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Villonco Realty Company paid, and Bormaheco, Inc.
VILLONCO REALTY COMPANY v.
BORMAHECO, GR No. L-26872, 1975-07-25
July 25, 1975
Facts:
Francisco N. Cervantes and his wife, Rosario P.
Navarra-Cervantes, are the owners of Lots 3, 15 and 16
located at 245 Buendia Avenue.
Cervantes is the president of Bormaheco, Inc., a dealer
and importer of industrial and agricultural
machinery. The entire three lots are occupied by the
building, machinery and equipment of Bormaheco, Inc.
and are adjacent to the property of Villonco Realty
Company... situated at 219 Buendia Avenue.
In the early part of February, 1964 there were
negotiations for the sale of the said lots and the
improvements thereon between Romeo Villonco of
Villonco Realty Company "and Bormaheco, Inc.,
represented by its president, Francisco N. Cervantes,
through the intervention of Edith Perez de Tagle, a real
estate broker."
During the negotiations, Villonco Realty Company
assumed that the lots belonged to Bormaheco, Inc. and
that Cervantes was duly authorized to sell the same.
Bormaheco, Inc., through Cervantes, made a written
offer dated February 12, 1964, to Romeo Villonco for
the sale of the property.
"(3) That this sale is to be consummated only after I
shall have also consummated my purchase of another
property located at Sta. Ana, Manila;
As a result of that conference Villonco Realty
Company,... through Teofilo Villonco, in its letter of
March 4, 1964 made a revised counter-offer (Romeo
Villonco's first counter-offer was dated February 24,
1964, Exh. C) for the purchase of the property.
Issues:
That no contract of sale was perfected because Cervantes
made a supposedly qualified acceptance of the revised
offer contained in Exhibit D, which acceptance
amounted to a... counter-offer, and because the condition
that Bormaheco, Inc. would acquire the Punta land
within the forty-five-day period was not fulfilled
Court Ruling:
Bormaheco's acceptance of Villonco Realty Company's
offer to purchase the Buendia Avenue property, as
shown in Teofilo Villonco's letter dated March 4, 1964
(Exh. D), indubitably proves that there was a meeting of
minds upon the subject matter and consideration of the...
sale. Therefore, on that date the sale was perfected.
Bormaheco, Inc. and the Cervantes spouses contend that
the sale was not perfected because Cervantes allegedly
qualified his acceptance of Villonco's revised offer and,
therefore, his acceptance amounted to a counter-offer
which Villonco Realty Company should accept but no
such... acceptance was ever transmitted to Bormaheco,
Inc. which, therefore, could withdraw its offer.
accepted, the sum of P100,000 as earnest money or
down payment. That crucial fact implies that Cervantes
was aware that Villonco Realty Company had... accepted
the modifications which he had made in Villonco's
counter-offer. Had Villonco Realty Company not
assented to those insertions and annotations, then it
would have stopped payment on its check for P100,000.
It is deducible from the tenor of those statements that the
consummation of the sale of the Buendia lots to Villonco
Realty Company was conditioned on Bormaheco's
acquisition of the Nassco land.
The term of forty-five days was not a part of the
condition that the Nassco property should be acquired.
Ang Yu Asuncion et al. vs. Court of Appeals and
Buen Realty Corp.
(G.R. No. 109125, December 2, 1994)
Facts:
Petitioners Ang Yu Asuncion et. al. are lessees of
residential and commercial spaces owned by the
Unjiengs. They have been leasing the property and
possessing it since 1935 and have been paying rentals.
In 1986, the Unjiengs informed Petitioners Ang Yu
Asuncion that the property was being sold and that
Petitioners were being given priority to acquire them
(Right of First Refusal). They agreed on a price of P5M
but they had not yet agreed on the terms and conditions.
Petitioners wrote to the Unjiengs twice, asking them to
specify the terms and conditions for the sale but received
no reply. Later, the petitioners found out that the
property was already about to be sold, thus they
instituted this case for Specific Performance [of the right
of first refusal].
