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G.R. No. 128120 ; October 20, 2004 ; TINGA, J.:

Swedish Match AB (SMAB) is a Swedish corporation engaged in match, lighter, and
shaving products businesses worldwide. One of its subsidiaries in the Philippines is
Phimco Industries, Inc. In 1988, SMAB decided to sell its shares in Phimco. ALS
Management & Development Corporation, through its president Antonio Litonjua sent
a letter to SMAB indicating an offer to buy the shares. The chief executive officer of
SMAB, Massimo Rossi (Rossi) informed Litonjua that their price offer was below their
expectations but urged them to undertake a comprehensive review and analysis of the
value of the shares, with the assurance that ALS would enjoy a certain priority although
several parties had indicated their interest to buy.
Thereafter, an exchange of correspondence ensued between petitioners and respondents
regarding the sale. In his letter dated 21 May 1990, Litonjua offered to buy the shares for
US$30.6 million, which per another letter of the same date was increased to US$36
million. Litonjua stressed that the amount could be adjusted subject to availability of an
audit verification of the company finances. Rossi replied informing Litonjua that ALS
should undertake a due diligence process or pre-acquisition audit and review of
Phimco at ALS convenience. However, Rossi made it clear that after the due diligence
process, ALS should submit its final offer in US dollar terms not later than 30 June 1990.
Rossi added that in case the "global deal" presently under negotiation with another
company would materialize, SMAB would reimburse up to US$20,000.00 of ALS costs
related to the due diligence process.
Litonjua replied to Rossi and expressed his disappointment at the change in SMABs
approach to the bidding process. He informed Rossi that it may not be possible for them
to submit their final bid on 30 June 1990, since the audit will not be completed until the
end of July.
In 3 July 1990, Rossi informed Litonjua that they have signed a conditional contract with
another party and the latters bid would no longer be considered unless the other party
would fail to consummate the transaction on or before 15 September 1990. Litonjua
promptly responded asserting that the US$36 million bid which he submitted on 21
May 1990 was their final bid.
Two months after, SMAB communicated with ALS stating that they are willing to
renegotiate under new terms and conditions for the sale of Phimco shares. Litonjua
replied stating that the new offer constituted an attempt to reopen the already perfected
contract of sale. As a result, Litonjua filed before the RTC of Pasig a complaint for
specific performance with damages.
Regional Trial Court decision: Dismissed Litonjuas complaint for specific performance
The lower court ruled that there was no perfected contract of sale between SMAB and
ALS. The 11 June 1990 letter showed that petitioners did not accept the bid offer of
respondents and ALS failed to submit their final bid on the deadline set by petitioners.
Also, it failed to comply with Art 1403 of the NCC and is thus unenforceable.
ALS appealed to the Court of Appeals.
Court of Appeals decision: The Court of Appeals reversed the trial courts decision
stating that the series of written communications between SMAB and ALS constitute a
sufficient memorandum of their agreement under Article 1403 of the Civil Code. The
appellate court further stated that any document, whether formal or informal, which
satisfies all the Statutes requirements would be sufficient; and that the letters
exchanged between the parties were enough to establish that an agreement to sell the
shares was reached.

ISSUES: (1) WON there was a perfected contract of sale between SMAB and ALS
(2) If there was a perfected contract, WON the same is unenforceable for not
complying with Art 1403

RULING: (1) There was no perfected contract of sale

A contract of sale requires: (a) consent or meeting of the minds; (b) determinate
subject matter, and (c) price certain in money or its equivalent. It undergoes three
stages, to wit: negotiation; perfection or birth; and consummation. Before there exists a
perfected contract of sale, the offer must be certain and the acceptance absolute.
In this case, the SC ruled that Litonjua did not present a certain and definite offer as
shown by his letter dated 21 May 1990 stating that the price he offered was still subject
to certain adjustments. It is also evident that the parties were merely in the negotiation
stage and the exchange of correspondence between the parties is an incident of
negotiation. In fact, SMAB did not manifest any intent to accept Litonjuas offer since
they have failed to agree on a price. Price is one of the essential requisites of a contract
of sale.
(2) Statute of Frauds is inapplicable in the case
The Statute of Frauds requires certain contracts to be evidenced by some note or
memorandum (in writing) in order to be enforceable. For a note or memorandum to
satisfy the Statute, it must be complete in itself and must contain the names of the
parties, the terms and conditions of the contract, and a description of the property. The
note or memorandum must contain the essential elements of the contract expressed.
In this case, since there is no contract of sale, the enforceability of the contract can no
longer be addressed. But assuming arguendo, the mere exchange of letters between
SMAB and ALS is not enough to satisfy the note or memorandum requirement of Art.
1403 since some of the elements of the contract are lacking.

