Professional Documents
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Law On Sales Digested Cases
Law On Sales Digested Cases
Held:
ZIGA) and SALVACION S. TRIA, petitioners,
vs. VICENTE RODRIGUEZ, respondent. Civil Code provides that By the contract of sale
one of the contracting parties obligates himself
G.R. No. 135634 May 31, 2000 to transfer the ownership of and to deliver a
determinate thing, and the other to pay therefor
Facts: a price certain in money or its equivalent.
Juan andres was the owner of the lot A contract of sale may be absolute or
situated in liboton, naga city. The sale was conditional.
evidenced by a deed of sale. Upon the death of
juan andres, ramon san andres was appointed As thus defined, the essential elements of sale
as administrator of the estate, and hired are the following:
geodetic engineer. Jose panero prepared a
consolidated plan of the estate and also a) Consent or meeting of the minds, that is,
prepared a sketch plan of the lot sold to consent to transfer ownership in exchange for
respondent. It was found out that respondent the price;
had enlarged the area which he purchased from
juan. The administrator sent a letter to the b) Determinate subject matter; and,
respoindent to vacate the said portion in which
the latter refused to do. 12
c) Price certain in money or its equivalent.
Respondent alleged that apart from the original
lot, which had been sold to him, the latter As shown in the receipt, dated September 29,
likewise sold to him the following day the 1964, the late Juan San Andres received
remaining portion of the lot. He alleged that the P500.00 from respondent as "advance payment
payment for such would be affected in 5 years for the residential lot adjoining his previously
from the eecution of the formal deed of sale after paid lot on three sides excepting on the
a survey is conducted. He also alleged that frontage; the agreed purchase price was P15.00
under the consent of juan, he took possession of per square meter; and the full amount of the
the same and introduced improvements thereon. purchase price was to be based on the results of
a survey and would be due and payable in five
(5) years from the execution of a deed of sale.
Respondent deposited in court the balance of
the purchase price amounting to P7,035.00 for
the aforesaid 509-square meter lot. Petitioner's contention is without merit. There is
no dispute that respondent purchased a portion
of Lot 1914-B-2 consisting of 345 square
On September 20, 1994, the trial court rendered meters. This portion is located in the middle of
judgment in favor of petitioner. It ruled that there Lot 1914-B-2, which has a total area of 854
was no contract of sale to speak of for lack of a square meters, and is clearly what was referred
valid object because there was no sufficient to in the receipt as the "previously paid lot."
indication to identify the property subject of the Since the lot subsequently sold to respondent is
sale, hence, the need to execute a new contract. said to adjoin the "previously paid lot" on three
sides thereof, the subject lot is capable of being
Respondent appealed to the Court of Appeals, determined without the need of any new
which on April 21, 1998 rendered a decision contract. The fact that the exact area of these
reversing the decision of the trial court. The adjoining residential lots is subject to the result
appellate court held that the object of the of a survey does not detract from the fact that
contract was determinable, and that there was a they are determinate or determinable. As the
conditional sale with the balance of the purchase Court of Appeals explained: 15
price payable within five years from the
execution of the deed of sale. Concomitantly, the object of the sale is certain
and determinate. Under Article 1460 of the New
Issue: whether or not there was a valid sale. Civil Code, a thing sold is determinate if at the
time the contract is entered into, the thing is
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capable of being determinate without necessity parties is absolute, not conditional. There is no
of a new or further agreement between the reservation of ownership nor a stipulation
parties. Here, this definition finds realization. providing for a unilateral rescission by either
party. In fact, the sale was consummated upon
Thus, all of the essential elements of a contract the delivery of the lot to respondent. 20 Thus, Art.
of sale are present, i.e., that there was a 1477 provides that the ownership of the thing
meeting of the minds between the parties, by sold shall be transferred to the vendee upon the
virtue of which the late Juan San Andres actual or constructive delivery thereof.
undertook to transfer ownership of and to deliver
a determinate thing for a price certain in money. The stipulation that the "payment of the full
As Art. 1475 of the Civil Code provides: consideration based on a survey shall be due
and payable in five (5) years from the execution
The contract of sale is perfected at the moment of a formal deed of sale" is not a condition which
there is a meeting of minds upon the thing which affects the efficacy of the contract of sale. It
is the object of the contract and upon the price. . merely provides the manner by which the full
. .That the contract of sale is perfected was consideration is to be computed and the time
confirmed by the former administrator of the within which the same is to be paid. But it does
estates, Ramon San Andres, who wrote a letter not affect in any manner the effectivity of the
to respondent on March 30, 1966 asking for contract. Consequently, the contention that the
P300.00 as partial payment for the subject lot. absence of a formal deed of sale stipulated in
As the Court of Appeals observed: the receipt prevents the happening of a sale has
no merit.
Without any doubt, the receipt profoundly
speaks of a meeting of the mind between San The claim of petitioners that the price of
Andres and Rodriguez for the sale. Evidently, P7,035.00 is iniquitous is untenable. The amount
this is a perfected contract of sale on a deferred is based on the agreement of the parties as
payment of the purchase price. All the pre- evidenced by the receipt (Exh. 2). Time and
requisite elements for a valid purchase again, we have stressed the rule that a contract
transaction are present. is the law between the parties, and courts have
no choice but to enforce such contract so long
as they are not contrary to law, morals, good
There is a need, however, to clarify what the
customs or public policy. Otherwise, court would
Court of Appeals said is a conditional contract of
be interfering with the freedom of contract of the
sale. Apparently, the appellate court considered
parties. Simply put, courts cannot stipulate for
as a "condition" the stipulation of the parties that
the parties nor amend the latter's agreement, for
the full consideration, based on a survey of the
to do so would be to alter the real intentions of
lot, would be due and payable within five (5)
the contracting parties when the contrary
years from the execution of a formal deed of
function of courts is to give force and effect to
sale. It is evident from the stipulations in the
the intentions of the parties.
receipt that the vendor Juan San Andres sold
the residential lot in question to respondent and
undertook to transfer the ownership thereof to The decision of the Court of Appeals is
respondent without any qualification, reservation AFFIRMED with the modification that
or condition. respondent is ORDERED to reimburse
petitioners for the expenses of the survey.
A deed of sale is considered absolute in nature
where there is neither a stipulation in the deed
that title to the property sold is reserved in the
seller until full payment of the price, nor one
giving the vendor the right to unilaterally resolve
the contract the moment the buyer fails to pay
within a fixed period.
Facts: Also worth noting is the fact that in the case filed
by Severino's tenant against Severino and
petitioner in 1989, assailing the validity of the
Severino sold his property to henry. Henry
sale made to petitioner, Severino explicitly
applied for a loan with philam life. As It was
asserted in his sworn answer to the complaint
already approved pending the submission of
that the sale was a legitimate transaction. He
certain documents such as the owners duplicate
further alleged that the ejectment case filed by
of transfer certificate of title which is in
petitioner against the tenant was a legitimate
possession of severino.
action by an owner against one who refuses to
turn over possession of his property.
Henry already took possession of the property in
question after ejectment of the lessees. He also
It should be emphasized that the non-
paid an ernest money of 300,000 under the
appearance of the parties before the notary
premise that it shall be forfeited in favor of
public who notarized the deed does not
severino in case of nonpayment.
necessarily nullify nor render the parties'
transaction void ab initio. We have held
Severino now claims ownership over the previously that the provision of Article 1358 of
property claiming that henry did not pay for the the New Civil Code on the necessity of a public
property, therefore there was no sale to speak document is only for convenience, not for validity
of. or enforceability. Failure to follow the proper
form does not invalidate a contract. Where a
Issue: whether or not there is a contract of sale contract is not in the form prescribed by law, the
perfected in this case. parties can merely compel each other to
observe that form, once the contract has been
Held: there was a perfected contract of sale due perfected.35 This is consistent with the basic
to the second deed of sale. principle that contracts are obligatory in
whatever form they may have been entered into,
The basic characteristic of an absolutely provided all essential requisites are present.3
simulated or fictitious contract is that the
apparent contract is not really desired or The elements of a valid contract of sale under
intended to produce legal effects or alter the Art. 1458 of the Civil Code are: (1) consent or
juridical situation of the parties in any way. 30 meeting of the minds; (2) determinate subject
However, in this case, the parties already matter; and (3) price certain in money or its
undertook certain acts which were directed equivalent.37 In the instant case, the second
towards fulfillment of their respective covenants deed reflects the presence of all these elements
under the second deed, indicating that they and as such, there is already a perfected
intended to give effect to their agreement. contract of sale.
