G.R. No.

170405

February 2, 2010

RAYMUNDO S. DE LEON, Petitioner,

vs.
BENITA T. ONG.1 Respondent.
Facts: Petitioner Raymundo S. de Leon sold three parcels of land with improvements situated in Antipolo, Rizal to
respondent Benita T. Ong. As these properties were mortgaged to Real Savings and Loan Association, Incorporated
(RSLAI), petitioner and respondent executed a notarized deed of absolute sale with assumption of mortgage.
Pursuant to this deed, respondent gave petitioner P415,500 as partial payment. Thereafter, petitioner handed the
keys to the properties and wrote a letter informing RSLAI of the sale and authorizing it to accept payment from
respondent and release the certificates of title. Respondent likewise informed RSLAI of her agreement with petitioner
for her to assume petitioners outstanding loan. RSLAI required her to undergo credit investigation. Subsequently,
respondent learned that petitioner again sold the same properties to one Leona Viloria after March 10, 1993 and
changed the locks, rendering the keys he gave her useless. Respondent proceeded to RSLAI to inquire about the
credit investigation. However, she was informed that petitioner had already paid the amount due and had taken back
the certificates of title. Respondent persistently contacted petitioner but her efforts proved futile. Respondent filed a
complaint for specific performance, declaration of nullity of the second sale and damages against petitioner and
Viloria in RTC claiming that since the property was previously sold to her on March 10, 1993, the petitioner no longer
had the right to sell the same to Viloria. The RTC and the CA had conflicting interpretations of the March 10, 1993
deed. The RTC ruled that it was a contract to sell while the CA held that it was a contract of sale.
Issue: Whether the parties entered into a contract of sale or a contract to sell? Void Sale Or Double Sale? Was
respondent a purchaser in good faith?
Ruling: It was a contract of sale the parties entered into. The deed executed by the parties in a manner absolute and
irrevocable. With regard to the manner of payment, it required respondent to pay P415,500 in cash to petitioner upon
the execution of the deed, with the balance payable directly to RSLAI. There was no reservation of ownership by the
petitioner of the properties until the full payment of the purchase price. the terms and conditions of the deed only
affected the manner of payment, not the transfer of ownership (upon the execution of the notarized contract). The
seller is obliged to transfer title over the properties and deliver the same to the buyer. Article 1498 of the Civil
Code provides that, as a rule, the execution of a notarized deed of sale is equivalent to the delivery of a thing sold
whereby in this case the petitioner executed a notarized deed of absolute sale in favor of respondent, turn over the
keys to the properties to respondent and authorized RSLAI to receive payment from respondent and release his
certificates of title to her. The totality of petitioners acts clearly indicates that he had unqualifiedly delivered and
transferred ownership of the properties to respondent
This case involves a double sale as the disputed properties were sold validly on two separate occasions by the same
seller to the two different buyers in good faith. Article 1544 of the Civil Code provides that If the same thing should
have been sold to different vendees, the ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership
shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be
no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title, provided there is good faith.
Yes, respondent is buyer in good faith. She purchased the properties, knowing they were encumbered only by the
mortgage to RSLAI. According to her agreement with petitioner, respondent had the obligation to assume the balance
of petitioners outstanding obligation to RSLAI. Consequently, respondent informed RSLAI of the sale and of her
assumption of petitioners obligation. However, because petitioner surreptitiously paid his outstanding obligation and
took back her certificates of title, petitioner himself rendered respondents obligation to assume petitioners
indebtedness to RSLAI impossible to perform. Because petitioner himself willfully prevented the condition vis--vis
the payment of the remainder of the purchase price, the said condition is considered fulfilled pursuant to Article 1186
of the Civil Code.