2. Conlu vs Araneta & Guanko | March 4, 1910

GR No. L-4508

FACTS: On Jan. 16, 1906, plaintiffs commenced an action against defendants to recover,
as owners, certain parcels of land located in the pueblo of Molo, Province of Iloilo.

The trial court found that the plaintiffs were the owners and were entitled to the
possession of all of the parcels of land described in paragraph 6 of the complaint,
EXCEPT that parcel, together with the house located thereon, described in subsection
(d) of said paragraph 6. This parcel of land belonged to the estate of Vito Tiongco.

The questioned property was originally the property of Catalina Tiongco, sister of
Anselma. By virtue of the will made by Catalina before her death, said property was left
to Anselma. After that time, Vito Tiongco was appointed gobernadorcillo of Molo.
Anselma put him into possession of the tile-roofed house as apparently his own. He
lived there from that date up to the time of his death. He considered it as if he was the
real owner, and made many repairs as well as alternations. Anselma agreed that he
could have the house as his own in consideration of Php3,000 absent any formal
conveyance of property.

ISSUE/S: May the sale of real property made in 1887 be proved by oral testimony?

HELD: Arts. 1278-80 of the Old Civil Code is construed by the courts holding that [a]n
oral contract for the sale of real estate, made prior to the enactment of the Code of Civil
Procedure, is binding between the parties thereto, although it may still be necessary for
the parties seeking to enforce such contract to take some action to secure the execution
of proper documents, but this requirement will not render the agreement invalid.

Following Section 335 of the Code of Procedure in Civil Actions, an oral contract for the
sale of real property cannot now be proven under said section EXCEPT some note or
memorandum thereof be in writing and subscribed by the party charged or by his

Section 335 of the said Code simply provides how contracts for the sale of real property
shall be proved. It does not attempt to make contracts invalid which have not been
executed in writing. It simply requires a form of contract. The contract exists and is
valid, though it may not be clothed with the necessary form and the effect of a
noncompliance with such provision is simply that no action can be proved unless the
requirement is complied with.

If the parties to the action, during the trial make no objection to the admissibility of oral
evidence to support a contract of sale of real property, and thus permit the contract to
be proved, it will be just as binding upon the parties as if it has been reduced to writing.
13 witnesses testified concerning the sale of the parcel of land, and no objection was
made by the plaintiffs. The contract of sale, therefore, being fully proven, is binding and
valid between the parties, even though it had not been reduced to writing.


G.R. No. 152411 September 29, 2004

FACTS: The University of the Philippines (UP) decided to construct an integrated

system of research organization known as the Research Complex. As part of the project,
laboratory equipment and furniture were purchased for the National Institute of
Biotechnology and Applied Microbiology (BIOTECH) at the UP Los Baos.
Providentially, the Ferdinand E. Marcos Foundation (FEMF) came forward and agreed
to fund the acquisition of the laboratory furniture, including the fabrication thereof.

Renato E. Lirio, the Executive Assistant of the FEMF, gave the go-signal to BIOTECH to
contact a corporation to accomplish the project. Dr. William Padolina, the Executive
Deputy Director of BIOTECH, arranged for Philippine Laboratory Industries, Inc.
(PHILAB), to fabricate the laboratory furniture and deliver the same to BIOTECH for
the BIOTECH Building Project, for the account of the FEMF. Padolina informed Hector
Navasero, the President of PHILAB, to proceed with the fabrication of the laboratory
furniture, per the directive of FEMF Executive Assistant Lirio. However, PHILAB failed
to forward any sample contract. Subsequently, PHILAB made partial deliveries of office
and laboratory furniture to BIOTECH.

UP, through the Chancellor of UP Los Baos and FEMF executed a Memorandum of
Agreement (MOA) in which FEMF agreed to grant financial support and donate sums
of money to UP for the construction of buildings, installation of laboratory and other
capitalization for the project.

In the meantime, Navasero promised to submit the contract for the installation of
laboratory furniture to BIOTECH. However, Navasero failed to do so. BIOTECH
reminded Navasero of the need to submit the contract so that it could be submitted to
FEMF for its evaluation and approval. Instead of submitting the said contract, PHILAB
submitted to BIOTECH an accomplishment report on the project and requested
payment thereon. President Marcos was ousted from office during the February 1986
EDSA Revolution.