Further, the fact that Severino executed the two The non-payment of the contract price merely
deeds in question, primarily so that petitioner results in a breach of contract for non-
could eject the tenant and enter into a performance and warrants an action for
loan/mortgage contract with Philam Life, is to rescission or specific performance under Article
our mind, a strong indication that he intended to 1191 of the Civil Code.
transfer ownership of the property to petitioner.
For why else would he authorize the latter to sue Be that as it may, we agree with petitioner that
the tenant for ejectment under a claim of although the law allows rescission as a remedy
ownership, if he truly did not intend to sell the for breach of contract, the same may not be
property to petitioner in the first place? Needless availed of by respondents in this case. To begin
to state, it does not make sense for Severino to with, it was Severino who prevented full
allow petitioner to pursue the ejectment case, in payment of the stipulated price when he refused
petitioner's own name, with petitioner arguing to deliver the owner's original duplicate title to
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Philam Life. His refusal to cooperate was
unjustified, because as Severino himself
admitted, he signed the deed precisely to enable
petitioner to acquire the loan. He also knew that
the property was to be given as security therefor.
Thus, it cannot be said that petitioner breached
his obligation towards Severino since the former
has always been willing to and could comply
with what was incumbent upon him.
PEOPLE OF THE PHILIPPINES v. ELIZABETH Whether the trial court erred in finding
GANGUSO that the prosecution has fully met the test of
moral certainty as to the guilt of the accused on
G.R. No. 115430 November 23, 1995 both charges of violation of section 15, Article III
of the Dangerous Drugs Act of 1972 and of
DAVIDE, JR., J.: illegal possession of firearms.
Facts: Decision:
Major Juvenile Sulapas, Officer-in- The instant appeal is partly granted, and
charge, Dangerous Drugs Enforcement Section, the challenged decision of the Regional Trial
Pasay City Police Station, received a Court of Pasay City is modified. As modified,
confidential report from an informant about the accused-appellant Beth is acquitted for the
rampant trafficking of drugs by Elizabeth charge of illegal possession of firearms on
Ganguso y Decena a.k.a. "Beth Tomboy". ground of reasonable doubt. The penalty
imposed on her for the violation of section 15,
A buy-bust operation was planned with Article III of the Dangerous Drugs Act of 1972 is
Dennis Vermug acting as poseur-buyer, backed- reduced to an indeterminate sentence of three
up by SPO1 Lumapat, SPO1 Gabutin, PO3s months of arresto mayor, as minimum, to three
Mendoza and Garcia with SPO3 Fucanan as years of prision correccional, as maximum.
team leader.
Ratio Decidendi:
The operation was carried out and they
were successful in arresting Beth for the Supreme Court held that the
violation of Dangerous Drugs Act of 1972. At the elements of a contract of sale were present.
same time, they were able to recover a .38 Beth is presumed to have given her consent
caliber Paltik revolver from the suspect. by not inquiring as to the meaning of “S”
when the officer posed to buy “Php 500
Several documentary exhibits were worth of S”. Therefore, there was a meeting
presented as evidence to the crime. Beth made of minds upon a definite object and upon the
statements in her testimony different to that of price.
the police’s: policemen barged into her house,
searched the premises and her person without a Though she was not in possession of
warrant and; denied the revolver recovered from the object of sale, Article 1459 merely
her. requires that the vendor must have the right
to transfer ownership of the object sold at
At the trial, defense presented two the time of delivery. In the case at bar,
witnesses who also claimed that no buy bust though Beth is not the owner, she had the
operation took place and no revolver was in the right to dispose of the prohibited drug.
possession of the suspect. Ownership was thereafter acquired upon her
delivery to the men in the alley after her
Nevertheless, the Regional Trial Court payment of the price.
of Pasay convicted her of both charges. She
was sentenced to suffer the penalty of life Supreme Court also held that failure to
imprisonment and to pay a fine plus costs for the conduct prior surveillance and absence of
crime involving drugs. She was also sentenced marked money does not affect the evidence of
to an indeterminate penalty of ten years and one the prosecution. It is sufficient that the members
day of prision mayor, as minimum, to twelve of the operation were accompanied by the
years and one day, as maximum, with fine and informant to the scene; the sale was adequately
costs for the crime of illegal possession of proven and; the drug subject was presented
firearms. before the court.
RULING:
Ruling:
1. The petitioneres had a cause of action to
institute an ejectment suit against the lessee
with the City Court thus the city court (now
MTC) has jurisdiction over it. The filing of
lessor of a suit with the RTC did not divest
Rulings:
1. There is a valid Contract of Sale
because all the essential elements are
present. In herein case, petitioner’s
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LAGRIMAS A. BOY, petitioner, ABUSED ITS DISCRETION IN NOT
vs. INTERPRETING THAT THE
COURT OF APPEALS, ISAGANI P. RAMOS "KASUNDUAN" EXECUTED BY AND
and ERLINDA GASINGAN RAMOS, BETWEEN PETITIONER
respondents. (DEFENDANT) AND PRIVATE
RESPONDENT (PLAINTIFF)
April 14, 2004 G.R. No. 125088 SUPERSEDES THE DEED OF SALE
WHICH HAS NOT BEEN
CONSUMMATED. NO.
FIRST DIVISION
Ruling:
AZCUNA, J.:
The imperatives of honest dealings given Elisco Tool Manufacturing Corp. Vs. Court of
prominence in the Civil Code under the heading: Appeals et. al.
Human Relations, provide another reason why May 31, 1999 GR 109966
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Second Division -On June 6, 1986, petitioner filed a complaint,
Mendoza J. entitled “replevin plus sum of money,” against
private respondent Rolando Lantan, his wife
Facts: Rina, and two other persons, identified only as
-Private respondent Rolando Lantan was John and Susan Doe, before the Regional Trial
employed at the Elisco Tool Manufacturing Court of Pasig, Metro Manila.
Corporation as head of its cash department. On -Petitioner alleged that private respondents
January 9, 1980, he entered into an agreement failed to pay the monthly rentals that despite
with the company which provided as follows: demands, private respondents failed to settle
- that, Elisco Tool Manufacturing Corp is the their obligation thereby entitling petitioner to the
owner of a car which for and in consideration of possession of the car; that petitioner was ready
a monthly rental of P 1010.65 will be leased to to post a bond in an amount double the value of
Rolando Lantan for 5 years the car, which was P60,000; and that in case
- That, Rolando Lantan shall pay the lease thru private respondents could not return the car,
salary deduction from his monthly remuneration they should be held liable for the amount of
in the amount as above specified for a period of P60,000 plus the accrued monthly rentals
FIVE (5) years; thereof, with interest at the rate of 14% per
- That, he shall for the duration of the lease annum, until fully paid.
contract, shoulder all expenses and costs of - Upon the posting of the bond, the sheriff took
registration, insurance, repair and maintenance, possession of the car and after 5 days turned it
gasoline, oil, part replacement inclusive of all over to the petitioner
expenses necessary to maintain the vehicle in - private respondents claim that their agreement
top condition was to buy and sell and not lease with option to
-That, at the end of FIVE (5) year period or upon buy the car
payment of the 60th monthly rental, Lantan may - in its reply, petitioner maintained that the
exercise the option to purchase the motor contract was one of lease with option to
vehicle from Elisco and all monthly rentals shall purchase and that the promissory note was
be applied to the payment of the full purchase merely a “nominal security” for the agreement.
price of the car and further, should Lantan desire - trial court rendered its decision in favor of the
to exercise this option before the 5-year period private respondent
lapse, he may do so upon payment of the - petitioner appealed to CA, petitioner filed
remaining balance on the five year rental unto motion for execution pending appeal
Elisco, it being understood however that the - CA affirmed in toto the decision of the trial
option is limited to the EMPLOYEE; court, hence the petition for review on certiorari
-That, in case of default in payment THREE (3)
accumulated monthly rentals, Elisco shall have Issue/s:
the full right to lease the vehicle to another Whether the Court of Appeals erred
EMPLOYEE; (a) in disregarding the admission in the
-That, in the event of resignation and or pleadings as to what documents contain the
dismissal from the service, Lantan shall return terms of the parties’ agreement.
the subject motor vehicle to the EMPLOYER in (b) in holding that the interest stipulation in
good working and body condition. respondents’ Promissory Note was not valid and
-On the same day, January 9, 1980, private binding.
respondent executed a promissory note which (c) in holding that respondents had fully paid
states his promise to pay P 1,010.65 without the their obligations.
necessity of notice or demand in accordance Held:
with the schedule of payment The decision of the Court of Appeals is
- After taking possession of the car, Lantan AFFIRMED with costs against petitioner.