G.R. No. 178584

October 8, 2012

ASSOCIATED MARINE OFFICERS AND SEAMEN'S UNION OF THE PHILIPPINES PTGWO-ITF, Petitioner,
vs.
NORIEL DECENA, Respondent.
Facts: PTGWO-ITF (petitioner) is a labor organization engaged in an on-going Shelter Program, which offers
residential lots and fully-furnished houses to its members-seafarers under a reimbursement scheme requiring no
down payment and no interest on the principal sum advanced for the acquisition and development of the land and the
construction of the house. On April 27, 1995, petitioner entered into a contract with one of its members, Noriel
Decena (respondent), to take possession of a house and lot 7 STOLT MODEL, Lot 16, Block 7, in the Seamen's
Village in Dasmarias, Cavite, with the obligation to reimburse petitioner the cost (US$28,563) 4 thereof in 180 equal
monthly payments. It was stipulated in said contract that, in case respondent fails to remit three (3) monthly
reimbursement payments, he shall be given a 3-month grace period within which to remit his arrears, otherwise, the
contract shall be automatically revoked or cancelled and respondent shall voluntarily vacate the premises without
need of demand or judicial action. Respondent failed to pay twenty-five (25) monthly reimbursement payments
covering the period August 1999 to August 2001, despite demands. Hence, petitioner cancelled the contract and
treated all his reimbursement payments as rental payments for his occupancy of the house and lot. Petitioner sent
respondent a notice of final demand requiring him to fulfill his obligation within a 30-day grace period. They received a
notice to vacate the premises but failed to heed said notices. A case for unlawful detainer was filed before MTC.
MTC ordered in favour of the petitioner. RTC affirmed in toto the decision of the MTC. On petition for review before
the CA, the appellate court set aside the decision of the RTC and entered a new judgment dismissing the complaint
for unlawful detainer and restoring respondent to the peaceful possession of the subject house and lot. The CA held
that the contract between the parties is not a contract of lease, but a contract to sell, which stipulates that upon full
payment of the value of the house and lot, respondent shall become the owner thereof. petitioner filed a motion for
reconsideration, which was denied by the CA
Issue: to whether or not the agreement between the parties is a contract of lease or a contract to sell
Ruling: the parties herein entered into a contract to sell in the guise of a reimbursement scheme requiring respondent
to make monthly reimbursement payments which are, in actuality, installment payments for the value of the subject
house and lot. the cancellation of a contract to sell may be done outside of court, however, "the cancellation by the
seller must be in accordance with Sec. 3(b) of R.A. No. 6552, which requires a notarial act of rescission and the
refund to the buyer of the full payment of the cash surrender value of the payments on the property. Petitioner failed
to prove that the Shelter Contract Award had been cancelled in accordance with R.A. No. 6552, which would have
been the basis for the illegality of respondent's possession of the subject premises. Hence, the action for ejectment
must necessarily fail. the Court orders respondent to pay his arrears and settle the balance of the full value of the
subject premises. He had enjoyed the use thereof since 1995. After defaulting in August 1999, respondent had not
made any subsequent reimbursement payments. Thus, for the delay in his reimbursement payments, we award
interest at the rate of 6% per annum on the unpaid balance applying Article 2209 34 of the Civil Code, there being no
stipulation in the Shelter Contract Award for such interest.35 For purposes of computing the legal interest, the
reckoning period should be the notice of final demand, conformably with Articles 1169 36 and 158937 of the same Code,
which, as found by the MTC, was sent by petitioner to respondent on August 21, 2001.

