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CA [202 SCRA 607]

The Villamors purchased from Macaria of the latters land for a price considerably higher than the
prevailing market price. They then executed a Deed of Option stating that the only reason why the
Villamors agreed to purchase the said lot is because Macaria agreed to confer upon them the exclusive
right to purchase the other half of the land. Such sale under the deed may be imposed whenever the
need for the sale arises on the part of either party. Macaria sought to repurchase the land, but the
Villamors refused. Instead, the Villamors exercised their option to purchase the other half of the
property. Macaria refused, thus the Villamors filed a case for specific performance. Macaria averred
that the option is void for lack of consideration.
Whether or not the option contract is void for lack of consideration
The Option Contract is supported by a considerationthat being the difference of the agreed price and
the market price of the other half of the land, which was sold to the Villamors. Thus, it is valid and
may be enforced by the Villamors. The consideration may consist of anything of value. The option was,
in fact, the only reason why they purchased the other half for an expensive price. Since the Villamors
exercised their option, this is tantamount to an acceptance of the offera valid and obligatory
contract of sale was thus perfected.

Bible Baptist Church vs. CA [444 SCRA 399]

Petitioner Bible Baptist Church entered into a contract of lease with respondent spouses Villanueva.
Spouses Villanueva are the registered owners of a property located at Leon Guinto St., Malate, Manila.
Petitioner Baptist Church seeks to buy the leased premises from the spouses Villanueva, under the
option given to them. Baptist Church argues that the consideration supporting the option was their
agreement to pay off the Villanueva's P84,000 loan with the bank, thereby freeing the subject property
from the mortgage encumbrance. Baptist Church states that "it is true that it did not pay a separate
and specific sum of money to cover the option alone. But the P84,000 it paid the Villanuevas in
advance should be deemed consideration for the one contract they entered into the lease with option
to buy. Spouses Villanueva argued that the amount of P84,000 was paid for the rental payments and
there is no separate consideration to speak of which could support the option.

1) Whether or not the option to buy given to the Baptist Church is founded upon a consideration that
would render the option contract valid and binding.
An option contract, to be valid and binding, needs to be supported by a separate consideration. The
consideration need not be monetary but could consist of other things or undertakings. However, if the
consideration is not monetary, these must be things or undertakings of value, in view of the onerous
nature of the contract of option. Furthermore, when a consideration for an option contract is not
monetary, said consideration must be clearly specified as such in the option contract or clause.
First, this Court cannot find that petitioner Baptist Church parted with anything of value, aside from
the amount of P84,000 which was in fact eventually utilized as rental payments. Second, there is no
document that contains an agreement between the parties that petitioner Baptist Church supposed
rescue of the mortgaged property was the consideration which the parties contemplated in support of
the option clause in the contract. As previously stated, the amount advanced had been fully utilized as
rental payments over a period of one year. While the Villanuevas may have them to thank for extending
the payment at a time of need, this is not the separate consideration contemplated by law.
This Court also notes that in the present case both the Regional Trial Court and the Court of Appeals
agree that the option was not founded upon a separate and distinct consideration and that, hence,
respondents Villanuevas cannot be compelled to sell their property to petitioner Baptist Church.

Norkis vs. Court of Appeals [193 SCRA 694]

Private respondent Alberto Nepales bought from Norkis, a brand new motorcycle. The Branch Manager
Labajo agreed to accept the P7,500.00 price payable by means of a Letter of Guaranty from the
Development Bank of the Philippines (DBP). Hence, credit was extended to Nepales, and as security for
the loan, he executed a chattel mortgage on the motorcycle in favor of DBP.
The motorcycle met an accident while being driven by a certain Zacarias Payba. The unit was a total
wreck, was returned, and stored inside Norkis' warehouse.
As the price of the motorcycle later increased to P7,828 in March, 1980, Nepales paid the difference of
P328 and demanded the delivery of the motorcycle. Norkis failed to deliver the unit, and Nepales filed
an action for specific performance with damages in the RTC. Norkis answered that the motorcycle had
already been delivered to private respondent before the accident, hence, he should bear the risk of
loss or damage as owner of the unit. Norkis concedes that there was no "actual" delivery of the vehicle,
but insists that there was constructive delivery of the unit upon the issuance of the sales invoice, upon
the registration of the unit in Nepales name, and upon the issuance of the official receipt.
Who should bear the risk of loss?
Affirming the decision of the Court of Appeals, the Supreme Court reiterated that Article 1496 of the
Civil Code which provides that "in the absence of an express assumption of risk by the buyer, the things
sold remain at seller's risk until the ownership thereof is transferred to the buyer," is applicable in the
case at bar for there was neither an actual nor constructive delivery of the thing sold.
The Court of Appeals correctly ruled that the purpose of the execution of the sales invoice dated
September 20, 1979 and the registration of the vehicle in the name of Alberto Nepales with the Land
Registration Commission was not to transfer the ownership and dominion over the motorcycle to him,
but only to comply with the requirements of the DBP for processing private respondent's motorcycle
loan. The circumstances in the case itself more than amply rebut the disputable presumption of
delivery upon which Norkis anchors its defense to Nepales' action.

