bought the car in good faith. buyer executed a PN for the balance payable on or before June 15. So seller moved to foreclose the mortgage and the car was sold at a public auction. which is an exception to the rule provided for in Article 1262 of the Civil Code 108 LEVY HERMANOS v GERVACIO (Meaning of Installment Sale Facts: • • Issue: Fernandez) Hermanos sold to Gervacio a Packard car.in this case. Del Socorro. Loss or damage to the books after delivery to the buyer shall be borne by the buyer. Fernandez Legaspi. Calinisan. Dean Villanueva (RC Note: Referring to the sale between Tagatac and Feist) As long as no action is taken by the party entitled.SALES DIGESTS 2C 2005-2006 Held: • • • • Jimenez has a better right to the car.such stipulation is sanctioned by Article 1504 of the Civil Code Where delivery of goods has been made to the buyer or to a bailee for the buyer. Tagatac delivered the car to Feist by virtue of said voidable contract of sale. Sarenas . Held: YES. Buyer failed to pay the note at maturity. Of course. Beron. a fire broke out and burned the law office of Tabora. or in case of force majeure the one under obligation to deliver the object is exempt from liability. 1937 with interest at 12% per annum. for value and without notice of the defect in Feist's title.
So. there may not be a difference between paying the price in 2 installments and paying partly in cash and partly in one installment in so far as the size of each partial payment is concerned. It rescinded the arrangement. Such temptation. Issue w/n seller has a right to rescind the agreement Ruling this is a contract to sell. Sales in installment involve those cases where partial payments consist in relatively small amounts which constitute a great temptation for improvident purchasers to buy beyond their means. sellers tried getting the payment but they failed. Calinisan. selller refused to comply. but in the regular course of business a difference exists. in which the balance. Rivas. Although rescission could be done under 1911. 1597 Dissent From the time the seller gave access to the buyer to enter the premises. It is true that article 1454 of the Civil Code provides that when the vendor exercises his right to foreclose the mortgage. That payment was not yet effected is immaterial because the nonpayment of the price is merely a resolutory condition which extinguishes the transaction. he has placed the goods in the possession of the buyer Such action transfers ownership. after payment of the initial sum. Sarenas Issue: - . They opined that there was an implied delivery when the buyer collected the scraps of iron. should be paid I it totality at the time specified in the PN. The opening of a letter of credit is not one of the requisites for the perfection of the sale. The aircons were delivered. Fernandez Legaspi. Delgado. There were also other conditions that were not complied with (please see p390) Although 1191 does not apply. he loses the right to further action against the buyer. Permission to collect the iron scraps cannot be construed as delivery failure of buyers to comply with the issuance of the LoC is simply an event that prevented the obligation of seller to acquire binding force. Visayan was not justified in rescinding the agreement. the Deed had an acceleration clause if ever the buyers were not able to pay 2 installments. seller received notive regarding the letter of credit. 109 VISAYAN SAWMILL v CA (Contracts to Sell Movable not covered Legaspi) Facts There is a sale involving scrap iron The condition was that a letter of credit for 250T will be secured in favor of the seller buyer went to the seller's premises and started digging and gathering the scrap irons Visayan (seller) stopped the gathering because there was no letter or credit yet.6k? Dean Villanueva Held: Yes. the sale was on a straight term. This was evidenced by a Deed of Conditional Sale. TC and CA: the agreement was a contract of sale. Thereafter. This is a contract of sale.SALES DIGESTS 2C 2005-2006 Can seller move to claim the balance of 1. Mendiola. W/n the buyers can get back the installments they already paid. For in contracts providing for payment of the price in two installments. RTC issued a writ of replevin for the goods and decreed that the sellers are entitled to the installments already paid (as rent for the use of the aircons) plus the balance of the purchase price of the goods. NIU KIM DUAN (Remedies available to unpaid seller Lopez) Facts: Niu Kim Duan bought 3 Daikin air conditioners from Delta Motor. does not exist in type of sale involved in this case. there is generally a provision for initial payment. Theoretically. 110 DELTA MOTOR SALES CORPORATION VS. the corporation may rescind the contract on the basis of art. Beron. According to buyer. Del Socorro. The sellers instituted this action to reacquire possession of the aircons and ask for balance of purchase price. At this point. Furthermore. However. The Deed says that payment would be made with a downpayment and 24 equal monthly installments. In this case. they already secured one and the transmittal was merely delayed. Lopez. It was also stated that title was not to pass to buyers until the full price is paid. it would not hold in the case because the breach was slight and not substantial. however. the provision will only apply if there was a contract for the sale of personal property payable in installments. But buyers were not able to pay two monthly installments.
Southern sought to collect the total sum. 1484. 111 TAJANGLANGIT v SOUTHERN MOTORS (Remedy of Specific Performance Mendiola) Facts: Tajanglangit bought a thresher from southern. the seller actually chose to collect on the note and did not seek foreclosure of the mortgage. Here. SC says no. it was not limited to the proceeds of the sale on execution of the mortgaged goods. Del Socorro. the barring effect of foreclosure cannot be applied. the sellers cannot claim the balance of the purchase price of the goods they already possess. Thus. 1486) authorizes such a stipulation provided that it is not unconscionable. The Civil Code (Art. Although the judgment on the collection led to the sale on execution of the machines. Held: Although the subject matter was mortgaged to secure the PN. should the vendee fail to pay. Tajanglangit executed a PN. The seller had a right to chose among 3 remedies established in Art. Dean Villanueva - SC says no. if there is one. Rivas. In choosing to sue on the note. not cumulative. the total sum unpaid will become due. Sarenas . Southern was able to purchase the machines. 112 NONATO v IAC (Nature of Remedy of Rescission Facts: • • • • • • • Issue: • Held: Rivas) Nonato purchased 1 volkswagen form People's Car on installment basis Nonato executed a promissory note and a chattel mortgage in favor of People's Car People's Car assigned its right to Investor's Finance Nonato defaulted so Investor's Finanace repossessed the car Investor's Finance is now asking from Nonato that they pay the balance of the price of the car CFI: ordered Nonato to pay the balance IAC: affirmed the decision of CFI W/N a vendor who had cancelled the sale of the motor vehvle has the right to demand payment for the balance of the purchase price Beron. Southern still seeks to attach Tajanglangit’s rights and interests over real properties for another sale on execution. the 6+k to be kept by the sellers is not unconscionable. Not. Thus. Calinisan. The fact is that the installments the buyers paid were for 7 months and that kept possession of the aircons for 22 mos. Fernandez Legaspi. So. the buyers cannot get the installments back. These remedies are alternative.SALES DIGESTS 2C 2005-2006 Held: W/n the sellers were entitled to the balance of the purchase price. The agreement provided that in case of default in the payment of installments. The machines of Tajanglangit were levied upon by the sheriff and sold at a public auction. 2. (2) cancel the sale upon the buyer’s failure to pay 2 or more installments and (3) foreclose the chattel mortgage. Issue: W/N a second sale on execution is allowable. The deed between the buyers and the sellers clearly stipulated that installments paid will be considered as rent for the use of the goods. Mendiola. (1) exact fulfillment of the obligation. SC said that the suit was actually to seek a judicial declaration that the sellers have validly rescinded the Deed of Conditional Sale. Sellers in a sale of personal property have three remedies namely. Tajanglangit defaulted. In this case. Court said that the stipulation is not unconscionable. they have actually been using the aircons for free for 15 mos. the sellers cannot claim the balance of the purchase price. the buyers allege that it is unconscionable because they already paid 6+k of a 19+k price. Delgado. upon the failure to pay 2 or more installments. sellers chose no. Lopez.
After making partial payments. Mendiola. dealer of Luneta Motor Company. an entity different and distinct from Luneta. IT CANNOT HAVE ITS CAKE AND EAT IT TOO 113 RIDAD v FILIPINAS INVESTMENT (3rd Party Mortgage Sarenas) Facts: • • • • • Issue: • Held: • • • • • Ridad bought from Supreme Sales 2 brand new Ford Consul Sedans for P26.SALES DIGESTS 2C 2005-2006 • • Dean Villanueva No! since the vendor has opted to cancel the contract of sale of the vehicle. Financing Transactions Facts: Zayas purchased on installment basis a motor vehicle from Mr Escano of the Escano Enterprises . it is barred form exacting payment from Nonato of the balAnce of the price of the vehicle which it has already repossessed. Luneta then filed a complaint for the recovery of the deficiency left unsatisfied despite the application of the proceeds of the foreclosure sale. 1484 of CC) When Filipinas chose to foreclose on the object of the chattel mortgage (the 2 cars) they are already precluded from selling the other things Vendor can only foreclose on the thing sold As I always say. Luneta's argument is without merit. touch move Beron) 114 ZAYAS v LUNETA MOTORS (Assignor-Assignee. W/N the mortgage and the public auction are null and void Yes it is null and void. According to Luneta. Zayas executed the promissory note and chattel mortgage to secure Luzon's interest for having financed the purchase of the motor vehicle by Zayas from the Escano Enterprises.887 payable in 24 monthly installments. Sarenas . and therefore Art 1484 of the civil code does not apply. A chattel mortgage was executed on the 2 cars plus another Chevrolet and Ridad’s franchise of public convenience to run a taxi fleet. Zayas executed a chattel mortgage on the subject motor vehicle in favor of the Luzon. Delgado. But notice was not given to Ridad regarding the public auction. Lopez. Rivas. Zayas defaulted in the payment of the balance and Luneta extrajudicially foreclosed the chattel mortgage. Ridad failed to pay. Zayas paid an initial payment and executed a promissory note to cover 26 installments. Escano Enterprises was an agent of Luneta. Held: NO. Fernandez Legaspi. Beron. The remedies of a vendor should the vendee default in its monthly installments are alternative and not cumulative (Art. Supreme Sales assigned its rights to Filipinas Investment. Issue: W/n a deficiency amount after the motor vehicle has been sold as public auction could still be recovered. Luneta was the highest bidder. Del Socorro. CFI and CA declared the chattel mortgage and the public auction null and void so far as to the Chevrolet and the franchise is concerned. There was a public auction were the objects of the chattel mortgage were sold. Calinisan. Escano a dealer of Luneta was merely a collecting agent as far as the purchase of the subject motor vehicle is concerned.