Exasperated, PHILAB filed a complaint for sum of money and damages against UP. In
its answer, UP denied liability and alleged that PHILAB had no cause of action against
it because it was merely the donee/beneficiary of the laboratory furniture in the
BIOTECH; and that the FEMF, which funded the project, was liable to the PHILAB for
the purchase price of the laboratory furniture.

The Regional Trial Court (RTC) rendered judgment dismissing the complaint and held
that there was never a contract between FEMF and PHILAB. Consequently, PHILAB
could not be bound by the MOA between the FEMF and UP since it was never a party
thereto. The appellate court reversed and set aside the decision and ruled that, although
UP did not bind itself to pay for the laboratory furniture; nevertheless, it is liable to
PHILAB under the maxim: "No one should unjustly enrich himself at the expense of

Upon the denial of its motion for reconsideration of the appellate courts decision, UP,
now the petitioner, filed its petition for review.

ISSUE: Whether there was a contract of sale between respondent and FEMF despite the
absence of a written contract.

HELD: YES. We agree with the petitioner that an implied-in-fact contract of sale was
entered into between the respondent and FEMF. A contract implied in fact is one
implied from facts and circumstances showing a mutual intention to contract. It arises
where the intention of the parties is not expressed, but an agreement in fact creating an
obligation. It is a contract, the existence and terms of which are manifested by conduct
and not by direct or explicit words between parties but is to be deduced from conduct
of the parties, language used, or things done by them, or other pertinent circumstances
attending the transaction. To create contracts implied in fact, circumstances must
warrant inference that one expected compensation and the other to pay. An implied-in-
fact contract requires the parties intent to enter into a contract; it is a true contract. The
conduct of the parties is to be viewed as a reasonable man would view it, to determine
the existence or not of an implied-in-fact contract. The totality of the acts/conducts of
the parties must be considered to determine their intention. An implied-in-fact contract
will not arise unless the meeting of minds is indicated by some intelligent conduct, act
or sign.

In this case, the respondent was aware, from the time Padolina contacted it for the
fabrication and supply of the laboratory furniture until the go-signal was given to it to
fabricate and deliver the furniture to BIOTECH as beneficiary, that the FEMF was to
pay for the same. Indeed, Padolina asked the respondent to prepare the draft of the
contract to be received by the FEMF prior to the execution of the parties (the respondent
and FEMF), but somehow, the respondent failed to prepare one. The respondent knew
that the petitioner was merely the donee-beneficiary of the laboratory furniture and not
the buyer; nor was it liable for the payment of the purchase price thereof. From the
inception, the FEMF paid for the bills and statement of accounts of the respondent, for
which the latter unconditionally issued receipts to and under the name of the FEMF.