The Trial Court dismissed the case. The trial court also
held that the Unjieng’s offer to sell was never accepted
by the Petitioners for the reason that they did not agree
upon the terms and conditions of the proposed sale,
hence, there was no contract of sale at all. Nonetheless,
the lower court ruled that should the defendants
subsequently offer their property for sale at a price of
P11-million or below, plaintiffs will have the right of
first refusal.
The Court of Appeals affirmed the decision of the Trial
Court.
Issues:
1. Whether or not the Contract of Sale is
perfected by the grant of a Right of First
Refusal.
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2. Whether or not a Right of First Refusal
may be enforced in an action for Specific
Performance.
Court ruling:
1. No. A Right of First Refusal is not a
Perfected Contract of Sale under Art. 1458 or an option
under Par. 2 Art 1479 or an offer under Art. 1319. In a
Right of First Refusal, only the object of the contract is
determinate. This means that novinculum juris is
created between the seller-offeror and the buyer-
offeree.
2. No. Since a contractual relationship does
not exist between the parties, a Right of First Refusal
may not be enforced through an action for specific
performance. Its conduct is governed by the law on
human relations under Art. 19-21 of the Civil Code and
not by contract law.
Vda. De Ape vs Court of Appeals
456 SCR 193
April 15, 2005
FACTS:
Cleopas Ape died in 1950 and left a parcel of land (Lot
2319) to his 11 children. The children never formally
divided the property amongst themselves except
through hantal-hantal whereby each just occupied a
certain portion and developed each.
On the other hand, the spouses Lumayno were interested
in the land so they started buying the portion of land that
each of the heirs occupied. On 11 Apr 1973, one of the
children, Fortunato, entered into a contract of sale with
Lumayno. In exchange of his lot, Lumayno agreed to pay
P5,000.00. She paid in advance P30.00. Fortunato was
given a receipt prepared by Lumayno’s son in law
(Andres Flores). Flores also acted as witness. Lumayno
also executed sales transactions with Fortunato’s siblings
separately.
In 1973, Lumayno compelled Fortunato to make the the
delivery to her of the registrable deed of sale over
Fortunato’s portion of the Lot No. 2319. Fortunato
assailed the validity of the contract of sale. He also
invoked his right to redeem (as a co-owner) the portions
of land sold by his siblings to Lumayno. Fortunato died
during the pendency of the case.
ISSUE:
Whether or not there was a valid contract of sale?
HELD:
No. Fortunato was a “no read no write” person. It was
incumbent for the the other party to prove that details of
the contract was fully explained to Fortunato before
Fortunato signed the receipt.
A contract of sale is a consensual contract, thus, it is
perfected by mere consent of the parties. It is born from
the moment there is a meeting of minds upon the thing
which is the object of the sale and upon the price. Upon
its perfection, the parties may reciprocally demand
performance, that is, the vendee may compel the transfer
of the ownership and to deliver the object of the sale while
the vendor may demand the vendee to pay the thing sold.
For there to be a perfected contract of sale, however, the
following elements must be present: consent, object, and
price in money or its equivalent.
For consent to be valid, it must meet the following
requisites:
(a) it should be intelligent, or with an exact notion of the
matter to which it refers;
(b) it should be free and
(c) it should be spontaneous. Intelligence in consent is
vitiated by error; freedom by violence, intimidation or
undue influence; spontaneity by fraud.
Lumayno claimed that she explained fully the receipt to
Fortunato, but Flores’ testimony belies it. Flores said
there was another witness but the other was a maid who
also lacked education. Further, Flores himself was not
aware that the receipt was “to transfer the ownership of
Fortunato’s land to her mom-in-law”. It merely occurred
to him to explain the details of the receipt but he never
did.
Sps. Torcuator v. Sps. Bernabe
G.R. No. 134219,
8 June 2005
FACTS:
The subject of this action is Lot 17, Block 5 of the Ayala
Alabang Village, Muntinlupa, Metro-Manila, with an area
of 569 square meters and covered by TCT No. S-79773.