Far East endorsed the PNs issued by Cruz. Beron. Of course. Mendiola. Should the vendee or purchaser of a personal property default in the payment of two or more of the agreed installments. When. Lopez. • • • 116 BORBON v SERVICEWIDE (Barring Effect of Foreclosure Delgado) Facts: Daniel and Francisco Borbon signed a promissory note in favor of Pangasinan Automart worth P122T payablein installments in ten months. To secure the PN. wanted to cancel the mortgage of Filipinas. Servicewide files suit to enforce claim. Because the defendants defaulted. Fernandez Legaspi. therefore. the person who constituted the first mortgage. He paid of the first mortgage. payable in installments of P1. Del Socorro.5T per month. REM was held in abeyance. Mrs Reyes. The lower court and appellate court favored Servicewide. Servicewide is the one enforcing the claim but their defense is that they are not in default since Pangasinan didn't fulfill their obligation since what they ordered is not the Crew Cab that was delivered instead of a jeepney-type Isuzu. Chattel Mortgage was executed for the Isuzu Crew Cab. Cruz executed a CM over it. Calinisan. and assigned all his rights and interests to Filipinas Investment. 115 CRUZ v FILIPINAS INVESTMENT (Barring Effect of Foreclosure Calinisan) Facts: • • • • • • • • Ruperto Cruz purchased from Far East Motor Corporation 1 Isuzu Diesel Bus for P44T. Now. Sarenas . Rivas. the nature of the transaction did not change at all. The proceeds of the sale wasn’t enough. but should include extrajudicial proceedings by virtue of which the seller may be enabled to exact recovery of the supposed unsatisfied balance of the purchase price from the purchaser or his privy “Action” is not limited to judicial proceedings. Cruz defaulted on all payments. Far East wanted a second secutity: a SECOND MORTGAGE on a parcel of land together with a building thereon. Pangasinan assigned PN to Filinvest with notice of Borbon and later tpo Servicewide Specialist without the notice of the petitioner. Excano assigned itws rights vis-a-vis the sale to respondent Luneta. the vendor or seller has the option to avail of any of the ff remedies: o Exact fulfillment o Cancel the sale o Foreclose the mortgage Any of these bars action to recover deficiency The further action being barred under 1484 is not limited to judicial proceddings. Appeal to the SC is to modify ruling by removing liquidated damages and attorney's fees. Filipinas tried to foreclose. Since there was no downpayment made by Cruz. The contract includes the payment of liquidated damages and attorney's fees.SALES DIGESTS 2C 2005-2006 Dean Villanueva But even assuming that the distinct and independedt theory of Lunera is valid the nature of the transaction as a sale of personal property on installment basis remains. Filinvest made several demands from them before it assigned its rights to Servicewide. for 30 months. Held: • • No. Issue: W/N Filipinas can still foreclose on the REM after foreclosing on the CM. Delgado. so Filipinas wanted to foreclose on the mortgaged lot.
The basis of the first option is the Civil Code. the judgment by default against a defendant who has neither appeared nor filed his answer does not imply a waiver of rights except that of being heard and of presenting evidence in his favor .seller called upon the sheriff to possess the car.nor could it be interpreted as an admission by the defendant that the plaintiff's causes of action find support in the law or that the latter is entitled to the relief prayed for 2. so seller filed for replevin .complaint by seller dismissed by the lower court Issues: 1. the court should have ordered the defendant to pay at least the stipulated interest.the Act merely qualifies the remedy Beron. Seller contends that the lower court incorrectly applied Act.the proviso to the right to foreclose is. denies the equal protection of the laws. Rivas. Buyer did not waive the application by the court of Act No. 4122 is valid. or he concealed beyond reach the chattel. Calinisan. 4122 and dismissed the complaint. the mortgagee may be forced to seek the aid of the court to protect his rights incurring expenses therein which by law and justice must be reimbursed. when the assignor chose the third remedy.seller filed to recover the balance . The basis of the last two options is Act No. the assignee is bound by the same law. 3.SALES DIGESTS 2C 2005-2006 Dean Villanueva Issue: W/N Servicewide can recover deficiency by way of liquidated damages and attorney's fees.it does not imply admission by the defendant of the facts and causes of action of the plaintiff.to guarantee the payment. Seller contends that Act. Sarenas . 4122. there are instances when the mortgagor refused to surrender the chattel subject of the mortgage upon failure of two or more installments. (issue related to sales) Seller contends that even granting that Act No. that if the vendor has chosen this remedy.buyer issued a promissory note w/c stated the price was payable in 12 monthly installments. 4122 is constitutional. the vendor may cancel the sale (c) if the vendee shall have failed to pay two or more installments. 4122 is to prevent abuses committed in connection with the foreclosure of chattel mortgages when sales were payable in installments . and default in one installment would make the whole obligation due . However. Delgado. and not interposing any special defense 2. attorney's fees. the vendor may foreclose the mortgage. in this case. Held: 1. Fernandez Legaspi.buyer Eustaquio bought a car from seller Macondray . . but the proceeds of the sale was insufficient to cover the debt (balance still remained) . if one has been given on the property .the car was sold at public auction. having been declared in default. Mendiola. it is barred from claiming the deficiency. although the buyer waived his right under the law by not appearing. Del Socorro. 4122. . he shall have no further action against the purchaser for the recovery of any unpaid balance owing by the same . Lopez.3 remedies are available to the vendor who has sold personal property on the installment plan: (a) exact the fulfillment of the obligation (b) if the vendee shall have failed to pay two or more installments. the court held that only attorney's fees is reasonable to be awarded 117 MACONDRAY v EUSTAQUIO (Barring effect of Foreclosure Del Socorro) Facts: . Thus. amendatory of the Civil Code .only 1st installment paid . and the costs.under the Rules of Court. because the plaintiff is required to adduce his evidence in support of his allegations as an indispensable condition before final judgment could be given in his favor .public purpose of Act No. Act.When the seller assigns his credit. However. That is the general rule. buyer executed a chattel mortgage on the car . but the buyer refused. and impairs the obligations of contracts. The exercise of one would bar the other. 4122 is unconstitutional because it takes property without due process of law. Held: The remedies in 1484 is alternative and not commulative.
attorney's fees.SALES DIGESTS 2C 2005-2006 Dean Villanueva 3. Possession of the car was awarded to the seller. the buyers failed to pay 5 consecutive installments. it would have so stated. The price was payable in 24 equal monthly installments with interest. W/n the agreement was one of lease or sale. Elisco delivered the car to Lantan. that the necessary expenses incurred in the prosecution by the mortgagee of the action. it renounced any and all rights which it might have under the PN as well as the payment of the unpaid balance. the RTC held that the car agreement was one of sale and not of lease. in the case at bar as shown by the note and by the mortgage deed. Issues: Is the seller precluded from claiming said actual expenses from buyer? Held: No. so that he can regain possession of the chattel. The rents were to be deducted from his salary. Lopez. in as much as the Recto Law protects the mortgagors from the mortgagees. Delgado. should be borne by mortgagor. CA (Purported lease with option to buy Lopez) Facts: Rolando Lantan was the head of the cash department of Elisco Tool Manufacturing Corp. This was secured by a PN and a chattel mortgage on the car. Lantan was laid off. in case he exercises the right to foreclose. Legaspi) Issue: Held: Beron. Fernandez Legaspi. Thereafter. or if he conceals the chattel to place it beyond the reach of the mortgagee. Elisco then ceased its operations. The motion of the buyers arise from the order of the lower courts directing said buyers to pay certain expenses (atty’s fees and actual expenses of suit) incurred by the seller in the seizure of the car. The vehicle was later sold to seller at a public auction. And it logically follows. Calinisan. 119 FILINVEST v CA (Purported lease with option to buy --was given earlier— 120 ELISCO TOOL MANUFACTURING CORPORATION VS. as matter of common sense. if the vendor has chosen to foreclose the mortgage he shall have no further action against the purchaser for the recovery of any unpaid balance owing by the same. i. and any agreement to the contrary shall be null and void. Del Socorro. And such “further action” does not only refer to the recovery of the principal but also other obligations arising from such. Buyers contend that when the seller moved to foreclose the mortgage. the mortgagee may enforce his rights through the means and within the limits delineated by law. Where a mortgagor plainly refuses to deliver the chattel subject of the mortgage upon his failure to pay 2 or more installments. After trial. it is NOT true that the mortgagee is not entitled to protection against PERVERSE MORTGAGORS. Act 4122 provides: However. The RTC issued a writ of replevin upon payment by Elisco of the requisite bond. replevin. and consequently as to payment of attorney’s fees and costs of suit pursuant to Art 1484 of the Civil Code. after the mortgaged chattel is sold at public auction. the proceeds obtained therefrom are insufficient to cover the full amount of the secured obligations which.e. Seller moved for the seizure of the car. and the costs 118 FILIPINAS INVESTMENT v RIDAD (Perverse Buyer Fernandez) Facts: • • • • Spouses Ridad bought a Ford Consul Sedan from Supreme Sales. The RTC said that Lantan was the owner of the said car. Lantan executed a Promissory note in favor of Elisco. This was affirmed by the CA. Nonetheless. However. shall have no further action against the vendee. . It is true that the present action governed by the Recto Law where the vendor. Were it the intention of the Legislature to limit its meaning to the unpaid balance of the principal. Lantan was able to pay the full purchase price of the car. include interest on the principal. The rents would be applied to the purchase price. Sarenas . Elisco filed an action for replevin and a sum of money.the words "any unpaid balance" refers to the deficiency judgment to which the mortgagee may be entitled where. He entered into an agreement with the company where the company would “lease” him a car (Colt Lancer) for five years with an option to buy at the end of the period. as a result of which. Rivas. expenses of collection. Mendiola.
