Sales

case

Ruling/ Doctrine

Carbonell v ca CONTRACTS; PURCHASE AND SALE OF REALTY; REGISTRATION; EFFECT OF GOOD FAITH
ON DOUBLE SALES. The buyer of realty must act in good faith in registering his deed of sale to merit
the protection of the second paragraph of Article 1544 of the New Civil Code. Unlike the first and third
paragraphs of said Article which accords preference to the one who first takes possession in good faith
of personal or real property, the second paragraph directs that ownership of immovable property
should be recognized in favor of one "who in good faith recorded" his right. Under the first and third
paragraphs, good faith must characterize prior possession. Under the second paragraph, good faith must
characterize the act of anterior registration. If there is no inscription, what is decisive is prior possession
in good faith. If there is inscription, prior registration in good faith is a pre-condition to support title.
ID.; ID.; DOUBLE SALE ; FIRST BUYER IN GOOD FAITH WITH SUPERIOR RIGHT OVER PROPERTY. Where
the first buyer was not aware - and could not have been aware - of any sale to another person as there
was no such sale, the buyer's prior purchase of the land was made in good faith. Her good faith
subsisted and continued to exist when she recorded her adverse claim four days prior to the registration
of the second buyer's deed of sale. The first buyer's good faith did not cease after the seller told her of
his second sale of the same lot to the second buyer. By reason thereof, she has superior right to the land
in question.
Dagupan Trading v Macam
SALES; CONFLICTING SALES; ONE SALE BEFORE REGISTRATION OF LAND
AND THE OTHER AN EXECUTION SALE AFTER REGISTRATION OF LAND; LAW GOVERNING. Where one
of two conflicting sales of a piece of land was executed before the land was registered, while the other
was an execution sale in favor of the judgment creditor of the owner made after the same property had
been registered, what should determine the issue are the provisions of the last paragraph of Section 35,
Rule 39 of the Rules of Court to the effect that, upon the execution and delivery of the final certificate of
sale in favor of the purchaser of land sold in an execution sale, such purchaser "shall be substituted to
and acquire all the rights, title, interest and claim of the judgment debtor to the property as of the time
of the levy".
UNREGISTERED SALE CANNOT BE DEFEATED BY SUBSEQUENT EXECUTION SALE AND REGISTRATION OF
LATTER. Where for a considerable time prior to the levy on execution the interest of the owner of the
land levied upon had already been conveyed to another who took possession thereof and introduced
improvements therein, the aforesaid levy is void. The prior sale, albeit unregistered, cannot be deemed
automatically cancelled upon the subsequent issuance of the Torrens title over the land.
David v Bandin UNREGISTERED LAND; DEFENSE OF BUYER IN GOOD FAITH CANNOT BE AVAILED IN
PURCHASES OF UNREGISTERED LAND; CASE AT BAR. As the record shows, petitioners bought the
property when it was still unregistered land. The defense of having purchased the property in good faith
may be availed of only where registered land is involved and the buyer had relied in good faith on the
clear title of the registered owner. One who purchases an unregistered land does so at his peril. His
claim of having bought the land in good faith, i.e. without notice that some other person has a right to,