installed accessories worth P15,000.00
-In 1981, Elisco Tool ceased operations, as a Ratio:
result of which private respondent Rolando First. Petitioner does not deny that private
Lantan was laid off. Nonetheless, as of respondent Rolando Lantan acquired the vehicle
December 4, 1984, private respondent was able in question under a car plan for executives of the
to make payments for the car in the total amount Elizalde group of companies. Under a typical car
of P61,070.94. plan, the company advances the purchase price
of a car to be paid back by the employee
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through monthly deductions from his salary. The respondent until April 16, 1989, after two (2)
company retains ownership of the motor vehicle years and eight (8) months, upon issuance by
until it shall have been fully paid for. However, the Court of Appeals of a writ of execution.
retention of registration of the car in the Petitioner prayed that private respondents be
company’s name is only a form of a lien on the made to pay the sum of P39,054.86, the amount
vehicle in the event that the employee would that they were supposed to pay as of May 1986,
abscond before he has fully paid for it. There plus interest at the legal rate. At the same time,
are also stipulations in car plan agreements to it prayed for the issuance of a writ of replevin or
the effect that should the employment of the the delivery to it of the motor vehicle “complete
employee concerned be terminated before all with accessories and equipment.” In the event
installments are fully paid, the vehicle will be the car could not be delivered to petitioner, it
taken by the employer and all installments paid was prayed that private respondent Rolando
shall be considered rentals per agreement. Lantan be made to pay petitioner the amount of
This Court has long been aware of the practice P60,000.00, the “estimated actual value” of the
of vendors of personal property of denominating car, “plus accrued monthly rentals thereof with
a contract of sale on installment as one of lease interests at the rate of fourteen percent (14%)
to prevent the ownership of the object of the sale per annum until fully paid.” This prayer of
from passing to the vendee until and unless the course cannot be granted, even assuming that
price is fully paid. As this Court noted in Vda. de private respondents have defaulted in the
Jose v. Barrueco: payment of their obligation. This led the trial
Sellers desirous of making conditional sales of court to say that petitioner wanted to eat its cake
their goods, but who do not wish openly to make and have it too.
a bargain in that form, for one reason or another, Both the trial court and the Court of Appeals
have frequently resorted to the device of making correctly ruled that private respondents could no
contracts in the form of leases either with longer be held liable for the amounts of
options to the buyer to purchase for a small P39,054.86 or P60,000.00 because private
consideration at the end of term, provided the respondents had fulfilled their part of the
so-called rent has been duly paid, or with obligation. The agreement does not provide for
stipulations that if the rent throughout the term is the payment of interest on unpaid monthly
paid, title shall thereupon vest in the lessee. It is “rentals” or installments because it was entered
obvious that such transactions are leases only in into in pursuance of a car plan adopted by the
name. The so-called rent must necessarily be company for the benefit of its deserving
regarded as payment of the price in installments employees. As the trial court correctly noted,
since the due payment of the agreed amount the car plan was intended to give additional
results, by the terms of the bargain, in the benefits to executives of the Elizalde group of
transfer of title to the lessee. companies.
Second. The contract being one of sale on
installment, the Court of Appeals correctly Third. Private respondents presented evidence
applied to it the following provisions of the Civil that they “felt bad, were worried, embarrassed
Code: and mentally tortured” by the repossession of
the car. This has not been rebutted by
The remedies provided for in Art. 1484 are petitioner. There is thus a factual basis for the
alternative, not cumulative. The exercise of one award of moral damages. In addition, petitioner
bars the exercise of the others. This limitation acted in a wanton, fraudulent, reckless and
applies to contracts purporting to be leases of oppressive manner in filing the instant case,
personal property with option to buy by virtue of hence, the award of exemplary damages is
Art. 1485. The condition that the lessor has justified. The award of attorney’s fees is likewise
deprived the lessee of possession or enjoyment proper considering that private respondents
of the thing for the purpose of applying Art. 1485 were compelled to incur expenses to protect
was fulfilled in this case by the filing by petitioner their rights
of the complaint for replevin to recover
possession of movable property. By virtue of
the writ of seizure issued by the trial court, the
deputy sheriff seized the vehicle on August 6,
1986 and thereby deprived private respondents
of its use. The car was not returned to private
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PEOPLE'S INDUSTRIAL AND COMMERCIAL the agreements be deemed not automatically
CORPORATION, petitioner, vs. COURT OF cancelled, the same agreements should be
APPEALS and MAR-ICK INVESTMENT declared null and void.
CORPORATION, respondents. Lower court rendered a decision finding
that the original agreements of the parties were
G.R. No. 112733 October 24, 1997 validly cancelled. The parties did not enter into a
new contract in accordance with Art. 1403 (2) of
281 SCRA 206 the Civil Code as the parties did not sign the
draft contract. Receipt by private respondent of
Ponente: ROMERO, J. (THIRD DIVISION) the five checks could not amount to perfection of
the contract because private respondent never
Facts:
encashed and benefited from those checks.
Private respondent Mar-ick Investment There was no meeting of the minds between the
Corporation is the exclusive and registered parties because Art. 475 of the Civil Code
owner of Mar-ick Subdivision in Barrio Buli, should be read with the Statute of Frauds that
Cainta, Rizal. On May 29, 1961, private requires the embodiment of the contract in a
respondent entered into 6 agreements with note or memorandum. What was clearly proven
petitioner People's Industrial and Commercial was that both parties negotiated a new contract
Corporation whereby it agreed to sell to after the termination of the first. Thus, the fact
petitioner 6 subdivision lots. that the parties tried to negotiate a new contract
indicated that they considered the first contract
Five of the agreements stipulate that the as already cancelled.
petitioner agreed to pay private respondent for Petitioner elevated the case to the Court
each lot, the amount of P7,333.20 with a down of Appeals which affirmed in toto the lower
payment of P480.00. The balance of P6,853.20 court's decision.
shall be payable in 120 equal monthly
installments of P57.11 every 30th of the month,
for a period of ten years. With respect to another
Issue:
lot, the parties agreed to the purchase price of
Whether or not there was a perfected
P7,730.00 with a down payment of P506.00 and
and enforceable contract of sale on October 11,
equal monthly installments of P60.20. After
1983 which modified the earlier contracts to sell
the lapse of ten years, petitioner still had not
which had not been validly rescinded.
fully paid for the six lots. It had paid only the
down payment and 8 installments.
Ruling:
After a series of negotiations between The contracts to sell of 1961 were
the parties, they agreed to enter into a new cancelled to which the parties voluntarily bound
contract to sell on October 11, 1983. The themselves. When petitioner failed to abide by
contract stipulates that the previous contracts its obligation to pay the installments provision
have been cancelled due to the failure of the No. 9 of the contract automatically took effect
purchaser to pay the stipulated installments. which states that “should the purchaser fail to
make the payment of any of the monthly
Neither of the parties signed the new installments as agreed herein, this contract
contract. Siatianum issued checks in the total shall, by the mere fact of nonpayment, expire by
amount of P37,642.72 to private respondent. itself and become null and void.”
Private respondent received but did not The 1961 agreements are contracts to
encash the checks. Instead, it filed in the sell and not contracts of sale. The distinction
Regional Trial Court of Antipolo, Rizal, a between these contracts is depicted in Adelfa
complaint for accion publiciana de posesion Properties, Inc. v. Court of Appeals which states
against petitioner and Tomas Siatianum, as that “the distinction between the two is important
president and majority stockholder of petitioner. for in a contract of sale, the title passes to the
It prayed that petitioner surrender possession of vendee upon the delivery of the thing sold;
the lots of Mar-ick Subdivision, and that whereas in a contract to sell, by agreement the
petitioner and Tomas Siatianum be ordered to ownership is reserved in the vendor and is not to
pay reasonable rentals for the use of the lots. In pass until the full payment of the price. In a
the alternative, the complaint prayed that should contract of sale, the vendor has lost and cannot
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recover ownership until and unless the contract questioned Decision of the Court of Appeals is
is resolved or rescinded; whereas, in a contract AFFIRMED.
to sell, title is retained by the vendor until the full
payment of the price, such payment being a
positive suspensive condition and failure of
which is not a breach but an event that prevents
the obligation of the vendor to convey title from
becoming effective. Thus, a deed of sale is
considered absolute in nature where there is
neither a stipulation in the deed that title to the
property sold is reserved in the seller until the
full payment of the price, nor one giving the
vendor the right to unilaterally resolve the
contract the moment the buyer fails to pay within
a fixed period.” Being contracts to sell, Article
1592 of the Civil Code which requires rescission
either by judicial action or notarial act is not
applicable.