Lantan was not remiss in paying the installments/”rents”. Lopez. it is impossible for Elisco to exercise any of the remedies. the contract between them was cancelled. hence. And according to 1485. Issue: W/N 1 of the lots can be conveyed to Saldana. 122 MCLAUGHLIN v CA (Anticipatory Breach Rivas) Facts: • On Feb 27. These remedies are alternative. The obligation has been substantially been performed in good faith. Saldana was able to pay for 8 years (95 out of 120). payable for 10 years divided into 120 installments. The car was repossessed by Elisco to secure the payment of the remaining installments. 121 LEGARDA v SALDAÑA (In Case of Immovables Mendiola) Facts: Saldana had entered into 2 written contracts with Legarda Hermanos. Rivas. Jurisprudence holds that oftentimes leases with option to buy are contracts of sale. Being a sale on installment. Beron. wherein Legarda Hermanos agreed to sell to Saldana 2 lots. Legarda should convey to Saldana 1 lot. Saldana filed for an action to deliver the 2 parcels of land. In the case at bar. indicating that they were monthly amortizations of the purchase price and not real rents. (2) cancel the sale upon the buyer’s failure to pay 2 or more installments and (3) foreclose the chattel mortgage. However.550 upon the execution of the contract and the balce to be paid not later than May 31. A buyer of 2 lots who has paid for 8 years is entitled to the conveyance of one fully paid lot of his choice. 1484 applies. Art. Saldana was prevented by the fact that Legarda had failed to build the roads. these apply also to leases with option to buy. the “rents” were to be applied to the full purchase price. Fernandez Legaspi. In this case. Such is the ruling despite the fact that the agreement was that in case of default of Saldana. Calinisan. Delgado. Sarenas • • • . if there is one. Mclaughlin and Flores entered into a conditional contract of sale of real estate property for the price of P140. Del Socorro. There are three remedies: (1) exact fulfillment of the obligation.SALES DIGESTS 2C 2005-2006 - Dean Villanueva - - SC says it is one of sale. 1979 until the obligation is fuly paid It is also stipulated in the contrac tthat in case Flores failed to pay his obligation. Legarda told Saldana that since Saldana had defaulted in the payments. he was deemed the owner of the vehicle. he waives his right to appeal from the order or rescission and all payments made by him is forfeited in favor of Mclaughlin. According to the lower court. Once Lantan paid the full purchase price. Thereafter. 1977 Flores failed to pay so Mclaughlin asked the court for the rescission of the contract A compromise agreement was entered into by the parties wherein they agreed to pay P1. upon the failure to pay 2 or more installments.000 payable as P26. Mendiola. Saldana failed to pay. Held: One of the lots can be conveyed. less damages suffered by the seller. the buyer may recover as though there had been strict and complete fulfillment. 1977.000 monthly rental starting Dec 5. This is fair and just in accordance with law and equity. Saldana wrote to Legarda regarding the building of a house over the land. not cumulative. SC held that the case filed by Elisco was actually for specific performance. should the vendee fail to pay. Hence. all amounts paid and improvements on the premises shall be considered as rents and payment of damages. Saldana’s payments were enough to cover 1 lot.
KASSCO sold some units to Mortel but this had a condition regarding the pending application of KASSCO for condominium conversion. The contract stipulated that the Daroya whall pay an initial amount upon execution and the balance in 60 monthly installments. That same year. FLores defaulted and when he temdered payments to McLaughlin.025 in Active REalty's subdivision. No! According to the Maceda Law. Daroya offered to pay for the balance of the contract price but Active Realty refused as it has allegedly sold the lot to Beron. Sarenas . the latter refused tha accept the payment McLaughlin asked the court to rescind the conditional contract of sale November 1980. Petitioner sent respondent a notice of cancellation of their contract to sell. Del Socorro. the seller can only cancel the contract after 30 days from the receipt of the buyer of the notice of cancellation Also. KASSCO applied for its building to be converted to a condominium. Lopez. Flores terdered a manager's check payable to McLaughlin covering the entire obligation plus installements due on Dec. Fernandez Legaspi. KASSCO later on asked and sued Mortel to leave the premises. This condition never happened. Cruz Manila The 1 st floor is being rented by PNB. Mortel still held the said units by paying rental fees. It entered into a Contract to SEll with respondent Daroya whereby Daroya agreed to buy a 515 sq. PD 957 and RA 6581 cannot be applied because they presuppose the existence of a valid and effective contract to sell a condominium Beron) • • • Issue: • Held: • • 124 ACTIVE REALTY v DAROYA (How Cancellation of Contract be Effected Facts: Active Realty is the owner and developer of Town and Country Hills Executive Village. 1980. Rivas.m. Mortel and KASSCO entered into an agreement regarding the 2nd floor of the building. the maceda law extends to the buyer grace periods after at least 2 years of regular installment payments The tender made by Flores payable to McLaughlin was a valid tender of payment. tender was made within the 30 day notice period 123 MORTEL v KAASCO (Transactions covered Sarenas) Facts: • • • • KASSCO is the owner of a lot and building in Sta. it would appear that he has already paid an amount higher than that stated as the contract price. Calinisan. One of the conditions for its application to be approved is that the mortgage in favor of PNB be cancelled. Morel is now suing for specific peformance regarding the contract of sale between him KASSCO W/N Mortel can ask for specific performance No. The building and lot is also mortgaged to PNB to secure a loan made by KASSCO. RTC: granted the petition of McLaughlin CA: reversed the decision of the RTC W/N McLaughlin can refuse to accept the payment made by Flores.SALES DIGESTS 2C 2005-2006 • • • • • Issue: • Held: • • • • Dean Villanueva On October 1980. KASSCO never got the consent of PNB to free the building from its mortgage. Adding the downpayment and installment payments made by Daroya. hence it was not converted. to take effect 30 days from receipf of the letter. Mendiola. Delgado. Respondent defaulted representing 3 monthly amortizations. The contract of sale was subject to a suspensive condition which is to convert the building into a condominium. lot for P224.
Calinisan.e. Leano built a house thereon. was authorized to declare the contract cancelled and to dispose of the parcel of land. 125 and 126 LEAÑO v CA (How Cancellation of Contract be Effected Calinisan) (Compensation Rule on Amortization Payments) Facts: • Carmelita Leano bought from Hermogenes Fernando a piece of land in Bulacan w the ff terms: o Total: P107.750 o Down: P10. In fact. Delgado. i. shall be considered as rents paid for the use and occupation of the premises and as liquidated damages. monthly amortization at P1. Filed an ejectment case against her. Petitioner is now ordered to refund to respondent the actual value to the lot resold or deliver a substitute lot at the option of Daroya. Issue: W/n Active Realty can be compelled to refund to the respondent the value of the lot or to deliver a substitute lot at Daroya's option. Daroya then filed a complaint for specific performance. the records disclose that it was only during the preliminary hearing of the case before the court tribunal when petitioner offered to pay the cash surrender value. Daroya can no longer exercise this right as the subject lot was laready sold by th petitioner to another buyer. forfeited bothe Daroya's land and money after Daroya has paid for not just the contract price but more than the consideration stated in the contract to sell.747. Sarenas . Should the month of grace expire without the installments for both months having been satisfied. Fernando wants her out. Failed to pay Fernando. together with the one corresponding to the month of grace. Held: The contract to sell in the case at bar is governed by RA 6552 more popularly known as the Maceda Law.30 o The contract also provided for a grace period of one month within which to make payments. However the records clearly show that the petitioner failed to comply with the mandatory twin requirements for a valid and effective cancellation under the law. Rivas. it failed to send a notarized notice of cancellation and refund the cash surrender value. However. Mendiola. as if the contract had not been entered into. The payments made. Del Socorro. an interest of 18% per annum will be charged on the unpaid installments.775. For failure to cancel the contract ina ccordance with the procedure provided by law. Lopez. o Should a period of ninety (90) days elapse from the expiration of the grace period without the overdue and unpaid installments having been paid with the corresponding interests up to that date. Daroya has the right to offer to pay for the balance of the purchase price without interest which Daroya did in this case.SALES DIGESTS 2C 2005-2006 Dean Villanueva another buyer. respondent Fernando. The court finds it illegal that Active REalty whithout complying with the mandatory requirements for cancelling the contract. together with all the improvements made on the premises. as vendor. Fernandez Legaspi. • Beron. Active Realty decided to cancel the contract when Daroya defaulted on three monthly amortizations. the court held that the contract to sell between the parties remained valid and subsiting. balance to be paid for 10 years. Daroya has already paid in 4 years a total amount exceeding the contract price.
Lopez. Held: YES. Sarenas .“exclusive option to purchase” was executed between seller and buyer . . not ownership. What was transferred was possession. Though it is payable in 10 years.conditions in the sale:appurtenant to the sale are the following: Beron. • • 127 ADELFA v CA (Contract of Sale vs Contract to Sell Delgado) Facts: . There is not even a deed that could be registered since the contract provided that the seller will execute such a deed “upon complete payment by the Vendee of the total purchase price of the property” with the stiupulated interest. W/N the transaction between the parties is an absolute sale or a conditional sale W/N there was a proper cancellation of the contract to sell W/N petitioner was in delay in the payment of the monthly amortizations • Conditional sale. De los Angeles but the buyer here didn’t exercise the privilege given by the doctrine 2) 3) 4) 5) 128 CORONEL v CA (Is a Contract to Sell a “Sale” under 1458? Del Socorro) Facts: . Failure to pay is not a breach.Coronels (seller) executed a document entitled Receipt of Down Payment in favor of plaintiff Ramona (buyer) . Calinisan. The land is covered by a Torrens title. buyer received summons from the kin of the seller .before any payment was made. it could have consigned the payment the seller validly rescinded the contract since buyer didn’t still pay amidst the resolution of the dispute of the kin letter of cancellation is enough and no need for judicial action since there is a stipulation for automatic rescission took judicial notice of UP vs.buyer withheld payment and as a result. It is an event that prevented the obligation of the vendor to convey title from acquiring obligatory force. Leano was not given the Cash Surrender Value of the payments that she made.SALES DIGESTS 2C 2005-2006 • Issues: • • • Held: • • • Dean Villanueva Leano filed a complaint for specific performance. Leano in delay in the payment of the monthly amortizations.the seller (private respondents) offered to buyer Adelfa the western portion of the lot . Rivas. The ownership of the lot was not transferred to Leano. the K stipulated that the purchase price is payable in monthly installments.buyer writes to seller its intention to pay the purchase price but seller refuse . not an absolute sale. Fernandez Legaspi. Del Socorro.the subject matter involved here is a land in Las Piñas owned by the private respondents and their brothers Jose and Dominador Jimenez. does not mention that buyer will return the possession of the property b) deed of absolute sale only to be issued after full payment as gleaned from the letter request of buyer to allow it to pay the price there was no valid tender of payment by the buyer. She deposited the total balance with the clerk of court. therefore there was still no actual cancellation of the contract. 1) it is a contract to sell and not a contract of sale a) although provided for remedies. the act of registration of the deed of sale was the operative act that could transfer ownership over the lot. The intention of the parties was to reserve the ownership of the land in the seller until the buyer has paid the total purchase price. Leano cannot ignore the provision.RTC and CA for the sellers Issue: W/N seller was justified in canceling its vinculum juris with buyer. seller sold it to another buyer . Delgado. In Contracts to Sell: full payament of purchase price is a positive suspensive condition. Mendiola.