4. Tapec v. CA | Davide, Jr., J.

GR No. 111952, October 26, 1994
Facts: On 4 December 1994, petitioners, who are husband and wife, filed a complaint for
recovery of ownership with RTC Batac, Ilocos Norte against David Cabuyadao and
private respondent Raguirag. The petitioners' claim of ownership is based on two deeds
of absolute sale, one executed on 2 January 1950 by Trinidad Gonzales in favor of
petitioner Tapec and the other executed on 28 May 1949 by Rosario Gonzales in favor of
the petitioners, both acknowledged before the same notary public and duly registered
with the Office of the Register of Deeds under Act No. 3344 on 8 March 1950 and 29 July
1949, respectively. The petitioners asked that they be declared the owners of Lot Nos.
7452 and 7444 and that a writ of preliminary injunction be issued ordering defendants
to desist from entering said lots.
David Cabuyadao was declared in default for failure to file his answer. Private
respondent Raguirag denied having knowledge of the property claimed by the
petitioners but by way of special defense asserted that he is the absolute owner of Lot
No. 7444, Cad, 445D of Paoay, Ilocos Norte. Private respondent Raguirag anchored his
defense on a document, dated 15 May 1931 and handwritten in Ilocano, wherein the
brothers Victoriano, Gregorio, Matias, and Alejandro, all surnamed Gonzales, sold to
the spouses Manuel Raguirag and Clara Tapec, grandparents of private respondent
Raguirag, for a consideration the land in suit.
In resolving the issue of which document should be given more weight in deciding
ownership, the RTC and the CA arrived at irreconcilably conflicting judgments. The
former held that the deeds of sale in favor of the petitioners, being duly acknowledged
before a notary public and registered under Act No. 3344, although executed much
later, should prevail over a prior conveyance in a private document in favor of the
private respondent's predecessor-in-interest. On appeal by the private respondent, the
CA held otherwise on the ground that the private document is an ancient document
under the rules of evidence and overturned the decision of the trial court. In this
petition for review under Rule 45 of the Rules of Court, petitioners no longer question
the validity and due execution of the 1931 deed of conveyance but they stand firm on
their argument that such instrument is valid and enforceable only as to the parties
thereto and cannot bind third persons and innocent purchasers.
PETITIONERS' claim of ownership: The parcels of land sold by Trinadad (Lot Nos.
7450 and 7452) and Rosario (Lot No. 7444) were in the name of their father, Miguel
Gonzales. But before petitioner Tapec bought the land of Trinidad, he had to redeem it
first from Ireneo Raguirag, who was in possession thereof, to whom it was mortgaged
by the owner. Petitioner Tapec was in possession of the lot since he purchased it in 1950
and also declared it for taxation purposes.
PRIVATE RESPONDENT's claim of owenrship: The land private respondent claims
to be his was sold by the Gonzales brothers (Victoriano, Gregorio, Matias and
Alejandro) to spouses Manuel Raguirag and Clara Tapec, grandparents of private
respondent, and the witnesses to said sale were Manuel Raguirag, Cornelio Cabuyao
and Miguel Gonzalez. Private respondent's grandfather has been in possession of the
land since the Japanese occupation and then by his father, Ireneo Raguirag, who in
1962, declared it for taxation purposes. After private respondent's father death, he took
over the possession of the property, claimed by Leoncia Raguirag, sister of Ireneo,
during the cadastral survey, as tenant-administrator.

Issues: (1) WoN petitioners be declared owners of Lot Nos. 7452 and 7444.
(2)WoN the petitioners deed of sale, embodied in a public instrument and
registered under Act No. 3344 should prevail over the alleged sale to the ancestors of
private respondent Raguirag executed much earlier in a private instrument.

Held: (1) The SC ruled in favor of petitioners. The SC upheld the ruling of the CA that
the sale in favor of the private respondent's grandparents as valid and enforceable but
not is findings that the vendor had no right to sell the subject property since at the time
her family no longer owned the land and thus no legal right was transferred by the
vendor to the petitioners. The original owner of the property sold by Trinidad and
Rosario was their father, Miguel Gonzales and as indicated in the deeds of sale they
executed, the portion each sold was declared for taxation purposes in the name of their
father. With respect to the 1931 sale, the vendors were the Gonzales brothers; Miguel
Gonzales was not a vendor but a mere witness. The CA erred in finding that Trinidad
had no more right to sell the property. It was also established that Trinidad had
mortgaged her property to private respondent's father which was redeemed shortly
before its sale to the petitioners. If private respondent's father was the owner, there was
no reason for him to have accepted the mortgage thereof. The petitioners also
sufficiently established the identity of the property claimed by them while private
respondent, who had the burden to prove its identity, failed to do so. Finally, private
respondent categorically admitted that he is only a tenant-administrator of Lot No. 7444
and this belies any claim of ownership.
(2) The SC upheld the decision of the CA the private instrument is an ancient
document whose proof of authenticity was no longer necessary because because of the
concurrence of the requisites in Section 21 of Rule 132. The RTC erroneously held that
the deed of sale is invalid because it is not in a public document; as correctly pointed
out by the CA, the said private instrument is a deed of sale in which all the requisites of
a valid contract are present and which is binding upon the parties. Article 1358 does not
invalidate the acts or contracts enumerated therein if they are not embodied in public
documents. As one noted civilian has said:
"This article enumerates certain contracts that must appear in public or private documents. This
article does not require such form in order to validate the act or contract but to insure its
efficacy. It is limited to an enumeration of the acts and contracts which should be reduced to
writing in a public or private instrument. The reduction to writing in a public or private
document, required in this article, is not an essential requisite for the existence of the contract,
but is simply a coercive power granted to the contracting parties by which they can reciprocally
compel the observance of these formal requisites. Contracts enumerated by this article are,
therefore, valid as between the contracting parties, even when they have not been reduced to
public or private writings. Except in certain cases where public instruments and registration are
required for the validity of the contract itself, the legalization of a contract by means of a public
writing and its entry in the register are not essential solemnities or requisites for the validity of
the contract as between the contracting parties, but are required for the purpose of making it
effective as against third person.