or interest in, the property, would not protect him if it turns out that the seller does not actually own
the property. This is what happened in the case at bar.
Olivares v Gonzales
It would be more in keeping with substantial justice if the controversy between
the parties be resolved on the merits rather than on a procedural technicality in the light of the express
mandate of the Rules that they be "liberally construed in order to promote their object and to assist the
parties in obtaining just, speedy and inexpensive determination of every action and proceeding."
Caram v Laureta
The rule of caveat emptor requires the purchaser to be aware of the supposed
title of the vendor and one who buys without checking the vendors title takes all the risks and losses
consequent to such failure.
Cruz v Caban SALES; DOUBLE SALE OF REAL PROPERTY; OWNERSHIP OF PROPERTY ACQUIRED BY
VENDEE WHO FIRST REGISTERS SALE IN GOOD FAITH. As the Court held in Carbonell vs. Court of
Appeals, 69 SCRA 99 (1976), "it is essential that the buyer of realty must act in good faith in registering
his deed of sale to merit the protection of the second paragraph of Article 1544 of the Civil Code." As the
writer stressed in his concurring opinion therein, "The governing principle here is prius tempore, potior
jure (first in time, stronger in right). Knowledge gained by the first buyer of the second sale cannot
defeat the first buyer's right except only as provided by the Civil Code and that is where the second
buyer first registers in good faith the second sale ahead of the first. Such knowledge of the first buyer
does not bar her from availing of her rights under the law, among them to register first her purchase as
against the second buyer. But in converso knowledge gained by the second buyer of the first sale
defeats his rights even if he is first to register the second sale, since such knowledge taints his prior
registration with bad faith. This is the price exacted by Article 1544 of the Civil Code of the second buyer
being able to displace the first buyer; that before the second buyer can obtain priority over the first, he
must show that he acted in good faith throughout (i.e. in ignorance of the first sale and of the first
buyer's rights) from the time of acquisition until the title is transferred to him by registration or failing
registration, by delivery of possession. The second buyer must show continuing good faith and
innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior
registration as provided by law."
KNOWLEDGE OF PRIOR SALE TAINTS SECOND PURCHASER'S PRIOR REGISTRATION WITH BAD FAITH;
CASE AT BAR. When petitioner Cruz succeeded in registering the later sale in his favor, he knew and
was informed of the prior sale in favor of respondents-spouses. Respondents appellate court correctly
held that such "knowledge of a prior transfer of a registered property by a subsequent purchasers
makes him a purchaser in bad faith and his
knowledge of such transfer vitiates his title acquired by virtue of the latter instruments of conveyance
with creates no right as against the first purchaser."
Valdez v Ca
The rule is clear that a prior right is accorded to the vendee who first recorded his right
in good faith over an immovable property

Nuguid v Ca
SALE; RECONVEYANCE; NOT POSSIBLE WHERE PROPERTY WAS TRANSFERRED TO AN
INNOCENT PURCHASER FOR VALUE. An innocent purchaser for value is protected such that when land
has already passed into the hands of an innocent purchaser for value, reconveyance of the same can no
longer be made.
SALE OF IMMOVABLE PROPERTY TO DIFFERENT VENDEES; OWNERSHIP BELONGS TO VENDEE WHO
FIRST RECORDED THE SALE. It is an established fact that the first sale to Juliana Salazar was not
registered while the sale to the petitioners was registered. The disputed property being immovable
property, the ownership should belong to the vendee who in good faith first recorded it in the Registry
of Property, pursuant to the same article.
Radiowealth Finance v Palileo DOUBLE SALE OF IMMOVABLE PROPERTY; REGISTRATION IS THE
OPERATIVE ACT TO CONVEY OR AFFECT REGISTERED LANDS AS FAR AS THIRD PERSONS ARE
CONCERNED. Article 1544 of the Civil Code provides that in case of double sale of an immovable
property, ownership shall be transferred: (1) to the person acquiring it who in good faith first recorded it
in the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession;
and (3) in default thereof, to the person who presents the oldest title, provided there is good faith.
There is no ambiguity regarding the application of the law with respect to lands registered under the
Torrens System. Section 51 of Presidential Decree No. 1529 (amending Section 50 of Act No. 496 clearly
provides that the act of registration is the operative act to convey or affect registered lands insofar as
third persons are concerned. Thus, a person dealing with registered land is not required to go behind
the register to determine the condition of the property. He is only charged with notice of the burdens on
the property which are noted on the face of the register or certificate of title. Following this principle,
this Court has time and again held that a purchaser in good faith of registered land (covered by a
Torrens Title) acquires a good title as against all the transferees thereof whose right is not recorded in
the registry of deeds at the time of the sale.
Under Act No. 3344, registration of instruments affecting unregistered lands is "without prejudice to a
third party with a better right". The aforequoted phrase has been held by this Court to mean that the
mere registration of a sale in one's favor does not give him any right over the land if the vendor was not
anymore the owner of the land having previously sold the same to somebody else even if the earlier sale
was unrecorded. The case of Carumba vs. Court of Appeals is a case in point. It was held therein that
Article 1644 of the Civil Code has no application to land not registered under Act No. 496. Like in the
case at bar, Carumba dealt with a double sale of the same unregistered land. The first sale was made by
the original owners and was unrecorded while the second was an execution sale that resulted from a
complaint for a sum of money filed against the said original owners. Applying Section 35, Rule 39 of the
Revised Rules of Court, this Court held that Article 1544 of the Civil Code cannot be invoked to benefit
the purchaser at the execution sale though the latter was a buyer in good faith and even if this second
sale was registered. It was explained that this is because the purchaser of unregistered land at a sheriff's
execution sale only steps into the shoes of the judgment debtor, and merely acquires the latter's
interest in the property sold as of the time the property was levied upon.