moreover. never materialized. the buyer shall pay the entire balance of the purchase price . .1M. This was not acceptable to PNB. Del Socorro. PNB approved of the offer subject to certain terms and conditions (deposit a certain sum and to institute ejectment proceedings against occupants of the land at the expense of buyer among others). Coronels will transfer in their names of the title of the property registered in the name of their deceased father upon receipt of the 50T downpayment. Mendiola. This was not done by PNB (kasi nga gusto ng bangko yung bumibili ang magpa-alis). Re-negotiations on the purchase price occurred but there was a failure on the part of the buyer to pay the balance of the required downpayment.hence. TC declared there was. had the certificate of title been in the names sellers at that time.therefore. the parties did not merely enter into a contract to sell where the sellers. they promised to present said title to the buyer and to execute the deed of absolute sale whereupon. but still containing the clause on the ejectment of occupants at the expense of buyer). So the sale. So Ngo said that she is willing to pay the balance of the downpayment as soon as PNB cleared the occupants. there would have been no reason why an absolute contract of sale could not have been executed and consummated right there and then . 2. after which. Both courts banked on the notion that the deposits (1st and 2nd agreement) accepted by PNB were in the form of earnest money. Ngo agreed. they could not fully effect such transfer although the buyer was then willing and able to immediately pay the purchase price . promised to sell the property to the buyer *for full discussion on contract of sale and to sell. • • • • • • Issue: Was there a perfected contract of sale between Ngo and PNB? Held: Beron.specific performance to consummate sale proper 129 PNB v CA (Is a Contract to Sell a “Sale” under 1458? Fernandez) Facts: • Ngo made a formal offer to purchase a land owned by PNB.furthermore. sellers undertook upon receipt of the down payment to be issued of a new certificate of title in their names from that of their father. Lopez. Delgado. Calinisan. Rivas. to execute the written deed of absolute sale . after compliance by the buyer with certain terms and conditions. Ramona will make a down payment of 50T. 3. upon the transfer in their names of the subject property.title to the property originally registered under the name of the Coronel’s father was transferred in their names . there was a clear intent on the part of the sellers to transfer title to the buyer.having already agreed to sell the subject property.but the Coronels sold the property to Mabanag (buyer 2) . Ngo accepted PNB’s terms except the ejectment undertaking because she already defrayed the expenses for the ejectment of the previous occupants and that the occupants were actually lessees of PNB.not a contract to sell because the sellers herein made no express reservation of ownership or title to the subject parcel of land . In the end. sellers did not merely promise to sell the property to private respondent upon the fulfillment of the suspensive condition . the Coronels will execute the deed of absolute sale in favor of Ramona and the latter will pay the whole balance of 1. 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 .it may be presumed that. that there was a perfected contract of sale between him and the bank.Coronels rescinded the contract w/ Ramona by depositing the downpayment w in the bank in trust for Ramona . CA also said there was a perfected contract of sale. This was approved by the PNB (with certain modifications on the terms and conditions. primarily. Fernandez Legaspi. Later on. but since the transfer certificate of title was still in the name of sellers’ father. Ngo made a request to revive the previously approved offer to purchase the property.Ramona filed for specific performance against the seller Coronels to compel them to consummate the sale of land Issue: W/N the contract between the Coronels and Ramona was a contract of sale or a contract to sell? Held: contract of SALE .construing the “Receipt of Down payment”.SALES DIGESTS 2C 2005-2006 Dean Villanueva 1. see case or book . in this agreement. the approved sale was cancelled. they undertook to have the certificate of title change to their names and immediately thereafter. Sarenas . So Ngo filed an action for Specific Performance arguing. unlike in a contract to sell.50T downpayment was made by buyer .
Fernandez Legaspi. Calinisan.1M 2. 200k in the 2nd) and then subsequently to deposit an additional amount representing 20% of the purchase price (in both agreements). the suspensive condition to transfer ownership is full payment of the purchase price. There was constructive delivery when the contract was executed and actual delivery when the vendee took possession of the lots. 300K downpayment at the signing of the contract 3. no title passes from seller to buyer under such documents. There was no proviso reserving title with the vendors until full payment of the purchase price. Vendee has the right to take immediate possession of the lots After the sale. there was both constructive and actual delivery in this case. the parties would stand as if the conditional obligation had never existed. the SC said that in a contract to sell.8M balance shall be paid after the TCT's have been presented free from all liens. The initial deposits should be construed as part of the consideration for PNB’s promise to reserve subject property for Ngo. the happening of a suspensive condition does not give rise to an executory contract of sale subject to an action for specific performance. Ngo’s obligation was to deposit an initial amount (100k in the first agreement. the failure of the buyer to remit the additional deposits. The failure to remit the required amounts gave occasion for PNB to cancel the agreement. The letteragreements were not deeds of sale. 1. the purchase price of the lots amount to 2. Coronel v CA was decided. Sarenas . the TCTs were in the name of 3rd persons The agreement was as follows: 1. vendor asked for an indefinite extension of time within which to deliver the clean titles Vendee refused Vendor executed a notarized unilateral rescission. And under both letter-agreements. The letter agreements were in the nature of contracts to sell. In this case. 4. In that case. Rivas. within 20 mos. Commonly. Clearly. In this case. The presumption that earnest money given in a sale transaction is considered as part of the purchase price and is a proof of a perfected contract of sale is rebuttable. But in the case above. Del Socorro. They alleged that vendor was already in the position to secure clean titles over the lots. The contract indicates that it is a contract of sale.SALES DIGESTS 2C 2005-2006 Dean Villanueva None. Failure to deliver the clean titles merely gave the vendee the abovementioned option. re. Delgado. Issue w/n vendor has a right to unilaterally rescind the contract Ruling vedor's act was unwarranted The sale in this case is an absolute sale though it is denominated as conditional. 130 BABASA v CA (Nature of Condition to pay Price Legaspi) Facts Spouses Babasa (vendors) and Tabangao realty (vendee) entered into an agreement denominated as Conditional Sale of Registered Lands Subject matter: 3 parcels of land in Batangas City At the time of the sale. the condition was on the performance of an obligation. A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the vendor’s obligation to transfer title is subordinated to the happening of a future and uncertain event so that if the suspensive condition does not take place. since the obligation of the seller is to enter into a contract of sale (an obligation to do). vendee made improvements on the property and also leased it to Shell 2 days prior to expiration of the 20 mos. (pero eto lang sa tingin ko mahalaga kya nasa list ang kaso na ‘to) *Interesting enough. Lopez. It should be noted that there were two separate transactions—the first was unconditionally cancelled and the effects thereof cannot be deemed applicable to the second transaction. This specific right by PNB is in the nature of a stipulation reserving title in the vendor until full payment of the purchase price or giving the vendor the right to unilaterally rescind the contract the moment the buyer fails to pay within a fixed period. the SC said that the happening of a condition in a contract to sell converts it to a contract of sell or at the most an executory sale to an executed one. deposits already given shall be forfeited and the bank can sell the property to others. Mendiola. Vendee filed an action for specific performance with damages to compel vendor to delivery clean titles over the properties. It demanded Shell to vacate the lots. 7 days after this decision. contention by vendors that they were forced to enter into the sale under the threat that it would be expropriated contracts are valid even though one of the parties entered into it against his own wish and desire Beron. In fact. the letter-agreements show the intention of the parties to enter into negotiations leading to a contract of sale. Failure to comply with such merely gives the injured party the option either to refuse to proceed with the sale or waive the condition.
Why not apply the Maceda Law? 2. CA said that it was only equitable to grant an extension taking into consideration the improvements brought in by Lapuz. 132 ANGELES v CALANZ (Stipulation on Power to Rescind 133 DIGNOS v CA (Stipulation on Power to Rescind Facts: • • • • • Issue: • • Mendiola) Rivas) Dignos is the owner of a parcel of land sold by installment to Jabil as evidenced by a deed of sale Several months thereafter. Lapuz’s refusal to pay further installments. Fernandez Legaspi. 1191) W/n Lapuz is entitled to the benefits of the 3rd paragraph of Art. SC. Lapuz failed to make payment. Art. Lapuz wanted to change the lots to Lots 4 and 12. Calinisan. First. Delgado. 1592 apply to contracts to sell while Art. Justice and equity actually call for approval of the rescission asked by Roque because Lapuz has already been occupying the land for a long time without having any right thereto and without paying anything. Block 1 of Rockville Subdivision payable in 120 equal monthly installments. Roque filed a case against Lapuz for rescission and cancellation of the agreement of sale. Roque asked Lapuz to sign the contract to sell to which the latter declined saying that he would sign after he has paid his unpaid balance. First. 1191 should be the provision applied. 1191. SC ruled that Art. Plan by the Bureau of Lands. there was no delivery or tradicion even if Lapuz is already in possession of the lot because the property was registered land so it is the act of registration of the Deed of Sale which could legally effect the transfer of title of ownership. (Based on 3rd paragraph of Art. Possible questions to ponder: 1. the SC ruled that the contract between the parties was a contract to sell. SC says no. This further strengthened the ruling that the contract was a contract to sell and not an absolute contract of sale. CA amended their decision and granted Lapuz a 90-day extension within which to pay the balance of the purchase price. Why can’t Art. This was approved by Roque. It has been held that absence of a deed of conveyance as indication that parties did not intend immediate transfer of ownership over realty. Lopez. though. This is because there is no obligation yet to rescind in a contract to sell until there is full payment. Mendiola. Also. Dignos sold the same parcel of land to Cabigas evidenced by a registration in the Register if Deeds Jabil discovered the subsequent sale by Dignos and asked the court to cancel the 2nd sale RTC: declared that the 2nd sale to Cabigos is null and void CA: affirmed the decision of the RTC W/N the 1st sake between DIgnos and Jabil is a valid contract of sale W/N there was a valid rescission of 1st sale by the subsequents 2nd sale to Cabigos Beron. 1592. Rivas. They entered into a new agreement for the said parcels of land.SALES DIGESTS 2C 2005-2006 Dean Villanueva 131 ROQUE v LAPUZ (Stipulation on Power to Rescind Facts: - Lopez) Issue: Held: - Felipe Roque sold to Nicanor Lapuz Lots 1. does not apply to contracts to sell. But in a motion for reconsideration. CFI ruled in favor of Roque. the sale was not in any deed.56 as payment of 4 installments. On the strength of the agreement. After the approcal of the subd. which serves as a positive suspensive condition. Lapuz paid 150 as deposit and 740. Lapuz occupied Lots 4 & 12 and built his house thereon and enclosed the land with barbed wires and adobe walls. Block 2. Thus. of 1191. 1191 can apply? Pareho lang naman silang rescission ah. which prohibits the extension of a contract when there is a judicial or notarial notice of rescission. CA affirmed. Also. Sarenas . 2 and 9. his dilatory tactic of refusing to sign the necessary contract of sale and his failure to deposit or make available any amount for the 2nd agreement are all unreasonable and unjustified which altogether manifest clear bad faith and malice making inapplicable and unwarranted the benefits of the 3rd par. said that there are no circumstances in this case that would merit the time extension allowed by the 3rd paragraph of Art. Del Socorro. 1191.