ANCIENT DOCUMENT Requisites are in Section 21, Rule 132 of the Rules of Court:
No other evidence of its execution and authenticity need be given if the private writing
is (1) more than thirty years old, (2) produced from a custody in which it would
naturally be found if genuine; (3) and is unblemished by any alteration or circumstances
of suspicion
DOUBLE SALE (Article 1544) An immovable property should have been sold to
different vendees, the ownership shall belong to the person acquiring it who in good
faith first recorded it in the Registry Property. In order that the above mentioned
provision may be invoked, it is necessary that the conveyance must have been made by
a party who has an existing right in the thing, and the power to dispose of it. It cannot,
therefore, be invoked in a case where the two different contracts of sale are made by
two different persons, one of them not being the owner of the property sold. (NOT

5. Leoncia Zaide v. CA | G.R. 46715

July 29, 1988 | Narvasa, J.

1. Spouses Edita and Roberto De Leon are owners of a parcel of land. Sometime in
the 1960s, spouses Primitivo and Leoncia Zaide lent the spouses De Leon 2,000
pesos as loan which the latter used to redeem the aforementioned land
mortgaged by them to the Pasay Rural Bank. At the same time, spouses Zaide
also transferred the ownership of a jitney valued at 7,000 pesos to Roberto De
Leon. The Zaides claim that the vehicle was ceded as part of the purchase price
of the said land which they had agreed to buy.
2. On January 11, 1965, Edita executed a public instrument denominated "Deed of
Sale" by which, in consideration of P5,000.00 paid to her, she sold the parcel of
land covered by TCT No. 69088 to Leoncia. The deed described both the vendor,
Edita, and the vendee, Leoncia, as "married," but named neither of their
husbands. The document however did bear the signature of Edita's husband,
Roberto de Leon, indicating his "marital consent." The omission of the name of
the vendee's husband in the deed of sale gave rise to a problem. Precisely
because of it, the Register of Deeds refused to accept it for registration. A second
deed of sale couched in the same terms as the first, differing from the first
only in that it set forth the names of the husbands of both the vendor and the
vendee 3-was shortly thereafter presented to, and was promptly accepted for
registration, by the Register of Deeds. The latter then cancelled the old title to
the land, and issued a new one in favour of the Zaides. The Zaides put up an
apartment where the De Leons rented one after their house burned down. They
were asked to pay rentals and they refused.
3. On July 4, 1969, the de Leon Spouses filed a complaint with the Court of First
Instance of Rizal against the Zaide Spouses. The case was docketed as Civil Case
No. 11977. Briefly, the de Leons alleged that in June, 1964 they discovered that
their title to the land in had been cancelled and another issued to the Zaides, on
the strength of "a forged deed of sale supposedly executed in Tagaytay City on
the 11th day of January, 1965," and that they "could not possibly have sold their
lot for the measly sum of P5,000.00 appearing in the forged deed considering
that the market price of the land cannot be less than P20,000.00." They thus
prayed for the cancellation of title of the Zaides and the re-issuance of another
"in the name of plaintiff, EDITA ZAIDE," as well as the payment to them of
damages and attorneys' fees.
4. In Sept. 25, 1972, Judgement was rendered in favour of the Zaides. This is the
result of the suit filed by the surviving Zaide children, through their guardian,
Simeon Tolentino against the de Leon Spouses in the same Court of First
Instance of Rizal, to recover the possession of the apartment unit occupied by
the latter and pay rentals at the rate of P300.00 pursuant to a "verbal contract of
5. In April 10, 1973, the judgement was reversed by a differed Judge upon a
motion for reconsideration, declaring that that the second deed of sale were
forgeries based on the sample signatures of the two appearing in the other
documents furnished to the NBI ..." The Court further stated that the defect in
the admittedly genuine first deed of sale consisting of the omission of the
names of the husbands of the vendor and vendee could not be corrected by a
forged document which is considered inexistent before the law. It therefore
ruled that the title issued to the Zaide Spouses was null and void, being "the
fruit of a forged deed of sale." However, it did not disturb the judgement of the
former judge that the Zaides are entitled to the payment of rentals by the De
6. The Court of Appeals found affirmed the decision of 1973 but modified it by
removing the payment of rentals by the De Leons to the Zaides. The appellate
court arrived at this decision because they found that the De Leons never
attested to the authenticity of the first deed of sale and that their counsel's
statement in the course of the trial that his clients were not contesting the first
deed, did "not amount to an outright admission of the genuineness thereof but
was an indication on their part to limit themselves within the issue of forgery of
the second deed of sale whose the signatures were definitely forgeries, and
since the Zaides invoked the second deed as basis of their title to the land, they
could not be deemed buyers in good faith.