Tanedo v CA RULE ON PREFERENTIAL RIGHT OF VENDEES IN CASE OF DOUBLE SALE. Petitioners

contend that they were in possession of the property and that private respondents never took
possession thereof. As between two purchasers, the one who registered the sale in his favor has a
preferred right over the other who has not registered his title, even if the latter is in actual possession of
the immovable property.
Occena v Esponilla
What is material is whether the second buyer first registers the second sale in
good faith, i.e. without knowledge of any defect in the title of the property sold. The defense of
indefeasibility of a Torrens title does not extend to a transferee who takes the certificate of title in bad
faith, without notice of a flaw.
Moles v IAC
SALES; IMPLIED WARRANTY; DOES NOT APPLY TO SECONDHAND ARTICLES SUBJECT TO
INSPECTION AT THE TIME OF THE SALE. It is generally held that in the sale of a designated and specific
article sold as secondhand, there is no implied warranty as to its quality or fitness for the purpose
intended, at least where it is subject to inspection at the time of the sale. On the other hand, there is
also authority to the effect that in a sale of a secondhand articles there may be, under some
circumstances, an implied warranty of fitness for the ordinary purpose of the article sold or for the
particular purpose of the buyer. In a line of decisions rendered by the United States Supreme Court, it
had theretofore been held that there is no implied warranty as to the condition, adaptation, fitness, or
suitability for the purpose for which made, or the quality, of an article sold as and for a secondhand
article. Thus, in finding for private respondent, the respondent court cited the ruling in Sison vs. Ago, et
al. to the effect that unless goods are sold as to raise an implied warranty, as a general rule there is no
implied warranty in the sale of secondhand articles.
EXCEPTIONS. The general rule, however, is not without exceptions. Article 1562 of our Civil Code,
which was taken from the Uniform Sales Act, provides: "Art. 1562. In a sale of goods, there is an implied
warranty or condition as to the quality or fitness of the goods, as follows: (1) Where the buyer, expressly
or by implication, makes known to the seller the particular purpose for which the goods are acquired,
and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or
manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such
purpose;" Furthermore, and of a more determinative role in this case, a perusal of past American
decisions likewise reveals a uniform pattern of rulings to the effect that an express warranty can be
made by and also be binding on the seller even in the sale of a secondhand article.
Engineering and Machinery Corp v CA REMEDY IN CASE OF VIOLATION OF THE WARRANTY AGAINST
HIDDEN DEFECTS. The obligations of a contractor for a piece of work are set forth in Articles 1714 and
1715 of the Civil Code. The provisions on warranty against hidden defects, referred to in Art. 1714 are
found in Articles 1561 and 1566. The remedy against violations of the warranty against hidden defects is
either to withdraw from the contract (redhibitory action) or to demand a proportionate reduction of the
price (accion quanti minoris), with damages in either case.
Sonny Lo v CA VENDOR OR ASSIGNOR WARRANTS THE EXISTENCE AND LEGALITY OF THE CREDIT AT
TIME OF SALE OR ASSIGNMENT. Hence, it may well be that the assignment of credit, which is in the