It is required that acts and contract which have for their object the extinguishment of real rights over an immovable must appear in a public document • Also.000 of this price was paid upon the execution of the said contract and the parties agreed that the balance of P950. W/N there is a perfected contract of sale that is enforceable Yes. Mendiola. When Topacio failed to pay the remaining balance. Myers send a letter to Maritime canceling the Deed of Conditional Sale. This parcel of land was foreclosed due to the failure of the spouses to pay certain obligations to which the land was subject to mortgage. BPI could not validly rescind the contract without complying with the Civil Code provisions on notarial or judicial rescission. the contract existing in this case is a contract of sale. the contract shall be annulled at the option of Myers and all payments already made by vendee shall be forfeited and the Myers shall have the right to reenter the property. BPI Investment acquired the land in public auction. Delgado. Topacio was able to pay the downpayment but failed to pay the remaining balance. Luzon then filed this action for interpleader.. Myers demanded payment but such demands remained unanswered. Topacio. Held: The failure of Maritime to pay the 4 monthly installments constitutes a breach of contract worth Beron. Maritime failed to pay the monthly installments corresponding to 3 months of the year 1961. later known as Maritime Building. Topacio does not want to get his money back but insists on buying the land at P1. Del Socorro. Rivas. The downpayment that Topacio gave is earnest money. They further agreed that in case of failure on the part of Maritime to pay any of the installments due.SALES DIGESTS 2C 2005-2006 Held: • • • Dean Villanueva It is valid contract of sale and not a contract to sell Nowhere in the contract did the parties stipulate that the title is reserved in the vendor until full payment There is also no stipulation giving the vendor the right to unilaterally rescind the contract No rescission of the 1st contract Dignos never notified Jabil by notarial act that they were rescinding the contract neither was there a case filed in court to rescind the contract • The contention of Dignos that there was a certain emissiary of Jabil which informed him Jabil agreed for Dignos to preceed to the 2ns sale is wrong. Earnest money is considered part of the purchase price. whereby Myers sold the land to Maritime for P1M.000 was to be paid in monthly installments. Nowhere in the transaction indicates that BPI reserved its title on the property nor did it provide for any automatic rescission upon default. Lopez. Sarenas . They arrived at the price of P1.25M. owner of 3 parcels of land entered into a contract entitled "deed of conditional sale" in favor of Bary Building. P50. son-in-law of the De Villa spouses. Myers demanded upon Luzon Brokerage to whom Maritime leased the properties the payment of monthly rentals. Fernandez Legaspi. BPI wanted Topacio to get back the check because somebody else was willing to buy the property at P1. • • 134 TOPACIO v CA (Condition on Reservation of Title Facts: • • • • • Issue: • Held: • • • • Sarenas) De Villa spouses were the owners of a certain parcel. Beron) 135 LUZON BROKERAGE v MARITIME (Issue of Substantial Breach Facts: Myers Building Co.25M with 30% as downpayment. offered to purchase the property from BPI. Calinisan. In the meantime.6M.000 balance and 1 month delay. a slight delay in the perfomance of the obligation of one party is not a sufficient ground for rescission • It is required by equity and justice that Jabil be given addition extention to pay the P4.
sta clara prohibited from Up and associated lumber mfg co inc had logging agreement in the land grants of the former in quezon and Alumco. Lopez. by 1964 incurred an upaid account of 219362. It is irrelevant whether appellant Maritime' s infringement to its contract was casual or serious. the cross claim file by Myers against Maritime in the court below constituted a judicial demand for rescission that satisfies that requirements of said Article. Maritime invokes art 1592 as entitling Maritime to pay despite its defaults. Maritime is not entitled to ask the court ot give further time to make paymnet and thereby erase the default or breach that it had deliberately incurred. Calinisan. Fernandez Legaspi. the practical effect of the stipulation being merely to transfer to the defendant/defaulter the initiative of instituting suit.H. Delgado. instead of rescinder. Shedler. The non-payment of the installments was the result of a deliberate course of action on the part of Maritime. Maritime's contention that rescission cannot be done extra-judicially cannot be done is untenable. it is not always necessary for the injured party to resort to court for rescission of the contract but in the case of abuse or error by the rescinder. Beron. designed to coerce Myers corporation into answering for an alleged promise of the late F. the failure of which is not a breach. Well settled is the rule that judicial action for the rescission of a contract is not necessary where the contract provides that it may be revoked and cancelled for violation of any of its terms and conditions. (W-in-ithold ni Maritime yung payments para dun sa sale para mapilitan si Myers na magbayad dun sa alleged na promise ni Myers na bayaran si Shedler) Therefore. casual or serious. the controlling stockholder of Maritime. Mendiola. the other party is not barred from questioning in court such abuse or error. even without court intervention. the other party denies that rescission is justified. Sarenas . The said failure was not made in good faith. rescinded it without court litigation Up conducted new bidding and awarded the logging right to sta clara lumber company Up filed for the collection of balance and alumco filed for tro and was granted.W.SALES DIGESTS 2C 2005-2006 Dean Villanueva Myers.94 Up repeatedly demanded for payment but to no avail worse alumco entered or incurred additional liability laguna in 1960 to last for 5 years Calinisan) Issue: w/n UP can treat its contract with alumco rescinded. where ownership is retained by the seller and is nit to pass until the full payment of the pricem such payment is a positive suspensive condition." 136 UP v DE LOS ANGELES (Minimum Requirement of Rescission Facts: of 60t operating Parties proceded so UP declared by court in contempt Up. To argue that there was only a casual breach is to proceed from the assumption that the contract is one of absolute sale. In contracts to sell. however. and may disregard the same before any judicial pronouncement to that effect Held: nothing in the law that prohibits party form stipulating that violation of the terms of the contract would cause cancellation thereof. Myers to indemnify E. The court in response to said contention stated: "Assuming arguendo that art 1592 is applicable. the action of Maritime in suspending payments to Myers was a breach of contract tainted with fraud or malice. Rivas. In other words. for any payments to be made to the members of the Luzon Labor Union. Del Socorro. If. by virtue of the stipulation in the contract. it is free to resort to judicial action to bring the matter to court. but simply an event that prevented the obligation of the vendor to convey title from acquiring binding force. where non-payment is a resolutory condition.
and the same having failed to happen.seller filed for the recovery of possession of the land Issue: Buyer claims that seller should have resorted to a judicial decree rescinding the contract to sell before awarding the lot in question to buyer 2 in order to avoid unnecessary litigation or conflict Held: .buyer paid seller P1. Fernandez Legaspi. Del Socorro. but the buyer did not vacate the premises . but was not able to eject them from the premises (as expressed by seller’s counsel). Pero ayaw nga pumayag ni buyer na i-cancel ang bentahan. offered a parcel of land in Parañaque. the contract between the parties was deemed ipso facto rescinded 139 ROMERO v CA (Conditions Fernandez) Facts: • • Romero and his foreign partners wanted to put up a warehouse in Manila.SALES DIGESTS 2C 2005-2006 Dean Villanueva - It is only the final judgment of the corresponding court that will conclusively and finally settle whether the Injunction granted to almuco reversed/lifted in favor of UP Delgado) action taken was or was not correct in law 137 CHENG v GENATO (Minimum Requirement of Rescission 138 TORRALBA v DE LOS ANGELES (Minimum Requirement of Rescission Del Socorro) Facts: . TC ruled in favor of buyer and said that seller had no right to rescind the contract since it was the seller who violated her obligation. in the same manner as if the contract has never been made.seller notified the buyer of the cancellation of the conditional contract to sell and gave her 30 days from notice within which to revive the contract by paying in cash all installments and interests due.hence. the seller shall deliver a deed of absolute sale. CA. or default in the payment of three monthly installments. Sarenas .PHHC (seller) entered into a conditional contract to sell a parcel of land w/ Torralba (buyer) upon the conditions. A Deed of Conditional Sale was executed between Romero (buyer) and Flores (seller). the downpayment given shall be returned to the buyer. the seller shall be entitled to immediate re-possession of the premises and the payments made shall be considered as rentals .untenable. ruled in favor of seller and said that since the contract was subject to a resolutory condition. Lopez. Seller also decided to retain the property. Delgado. na pampagulo. Mendiola. does seller have the right to rescind the contract? Beron. but buyer still failed to pay . that should buyer violate. accompanied by a broker. Seller was able to obtain a favorable judgment against the squatters. Except for the presence of squatters. seller’s counsel wrote to buyer’s counsel and informed him that the deed of conditional sale had been rendered null and void by virtue of seller’s failure to evict the squatters within the 60-day period. Later on. there was a failure on the object of the contract.. Romero liked the land.431but failed to make further payments . The contract contained a stipulation on: an initial payment of 50k (to be used in the ejectment case against the squatters). refuse or fail to comply with the terms and conditions of the contract. upon full payment. it proposed to eject the squatters himself. Rivas. the balance being payable 45 days after the removal of all squatters and. Since buyer really wanted the land. the contract executed by the buyer and seller expressly provided that the contract shall be deemed annulled and cancelled and the seller shall be at liberty to take possession of said property and dispose the same to any other person upon default of the buyer pay the installments due .seller again notified the petitioner in writing of the definite annulment and cancellation of the conditional contract to sell and required her to vacate the premises within 15 days from notice. there was no contract to rescind in court because from the moment the seller defaulted in the timely payment of the installments.gusto niya talaga yung lupa. and. The contract also provided that if the seller would not be able to remove the squatters after 60 days from the signing of the deed of conditional sale. that the buyer shall pay to the seller downpayment of P400 and P41 as monthly installment. Calinisan. the contract shall be deemed annulled and cancelled and the seller shall be at liberty to dispose of the property to any person. • • • • • • Issue: What was the nature of the condition—eviction of squatters—with respect to the contract between buyer and seller? Considering the first issue. Flores and wife.