Issue: Can there be a valid contract of sale despite a defective deed of sale?

Held: YES. First, the Court clarifies that the first deed of sale that the De Leons say they
never admitted to as genuine are in fact, genuine since the Zaides pleaded both the first
and second deeds of sale and the the De Leons faild to specifically deny the
genuineness and due execution of the said instruments under oath. As such the deeds
are deemed admitted. Second, on the alleged forgery of the second deed of sale, the
court finds that it cannot be ruled that the second deed is a forgery. There is in any case
no satisfactory explanation why the expert did not see fit to use, for purposes of
comparison, the document nearest in point of time to the questioned deed namely, the
first deed; or why such expert's testimony should be accorded full faith and credit
despite its (1) not having been subjected to cross-examination, and (2) being
contradicted by the positive testimony of a subscribing witness, and of the judge who,
as notary public ex oficio, had notarized both deeds of sale, both of whom had affirmed
that the vendors and vendees had actually signed the documents. There was simply a
naked assertion that the expert's evidence proved the forgery without any discussion,
much less refutation, of the facts militating against it. Obviously, such an unreasoned
assertion cannot be sustained.
Now, on the issue of the case, despite the authenticity of the first deed, it was
defective as to render it unregistrable in the Registry of Property. As already pointed
out, it did not set forth the name of the vendee's husband and was for this reason
refused registration by the Register of Deeds. The defect was unsubstantial. It did not
invalidate the deed. Though defective in form, the sale was valid; and the parties could
compel each other to do what was needful to make the document of sale registrable.
The law generally allows a contract of sale to be entered into in any form, whether "in
writing, or by word of mouth, or partly in writing and partly by word or mouth, or
(even) inferred from the conduct of the parties;" but if the agreement concerns "the sale
of land or of an interest therein," the law requires not only that "the same, or some note
or memorandum thereof, be in writing, and subscribed by the party charged" in order
that it may be enforceable by action, but also that the writing be in the form of a "public
document." The law finally provides that "If the law requires a document or other special
form, as in the acts and contracts enumerated in (Article 1358), the contracting parties
may compel each other to observe that form, once the contract has been perfected (and
such) right may be exercised simultaneously with the action upon the contract." The
Zaides thus had the right to compel the de Leons to observe the special form prescribed
by law; i.e., revised the public document by inserting the name of the vendee's husband.
Indeed, this was precisely what was done in the second deed of sale, Exhibit 2.
Assuming for the sake of argument that the second deed was indeed a forgery, it does
not alter (1) the fact that the parties had voluntarily executed a sale in writing first deed,
which recites that the price of P5,000.00 had been paid, and the further fact that (a) the
de Leons had received from the Zaides the sum of P2,000.00 as well as a vehicle valued
at P7,000.00 and (b) they, the de Leons, knew that the Zaides had exercised an act of
ownership over the property thereby acquired by mortgaging it as security for a loan;
or (2) the legal consequence flowing therefrom: that in order to cure the defect in the
first deed, in that it did not specify the name of the vendee's husband, the Zaides could
legally compel the de Leons to execute another deed containing this omitted
circumstance. Hence, even if the second document of sale be invalidated as a forgery,
and the de Leons' title to the land restored to them, this would be inutile, an empty
ceremony, since the de Leons could nevertheless still be compelled by the Zaides to
execute another deed, in proper form, to carry into effect the sale originally entered into.
As such the judgement of 1972, in favor of the Zaides, are sustained and affirmed.

6. Limketkai Sons Milling, Inc. vs CA | December 1, 1995

G.R. No. 118509; Melo, J.