nature of a sale of personal property, produced the effects of a dation in payment which may extinguish
the obligation. However, as in any other contract of sale, the vendor or assignor is bound by certain
warranties. More specifically, the first paragraph of Article 1628 of the Civil Code provides: The vendor
in good faith shall be responsible for the existence and legality of the credit at the time of the sale,
unless it should have been sold as doubtful; but not for the solvency of the debtor, unless it has been so
expressly stipulated or unless the insolvency was prior to the sale and of common knowledge. From the
above provision, petitioner, as vendor or assignor, is bound to warrant the existence and legality of the
credit at the time of the sale or assignment. When Jomero claimed that it was no longer indebted to
petitioner since the latter also had an unpaid obligation to it, it essentially meant that its obligation to
petitioner has been extinguished by compensation. In other words, respondent alleged the nonexistence of the credit and asserted its claim to petitioner's warranty under the assignment. Therefore,
it behooved on petitioner to make good its warranty and paid the obligation.
Catungal v Rodriguez
Ramos v CA
EQUITABLE MORTGAGE; PRESUMPTION UNDER ART. 1602 OF THE CIVIL CODE;
EXISTENCE OF ANY ONE CIRCUMSTANCE SUFFICIENT. Settled is the rule that to create the
presumption enunciated by Article 1602, the existence of one circumstance is enough. The said article
expressly provides therefor "in any of the following cases," hence the existence of any of the
circumstances enumerated therein, not a concurrence nor an overwhelming number of such
circumstances, suffices to give rise to the presumption that the contract with the right of repurchase is
an equitable mortgage.
SALE WITH A RIGHT TO REPURCHASE; NOT FAVORED. Sales with a right to repurchase, as defined by
the Civil Code, are not favored. We will not construe instruments to be sales with a right to repurchase,
with the stringent and onerous effects which follow, unless the terms of the document and the
surrounding circumstances require it. Whenever, under the terms of the writing, any other construction
can fairly and reasonably be made, such construction will be adopted and the contract will be construed
as a mere loan unless the court can see that, if enforced according to its terms, it is not an
unconscionable one.
REGARDED AS EQUITABLE MORTGAGE WHEN GIVEN AS SECURITY FOR A LOAN. The contracts purport
to be sales with pacto de retro; however, since the same were actually executed in consideration of the
aforesaid loans said contracts are indubitably equitable mortgages. The rule is firmly settled that
whenever it is clearly shown that a deed of sale with pacto de retro, regular on its face, is given as
security for a loan, it must be regarded as an equitable mortgage.
De Leon v Salvador
Flores v So
The pacto de retro sale between Gallano and Flores was executed when the Civil Code
of Spain was still in effect. It is provided in Art 1509 thereof that if the vendor does not comply with the
provisions of Art 1518 (i.e. to return the price, plus expenses) the vendee shall acquire irrevocably the
ownership of the thing sold.