Petitioner alleges that there was a new
perfected and enforceable contract of sale
between the parties in October 1983. Private
respondent's company lawyer volunteered that
after the cancellation of the 1961 agreements,
the parties should negotiate and enter into a
new agreement. However, after he had drafted
the contract and sent it to petitioner, the latter
deposited a check for downpayment but its
representative refused to sign the prepared
contract. In the absence of proof to the contrary,
this draft contract may be deemed to embody
the agreement of the parties. Private respondent
did not and has not denied the existence of that
contract. Under these facts, therefore, the
parties may ideally be considered as having
perfected the contract of October 1983.
Justice and equity, however, will not be
served by a positive ruling on the perfection and
performance of the contract to sell. There are
facts on record proving that the parties had not
arrived at a definite agreement. By Atty.
Villamayor's admission, the checks were not
encashed because Tomas Siatianun did not sign
the draft contract that he had prepared. On his
part, Tomas Siatianun explained that he did not
sign the contract because it covered 7 lots while
their agreement was only for 6 lots.
The number of lots to be sold is a material
component of the contract to sell. Without an
agreement on the matter, the parties may not in
any way be considered as having arrived at a
contract under the law. Moreover, installments
paid by the petitioner on the land should be
deemed rentals. Article 1486 of the Civil Code
provides that a stipulation that the installments
or rents paid shall not be returned to the vendee REGALADO DAROY, complainant, vs. ATTY.
or lessee shall be valid insofar as the same may ESTEBAN ABECIA, respondent.
not be unconscionable under the circumstances.
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A.C. No. 3046 October 26, 1998 Ruling:
Respondent’s motion is well taken.
Ponente: MENDOZA, J. (SECOND DIVISION) As already stated, the land in question
was purchased by complainant at the sheriff’s
sale. Deputy Sheriff stated that when he finally
transferred the land to the buyer, he placed in
possession of the land not only the buyer,
Facts: Regalado Daroy, but also the latter’s assignee,
This refers to the complaint for Nena Abecia, in whose name the title to the land
malpractice filed by Regalado Daroy against had in fact been transferred. It would appear,
Esteban Abecia, a member of the Bar. therefore, that Daroy already knew that title to
Respondent Abecia was counsel of the land had already been transferred in the
complainant Daroy in a case for forcible entry name of the respondent’s wife.
before the Municipal Trial Court of Opol, Indeed, what appears to have happened
Misamis Oriental. Judgment was rendered in in this case is that the parties thought that
favor of complainant. To satisfy the judgment, because the land had been acquired by
the sheriff sold at public auction a parcel of land complainant at a public sale held in order to
belonging to one of the defendants to satisfy a judgment in his favor in a case in which
complainant Daroy as highest bidder. Upon respondent was complainant’s counsel, the latter
failure of the defendants to redeem the land, its could not acquire the land. The parties
ownership was consolidated in complainant apparently had in mind Art. 1491 of the Civil
Daroy. Code which provides:
Complainant Daroy claimed that
respondent Abecia forged his signature in a
ART. 1491. The following persons
deed of absolute sale transferring the parcel of
cannot acquire by purchase, even at a
land to Jose Gangay and that in a fictitious deed
public or judicial auction, either in
of absolute sale it was made to appear that
person or through the mediation of
Gangay in turn conveyed the land to Nena
another:
Abecia, wife of respondent Abecia. Daroy
5) Justices, judges, prosecuting
alleged that he entrusted the title to the land to
attorneys, clerks of superior and inferior
Abecia as his counsel and allowed him to take
courts, and other officers and
possession of the land upon the latter’s request.
employees connected with the
By means of the forged deed of sale, Abecia
administration of justice, the property
was able to obtain new transfer certificates of
and rights in litigation or levied upon an
title, first in the name of Gangay and then in that
execution before the court within whose
of Mrs. Abecia, from the Registry of Deeds of
jurisdiction or territory they exercise their
Misamis Oriental. Daroy claimed he discovered
respective functions; this prohibition
the fraud only in 1984.
includes the act of acquiring by
On July 15, 1993,
assignment and shall apply to lawyers,
Commissioner Plaridel Jose ruled that
with respect to the property and rights
respondent Abecia is guilty of malpractice and
which may be the object of any litigation
recommended his disbarment. The Integrated
in which they may take part by virtue of
Bar of the Philippines approved the report but
their profession.
reduced the penalty to indefinite suspension.
Respondent Abecia filed a Motion for
Reconsideration and/or Appeal. In Guevara v. Calalang, we held that the
prohibition in Art. 1491 does not apply to the
sale of a parcel of land, acquired by a client to
Issues:
satisfy a judgment in his favor, to his attorney as
Whether or not the Commission on Bar
long as the property was not the subject of the
Discipline erred when it held that complainant
litigation. While judges, prosecuting attorneys,
had no knowledge of the execution of the Deed
and others connected with the administration of
of Absolute Sale.
justice are prohibited from acquiring property or
Whether or not respondent Atty. Esteban
rights in litigation or levied upon in execution, the
Abecia is prohibited from acquiring the parcel of
prohibition with respect to attorneys in the case
land.
extends only to property and rights which may
Held:
It is expressly provided by law that the thing sold
shall be understood as delivered, when it is
placed in the control and possession of the
vendee. Where there is no express provision
that title shall not pass until payment of the
price, and the thing gold has been delivered, title
passes from the moment the thing sold is placed
in the possession and control of the buyer. SPOUSES CAMILO L. SABIO, and MA.
Delivery produces its natural effects in law, the MARLENE A. LEDONIO-SABIO, petitioners,
principal and most important of which being the vs. THE INTERNATIONAL CORPORATE
conveyance of ownership, without prejudice to BANK, INC. (now UNION BANK OF THE
the right of the vendor to payment of the price. PHILIPPINES), GOLDENROD, INC., PAL
When the sale is made through a public EMPLOYEES SAVINGS AND LOAN
ASSOCIATION, INC., AYALA CORPORATION,
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LAS PINAS VENTURES, INC., FILIPINAS LIFE Held:
ASSURANCE COMPANY(now AYALA LIFE
ASSURANCE, INC.), AYALA PROPERTY Under Article 1498 of the Civil Code,
VENTURES CORPORATION, and AYALA “when the sale is made through a public
LAND, INC., respondents. instrument, the execution thereof shall be
equivalent to the delivery of the object of the
G.R. No. 132709. September 4, 2001. contract , if from the deed the contrary does not
appear or cannot be inferred.” Possession is
YNARES-SANTIAGO, J.: also transferred, along with ownership thereof,
to the petitioners by virtue of the deed of
Facts: conveyance. Petitioner’s contention that
respondents “never acquired ownership over the
The object of the controversy is a subject property since the latter was never in
portion of a vast tract of land located at Tindig na possession of the subject property nor was the
Manga, Almanza, Las Pinas City. The spouses property ever delivered” is totally without merit.
Gerardo and Emma Ledonio, assigned to the The mere execution of the deed of conveyance
spouses Camilo and Ma. Marlene Sabio (herein in a public document is equivalent to the delivery
petitioners) all their rights, interests, title and of the property. Since the execution of the deed
participation over a contiguous portion of the of conveyance is deemed equivalent to delivery,
subject property measuring 119,429 square prior physical delivery or possession is not
meters. Similarly, while the subject property was legally required. The deed operates as a formal
still the object of several pending cases, the or symbolic delivery of the property sold and
International Corporate Bank, Inc. (or Interbank) authorizes the buyer or transferee to use the
acquired from the Trans-Resource Management document as proof of ownership. Nothing more
and Development Corporation all of the latter’s is required.
rights to the subject property by virtue of a deed
of assignment executed between them.
Issue:
Issue:
July 8, 1991
Third Division
Justice Gutierrez, Jr.
Facts:
Meanwhile a civil case entitled ‘”Gelac Trading, The sale of the object tractor was consummated
Inc v. Wilfredo Dy was pending in another court upon the execution of the public instrument. At
in Cebu regarding a collection case to recover a this time constructive delivery was already
sum. Through an alias writ of execution, the effected. Hence, the subject tractor was no
sheriff was able to seize and levy on the tractor longer owned by Wilfredo Dy when it was levied
which was in the premises of Libra in Carmen, upon by the sheriff(Dy, Jr. vs. Court of Appeals).
Cebu. The tractor was subsequently sold at
public auction. The property was sold to Antonio
Gonzales. It was only when the check was
cleared that Perfecto learned about Gelac
having already taken custody of the subject
tractor.