Facts: On June 23, 1988, Pedro Revilla, a real estate broker was given an authority by
BPI, herein private respondent, to sell to a lot located at Barrio Bagong Ilog, Pasig for
P1,000.00 per square meter. The former then contacted Alfonso Lim, herein official of
petitioner company, who agreed to purchase the said lot. On July 11, 1988, petitioners
went to BPI to confirm the sale by requesting that the price be reduced to 900 per square
meter with VP Merlin Albano and AVP Aromin. After a few negotiations, they finally
agreed on the original price to be paid in cash. Petitioner subsequently requested the
payment to be in terms which was acknowledged by Aromin and Albano provided that
in case petitioner failed to pay at the due date, the price shall be paid in cash. Two days
later, petitioner learned that its offer to pay on terms had been frozen. Hence, Lim went
directly to BPI to tender the full payment of the lot. The payment was then rejected due
to the fact that the authority to sell the land was withdrawn. Petitioner then filed an
action for specific performance. During the trial, BPI informed the court that the said
land had already been sold to National Bookstore (NBS), herein co-respondent. The trial
court ruled in favour of petitioners which were subsequently reversed by the appellate
court. Hence, the instant petition.

Issue: 1. Whether or not there was a perfected contract of sale between the parties.
2. Whether or not the contract is enforceable.
2. Whether or not NBS was a buyer in good faith.

Held: 1. The Court ruled in the AFFIRMATIVE. One of the characteristics of a contract
of sale is that it is consensual and is perfected by the mere meeting of the minds of the
parties. In the instant case, the respondents aver that what transpired on July 11, 1988
was part of a continuing negotiation and that Aromin and Albano had no authority to
bind BPI to the said transaction. The contention has no merit by reason that AVP
Aromin directly supervised the Real Property Management Unit of the respondent
bank and was the head supervising officer of real estate matters for several years which
shows that he had full authority to act on behalf of BPI.
Respondents cannot also contend the request for the payment in terms by petitioner
was a counter-offer by reason that the parties had already agreed on the price property
after the usual haggling. There was a meeting of the minds as far as the price is

2. The Court held in the AFFIRMATIVE. A sale of land is valid regardless of the
form it may have been entered into. The requisite form as stated in Article 1403 and
1458 of the NCC is merely for greater efficacy or convenience. The failure to comply
therewith does not affect the validity and binding effect of the act between the parties.
An exception to the requirements under the Statute of Frauds is when there is an
existence of a written note or memorandum evidencing the contract. In the instant case,
evidences show of the abundant notes and memoranda addressed to Aromin
authorizing the sale of the said lot.

3. The Court ruled in the NEGATIVE. A buyer is in good faith when he purchases
without notice of any defect in the title of the seller or that there is no knowledge that
the thing which is the object of the contract is subject to litigation. In the instant case, the
fact that NBS ignored the notice of lis pendens annotated on the title when it bought the
lot shows bad faith. Also petitioner cites the various badges of fraud indicating a
conspiracy between BPI and NBS to prevent petitioner from acquiring the said land:
a. The sale was supposed to be done through and authorized broker but the top
officials of BPI personally and directly took over this particular sale when a close
friend became interested.
b. The Senior Vice President of BPI admitted that he was friends with the president
of NBS and that they discussed in one of their lunch meetings the sale of the said
c. NBS offered P7M to the petitioner in order for the latter to drop the case and
give up the lot.
d. NBS constructed warehouse in the said lot by easy portability which can be
dismantled easily.

To sum it all up, there was a perfected contract between the parties. Hence, the
judgement of the Court of Appeals is hereby reversed.

7.Blas vs Santos

FACTS: Simeon Blas contracted a first marriage with Marta Cruz and had three
children, only one of whom, Eulalio, left children namely: Maria Gervacio Blas (one of
the plaintiffs), Marta Gervacio Blas (one of the defendants), and Lazaro Gervacio Blas.
Lazaro died and is survived by three legitimate children who are plaintiffs herein
namely, Manuel, Leoncio and Loid. Subsequently after Martas death, Simeon
contracted a second marriage with Maxima Santos. At the time of second marriage, no
liquidation of the properties of Simeon and Marta was made. A week before Simeons
death, he executed a last Will and Testament, and he also ordered a preparation of a
document (Exhibit A) because the properties he had acquired during his first marriage
with Mart had not been liquidated and were not separated from those acquired during
the second marriage. Such document contains promises by Maxima to respect the
disposition of said will and to give one-half (1/2) of the properties she and her husband
will leave to the heirs, legatees or beneficiaries named in the will. Pursuant to this
document, the plaintiffs instituted an action against the administration of the estate of
Maxima Santos to secure a judicial declaration that one-half (1/2) of the properties left
by Maxima be adjudicated to them. Upon filing of opposition by the administratix, the
trial court dismissed the complaint. Hence, this appeal.