So continue with the sale. the evident intention of the contract is one of a sale. they instituted a case to cancel the sale with vendees The vendees opposed contending that vendors have no right to sell the lots. vendors have no right to rescind in a contract of sale the non-payment of the price is a resolutory condition the injured party has the option either the rescind or to waive the condition. seller DOES NOT have a right to rescind the contract. the vendee opted to waive the condition. In this case. vendors did not reserve unto themselves the ownership of the property until full payment b. Vendees are correct in saying that the approval of the probate court exists only where specific property of the estate are sold and not when only the ideal share of an heir is disposed of. the vendors asked the court to sell their shares to another party Hence. Although the stipulation is the law between the parties. or waive the condition and proceed—So anong naging choice ni buyer? E di to waive the condition (remember he offered to undertake the eviction of the squatters himself. The contract's validity is not affected by the stipulation. Rivas. Only the effectivity is affected. 1191 (reciprocal obligations) gives a right to a to party demand rescission upon breach of obligation by the other party. The parties executed a Deed of Absolute Sale with Assumption of Mortgage. Vendee2 was also in bad faith. notwithstanding seller’s failure). Mendiola. Beron. Since the condition (eviction of squatters) is not imposed upon the perfection of the contract. TC and CA ruled that the deed of sale is a contract to sell and it shall become effective only upon approval of the probate court and full payment of the purchase price Issue w/n it is a contract of sale or a contract to sell w/n vendors have a right to rescind the sale on the basis of the stipulation requiring the approval of the court Ruling 1. PCIC assumed the mortgages constituted on the lot in favor of PNB. But failure to comply with the second type of condition prevents the creation of a juridical relation between the parties (kasi walang contract). it is a perfected contract of sale a. This is revealed by the contemporaneous acts of the parties 141 POWER COMMERCIAL v CA (Conditions versus Warranties Lopez) Facts: PCIC bought a parcel of land from Spouses Quiambao for a new office and warehouse. Del Socorro. 140 HEIRS OF ESCANLAR v CA (Conditions Legaspi) Facts spouses Guillermo Nombre and Victoriana Cari-an owned 2 parcels of land After their death. there is no stipulation giving the sellers the right to unilaterally rescind the contract the moment vendee fails to pay c. buyer to pay balance of the price and seller to execute an absolute deed of sale upon such payment. Sarenas . Remember. the Cari-an's received Victoriana's 1/2 share The Cari-an's sold their share to Escanlar and Holgado The contract of sale contains a stipulation that the contract shall become effective only upon the approval by the honorable CFI The balance shall be paid on a certain date The vendor received 12 installments but after that the vendee was unable to pay The vendee continued to possess the lot and pay rent Meanwhile. Why? Because seller is not the injured party. Lopez. Pero pano nga. hindi ginawa ni seller yung obligasyon niya? Well the paragraph above said that the other party (in this case si buyer) has the choice—either to refuse proceeding with the contract. Delgado. Calinisan. In the end. Failure to comply with the first type of condition gives a right to the other party to either refuse to proceed with the contract or waive said condition. there was symbolic delivery in this case in the form of tradition brevi manu 2. Fernandez Legaspi. the non-fulfillment of such condition has no effect on the contract’s coming into existence.SALES DIGESTS 2C 2005-2006 Dean Villanueva Held: The condition of evicting the squatters from the premises is in the nature of a condition imposed on an obligation of party and not a condition imposed upon the perfection of the contract itself.
Issue: W/N Nutrimix is liable for breach of warranty against hidden defects. W/n PCIC had a right to rescind the contract with the sellers. The elements for there to be a recovery on account of hidden defects are: 1. The Evangelistas purchased these feeds by paying them with checks. Beron. After examination of the samples. Delgado. PCIC sent a letter to PNB pleading that their application be approved so that they may take the necessary procedures to eject the people possessing the lot. PCIC was well aware of the lessees when they entered the sale contract. CA reversed saying that the deed of sale did not obligate the sellers to eject the lessees from the land as a condition of a sale nor was the occupation by said lessees a violation of the warranty against eviction. A difference of approximately 3 months enfeebles the theory of Evangelistas that Nutrimix is guilty of breach. PCIC filed a case against the sellers for rescission and damages. defect must exist at the time sale was made. RTC for PCIC. saying that the sellers failed to eject the occupants of the land. The court finds it difficult to believe that the feeds delivered and fed to the animals were contaminated at the time they reached the respondents. Sarenas . According to the Evangelistas. 3. action must be instituted within the statute of limitations. Fernandez Legaspi. - 142 NUTRIMIX FEEDS v CA (Warranty against hidden defects Mendiola) Facts: The Evangelistas started to directly procure various kinds of animal feeds from Nutrimix. it was discovered that the feeds contained a COUMATETRALYL compound aka Racumin. The payment they made was under an obligation. In fact. The contract merely contained a warranty for the peaceful possession by the buyer of the land (warranty against eviction). Plus. (3) basis is a right prior to the sale made by a seller. Calinisan. the Evangelistas filed a claim for damages against Nutrimix for the breach of warranty against hidden defects. They assert that they need not pay because the contaminated products of Nutrimix caused the sudden and massive death of their animals. defect is important. PCIC cannot claim the payments they made on the mortgage by virtue of solutio indebiti. PCIC was obliged to pay the amounts to PNB by virtue of their assumption of the mortgage. W/n PCIC can claim the amounts they paid on the mortgage from PNB. Even if we consider PCIC that the assumption of mortgage was not approved. defect must be hidden. 5. Still. the mortgage was foreclosed so PNB was impleaded.SALES DIGESTS 2C 2005-2006 - Dean Villanueva Issue: Held: - Mrs. it cannot be said that its non-fulfillment is a ground for rescission. 3. PCIC was then informed that their application was denied because it lacked certain necessary papers. and (4) seller had been summoned and made a defendant in the suit at the instance of the buyer. defect must ordinarily have been excluded from the contract. PCIC paid the mortgage. While the case was pending. Del Socorro. Eventually. The ejectment of the lessees was not stipulated as a condition in the contract nor was its effects and consequences specified. There was no breach of warranty against eviction. their nonpayment was based on a just and legal ground. the feeds could have already been contaminated by outside factors. Nutrimix filed a suit against the Evangelistas alleging that the checks issued were dishonored. Rivas. PCIC was still liable to pay the mortgage because that was one of the conditions of the sale. SC says that PCIC cannot rescind. PNB sent a letter informing PCIC that the latter have not been paying the mortgage lately. Lopez. The requisites2 needed were not present. Mendiola. General Manager of PCIC submitted a formal application for the assumption of mortgage with PNH. The failure of the sellers to eject the lessees from the land cannot be considered a substantial breach to call for rescission. 143 VILLARICA v CA 2 Purchaser has been deprived of the whole or part of the thing. (2) eviction is by final judgment. 2. They even filed a suit to eject said occupants. Constantino. In a span of three months. Held: Nutrimix is not liable. Absent a stipulation for the supposed condition.
The spouses were not able to pay Olores the full amount for the construction. he filed for a rescission of the sale from spouses to Torres. Consunji granted Villarica an option to buy the same property within the period of 1 year The TCT under the name of Villarica was cancelled and a new TCT was issued in the name of Consunji In 1953. sold said lot to private respondent Aurelio Octaviano for P8.SALES DIGESTS 2C 2005-2006 (Nature of the Right to repurchase Facts: Rivas) Dean Villanueva Villarica sold to Consunji a lot in Davao in 1951 as evidenced by a deed of absolute sale Several days later. and later on making it a 10-door apartment. Upon appeal. Rivas. spouses sold to Torres. Del Socorro. the sale is not a pacto de retro sale.600. W/N the spouses can still buy back their property No.000 representing redemption price of the land by virtue of a deed of sale with pacto de retro Oimpia has executed in favor of Gumayan.600 representing redemption price of the land by virtue of a deed of mortgage executed by Olimpia in favor of Gumayan. the spouses contracted Olores for the construction of a 9-door apartment. Lopez.5 hectare rice land. In order to pay. Sarenas . and the taxes paid by the vendor were back taxes up to the time of the sale - 144 TORRES v CA (Right to repurchase must be reserved Facts: • • • • Sarenas) • • Issue: • Held: • • The Illuscipideses (spouses) are the owners of 2 lots in Dagupan. The case did not prosper. de Zulueta. The contract stipulated that Octaviano shall pay unto one Maximo Gumayan P5. It further stipulated that Octaviano should pay Gumayan an additional P1. the registered owner of a 5. A right to repurchase was made on a separate agreement (not on the deed of sale) Napraning to si Olores na hindi siya mababayaran. CA ruled that it was not a pacto de retro sale. the vendor did not remain in possession of the land sold as lessee or otherwise. Fernandez Legaspi. but is a right reserved by the vendor in the same instrument of sale as one of the stipulations of the contract. Calinisan. 145 VDA DE ZULUETA v OCTAVIANO (Pactum Commissorium Beron) Facts: Olimpia Fernandez Vda. Olores sued and won. The 2 lots are mortgaged to GSIS. but is a right reserved by the vendor in the same instrument of sale as one of the stipulations of the contract. In 1965. by stipulation to that effect in the contract of sale What the Consunji’s granted Villarica was an option to buy the property within the period of 1 year and not a right to repurchase The right to repurchase is not a right granted the vendor by the vendee in a subsequent instrument. the GSIS sent notice to the spouses that they are foreclosing the property. Pending appeal to the CA. the vendee as new owner merely granted the vendor on option to buy the property sold. Once the instrument of absolute sale is executed the vendor can no longer reserve the right to repurchase and any right thereafter granted the vendor by the vendee in a separate instrument cannot be a right of repurchase but some other right like the option to buy like case The contract is also not an equitable mortgage because the price was not inadequate. Consunji sold the lot to Francisco and a new TCT was issued in the name of Francisco Villarica is now arguing that the real agreement between him and Consunji was really an equitable mortgage as a security for a usurious loan RTC: held that the agreement was really an equitable mortgage CA: reversed the decision of the RTC and held that the agreement was a sale Issue: W/N the agreement between the Villarica and Consunji was an equitable mortgage or an absolute sale Held: An absolute sale An option to buy is different and distinct from right of repurchase which must be reserved by the vendor. Beron. Delgado. The right of repurchase is not a right granted the vendor by the vendee in a subsequent instrument. Mendiola.