DALLION vs. CA [February 28, 1990]

Sabesaje sued to recover ownership of a parcel of land, based on a private document of absolute sale,
allegedly executed by Dalion. However Dalion denied the fact of sale, contending that the document
sued upon is fictitious, his signature thereon, a forgery, and that subject land is conjugal property,
which he and his wife acquired.
Whether or not there has been a contract of sale between the parties
Under Art. 1498, NCC, when the sale is made through a public instrument, the execution thereof is
equivalent to the delivery of the thing. Delivery may either be actual (real) or constructive. 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).
Dallions claim that the sale is invalid because it was not made in a public document is of no merit.
This argument is misplaced. The provision of Art. 1358 on the necessity of a public document is only for
convenience, not for validity or enforceability. 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. Sale is perfected upon meeting of
the minds of both parties.
A contract of sale is a consensual contract, which means that the sale is perfected by mere consent. No
particular form is required for its validity. Upon perfection of the contract, the parties may
reciprocally demand performance (Art. 1475, NCC), i.e., the vendee may compel transfer of ownership
of the object of the sale, and the vendor may require the vendee to pay the thing sold (Art. 1458,
NCC).A sale of a real property may be in a private instrument but that contract is valid and binding
between the parties upon its perfection. And a party may compel the other party to execute a public
instrument embodying their contract affecting real rights once the contract appearing in a private
instrument had been perfected (See Art. 1357).

Consolidated Rural Bank vs. CA and Heirs of dela Cruz [G.R. No. 132161]
The Madrid brothers were the registered owners lot which was subdivided into several lots. Rizal
Madrid sold part of his share to Gamiao and Dayag by virtue of a Deed of Sale, to which his brothers
offered no objection as evidenced by their Joint Affidavit .The deed of sale was not registered with the
ORD of Isabela. However, Gamiao and Dayag declared the property in their names on a Tax Declaration.
Gamiao and Dayag sold the subject southern half of lot to Teodoro dela Cruz, and the northern half to
Hernandez. Thereupon, Teodoro dela Cruz and Hernandez took possession of and cultivated the
portions of the property respectively sold to them (Later Restituto Hernandez donated the northern
half to his daughter. The children of Teodoro dela Cruz continued possession of the southern half after
their fathers death.)
In a Deed of Sale the Madrid brothers conveyed all their rights and interests over to Marquez which the
former confirmed. The deed of sale was registered with the ORD of Isabela.
Subsequently, Marquez subdivided lot A-7 into eight (8) lots. On the same date, Marquez and his
spouse, Mercedita Mariana, mortgaged 4 lots to the Consolidated Rural Bank, Inc. of Cagayan Valley
(hereafter, CRB) to secure a loan. These deeds of real estate mortgage were registered with the ORD.
As Marquez defaulted in the payment of his loan, CRB caused the foreclosure of the mortgages in its
favor and the lots were sold to it as the highest bidder.
The Heirs-now respondents filed a case for reconveyance and damages for the southern portion of Lot
No. 7036-A (hereafter, the subject property) against Marquez and CRB.
The RTC handed down a decision in favor of Marquez. The Heirs interposed an appeal with the CA,
which upheld the claim of the Heirs. Hence, the instant CRB petition.

Whether or not Art. 1544 of the Civil Code (double sale) applicable in this case


ART. 1544. 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
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is
good faith.
The provision is not applicable in the present case. It contemplates a case of double or multiple sales
by a single vendor. It cannot be invoked where the two different contracts of sale are made by two
different persons, one of them not being the owner of the property sold. And even if the sale was made
by the same person, if the second sale was made when such person was no longer the owner of the
property, because it had been acquired by the first purchaser in full dominion, the second purchaser
cannot acquire any right.
In a situation where not all the requisites are present which would warrant the application of Art.
1544, the principle of prior tempore, potior jure or simply he who is first in time is preferred in right,
should apply. The only essential requisite of this rule is priority in time; in other words, the only one
who can invoke this is the first vendee. Undisputedly, he is a purchaser in good faith because at the
time he bought the real property, there was still no sale to a second vendee. In the instant case, the
sale to the Heirs by Gamiao and Dayag, who first bought it from Rizal Madrid, was anterior to the sale
by the Madrid brothers to Marquez. The Heirs also had possessed the subject property first in time.
Thus, applying the principle, the Heirs, without a scintilla of doubt, have a superior right to the subject


Defendant spouses Castro sold to plaintiff-appellee Palileo, a parcel of unregistered coconut land
situated in Surigao del Norte. The sale is evidenced by a notarized Deed of Absolute Sale. The deed was
not registered in the Registry of Property for unregistered lands. Since the execution of the deed of
sale, appellee Palileo exercised acts of ownership over the land through his mother as administratrix or
overseer. Appellee has continuously paid the real estate taxes on said land from 1971 until the present.
A judgment was rendered against defendant Castro by the then CFI to pay herein defendant-appellant
Radiowealth Finance Company (petitioner herein). Upon the finality of the judgment, a writ of
execution was issued. Pursuant to said writ, defendant provincial Sheriff levied upon and finally sold at
public auction the subject land that defendant Enrique Castro had earlier sold to appellee Palileo. A
certificate of sale was executed by the Provincial Sheriff in favor of defendant- appellant Radiowealth
Finance Company, being the only bidder. After the period of redemption has (sic) expired, a deed of
final sale was also executed by the same Provincial Sheriff. Both the certificate of sale and the deed of
final sale were registered with the RD.
Learning of what happened to the land, private respondent Palileo filed an action for quieting of title
over the same. After a trial on the merits, the court a quo rendered a decision in his favor. On appeal,
the decision of the trial court was affirmed. Hence, this petition for review on certiorari.

Who, as between two buyers of unregistered land, is the rightful ownerthe first buyer in a prior sale
that was unrecorded, or the second buyer who purchased the land in an execution sale whose transfer
was registered in the Register of Deeds

There is no doubt that had the property in question been a registered land, this case would have been
decided in favor of petitioner since it was petitioner that had its claim first recorded in the RD.
It must be stressed however that this case deals with a parcel of unregistered land and a different set
of rules applies. We affirm the decision of the CA.
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 ones 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.
Applying this principle, the CA correctly held that the execution sale of the unregistered land in favor
of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time
of the said execution sale.