The above parcel of land was purchased by the Salvador
spouses from the developers of Ayala Alabang subject,
among others, to the following conditions:–“It is part of
the condition of buying a lot in Ayala Alabang Village (a)
that the lot buyer shall deposit with Ayala Corporation a
cash bond (about P17,000.00 for the Salvadors) which
shall be refunded to him if he builds a residence thereon
within two (2) years of purchase, otherwise the deposit
shall be forfeited, (b)architectural plans for any
improvement shall be approved by Ayala Corporation,
and (c) no lot may be resold by the buyer unless a
residential house has been constructed thereon (Ayala
Corporation keeps the Torrens Title in their [sic]
possession). Salvadors sold the parcel of land to Bernabe
spouses. Salvadors executed a special power of attorney
authorizing the Bernabes to construct a residential house
on the lot and to transfer the title in their names. Bernabes,
on the other hand, without making any improvement,
contracted to sell the parcel of land to Torcuator spouses.
Confronted by the Ayala Alabang restrictions, the parties
agreed to cause the sale between the Salvadors and the
Bernabes cancelled, in favor of (a) a new deed of sale
from the Salvadors directly to the Torcuators; (b) a new
Irrevocable Special Power of Attorney executed by the
Salvadors to the Torcuators in order for the latter to build
a house on the land in question; and (c) an Irrevocable
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Special Power of Attorney from the Salvadors to the
Bernabes authorizing the latter to sell, transfer and
convey, with power of substitution, the subject lot. The
deed of sale was never consummated nor was payment on
the said sale ever effected. Subsequently,Bernabes sold to
Angeles, a brother-in-law, however the document was not
notarized. Torcuators filed an action against the Bernabes
and Salvadors for Specific Performance or Rescission
with Damages. TC dismissed petition. CA also dismissed
the appeal, ruling that the sale between the Bernabes and
the Torcuators was tainted with serious irregularities and
bad faith.
ISSUE:
Whether or not the agreement is a contract to sell or a
contract of sale.
COURT RULING:
The agreement is a contract to sell.Contract of sale- title
passes to the buyer upon delivery of the thing sold; Non-
payment of the price is anegative resolutory
condition.Contract to sell- ownership is reserved in the
seller and is not to pass until the full payment of the
purchase price is made; Full payment is a positive
suspensive condition.
The agreement imposed upon petitioners the obligation to
fully pay the agreed purchase price for the property; that
ownership shall not pass to petitioners until they have
fully paid the price is implicit in the agreement. Salvadors
did not execute a deed of sale in favor of Torcuator, but a
special power of attorney authorizing the Bernabes to sell
the property on their behalf, in order to afford the latter a
measure of protection that would guarantee full payment
of the purchase price before any deed of sale in favor of
Torcuator was executed. Ayala Corporation retained title
to the property and the Salvador spouses were precluded
from selling it unless a residence had been constructed
thereon. Had the agreement been a contract of sale, the
special power of attorney would have been entirely
unnecessary as petitioners would have had the right to
compel the Salvadors to transfer ownership to them. The
special power of attorney does not contain the essential
elements of the purported contract and, more tellingly,
does not even refer to any agreement for the sale of the
property. In any case, it was rendered virtually inoperable
as a consequence of the Salvadors’ adamant refusal to part
with their title to the property. Petition denied.
Gaite v. Fonacier
2 SCRA 830
July 31, 1961
Facts:
Gaite was appointed by Fonacier as attorney-in-fact to
contract any party for the exploration and development
of mining claims. Gaite executed a deed of assignment
in favor of a single proprietorship owned by him. For
some reasons, Fonacier revoked the agency, which was
acceded to by Gaite, subject to certain conditions, one of
which being the transfer of ores extracted from the
mineral claims for P75,000, of which P10,000 has
already been paid upon signing of the agreement and the
balance to be paid from the first letter of credit for the
first local sale of the iron ores. To secure payment,
Fonacier delivered a surety agreement with Larap Mines
and some of its stockholders, and another one with Far
Eastern Insurance. When the second surety agreement
expired with no sale being made on the ores, Gaite
demanded the P65,000 balance. Defendants contended
that the payment was subject to the condition that the
ores will be sold.