Issue:
Whether or not respondent may be held liable
for the plastic bags which were not actually
used for packaging cement as originally
intended.
Aerospace Chemical Industries, Inc vs. Court
Ruling: of Appeal, Philippine Phosphate Fertilizer
The decision appealed from is SET ASIDE and Corporation.
the decision of the trial court REINSTATED.
G.R. No. 108129. September 23, 1999.
Ratio: (Industrial Textile Manufacturing
Company of the Phils. v. LPJ Enterprises, Inc, QUISUMBING, J.:
pp 326-327)
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FACTS: Petitioner Aerospace Industries The RTC ruled in favor of the petitioner. Upon
purchased five hundred (500) metric tons of appeal, Court of Appeals reversed the decision
sulfuric acid from private respondent Philippine of RTC, ruling in favor of the private respondent.
Phosphate Fertilizer Corporation (Philphos).The Hence, this petition
agreement provided that the buyer shall pay its
purchases in Philippine Currency five days ISSUES: Whether or not respondent Court of
before the shipment date. Petitioner as buyer Appeals erred in holding that the petitioner
committed to secure the means of transport to committed breach of contract due to the delay in
pick-up the purchases from private respondents the performance of its obligation? Did private
load ports. Per agreement, 100 metric tons of respondent err in awarding damages to private
sulfuric acid should be taken from Basay Negros respondent?
Oriental storage tank, while the remaining 400
metric tons should be retrieve from Sangi, Cebu. RULING: Supreme Court ruled in sustaining the
decision of the Court of Appeals finding in favor
On August 6, 1986, private respondent Philphos of private respondent. SC held that petitioner
sent an advisory letter to petitioner to withdraw violated the subject contract of sale supported
the sulfuric acid purchased at Basay because by preponderant evidence. The contention that
private respondent has been incurring petitioner’s delay was caused by a storm or
incremental expenses of 2,000 for each delay in force majeure is untenable. The report revealed
shipment.On October 3, 1986, petitioner paid that the vessel chartered by petitioner is
Php 553,280 for 500 metric tons of sulfuric acid. unstable and incapable of carrying full load.
Despite of several repairs of the vessel, the
Petitioner charted the M/T Sultan Kayumanggi to vessel still failed to carry the whole metric tons
carry out the agreed volumes of freight form of sulfuric acid. Its unfortunate sinking was not
designated loading areas. The chartered vessel due to force majeure. Hence, the proximate
only withdrew 70 metric tons of sulfuric acid from cause of the delay of the petitioner cannot be
Basay because said vessel heavily tilted on its attributed due to force majeure but because of
port side. Because of this, the vessel underwent the chartered vessel contracted by petitioner to
repairs. carry out the sulfuric acid. Despite demands to
immediate replace M/T Sultan Kayumanggi,
Private respondents asked petitioners to retrieve petitioner did not comply.
the remaining sulphur in Basay tanks so that
said tanks are emptied before December 15, Moreover, because of petitioner delay in
1986.Private respondent said that if petitioner complying with its obligation to replace
will not comply petitioner will be charge storage immediately the defective chartered vessel
and consequential costs. Petitioner chartered despite several demand letters sent by private
another vessel after several demand of the respondent to it, the awarding of damages
private respondent. Hernandez, acting for the against the petitioner is justified .Petitioner in
petitioner, addressed a letter to private this case is guilty of delay. Since petitioner failed
respondent, commencing additional orders to to comply with its obligation under the contract it
replace its sunken purchases. Petitioner became liable for its shortcomings.
Counsel, Atty Santos, sent a demand letter to
private respondent for the delivery of the 272.49
MT of sulfuric acid or return the purchase price
of Php 307, 530.In reply, private respondent
instructed petitioner to lift remaining 30 MT of
sulfuric acid from Basay or pay maintenance
and storage expenses. Despite several
demands to deliver remaining sulfuric acids and
other counter demands also of private Conchita Nool and Gaudencio Almojera vs.
respondents, petitioner filed a complaint for Court of Appeals, Anacleto Nool and Emilia
specific performance and/or damages before the Nebre.
RTC. Private respondent contends that it was
the petitioner who was remiss in the G.R. No.116635. July 24, 1997
performance of its obligation.
PANGANIBAN, J.:
Facts: Facts:
During the pendency of this case Nieves died Issue 3: Nonetheless while it is true that a
and her heirs substituted her. On September 30, Torrens title is indefeasible and imprescriptible,
1994, the trial court rendered its decision, ruling the registered owner may lose his right to
Sales Case Digests
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2A SY 2009-2010
recover possession of his registered property by
reason of laches.
Facts: Gaudioso Nogales acquired ownership “Art. 1544. If the same thing should have been
over the subject property on the basis of the sold to different vendees, the ownership shall be
Compromise Agreement and the Deed of transferred to the person who may have first
Absolute Sale executed by Julia Deocareza who taken possession thereof in good faith, if it
had acquired of said property from the Canino should be movable property.
brothers and sisters. However, Preciosa Canino
subsequently sold at different times portions of Should it be immovable property, the
the subject property to herein petiitoners, ownership shall belong to the person acquiring it
Francisco Bayoca, Nonito Dichoso, Erwin who in good faith first recorded it in the Registry
Bayoca, and spouses Pio and Dolores Dichoso. of Property.
The Appellee, filed complaint against the Should there be no inscription, the
Appellants for “Accion Reinvindicatoria with ownership shall pertain to the person who in
Damages.” He alleged in his complaint, that he good faith was first in possession; and in the
purchased the said property from Julia Decareza absence thereof, to the person who presents the
and thus acquired ownership thereof and that oldest title, provided there is good faith.”
the Appellants respectively purchased portions
of said property in bad faith and through fraud. Based on the foregoing, to merit the protection
The Appellants, in their Answer to the complaint, under Article 1544, second paragraph, the
alleged that Preciosa Canino and her siblings second buyer must act in good faith in
acquired just title over the property when they registering the deed. Thus, It has been held that
executed their “Deed of Partition of Real in cases of double sale of immovables, what
Property” and conveyed titles to the vendees, finds relevance and materiality is not whether or
the Appellants in the present recourse, as not the second buyer was a buyer in good faith
buyers in goof faith. but whether or not said second buyer registers
such second sale in good faith, that is, without
The Regional Trial Court ruled in favor of knowledge of any defect in the title of the
Nogales and declared that the sales of portions property.
of said property by Preciosa Canino were null
and void. The trial court further declared further On account of the undisputed fact of registration
that petitioners were purchasers in bad faith. by respondent Nogales as the first buyer,
necessarily, there is absent good faith in the
On appeal, the court of Appeals affirmed the registration of the sale by the petitioners Erwin
RTC ruling. Hence this petition. Bayoca and the spouses Pio and Lourdes
Dichoso for which they had been issued
Issue: Who has the superior right to the parcel certificates of title in their names. As for the
of land sold to different buyers at different times petitioners Francisco Bayoca and Nonito
by its former owners? Dichoso, they failed to register the portions of
the property sold to them, and merely rely on the
Ruling: Petition is hereby DENIED and the fact that they declared the same in their name
assailed DECISION of the Court of Appeals is for taxation purposes. Suffice it to state, that
AFFIRMED. such fact, does not, by itself, constitute evidence
of ownership and cannot likewise prevail over
There is no question from the records that the title of respondent Nograles.
respondent Nogales was the first to buy the
subject property from Julia, who in turn bought
the same from the Canino brothers and sisters.
Petitioners, however, rely on the fact that they
were the first to register the sales of the different
portions of the property resulting in the issuance
of new titles in their names.