ISSUES: 1. Whether or not the heirs of Simeon Blas and wife Marta Cruz can make any
claim for the unliquidated conjugal properties acquired during their marriage.
2. Whether or not Exhibit A is a valid and enforceable contract.

HELD: The heirs of Simeon Blas and his wife Marta Cruz can no longer make any claim
for the unliquidated conjugal properties acquired during said first marriage because the
same were already included in the mass properties constituting the estate of the
deceased Simeon Blas and in the adjudications made by virtue of his will.

Exhibit A appears to be the compromise defined in Article 1809 of the Civil Code of
Spain, in force at the time of the execution of such document, which provides as

Compromise is a contract by which each of the parties in interest, by giving, promising,

or retaining something avoids the provocation of a suitor terminates one which has
already provocation been instituted.

The agreement or promise that Maxima Santos made in Exhibit A is to hold one-half of
her share in the conjugal assets in trust for the heirs and legatees of her husband in his
will, with the obligation of conveying the same to such of his heirs or legatees as she
may choose in her last will and testament. This kind of agreement or promise is not

The properties subject of the contract Exhibit "A" are well-defined properties, existing at
the time of the agreement, which Simeon Blas declares in his testament as belonging to
his wife as her share in the conjugal partnership. Certainly his wife's actual share in the
conjugal properties may not be considered as future inheritance because they were
actually in existence at the time Exhibit "A" was executed.


ON FUTURE INHERITANCE. A document signed by the testator's wife, promising
that she would respect and obey all the dispositions in the latter's will, and that she
would hold one-half of her share in the conjugal assets in trust for the heirs and legatees
of her husband in his will, with the obligation of conveying the same to such of his heirs
or legatees as she might choose in her last will and testament, is a compromise and at
the same time a contract with sufficient cause or consideration.


G.R. No. 147324 May 25, 2004

Facts: On May 7, 1991 Petitioner Philcomsat & Defendant Globe entered into an
agreement whereby Philcomsat obliged itself to establish, operate & provide an IBS
standard B earth station for the exclusive use of US defense communications Agency
(USDCA). Such service will be used in the US Bases here in the Philippines. The term
was for 60 months or 5 yrs In turn, Globe promised to pay Philcomsat monthly rentals.
At the execution of the agreement, both parties knew that military Bases Agreement
was to expire in 1991. Subsequently, Philcomsat installed the earth station & USDCA
made use of the same.
The Senate passed a resolution expressing its decision not to concur in the ratification of
the treaty of friendship. So the RP-US Military bases Agreement is set to be terminated
on Dec. 31, 1992. Globe notified Philcomsat its instruction to discontinue effective Nov.
8, 1992, in view of the withdrawal of US military personnel. Philcomsat sent a reply to
pay the stipulated rentals even after Globe shall have discontinued the use of earth
station after Nov. 8 1992. After the US military force left Subic, Philcomsat sent a letter
demanding payment. However, Globe refused to heed Philcomsat s demand because
the termination of the US military bases agreement constitute force majeure and said
event exempted it from paying rentals.

Issue: 1. WON the termination of the RP-US Military Bases Agreement constitutes a
fortuitous event which would exempt Globe from complying with its obligation to pay
rentals under its Agreement with Philcomsat?

Held: Yes. The SC ruled that in order that Globe may be exempt from non-compliance
with its obligation to pay rentals under Section 8 of their contract the concurrence of the
following elements must be established:
a. the event must be independent of the human will;
b. the occurrence must render it impossible for the debtor to fulfill the obligation
in a normal manner; and
c. the obligor must be free of participation in, or aggravation of, the injury to the
Philcomsat and Globe had no control over the non-renewal of the term of the RP-US
Military Bases Agreement when the same expired in 1991, because the prerogative to
ratify the treaty extending the life thereof belonged to the Senate.

Resolution No. 141 of the Philippine Senate and the Note Verbale of the Philippine
Government to the US Government are acts, direction or request of the Government of
the Philippines and circumstances beyond the control of the defendant. The formal
order from Cdr. Walter Corliss of the USN, the letter notification from ATT and the
complete withdrawal of all the military forces and personnel from Cubi Point in the
year-end 1992 are also acts and circumstances beyond the control of the defendant.
Article 1174, which exempts an obligor from liability on account of fortuitous events or
force majeure, refers not only to events that are unforeseeable, but also to those which
are foreseeable, but inevitable.