Under the old Civil Code, the ownership was consolidated in the vendee a retro by operation of law.
Accordingly, upon the failure of Gallano, as the vendor a retro, to redeem the property subject of the
pacto de retro sale within the period agreen upon, the vendee a retro, Flores, became the absolute
owner of the subject property.
Alonzo v IAC CONTRACTS; PACTO DE RETRO SALE; EXCEPTION TO THE GENERAL RULE ADOPTED IN
CASE AT BAR. In arriving at our conclusion today, we are deviating from the strict letter of the law,
which the respondent court understandably applied pursuant to existing jurisprudence. The said court
acted properly as it had no competence to reverse the doctrines laid down by this Court in the abovecited cases. In fact, and this should be clearly stressed, we ourselves are not abandoning the De
Conejero and Buttle doctrines. What we are doing simply is adopting an exception to the general rule, in
view of the peculiar circumstances of this case. The co-heirs in this case were undeniably informed of
the sales although no notice in writing was given them. And there is no doubt either that the 30-day
period began and ended during the 14 years between the sales in question and the filing of the
complaint for redemption in 1977, without the co-heirs exercising their right of redemption. These are
the justifications for this exception.
Lao v CA
EQUITABLE MORTGAGE, WHEN PRESUMED. The law enumerates when a contract
may be presumed to be an equitable mortgage: "(1) When the price of a sale with right to repurchase is
unusually inadequate; (2) When the vendor remains in possession as lessee or otherwise; (3) When
upon or after the expiration of the right to repurchase another instrument extending the period of
redemption or granting a new period is executed; (4) When the purchaser retains for himself a part of
the purchase price; (5) When the vendor binds himself to pay the taxes on the thing sold; (6) In any
other case where it may be fairly inferred that the real intention of the parties is that the transaction
shall secure the payment of a debt or the performance of any other obligation. . ." The foregoing
presumption applies also to a "contract purporting to be an absolute sale."
CASE AT BAR. Applying the preceding principles to the factual milieu of this case, we find the
agreement between the private respondent and N. Domingo Realty & Housing Corporation, as
represented by petitioner, manifestly one of equitable mortgage. First, possession of the property in the
controversy remained with Petitioner Manuel Lao who was the beneficial owner of the property, before,
during and after the alleged sale. It is settled that a "pacto de retro sale should be treated as a mortgage
where the (property) sold never left the possession of the vendors." Second, the option given to Manuel
Lao to purchase the property in controversy had been extended twice through documents executed by
Mr. Tan Bun Uy, President and Chairman of the Board of Better Homes Realty & Housing Corporation.
The wording of the first extension is a refreshing revelation that indeed the parties really intended to be
bound by a loan with mortgage, not by a pacto de retro. It reads, "On June 10, 1988, this option is
extended for another sixty days to expired (sic) on Aug. 11, 1988. The purchase price is increased to
P137,000.00. Since Mr. Lao borrow (sic) P20,000.00 from me." These extensions clearly represent the
extension of time to pay the loan given to Manuel Lao upon his failure to pay said loan on its maturity.
Mr. Lao was even granted an additional loan of P20,000.00 as evidenced by the above-quoted
document. Third, unquestionably, Manuel Lao, and his brother were in such "dire need of money" that
they mortgaged their townhouse units registered under the name of N. Domingo Realty Corporation,