Issue:
(1) Whether the sale is conditional or one with a period
(2) Whether there were insufficient tons of ores
COURT RULING:
(1) The shipment or local sale of the iron ore is not a
condition precedent (or suspensive) to the payment of
the balance of P65,000.00, but was only a suspensive
period or term. What characterizes a conditional
obligation is the fact that its efficacy or obligatory force
(as distinguished from its demandability) is subordinated
to the happening of a future and uncertain event; so that
if the suspensive condition does not take place, the
parties would stand as if the conditional obligation had
never existed.
A contract of sale is normally commutative and onerous:
not only does each one of the parties assume a
correlative obligation (the seller to deliver and transfer
ownership of the thing sold and the buyer to pay the
price),but each party anticipates performance by the
other from the very start. While in a sale the obligation
of one party can be lawfully subordinated to an uncertain
event, so that the other understands that he assumes the
risk of receiving nothing for what he gives (as in the
case of a sale of hopes or expectations, emptio spei), it is
not in the usual course of business to do so; hence, the
contingent character of the obligation must clearly
appear. Nothing is found in the record to evidence that
Gaite desired or assumed to run the risk of losing his
right over the ore without getting paid for it, or that
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Fonacier understood that Gaite assumed any such risk. sell a portion of the property to Concepcion, who accepted
This is proved by the fact that Gaite insisted on a bond a the offer and agreed to pay P100,000.00 as consideration.
to guarantee payment of the P65,000.00, an not only The contract of sale was consummated when both parties
upon a bond by Fonacier, the Larap Mines & Smelting fully complied with their respective obligations. Eugenia
Co., and the company's stockholders, but also on one by delivered the property to Concepcion, who in turn, paid
a surety company; and the fact that appellants did put up Eugenia the price of P100,000.00, as evidenced by the
receipt. Since the land was undivided when it was sold,
such bonds indicates that they admitted the definite
Concepcion is entitled to have half of it.
existence of their obligation to pay the balance of
P65,000.00. Antonio cannot, however, attack the validity of the sale
b/n his wife and his mom-in-law, either under the Family
(2) The sale between the parties is a sale of a specific Code or the Old Civil Code due to prescription. The sale
mass or iron ore because no provision was made in their came to his knowledge in 1987. He only filed the case in
contract for the measuring or weighing of the ore sold in 1999. His right prescribed in 1993 (under the FC [5
order to complete or perfect the sale, nor was the price of years]) and 1997 (under OCC [10 years]).
P75,000,00 agreed upon by the parties based upon any
such measurement.(see Art. 1480, second par., New
Civil Code). The subject matter of the sale is, therefore,
a determinate object, the mass, and not the actual
number of units or tons contained therein, so that all that
was required of the seller Gaite was to deliver in good
faith to his buyer all of the ore found in the mass,
notwithstanding that the quantity delivered is less than
the amount estimated by them.

Ainza vs. Padua

462 scra 614
June 30, 2005
,
FACTS:

This is a case involving family members. In April 1987,

Ainza and her daughter Eugenia orally agreed that Ainza
pay P100k in exchange for half of the portion of
Eugenia’s undivided conjugal property (a lot located in
QC). No Deed of Absolute Sale was executed. There was
physical delivery of the land through Concepcion’s other
daughter (Natividad) acting as atty-in-fact. Concepcion
thereafter allowed Natividad and her husband occupy the
purchased portion of the land.
In 1994, Antonio caused the division of the lot into three
(two were occupied by the spouses), necessarily
displacing Natividad. He also had each subdivision titled.
Antonio requested Natividad to vacate the premises.
Antonio averred that his wife only admitted of selling 1/3
of the property to Concepcion for which a receipt was
issued signed by Concepcion. The RTC ruled in favor of
Concepcion. The CA reversed the RTC ruling. CA
explained that the property is conjugal hence the sale
should have been with Antonio’s consent.
ISSUE:
Whether or not the contract of sale between Ainza and
Eugenia is valid.

COURT RULING:
Yes it is valid until annulled (voidable). There was a
perfected contract of sale between Eugenia and
Concepcion. The records show that Eugenia offered to