HELD:
Facts: Spouses Salera filed an action for The Court of Appeals is wrong. Article 1544 of
quieting of title regarding a parcel of land in the Civil Code contemplates a case of double
Brgy. Basud, San Isidro, Leyte. The land was sale or multiple sales by a single vendor.
bought from the heirs of Brigido Tonacio as More specifically, it covers a situation where a
evidenced by the Deed of Absolute Sale single vendor sold one and the same immovable
executed on June 23, 1986. They allege that property to two or more buyers. Art. 1544 does
they have been in possession of the property not apply in this case since the sale was made
and the house they built thereon because they by Catalino and the heirs of Brigido.
had paid the purchase price even before the
execution of the deed of sale. When they asked Bad faith was established in the RTC. The
the Provincial Assessor to declare the property evidence submitted to the court, established that
under their names for taxation purposes, they Spouses Rodaje knew beforehand that the
found that Tax Declaration No. 2994 (R-5) in the property was declared in the name of Brigido
name of Brigido was already cancelled and Tonacao for taxation purposes. Any lot buyer is
another one, Tax Declaration No. 2408, was expected to be vigilant, exercising utmost care in
issued in the names of Spouses Rodaje. determining whether the seller is the true owner
of the property and whether there are other
Spouses Rodaje claimed that they bought the claimants. There is no indication from the
land from Catalino Tonacio, father of Brigido on record that Rodaje first determined the status of
June 6, 1986 and that the sale was registered the lot.
with the Register of Deeds and the Tax
Declaration No. 2408 was issued in their name. While tax declarations are not conclusive proofs
They also claimed that they had a verbal of ownership, however, they are good indicia of
contract with Catalino even before the execution possession in the concept of owner, for no one
of the sale since January 1984. They paid a in his right mind would be paying taxes for a
downpayment of P1,000 and paid the balance of property that is not in his actual or at least
P4,000 when the sale was executed. They constructive possession. Hence, Catalino, not
allege that they been in exercising their right of being the owner or possessor, could not validly
ownership over the property and the building sell the lot to respondents.
constructed thereon peacefully, publicly,
adversely and continuously. Apart from being The certification presented by respondents
the first registrants, they are buyers in good clearly shows that the house is owned by Aida
faith. Salera and that respondents started paying the
electric bills (in the name of Aida Salera) only in
RTC of Calubian, Leyte declared Spouses 1986. The respondents proof of payment of
Salera as the rightful and legal owners while realty tax from the period of 1974 to 1984 was
declaring null and void the Deed of Absolute paid in lump sum.
Sale between Catalino and herein respondents
and ordering the cancellation of Tax Declaration (Petition is GRANTED. The assailed Decision
No. 2408 issued. The court cited that the real of the Court of Appeals is REVERSED and the
owners of the land, by operation of the law on Decision of the trial court is REINSTATED.)
succession would be the heirs of Brigido and not
his father. Catalino had no legal personality to
sell the parcel of land.
Held:
On October 30, 1985, the Avenue Group filed an
ejectment case against petitioners ordering the
latter to vacate the commercial building standing On Novation
on the lot in question.
Novation is never presumed; it must be
Petitoners filed an amended complaint sufficiently established that a valid new
impleading the Avenue Group as new agreement or obligation has extinguished or
defendants after about 4 years after the filing of changed an existing one. The registration of a
the original complaint. later sale must be done in good faith to entitle
the registrant to priority in ownership over the
vendee in an earlier sale.
RTC found two perfected contracts of sale
between the Velezes and the petitioners
involving the real property in question. The first Article 1600 of the Civil Code provides that
sale was for P1,050,000.00 and the second was "(s)ales are extinguished by the same causes as
for P1,400,000.00. In respect to the first sale, all other obligations, . . . ." Article 1231 of the
On Double Sale
G.R. No. 110295 October 18, 1993 Art. 1567. In the case of Articles 1561, 1562,
1564, 1565 and 1566, the vendee may elect
Davide, Jr., J, First Division between withdrawing from the contract and
demanding a proportionate reduction of the
price, with damages eithercase.
Facts: Lydia L. Geronimo was the proprietress of
Kindergarten Wonderland Canteen in Dagupan The vendee may also ask for the annulment of
City, an enterprise engaged in the sale of soft the contract upon proof of error or fraud, in
drinks (including Coke and Sprite) and other which case the ordinary rule on obligations shall
goods to the students of Kindergarten be applicable. Under the law on obligations,
Wonderland and to the public. On or about responsibility arising from fraud is demandable
August 12 1989, some parents of the students in all obligations and any waiver of an action for
complained to her that the Coke and Sprite soft future fraud is void. Responsibility arising from
drinks sold by her contained fiber-like matter and negligence is also demandable in any obligation,
other foreign substances or particles. She then but such liability may be regulated by the courts,
went over her stock of softdrinks and discovered according to the circumstances. Those guilty of
the presence of some fiber-like substances in fraud, negligence, or delay in the performance of
the contents of some unopened Coke bottles their obligations and those who in any manner
and a plastic matter in the contents of an contravene the tenor thereof are liable for
unopened Sprite bottle. She brought the said damages.
bottles to the Regional Health Office of the
Department of Health at San Fernando, La The vendor could likewise be liable for quasi-
Union, for examination. She received a letter delict under Article 2176 of the Civil Code, and
from the Department of Health informing her that an action based thereon may be brought by the
the samples she submitted "are adulterated;" as vendee. While it may be true that the pre-
a consequence of the discovery of the foreign existing contract between the parties may, as a
substances in the beverages, her sales of soft general rule, bar the applicability of the law on
drinks severely plummeted from the usual 10 quasi-delict, the liability may itself be deemed to
cases per day to as low as 2 to 3 cases per day arise from quasi-delict, i.e., the acts which
resulting in losses of from P200.00 to P300.00 breaks the contract may also be a quasi-delict.
per day, and not long after that she had to lose
shop on December 12 1989, she became
jobless and destitute. She demanded from the
petitioner the payment of damages but was
rebuffed by it.
359 SCRA 91
Puno, J.:
QUISUMBING, J.: The Court of Appeals (CA) reverse and set aside
the jugdgment. It deleted the award of
FACTS P790,324.30 as compensatory damages as well
as the award of moral damages and attorney's
Integrated Packaging Corp (petitioner) and Fil- fees, for lack of factual and legal basis.
Anchor Paper Co. Inc. (respondent) executed on
May 5, 1978, an order agreement whereby Hence this petition.
respondent bound itself to deliver to petitioner
3,450 reams of printing paper. The materials ISSUE
were to be paid within a minimum of thirty days
and maximum of ninety days from delivery. Whether or not the respondent violated the order
agreement
Respondent filed with the Regional Trial Court
(RTC) a collection suit against petitioner for the RULING
sum of P766,101.70, representing the unpaid
purchase price of printing paper bought by PETITION DENIED. The respondent did not
petitioner on credit. violate the order agreement when the latter
failed to deliver the balance of the printing paper
In its counterclaim, the petitioner denied the on the dates agreed upon.
material allegations of the complaint. It alleged
that respondent delivered only 1,097 reams of The transaction between the parties is a contract
printing paper which was short of 2,875 reams, of sale whereby respondent (seller) obligates
in total disregard of their agreement and also itself to deliver printing paper to petitioner
failed to deliver the balance of the printing paper (buyer) which, in turn, binds itself to pay therefor
despite demand therefor, hence, petitioner a sum of money or its equivalent (price). Both
suffered actual damages and failed to realize parties concede that the order agreement gives
expected profits. rise to a reciprocal obligations such that the
obligation of one is dependent upon the
obligation of the other. Reciprocal obligations
are to be performed simultaneously, so that the
In its reply respondent alleged that subsequent
performance of one is conditioned upon the
to the enumerated purchase invoices in the
simultaneous fulfillment of the other. Thus,
original complaint, petitioner made additional
respondent undertakes to deliver printing paper
purchases of printing paper on credit amounting
of various quantities subject to petitioner's
to P94,200.00 and that petitioner refused to pay
corresponding obligation to pay, on a maximum
its outstanding obligation although it made
90-day credit, for these materials. In the
partial payments amounting to P97,200.00
contract, petitioner is not even required to make
which was applied to back accounts, thus,
any deposit, down payment or advance
reducing petitioner's indebtedness to
payment, hence, the undertaking of respondent
P763,101.70.
to deliver the materials is conditional upon
payment by petitioner within the prescribed
RTC ruled that petitioner should pay period. Clearly, petitioner did not fulfill its side of
P763,101.70 representing the value of printing the contract as its last payment in August 1981
paper delivered by respondent from June 5, could cover only materials covered by delivery
1980 to July 23, 1981. However it also found invoices dated September and October 1980.
petitioner's counterclaim meritorious because if
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The agreement provides for the delivery of
printing paper on different dates and a separate
price has been agreed upon for each delivery. It
is also admitted that it is the standard practice of
the parties that the materials be paid within a
minimum period of thirty (30) days and a
maximum of ninety (90) days from each delivery.
Accordingly, the respondent's suspension of its
deliveries to petitioner whenever the latter failed
to pay on time, as in this case, is legally justified
under the second paragraph of Article 1583 of
the Civil Code which provides that:
Subsequently, negotiations for the barter of the RTC, as affirmed by the Court of Appeals, held
jewelry and the Tanay property ensued. When the earrings uses as consideration for the sale
Dr. Cruz had later agreed to the proposal, was delivered by Dr. Cruz to the petitioner as
petitioner went to Prudential Bank once again to genuine.
take a look at the jewelry.