the family corporation put up by their parents, to Private Respondent Better Homes Realty & Housing
Corporation. In retrospect, it is easy to blame Petitioner Manuel Lao for not demanding a reformation of
the contract to reflect the true intent of the parties. But this seeming inaction is sufficiently explained by
the Lao brothers' desperate need for money, compelling them to sign the document purporting to be a
sale after they were told that the same was just for "formality." Based on the conduct of the petitioner
and private respondent and even the terminology of the second option to purchase, we rule that the
intent and agreement between them was undoubtedly one of equitable mortgage and not of sale.
Lanuza v De Leon
The stipulation in deed denominated by the parties as a "Deed of Sale With
Right to Repurchase" to the effect that if the vendor fails to pay the amount agreed upon within the
stipulated period, his right to repurchase the property shall be forfeited and the ownership over the
same would automatically pass to the vendee without need of court intervention, is contrary to the
nature of a true pacto de retro sale, under which a vendee acquires ownership of the thing sold
immediately upon execution of the sale, subject only to the vendor's right of redemption. (See e.g.,
Guerrero vs. Yigo, 96 Phil., 37 [1954]; Floro vs. Granada, 83 Phil., 486 (1949). Indeed, the stipulation
which enables the mortgagee to acquire ownership of the mortgaged property without need of
foreclosure proceedings establishes a pactum commissorium, and, being contrary to the provisions of
Article 2080 of the Civil Code, is a nullity. Its insertion in the contract is an avowal of an intention to
mortgage rather than to sell. (Alcantara vs. Alinea, 8 Phil., 111 [1907]).
Between the unrecorded deed of Reyes and Navarro which we hold to be an equitable mortgage, and
the registered mortgage of De Leon, the latter must be preferred. Preference of mortgage credits is
determined by the priority of registration of the mortgages, following the maxim "Prior tempore potior
jure".
Capulong v Ca Where any of the circumstances defined in Article 1602 of the Civil Code is present, a
contract of sale with right to repurchase is presumed to be an equitable mortgage. As stated by the
Code Commission which drafted the new Civil Code, in practically all of the so-called contracts of sale
with right of repurchase, the real intention of the parties is that the pretended purchase price is money
loaned and in order to secure the payment of the loan, a contract purporting to be a sale with pacts de
retro is drawn up
Solid Homes v CA
In a contract of sale with pacto de retro, the vendee has a right to the
immediate possession of the property sold, unless otherwise agreed upon. It is basic that in pacto de
retro sale, the title and ownership of the property sold are immediately vested in the vendee a retro,
subject only to the resolutory condition of repurchase by the vendor a retro within the stipulated
period.
Primary Structures Corp v Valencia
Whenever a piece of rural land not exceeding one hectare is
alienated, the law grants to the adjoining owners a right of redemption except when the grantee or
buyer does not own any other rural land. In order that the right may arise, the land sought to be
redeemed and the adjacent property belonging to the person exercising the right of redemption must
both be rural lands. If one or both are urban lands, the right cannot be invoked. Here, the one or both

are urban lands, the right cannot be invoked. Here, the trial court found the lots involved to be rural
lands and respondents did not dispute it before the Court of Appeals.
.; EXCEPTION; WHEN BUYER DOES NOT OWN ANY OTHER RURAL LAND. Article 1621 of the Civil Code
expresses that the right of redemption it grants to an adjoining owner of the property conveyed may be
defeated if it can be shown that the buyer or grantee does not own any other rural land. The appellate
court, sustaining the trial court, has said that there has been no evidence proffered to show that
respondents are not themselves owners of rural lands for the exclusionary clause of the law to apply
MUST BE EXERCISED WITHIN 30 DAYS FROM NOTICE IN WRITING BY VENDOR; AFFIDAVIT OF VENDOR
TO THAT EFFECT BEFORE SALE RECORDED IN THE REGISTRY OF PROPERTY, NOT SUFFICIENT. Article
1623 of the Civil Code provides that the right of legal pre-emption or redemption shall not be exercised
except within thirty days from notice in writing by the prospective vendor, or by the vendor, as the case
may be. In stressing the mandatory character of the requirement, the law states that the deed of sale
shall not be recorded in the Registry of Property unless the same is accompanied by an affidavit of the
vendor that he has given notice thereof to all possible redemptioners. The Court of Appeals has equated
the statement in the deed of sale to the effect that the vendors have complied with the provisions of
Article 1623 of the Civil Code, as being the written affirmation under oath, as well as the evidence, that
the required written notice to petitioner under Article 1623 has been met. Respondents, like the
appellate court, overlook the fact that petitioner is not a party to the deed of sale between respondents
and Mendoza and has had no hand in the preparation and execution of the deed of sale. It could not
thus be considered a binding equivalent of the obligatory written notice prescribed by the Code.
Etcuban v CA While it is true that written notice is required by the law (art 1623), it is equally true that
the same art 1623 does not prescribe any particular form of notice nor any distinctive method for
notifying the redemptioner. So long, therefore, as the latter is informed in writing of the sale and the
particulars thereof, the 30 days for redemption start running, and the redemptioner has no real cause to
complain.
A sworn statement or clause in a deed of sale to the effect that a written notice of sale was given to
possible redemptioners or co-owners might be used to determine whether an offer to redeem was
made on or out of time, or whether there was substantial compliance with the requirement of said Art
1623.
Guzman, Bocalin & Co. v Bonnevie
It was not necessary to secure the approval by the probate
court of the Contract of Lease because it did not involve an alienation of real property of the estate nor
did the term of the lease exceed one year so as to make it fall under Art 1878(8) of the Civil Code. Only if
par 20 of the Contract of Lease was activated and the said property was intended to be sold would it be
required of the administratrix to secure the approval of the probate court pursuant to rule 89 of the
rules of court
Yak Seng Co. v CA
The mere occupancy of the premises for a number of years, by itself is not
sufficient. The circumstance that the petitioner has paid its rentals religiously during the past twenty
years is also not sufficient to justify the extension it demands. Neither are the substantial improvements