Relying on the express consent of Olimpia. Olimpia did not accept the offer.. Aurelio signed another document giving Olimpia. Aurelio offered Olimpia the option to repurchase the property. Catabona then executed a deed of absolute sale in favor of Ynigo. The couple lent him money. the evidence shows that Olimpia opted to repurchase 2 years after the stipulated date of repurchase. Rivas. neither howver did she tender the redemption price to Aurelio's brother. If Olimpia could not locate Aurelio. Third mortgage was executed dubbed “Mortgage with conditional sale”. Guerrero was not able to get possession of the land. Olimpia owed nothing to Aurelio. The option to repurchase was contained on a subsequent document and was made by the Aurelio. He promised with this mortgage to sell the land at the price of P2t per hectare. the option to repurchase the property at any time after May 1958 but not later than May 1960. Olimpia then commenced suit to recover ownership and possession of the subject land against the brothers. Catabona sold to GUERRERO ½ of the property. Olimpia desired to repurchase the land and wrote the brother of Aurelio a letter asking him if he was willing to resell the land. There is nothing in the contract which it could be inferred that the property was being utilized as security. neither can it be alleged that it partook of a pactum commisorium and was therefore void. to wit. Held: NO. Aurelio paid the P6. Del Socorro. he promised to sell the same to the mortgagees for the sum of P18T and that the amount of the mortgage. It bears reiterating that Olimpia was not a debtor but a vendor. Isauro refused. Neither is the contract between the parties one of equitable mortgage. About 2 years after May 1960. Conventional redemption takes place when the vendor reserves the right to repurchase the thing sold. All these were annotated in the TCT..600 representing the obligation of Olimpia that was assumed by Aurelio. if he fails to repurchase the land. Aurelio took possession of the land after the sale. Lopez. as she contends. Ynigo would not surrender the TCTs. with the obligation to comply with the provisions of Art 1616. so he allowed Guerrero to purchase it as long as the obligation to Ynigo was paid. who in turn informed him that the title had been deposited with PNB. Mendiola. P18T shall be treated as payment of one-half xxxand further warrants that he shall sell xxx to no other xxx” A second mortgaged was entered into with the same spouses on the same land for an additional sum. Issue: W/n Olimpia can validly repurchase the land from Aurelio. The nature of the transaction between Olimpia and Aurelio is not a sale with right to repurchase. Sarenas . there was no reservation made by the vendor in the document representing the contract.SALES DIGESTS 2C 2005-2006 Dean Villanueva On the same date of execution of the contract between Olimpia and Aurelio. Aurelio tried to take possession of the certificat of title from Olimpia for the purpose of registering the deed of absolute sale but was told that the same was in possession of Gumayan. Ynigo cannot purchase the property. for the sum of P18T for 5 years. Even granting arguendo that the sale was a pacto de retro sale. Beron. Inasmuch as the contract was neither a sale with right of repurchase nor an equitable mortgage. but merely wrote him letters 146 GUERRERO v YÑIGA (Additional Period of Redemption Facts: Calinisan) • • • • • • • • CATABONA has been mortgaging his parcel of land to YNIGO and his wife BATANGAN. It states there that title shall pass to and become vested absolutely in the said spouses. Aurelio also paid Gumayan P1486 covering receipts representing additional sums of money borrowed by Olimpia. In this case. the vendee. Allegedly. Fernandez Legaspi. since Ynigo remained in possession. Calinisan. Delgado. and based on her allegation that the contract between her was one of sale with right to repurhcase. It has the stipulation that “should he (CATABONA) desire to convey or sell in the future the above described land. Aurelio negotiated with his own brother for the sale of the property. To avoid further trouble.
Mendiola. they have thirty days to repurchase the said land. the parties did not stipulate on a period after the 5 years within which the mortgagor may redeem it. 1617 is applicable. which reads: However. Held: NO. Del Socorro. respondents maintained their view that the transaction was an equitable mortgage.buyer filed for specific performance for seller to give one-half share. by simply instituting an action to reform the contract — known to him to be in truth a sale with pacto de retro — into an equitable mortgage. The seller is Gobenseng and the buyer is Abilla. It must appear that there was a belief on his part. respondents abandoned their theory that the transaction was an equitable mortgage and adopted the finding of the Court of Appeals that it was in fact a pacto de retro sale. Lopez. At the outset. Held: NO PACTO DE RETRO HERE. 1617 applies to the sharing arrangement of the parties Issue: W/N Art. The application of the third paragraph of Article 1606 is predicated upon the bona fides of the vendor a retro. honestly and sincerely entertained. that the agreement was in reality a mortgage. however. Rivas. under a pacto de retro sale . Except as to the period of 5 years from the date of the instrument within which the mortgagor may not redeem the property. Rationale: If the rule were otherwise. Beron. RTC granted the motion hence this appeal. If the stipulation be construed as giving the mortgagees the right to own the property upon failure of the mortgagor to pay the loan on the stipulated time – which is not provided – that would be pactum commissorium which is unlawful and void. but merely to give it as security for a loan or other obligation. founded on facts attendant upon the execution of the sale with pacto de retro.seller Daluro sold a landto buyer Almeda. Seeing the chance to turn the decision in their favor. Fernandez Legaspi. but the second harvest was only appropriated by the seller . Calinisan. Held: NO. Issue: W/N Art 1606 applies. SC affirmed it with finality. it would be within the power of every vendor a retro to set at naught a pacto de retro. (RC note: pls explain to me why) See page 41 for the contract.seller redeemed the property from the buyer and entered into an agreement w/c specifically provided that the parties would share equally on the net harvest of the palay planted on the land in question . one not intended to affect the title to the property ostensibly sold. Seller asserts that since judgment declares it as sale a retro.first harvest was divided equally. Respondents now insist that they are entitled to exercise the right to repurchase pursuant to the third paragraph of Article 1606 of the Civil Code. Buyer instituted against Gobonseng action for specific performance seeking reimbursement of the expenses they incurred in connection with the preparation of the Deed of Sale and Option to Buy which appears to be a Deed of Sale with Right of Repurchase. RTC had it for Abilla declaring it not an equitable mortgage but a sale a retro. Sarenas . but seller refused . or resurrect an expired right of repurchase. the vendor may still exercise the right to repurchase within thirty days from the time final judgment was rendered in a civil action on the basis that the contract was a true sale with right to repurchase. Even after the Court of Appeals declared the transaction to be a pacto de retro sale.seller contends that Art. • • • 147 ABILLA v GOBONSENG (Additional Period of Redemption Delgado) Facts: Subject in this case is a land in Dumaguete. it must be stressed that it has been respondents’ consistent claim that the transaction subject hereof was an equitable mortgage and not a pacto de retro sale or a sale with option to buy. Delgado. 148 ALMEDA v DALURO (Fruits Del Socorro) Facts: .SALES DIGESTS 2C 2005-2006 Dean Villanueva Issue: W/N there was a pacto de retro in the third mortgage.
in this case. Francisco.the phrase "sometime in September 1957" was not meant to limit the right of the buyer to participate in the harvest of the crop planted in June 149 and 150 FRANCISCO v BOISER (When Period of Redemption Begins (Recent Ruling) Facts: • • • • • • Fernandez) • Francisco and her 3 sisters were co-owners of 4 lands in Caloocan city. Francisco reacted by informing Boiser that she was exercising her right of redemption as co-owner of the property. it was well within the 30-day period for redemption. with a copy of the complaint filed by Boiser demanding her share in the rentals from the land. 1617 applies only when the parties did not provide for their sharing arrangement with respect to the fruits existing at the time of redemption . since the same was repurchased by defendants-vendors a retro only on August . In this case. The reason why it the notice should come from the vendor/prospective vendor is that such person is in the best position to know who are his co-owners. 1992 was timely and should be given effect. 1992 and not May 30.SALES DIGESTS 2C 2005-2006 Dean Villanueva . and Etcuban v CA (1987) among others—so ang doctrine ng mga case na ‘to is walang prescribed form ang notice. 151 DE GUZMAN v CA (Among Co-Heirs Legaspi) Facts Teofila Manimtim sold a piece of land with a right to repurchase within 7 years Teofila died without a will De Guzman redeemed the property in favor of Manimtim and secured a tax declaration in their name The other heir of Manimtim filed an action against the De Guzmans to secure the partition of the land which the latter Beron. under the law. Blas sold her 1/5 share to Boiser. or that who. the receipt by Francisco of the summons constitutes actual knowledge on the basis of which the 30-day period for redemption should start. 1992. Issue: Which date should the period of redemption be counted from? Held: August 5. must be notified of the sale. Both court relied on the interpretation that Art 1623 of the Civil Code does not prescribe any particular form of notifying co-owners about the sale of property owned in common. This occurred in Aug 8. Lopez.buyer has the right to participate in the harvest made even after the month of September. CA affirmed.since said Agreement is not contrary to law. Boiser claims that the period of redemption has lapsed since it should be counted from the time she sent a letter to Francisco asking for a share of the rentals (this was May 30. (So Blas became a co-owner as well) Without the knowledge of the other co-owners. 1992.the palay was planted on the land in question in June when vendees a retro were still the owners.Art. Hence. The co-owners sold 1/5 of their undivided share to their mother Blas. the Agreement specifically provided that the parties would share equally the net harvest of the palay planted on the land in question . Art 1623 is very clear and interpretation is not needed. vendor/prospective vendor—any form of notice is sufficient. Badillo v Ferrer (1987). De Conejero v CA (1987). claims that it should be counted from the receipt of the summons (August 5. Del Socorro. Calinisan. 1992) and since the right was exercised in August 12. period for redemption begins. Francisco received summons. Sarenas . on the other hand.e. These courts relied on Distrito v CA (1991). TC said May 30. And notice by the seller removes all doubts as to facts of the sale. Another rule affirmed in this case is that when the notice was given by the proper party—i. morals or public policy. and upon such proper notice. This doctrine is supported by Salatandol v Retes (1988) which affirmed the previous doctrine in Butte v Manuel Uy (1962) – notice to be given by vendor. it is binding on the parties solution: . Francisco deposited amount as redemption price with the Clerk of Court on August 12.September was the month which the parties reckoned the palay planted in June would be harvested . the notice should be the given by Blas and not by Boiser. 1992). as soon as nalaman ng partido na mag-re-redeem ang tungkol sa bentahan. 1957 . 1986 In August 5. The said provision states that the notice must be given by the vendor. Mendiola. magsimula na ang period for redemption. And the deposit of the redemption price on August 12. Fernandez Legaspi. Rivas. Delgado.