Hence this petition.
In the afternoon of October 23, 1984, petitioner
met Atty. Belarmino (Dr. Cruz’s lawyer) at the ISSUE
latter's residence to prepare the documents of
sale. The Attorney accordingly caused the Whether or not the deed of sale of the Tanay
preparation of a deed of absolute sale while property is null and void.
petitioner and Dr. Cruz attended to the
safekeeping of the jewelry.
RULING
Issues:
Issues:
Held:
vs.
Court of Appeals, Tenth Division, Mariano B. 1. Whether the sale made to Amores by
Nemenio and Felisa V. Nemenio, Constantino Galeos is valid?
M. Galeos and Eugenio V. Amores
2. Whether the Nemenio spouses are
purchasers in good faith?
February 9, 2000 G.R. No. 105902
FACTS: Issue 1
Baricuatro bought two lots, part of the Victoria Amores was in good faith when he bought the
Village, on installments basis from Galeos on subdivision, however, when he registered his
October 16, 1968. title he already had knowledge of the previous
sale. Such knowledge tainted his registration
with bad faith. In addition, the agreement to
collect the balance of the purchase price of the
Two months from the date of the previous sale, disputed lots from Baricuatro which presupposes
Galeos sold the entire subdivision, including the knowledge of the previous sale by Amores.
two lots, to Amores. Baricuatro was informed by
Galeos about the sale and was advised to pay
the balance of the purchase price of the two lots
directly to Amores. Under Art. 1544, the ownership of an immovable
property shall belong to the purchaser who in
good faith registers it first in the registry of
property.
Amores took possession of the subdivision and
developed the same for residential purposes. He
secured the transfer of the title to the same in
his name. Afterwards, he sold the two lots of the (Uraca vs Ca) “The second buyer must show
spouses Mariano and Felisa Nemenio. Prior to continuing good faith and innocence or lack of
the sale, Baricuatro was informed through a knowledge of the first sale until his contract
letter by Amores about the impending sale of the ripens into full ownership through prior
two lots but the former failed to respond. registration as provided by law.” This means that
Nemenio spouses demanded from Baricuatro to the good faith of the purchaser should be from
vacate the said lots but the latter refused to do the time of the perfection of the sale until up to
so. the time that he be declared the sole and true
owner of the property.
Decision of CA is REVERSED.
vs.
ISSUE:
Honorable Court of Appeals and Aznar
Brothers Realty Company.
Nachura, J.:
RULING:
FACTS:
Art. 1544 provides:
Division: En banc
ISSUE: Whether or not lower court erred in
Ponente: Justice Davide ruling that automatic rescission could not be
applied in the instant case.
Third Division
None.
PANGANIBAN, J:
A contract of repurchase arising out of a sale
where the seller did not have any title to the
property “sold” is not valid. Since nothing was
FACTS: sold, then there is also nothing to repurchase. It
is clear that Conchita no longer had any title to
the parcels of land at the time of sale because
when the mortgaged parcels of land were
Two parcels of land are in dispute and litigated foreclosed due to their non-payment of said
which was formerly owned by Victorino Nool and loan, ownership of the mortgaged lands was
Francisco Nool. Plaintiff spouses Conchita Nool consolidated to DBP. DBP gave the mortgagors
seek recovery of the aforementioned parcels of one year redemption period but this was not
land from defendants Anacleto Nool, younger exercised by them. Thereafter Anacleto
brother of Conchita. Plaintiffs alleged that they succeeded in buying the same, so that DBP’s
are the owners of subject parcels of land and titles were cancelled and new certificates of title
they bought the same from Conchita’s other were issued to him. Since, the alleged contract
brother, Victorino and Francisco. When they of repurchase was dependent on the validity of
were in dire of money, they obtained a loan from the contract of sale, it is itself void. A void
Development Bank of the Philippines (DBP) contract cannot give rise to a valid one. It is
secured by a real estate mortgage on said land likewise clear that Conchita can no longer
which was still registered in the names of deliver the object of the sale to the Anacleto
Victorino and Francisco. For their failure to pay because he has already acquired title and
said loan, the mortgage was foreclosed. That delivery thereof from the rightful owner, the DBP.
within the period of redemption, plaintiff Thus, the contract may be deemed to be
contacted defendant Anacleto to redeem it from inoperative. The right to repurchase
DBP which the latter did. Because of this, titles presupposes a valid contract of sale between
of two parcels were transferred to Anacleto. the same parties. Undisputedly, Anacleto
Anacleto agreed to buy the land for acquired title to the property from DBP and not
P100,000.00, P30,000.00 of which was paid to from the petitioners. Petition denied.
Conchita and upon payment of the balance
P14,000.00, plaintiffs were to regain possession
which amounts defendant failed to pay. Another
agreement was entered where by defendants
agreed to return to plaintiffs the land at anytime
the latter have the necessary amount. Plaintiffs
asked the defendants to return the same but
defendant refused, impelling them to come to
court for relief.
ISSUE:
RULING:
Eulalia was engaged in the business of buying
and selling large cattle. For this purpose, she
employed “biyaheros” whose primary task 1. No.
involved the procuring of large cattle with the In executing the said Deed of
financial capital provided by Eulalia and Sale, Dominador and Eulalia never
delivering the procured cattle to her for further intended the transfer of ownership of the
diposal. To secure the financial capital she subject property but to burden the same
advanced for the “biyaheros” Eulalia required with an encumbrance to secure the
them to surrender the Transfer Certificates of indebtedness incurred by Dominador on
Title of their properties and to execute the the occasion of his employment with
corresponding Deeds of Sale in her favour. Eulalia. By Eulalia’s own admission it
Dominador had been working for Eulalia as one was her customary business practice to
of her “biyaheros” for three decades so she no require her “biyaheros” to deliver to her
longer required him to post any security in the the titles to their real properties and to
performance of his duties. However, Eulalia execute in her favour the corresponding
found that he incurred shortage in his cattle deeds of sale over the said properties
procurement operation so Dominador and his as security for the money she provided.
wife Rosalia Bandong executed a Deed of Sale Hence, said transaction is an equitable
in favour of Eulalia. The subject property was mortgage, so that Eulalia has no right to
thereafter sold by Eulalia and her spouse Carlos subsequently transfer ownership of the
Raymundo to Eulalia’s grandniece Jocelyn subject property, in consonance that
which was later registered in the name of nobody can dispose of what he does not
Jocelyn and her husband Angelito Buenaobra. have. Their relationship is merely
Spouses Buenaobra instituted before the MeTC mortgagor and mortgagee rather than
an action for ejectment against Souses Bandong seller and buyer. The contention of
which they opposed on the ground that they are petitioner that Dominador ceded his
the rightful owners. Spouses Bandong instituted property to Eulalia as payment for his
an action for annulment of sale before RTC obligation for it is contrary to human
against Eulalia and Jocelyn on the ground that experience because he would first look
their consent to the sale of the subject property for means to settle his obligation and the
was vitiated by Eulalia after they were served by selling of a property on which his house
Jocelyn’s counsel to vacate. They alleged that that shelters them stand would be his
there was no sale intended but only equitable last resort.
mortgage for the purpose of securing the
shortage incurred by Dominador while employed
as “biyahero”. Jocelyn maintained that she was
a buyer in good faith and for value. The court of 2. No.
appeals reversed the RTC Decision and found
Petition is denied.
YNARES-SANTIAGO, J.:
Issue:
Respondents, on the other hand claim It is well-settled that the presence of even one of
that the sale of the property in question was the foregoing circumstances is sufficient to
brokered by their mutual acquaintance and declare a contract as an equitable mortgage, in
broker, Philip dela Torre. They thus negotiated consonance with the rule that the law favors the
for the purchase of the property, which had an least transmission of property rights.For the
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UST Faculty of Civil Law Page 81
2A SY 2009-2010
presumption of an equitable mortgage to arise
under Article 1602, two requisites must concur:
(1) that the parties entered into a contract
denominated as a sale; and (2) that their
intention was to secure an existing debt by way
of a mortgage.
CA: REVERSED.
HELD: AFFIRMED.
CA: REVERSED.
HELD: AFFIRMED.
Petition DENIED.
_______________________________________
Petition DENIED.
ISSUE:
HELD:
FACTS:
The Deed of Sale with right to
Hamilton Salak and Shirley G. Unangst repurchase is that of an equitable mortgage.
were arrested on February 02, 1997 for estafa The petition is denied for lack of merit.
and carnapping for the former’s failure to return
a car he rented from Benjamin Bautista.