G.R. No. 153820

October 16, 2009

DELFIN TAN, Petitioner,

vs.
ERLINDA C. BENOLIRAO, ANDREW C. BENOLIRAO, ROMANO C. BENOLIRAO, DION C. BENOLIRAO, SPS.
REYNALDO TANINGCO and NORMA D. BENOLIRAO, EVELYN T. MONREAL, and ANN KARINA
TANINGCO,Respondents.
Facts: Spouses Lamberto and Erlinda Benolirao and the Spouses Reynaldo and Norma Taningco were the coowners of a 689-square meter parcel of land (property) located in Tagaytay City. On October 6, 1992, the co-owners
executed a Deed of Conditional Sale over the property in favor of Tan. Pursuant to the Deed of Conditional Sale, Tan
issued and delivered to the co-owners/vendors Check for P200,000.00 as down payment for the property, for which
the vendors issued a corresponding receipt. On November 6, 1992, Lamberto Benolirao died intestate. His heirs
executed an extrajudicial settlement of Lambertos estate whereby a new certificate of title over the property was
issued. Tan refused to comply with the vendors demand and instead wrote them a letter claiming that the annotation
on the title, made pursuant to Section 4, Rule 74 of the Rules, constituted an encumbrance on the property that would
prevent the vendors from delivering a clean title to him. Thus, he alleged that he could no longer be required to pay
the balance of the purchase price and demanded the return of his down payment but the vendors refused, thereafter
sent another demand letter. The vendors still refused to heed Tans demand, prompting Tan complaint with the RTC
for specific performance against the vendors. He alleged that there was a novation of the Deed of Conditional Sale
done without his consent since the annotation on the title created an encumbrance over the property. Tan prayed for
the refund of the down payment and the rescission of the contract. Later, he amended his Complaint, contending that
if the respondents insist on forfeiting the down payment, he would be willing to pay the balance of the purchase price
provided there is reformation of the Deed of Conditional Sale. In the meantime, Tan caused the annotation on the title
of a notice of lis pendens. Respondents executed a Deed of Absolute Sale over the property in favor of Hector de
Guzman who registered the property under his name. Thereafter, the respondents moved for the cancellation of the
notice of lis pendens which was granted by RTC. Tan then filed a motion to carry over the lis pendens annotation to
TCT No. 28104 registered in de Guzmans name, but the RTC denied the motion. The RTC ruled that the
respondents forfeiture of Tans down payment was proper in accordance with the terms and conditions of the contract
between the parties. On appeal, the CA dismissed the petition and affirmed the ruling of the trial court in toto.
Issue: Whether the parties entered into a contract of sale or a contract to sell?
Ruling: The true nature of the contract is revealed by paragraph D thereof. Jurisprudence has established that
where the seller promises to execute a deed of absolute sale upon the completion by the buyer of the payment of the
price, the contract is only a contract to sell. Thus, while the contract is denominated as a Deed of Conditional Sale,
the presence of stipulated provision identifies the contract as being a mere contract to sell. A contract is what the law
defines it to be, taking into consideration its essential elements, and not what the contracting parties call it. Article
1485 of the Civil Code defines a contract of sale as one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent.
In contrast, a contract to sell is defined as a bilateral contract whereby the prospective seller, while expressly
reserving the ownership of the property despite delivery thereof to the prospective buyer, binds himself to sell the
property exclusively to the prospective buyer upon fulfillment of the condition agreed, i.e., full payment of the
purchase price. A contract to sell may not even be considered as a conditional contract of sale where the seller
may likewise reserve title to the property subject of the sale until the fulfillment of a suspensive condition, because in
a conditional contract of sale, the first element of consent is present, although it is conditioned upon the happening of
a contingent event which may or may not occur. The SC holds that the contract to sell was terminated when the
vendors could no longer legally compel Tan to pay the balance of the purchase price as a result of the legal
encumbrance which attached to the title of the property. Since Tans refusal to pay was due to the supervening event
of a legal encumbrance on the property and not through his own fault or negligence, we find and so hold that the
forfeiture of Tans down payment was clearly unwarranted.

G.R. No. 154493

December 6, 2006

REYNALDO VILLANUEVA, petitioner,

vs.
PHILIPPINE NATIONAL BANK (PNB), respondent.
Facts: SAMD of PNB issued an advertisement for the sale thru bidding of certain PNB properties in Calumpang,
General Santos City, including Lot No. 17and Lot No. 19. Bidding was subject to the following conditions: 1) that cash
bids be submitted not later than April 27, 1989; 2) that said bids be accompanied by a 10% deposit in managers or
cashiers check; and 3) that all acceptable bids be subject to approval by PNB authorities. In a June 28, 1990,
Reynaldo Villanueva (petitioner) offered to purchase Lot Nos. 17 and 19 and deposited manifested P400,000.00 to
show his good faith but with the understanding that said amount may be treated as part of the payment of the
purchase price only when his offer is accepted by PNB. On July 6, 1990, Guevara, Vice President of SAMD, informed
Villanueva that only Lot No. 19 is available and that the asking price is P2,883,300.00. Villanueva paid P200,000.00
to PNB which issued O.R. No. 16997 to acknowledge receipt of the "partial payment deposit on offer to purchase."
Also, on July 24, 1990, P380,000.00 was debited from Villanuevas Savings Account No. 43612 and credited to
SAMD. On October 11, 1990, Guevara wrote Villanueva that, upon orders of the PNB Board of Directors to conduct
another appraisal and public bidding of Lot No. 19, SAMD is deferring negotiations with him over said property and
returning his deposit of P580,000.00. Undaunted, Villanueva attempted to deliver postdated checks covering the
balance of the purchase price but PNB refused the same. Villanueva filed with the RTC a Complaint for specific
performance and damages against PNB. The RTC granted the Complaint, The RTC anchored its judgment on the
finding that there existed a perfected contract of sale between PNB and Villanueva. PNB appealed to the CA which
reversed and set aside RTC Decision. According to the CA, there was no perfected contract of sale because the July
6, 1990 letter of Guevara constituted a qualified acceptance of the June 28, 1990 offer of Villanueva, and to which
Villanueva replied on July 11, 1990 with a modified offer. Villanuevas Motion for Reconsideration was denied by the
CA.
Issues: Whether a perfected contract of sale exists between petitioner and respondent PNB
Ruling: No, the contract was not perfected due to lack of mutual consent by the parties. Contracts of sale are
perfected by mutual consent whereby the seller obligates himself, for a price certain, to deliver and transfer
ownership of a specified thing or right to the buyer over which the latter agrees. Acceptance of petitioners payments
did not amount to an implied acceptance of his last counter-offer. the amounts paid by petitioner were not in the
nature of downpayment or earnest money but were mere deposits or proof of his interest in the purchase of Lot No.
19. Acceptance of said amounts by respondent does not presuppose perfection of any contract. Petition is denied.