it allegedly made on the leased premises nor the difficulty of finding another place of business, on which
it has not submitted any evidence at all.
As the rental was paid monthly and the term had not been expressly agreed upon, the lease was
understood under Article 1687 to be terminable from month to month. At the time the petitioner was
asked to vacate the leased premises, the lease contract had already expired and therefore, could no
longer be extended.
If the contract of lease had not yet expired, its extension would still be subject to the sound discretion of
the court and was by no means obligatory upon it as a merely ministerial duty.
"The power of the Courts to fix a longer term for lease is protestative or discretionary, 'may' is the word
to be exercised or not in accordance with the particular circumstances of the case; a longer term to
be granted where equities come into play demanding extension, to be denied where none appears,
always with due deference to the parties freedom to contract."
Clutario v CA The acceptance by the lessor of the payment by the lessee of the rentals in arrears does
not constitute a waiver of the default in the payment of rentals as a valid cause of action for ejectment
Proof of any one of the factors enumerated in Section 5 of B.P. Blg. 25 (1979) is sufficient cause for
judicial ejectment of a lessee. Having proved one of such grounds, i.e., arrears in payment of rent for
three (3) months at any one time, private respondents may legally eject petitioners without having to
prove the other grounds for ejectment. Nevertheless, to bolster their action for ejectment, private
respondents invoked in their complaint a second ground for ejectment, namely, their need for the
leased premises.
Yap v Cruz
There is no question that private respondent has not effectively relinquished his
leasehold rights over the premises in question in view of the failure of negotiations for the sale of the
goodwill. Clearly, the transfer of the leasehold rights is conditional in nature and has no force and effect
if the condition is not complied with
the lack of proper notice or demand to vacate upon the private respondent is clearly evident. In the
absence of such notice, the lease of private respondent continues to be in force and can not be deemed
to have expired as of the end of the month automatically. Neither can the non-payment of the rent for
the month of August, 1985 be a ground for termination of the lease without a demand to pay and to
vacate.
United Realty Corp v CA Since the lease agreement in question is for a definite period it follows that
petitioner has a right to judicially eject private respondent from the premises as an exception to the
general rule provided for in Section 4 of P.D. No. 20
under Section of 5(f) of B.P. Blg. 25 one of the grounds for ejectment is the expiration of the period of a
written lease contract. In this case, because of the failure of the private respondent to pay the increased
rental demanded by petitioner, petitioner elected to terminate the contract and asked the private
respondent to vacate the premises. A lease contract may be terminated at the end of any month, which

shall be deemed terminated upon the refusal to pay the increased monthly rental demanded by the
petitioner, provided the same is not exhorbitant. 8
Legar Management & Realty Corp v CA the lease over the subject property was on a month-to-month
basis, and that there was proper notice of non-renewal of contract and demand for vacation of premises
made by petitioners on private respondent. Unquestionably, therefore, the verbal lease agreement
entered into by private respondent and petitioners' father and predecessor-in-interest has been validly
terminated, in which case there is sufficient cause for ejectment under Section 5(f) of Batas Pambansa
Blg. 877
The determination of the period of a lease agreement can still be made in accordance with said Article
1687, and that in a month to month lease situation, when petitioners (lessor) gave private respondent
(lessee) notice to vacate the premises in question, the contract of lease is deemed to have expired as of
the end of the month."