Lopez. W/n the mortgagees are entitled to specific performance consisting of the execution by the mortgagors of the corresponding deed of sale. Mortgagors argue that they have the right to redeem the property because such right is inherent and inseparable from this kind of contract. ae ng v e th in r m e aIi Beron. So. offer and acceptance converged and gave rise to a perfected and binding contract of purchase and sale. Del Socorro. Rivas. CFI ruled that mortgagors should enter into a deed of sale with the mortgagees. of the mortgagees informed the mortgagors wanted to exercise their option to buy. the redemption was made in favor of the heirs of Teofila 2. This provision creates a personal obligation on the part of the mortgagor to sell the land once the mortgagees express their interest to buy. SC says yes. Fernandez Legaspi. nt ta sB sa - r or 153 LICAROS v GATMAITAN (Definition and Nature of Assignment Mendiola) Facts: Licaros decided to make a fund placement with Anglo-Asean Bank. it can be said that when the mortgagees expressed their interest to buy the land. Sarenas romwhter iblecgl p. The two cases were joined. Mendiola.SALES DIGESTS 2C 2005-2006 redeemed. Delgado.uicarthsneenie tansatof ede rrcohathaenyseenteiacAAiaaiaitainaacpartheoredwi v er . A sale during the period of redemption to any other person other than the heirs could not have been made by the vendee a retro Hence. the atty. Prescription cannot run against co-heirs The heirs have a right to secure partition of the parcels of land 152 SORIANO v BAUTISTA (Redemption in judicial foreclosure of mortgage Facts: Issue: Held: Lopez) The parties entered into an agreement of mortgage of a parcel of land. On the other hand. Thus. the mortgagees are not enforcing a real right to the land but are rather seeking to obtain specific performance of a personal obligation (hindi ba un involuntary servitude?) to execute the deed of sale. The Mortgagors (Bautista) transferred possession of the land to the mortgagees. SC says that that is correct but the contract also contained a provision giving the mortgagees the option to buy the lot. The contract included a clause giving the mortgagees (Soriano) the option to buy the land. Issue 1. which was done in this case. The provision constituted an “option to buy” which is supported by the same consideration as that of the mortgage. Calinisan. This provision renders the mortgagor’s right to redeem defeasible at the election of the mortgagees. Sometime in May 1958. in effect. Mortgagees filed a suit to compel the mortgagors to enter into a contract of sale with them. However. w/n the De Guzmans became the owners of the property through prescription Dean Villanueva Ruling 1.FGxyEQqW/CBHNwv aoednalc r tted.icarsthoun()Tj301948m7f562ebd. w/n the repurchase was in favor of the heirs 2. the mortgagors filed a suit asking the court to order the mortgagees to accept the payment for the obligation and release the mortgage.
it was already a different store: Occidental Foundry Shop Wong was found guilty for violation of the Bulk Sales Law. without delivering to the vendee Lim Guan a written statemenr containing the names and addresses of his creditors and the amounts of indebtedness due and owing them. With the exchange of checks. who would then be allowed to proceed against the debtor. he willfully sold his shop and that he received the purchase price thereof. Nyco executed a Deed of Assignment in favor of BA Finance. • • • • • • Issue: Beron. So Sanshell gave checks to Nyco. Ocampo’s lawyer. Wong was indebted to Ocampo for P2T.” 154 PNB v CA (Definition and Nature of Assignment 155 NYCO SALES v BA FINANCE (Warranties of Assignor Sarenas) Facts: • • • • • Issue: • Held: • • • Rivas) Nyco is engaged in selling construction materials. Delgado. Sanshell Corp was asking Nyco for a credit accommodation. Wong signed. Because of this. kasi kung nagbayad sila eh di wala sanang kaso. the written words “WITH OUR CONFORME” under which appears “ANGLO-ASEAN BANK AND TRAUST. The assignor-vendor then is liable for the invalidity of whatever he assigned to assignee-vendee. When the Shurdust representative went to Wong’s store to demand payment. Del Socorro. Nyco refuses to pay. Mendiola. Sarenas ..591. Besides. Sanshell failed to pay. it appears in the MOA that on the signature page. W/N the assignor is liable to its assignee for its dishonored checks Yes. Wong was also indebted to the Shurdust Mills Supply Co. Inc for P1. Nyco indorsed the checks to BA Finance. Pumayag si Nyco. The assignor-vendor warrants both the credit itself and the person of the debtor. Lopez. Rivas. BA Finance gave new checks to Nyco and Nyco indorsed these checks to Sanshell. Had the intention merely been to confer upon Gatmaitan the status of a mere “assignee. of course through Ocampo’s order. Fernandez Legaspi. executed a deed of sale of the SHOP. or processes or casts metals). At the back of each deed is a continuing surety agreement by Sanshell.” there is simply no sense in having made that stipulation of express conformity by Anglo-Asean bank. 156 CHIN v UY (Bulk Sales Law Beron) 157 PEOPLE v WONG SZU TUNG (Bulk Sales Law Calinisan) Facts: Wong was the owner of the Kim Tay Seng Foundry Shop (a shop that manufactures iron works. So BA Finance collected from Nyco. Apparently. It was built on the land of Santiago Ocampo. Lim Guan bought it.SALES DIGESTS 2C 2005-2006 other Does not remedy the nullity of the obligation Dean Villanueva Cures the nullity of the old obligation The MOA is a conventional subrogation because it appears in the WJEREAS clauses that they have come into the agreement with the express conformity of the third parties concerned which is Anglo-Asean. as required by law W/N Wong was in violation of the Bulk Sales Law. Nyco is liable to BA Finance Corp The assignment of credit is the process of transferring the right of the assignor to the assignee. Allegedly. Calinisan. He failed to pay after demands were made.
etc to dealers who in turn sell it to others. BF Goodrich seeks a declaratory relief claiming that it does not fall within the ban. They had been employed long before the enactment of Republic Act No. restraining or governing influence over an affair or business to which they relate. Fernandez Legaspi. The three Chinese petitioners testified that they had nothing to do with the management and control of the business. The reason is obvious: to plug any loophole or close any avenue that an unscrupulous alien may resort to flout the law or defeat its purpose. The one advocates the complete nationalization of the retail trade by denying its ownership to any alien. while the other limits its management. administration and control to Filipino citizens. Assuming that he wasn’t forced: What Wong sold is the SHOP itself. They only wait for customers and sell according to the prices appearing on the tags previously fixed by their manager Macario King. Mendiola. The Office of the Solicitor General said that the company is not exempt as it is not a corporation wholly owned by citizens of the Philippines. Rivas. Issue: Is BF Goodrich engaged in the retail business? Beron. there was no violation of the bulk sales law. (Consumer Goods Coverage Facts: • • • • Fernandez) • BF Goodrich is engaged in the business of manufacturing and selling rubber products. Under RA 1180. The prevailing idea is to secure both ownership and management of the retail business in Filipino hands. It is imperative that the law be interpreted in a manner that would stave off any attempt at circumvention of this legislative purpose. Held: We agree to this contention of respondent not only because the context of the law seems to be clear on what its extent and scope seem to prohibit but also because the same is in full accord with the main objective that permeates both the Retail Trade Law and the Anti-Dummy Law. They desire to continue in the employ of Macario King in his business and their job is their only means of earning support for themselves and their families. it cannot engage in retail business. operation. operation. Delgado. King sought the permission of the President through the Secretary of Commerce and Industry to retain the services of the three Chinese nationals since their job was merely technical positions but his request was disapproved because the work of the Chinese were purchaser and salesmen violating the Retail Trade Law. batteries. These words may be technically synonymous in the same that they all refer to the exercise for a directing. Del Socorro. nor do they participate in its profits outside of their monthly salaries. Merchandise: things usually bought and sold in trade by merchants. merchandise. for no one can deny that while one may be employed in a non-control position who apparently is harmless he may later turn out to be a mere tool to further the evil designs of the employer. The lower court rendered a decision making permanent the temporary restraining order upon the company and held that it is not exempt from RA 1180. Therefore. and NOT MERCHANDISE. but it cannot be denied that by reading them in connection with the positions therein unumerated one cannot draw any other conclusion than that they cover the entire range of employment regardless of whether they involve control or non-control position is prohibited. Of the 15 employees the establishment has. and at no more than the prices indicted in said list. Delgado) 158 KING v HERNAEZ (Scope and Definition of Retail Trade Facts: Macario King is a naturalized Filipino citizen and became the owner of the business establishment Import Meant and Produce. He was merely FORCED to sign the deed of sale. Calinisan. King files case in court claiming that their employment is not prohibited either by the Retail Trade Law or the AntiDummy Law. namely to sell direct to the general public. administration and control to Filipino citizens. Lim Pin who is employed as buyer declared that his duties include no more than buying the groceries appearing in a lies prepared and given to him from time to time by Macario King. 159 BALMACEDA v UNION CARBIDE (Consumer Goods Coverage Del Socorro) 160 BF GOODRICH v REYES Sr. commodities or goods for consumption. principally automotive tires and tubes. Lopez. BF Goodrich admitted that it sold directly to the government and its instrumentalities and to its own employees.SALES DIGESTS 2C 2005-2006 Dean Villanueva Held: • • • • No. 12 of these are Filipinos and the three are Chinese nationals. It prohibits a person not a Filipino from engaging in retail trade directly or indirectly while it limits the management. 1180. After acquiring the business from Philippine Cold Stores. Sarenas .
(Consumer Goods Coverage 162 MARSMAN v FIRST COCONUT (Consumer Goods Coverage Facts: Issue: Held: Legaspi) Lopez) First Coconut Central Company purchased one diesel generating unit from Madrid Trading. The diesel generating unit is not a consumer good because it was not bought for use primarily for personal. occupation or calling of habitually selling direct to the general public merchandise. First Coconut defaulted in the payments so Marsman filed a case against them. Fernandez Legaspi. no. the diesel generating unit was used by First Coconut in its Coconut Central. but when sold to its own employees. such is covered by the ban. Thus. or (b) a farmer or agriculturist selling the product of his farm”. In this case. RTC granted Marsman’s claim.SALES DIGESTS 2C 2005-2006 Dean Villanueva Held: No. 3 is missing. PD 714 which amended RA 1180. Lopez. PD 714 added: “(c) a manufacturer or processor selling to the industrial and commercial users or consumers who use the products bought by them to render service to the general public and/or produce or manufacture goods which are in turn sold to them…” It is clear that proprietary planters and persons engaged in the exploration of natural resources are included within the aforesaid amendment. Rivas. The balance (after downpayment) was secured by a chattel mortgage on the same diesel generating unit. W/n the sale violated the RTNL. the sale cannot be considered as retail trade but wholesale. processed or produced by him if his capital does not exceed 5k pesos. It was meant to be a factor of production. it would constitute consumer goods) 161 GOODYEAR TIRES v REYES SR. family or household purposes. commodities or goods for consumption. it would not constitute consumer goods. processor. CA held that the sale violated the Retail Trade Nationalization Law (RTNL). but also required as an element the purpose or use for which the goods are bought. (1) the seller should be habitually engaged in selling. commodities or goods for consumption. but shall not include: (a) a manufacturer. Calinisan. (When the products were sold to industrial or commercial consumers. except as to the sale of its products to its employees. The ruling tells us that the term “consumer goods” did not depend entirely on the nature of the goods themselves. laborer or worker selling to the general public the products manufactured. PD 714 affirms in its preamble that sales made to industrial or commercial users or consumers are not within the scope of the RTNL. Furthermore. Delgado. In this case. Madrid assigned all of its rights in the chattel mortgage to Marsman & Company. Insofar as the sales to the employees are concerned. SC says no. Mendiola. - - ---END--- Beron. clarified that “retail business” covers any act. Del Socorro. CA reversed the ruling. The RTNL calls for the following elements. It was sold not for consumption but for industry or business. Sarenas . (2) the sale must be direct to the general public and (3) the object of the sale is limited to merchandise.
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