G.R. No. 139233 November 11, 2005

SPOUSES ALFREDO and BRIGIDA ROSARIO, Petitioners,
vs.
PCI LEASING AND FINANCE, INC.,* Respondent.
Facts: Spouses Rosario purchased an Isuzu Elf Pick-up Utility vehicle from CarMerchants, Inc. The transaction was
covered by a Purchase Agreement whereby the spouses undertook to make a downpayment of P190,000.00 of the
total purchase price of P380,000.00. The spouses then applied for a loan with PCI Leasing to pay for the balance
of P190,000.00. Upon the approval of their loan application, the spouses Rosario executed a Promissory Note in
favor of PCI Leasing covering the amount of the loan plus finance charges in the total amount of P274,008.00. The
spouses undertook to pay the loan in monthly installments .The spouses Rosario also agreed that, in case of default,
the payment of the outstanding sum with interest shall immediately become due and payable. They executed a
Chattel Mortgage to secure the payment of the loan in favor of PCI Leasing over the Isuzu Elf 4BD1. The motor
vehicle was delivered to the spouses and it was registered in their names. Later the spouses were unable to pay
their monthly dues. PCI Leasing filed a Complaint in the RTC for "Sum of Money with Damages with a Prayer for a
Writ of Replevin." which was granted. The Sheriff seized the motor vehicle. After five (5) days, without the court
issuing an order discharging the writ, the Sheriff turned over the possession of the vehicle to PCI Leasing. The
spouses Rosario alleged that the chattel mortgage they executed in favor of PCI Leasing covering the motor vehicle
was in effect a contract of sale of personal property, payable in installments to be governed by Article 1484 of the
New Civil Code of the Philippines. They further alleged that since PCI Leasing opted to foreclose the chattel
mortgage, it was estopped from collecting the balance of their account under the promissory note and chattel
mortgage. The trial court rendered decision in favor of PCI leasing. On appeal, the court ruled that even if Article
1484 of the New Civil Code were to be applied, the chattel mortgage had not been foreclosed; hence, PCI Leasing
was not precluded from collecting the balance of the appellants account. It held that the remedy of the unpaid seller
under Article 1484 of the New Civil Code is alternative and not cumulative.
Issue: whether the respondent is the assignee of the petitioners account with CarMerchants, Inc. (as the vendor of
the motor vehicle).
Ruling: There is no factual basis for the petitioners claim that CarMerchants, Inc. had assigned its rights to collect the
balance of the purchase price to the respondent. Petitioners admitted that they were declared in default and failed to
prove such claim. The evidence shows that the petitioners secured a loan from the respondent to pay
the P190,000.00 balance to CarMerchants, Inc., and executed a promissory note evidencing their loan in favor of the
respondent. The petitioners forthwith executed a chattel mortgage in favor of the respondent over the vehicle as
security for the payment of their loan and the interests thereon. Under Article 1625 of the New Civil Code, an
assignment of credit, right or action must appear in a public document to bind third persons. There is no evidence that
Car Merchants, Inc. executed such a deed, assigning its right to collect the balance of the purchase price of the
vehicle from the petitioners; hence, Article 1484 of the New Civil Code does not apply in this case.