Bautista demanded from Salak the sum of Php
232, 372.00 as payment for car rental fees, RATIO DECIDENDI:
other fees and incidental expenses in the
retrieval of the car. The Deed of Sale with right to
repurchase qualifies as an equitable mortgage
Salak and the respondent proposed to under Article 1602, for respondent merely
sell to the petitioner a house & lot under the secured the payment of the unpaid car rentals
Unangst’s name to amicably settle the cases and the amount advanced by petioner to Jojo
filed against them and their accounts with the Lee.
same, which the petitioner welcomed.
Furthermore, petitioner agrees to pay the Provided for are the cases to presume a
mortgage loan over the subject property to a contract to be an equitable mortgage under
certain Jojo Lee (as the property was then set to Article 1602 (NCC):
be publicly auctioned).
(1.) When the price of the sale with right to
They executed a deed of sale with right repurchase is unusually inadequate;
to repurchase within 30 days, and that the (2.) When the vendor remains in possession
respondents shall pay the taxes and utility bills as lease or otherwise;
related to the subject property. (3.) When upon or after the expiration of the
right to repurchase another instrument
Upon the failure of the respondent to extending the period of redemption or
repurchase, petitioner filed a complaint for granting a new period is executed;
specific performance or recovery of possession, (4.) When the purchaser retains for himself a
for sum of money, for consolidation of part of the purchase price;
ownership, and damages against the (5.) When the vendor binds himself to pay the
respondent. taxes on the thing sold;
(6.) In any other case where it may be fairly
After the RTC deciding in favor of the inferred that the real intention of the
petitioner, respondent now argues before the CA parties is that the transaction shall secure
to annul the deed, arguing that respondent the payment of a debt of the performance
Unangst’s consent to the deed was procured of any other obligation
under duress and assuming arguendo that the
same was freely given the same partakes the
nature of an equitable mortgage and not of sale. In the case at bar, first, the consent was
The CA ruled in favor of the respondent; hence taken in duress since it was signed by the
this petition for review on certiorari. respondent to be freed from police custody.
Following the principle, “Nel consensui tam
The petitioner argues that the deed was contrarium est quam vis ataqui mtus”
clear and unequivocal, ergo; such must be (Necessitous men are not, truly speaking, free
construed in its literal sense. men; but to answer a present emergency will
After which, LBP issued a letter of Whether the Deed of Absolute Sale
guarantee in favor of the Carloses, informing entered into by the parties was an equitable
them that Cruz’ loan has been approved, and mortgage?
subsequently a new title in the name of Cruz
was issued in lieu thereof; thus, the mortgage
was discharged.
THIRD DIVISION
FRANCISCO, J.:
Aggrieved, petitioner filed an action for
cancellation of liens, quieting of title, recovery of
possession and damages against Parangan and
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UST Faculty of Civil Law Page 109
2A SY 2009-2010
PNB in the Regional Trial Court of Iloilo City. The speaks of the intent of the parties in entering into
RTC ordered the cancellation by the Register of the contract respecting the subject matter and
Deeds of the Province of lloilo, of the the consideration thereof. If the words of the
unauthorized loans, the liens and encumbrances contract appear to be contrary to the evident
appearing in the Transfer Certificate of the land. intention of the parties, the latter shall prevail
Declaring the Deed of Pacto de Retro Sale over the former. In the case at bench, the
dated April 25, 1978 and the Deed of Definite evidence is sufficient to warrant a finding that
Sale dated May 6, 1979, both documents petitioner and Parangan merely intended to
executed by Adoracion Lustan in favor of consolidate the former's indebtedness to the
Nicolas Parangan over Lot 8069 in TCT No. T- latter in a single instrument and to secure the
561 of the Register of Deeds of lloilo, as null and same with the subject property. Even when a
void, declaring the same to be Deeds of document appears on its face to be a sale, the
Equitable Mortgage. It also ordered defendant owner of the property may prove that the
Nicolas Parangan to pay all the loans he contract is really a loan with mortgage by raising
secured from defendant PNB using thereto as as an issue the fact that the document does not
security TCT No. T-561 of plaintiff and defendant express the true intent of the parties. In this
PNB to return TCT No. T-561 to plaintiff. Also, case, parol evidence then becomes competent
Ordering defendant Nicolas Parangan to return and admissible to prove that the instrument was
possession of the land in question to the plaintiff in truth and in fact given merely as a security for
upon payment of the sum of P75,000.00 by the repayment of a loan. And upon proof of the
plaintiff to defendant Parangan which payment truth of such allegations, the court will enforce
by plaintiff must be made within ninety (90) days the agreement or understanding in consonance
from receipt of this decision; otherwise, sale of with the true intent of the parties at the time of
the land will be ordered by the court to satisfy the execution of the contract.
payment of the amount;
QUISUMBING, J.:
For their part, respondents insisted in their
Answer that on October 1981, petitioner Leonisa
Hilario sold to them the three lots in question.
FACTS Respondent Veronica Gonzales agreed to buy
the same out of pity for petitioners, whose
several properties had earlier been foreclosed
by the bank. The transaction was embodied in a
On September 4, 1991 , petitioners Crispin Deed of Absolute Sale and notarized before
Austria and Leonisa Hilario filed a civil action for Notary Public Protacio Cortez, Jr. The original
Declaration of Nullity of Document and amount in the Deed of Absolute Sale was
Reconveyance before the RTC of Malolos, P240,000. However, before the properties were
Bulacan, against herein respondents Danilo registered, petitioner Leonisa Hilario in a letter
Gonzales, Jr., and Veronica Gonzales. In their dated July 20, 1983 , requested for the
Complaint, petitioners alleged that they are the execution of another Deed of Absolute Sale
owners and possessors of three (3) parcels of indicating a price of P50,000, purportedly to
land, all in the name of petitioner Leonisa lessen the taxes and fees that they will be
Hilario. paying as the vendors.
ISSUE
G.R. No. 125233 March 9, 2000 Petitioners appealed to the Court of Appeals in
vain. The Court of Appeals affirmed the decision
Facts: Adriano and Gertrudes were married. of the Regional Trial Court, holding that since
Gertrudes acquired from the then Department of the property was acquired during the marriage of
Agriculture and Natural Resources (DANR) a Gertrudes to Adriano, the same was presumed
parcel of land. The Deed of Sale described to be conjugal property under Article 160 of the
Gertrudes as a widow. TCT No. 43100 was Civil Code. The appellate court, like the trial
issued in the name of "Gertrudes Isidro," who court, also noted that petitioner did not comply
was also referred to therein as a "widow." with the provisions of Article 1607 of the Civil
Code.
When Adriano died It did not appear that he
executed a will before his death. Petitioners are now before this Court seeking
the reversal of the decision of the Court of
Appeals.
Gertrudes then obtained a loan from petitioners,
the spouses Alexander and Adelaida Cruz, in the
amount of P15,000.00 at 5% interest, payable Issue: whether or not a co-owner may acquire
on or before 5 February 1986. The loan was exclusive ownership over the property held in
secured by a mortgage over the property common?
covered by TCT No. 43100. Gertrudes, however,
failed to pay the loan on the due date. Held: Essentially, it is the petitioner's contention
that the property subject of dispute devolved
Unable to pay her outstanding obligation, upon him upon the failure of his co-heirs to join
Gertrudes executed two contracts in favor of him in its redemption within the period required
petitioner Alexander Cruz. The first is by law. He relies on the provisions of Article
denominated as "Kasunduan" which the parties 1515 of the old Civil Code, Article 1613 of the
concede is a pacto de retro sale, granting present Code, giving the vendee a retro the right
Gertrudes one year within which to repurchase to demand redemption of the entire property.
the property. The second is a "Kasunduan ng
Tuwirang Bilihan," a Deed of Absolute Sale There is no merit in this petition.
covering the same property for the price of
P39,083.00, the same amount stipulated in the The right of repurchase may be exercised by a
"Kasunduan." For failure of Gertrudes to co-owner with respect to his share alone (CIVL
repurchase the property, ownership thereof was CODE, art. 1612; CIVIL CODE (1889), art.
consolidated in the name of Alexander Cruz. 1514.). While the records show that petitioner
redeemed the property in its entirety,
When Gertrudes Isidro died, her heirs, herein shouldering the expenses therefor, that did not
private respondents, received demands to make him the owner of all of it. In other words, it
vacate the premises from petitioners, the new did not put to end the existing state of co-
owners of the property. Private respondents ownership (Supra, Art. 489). There is no doubt
responded by filing a complaint. that redemption of property entails a necessary
expense.
On the basis of the foregoing facts, the RTC
rendered a decision in favor of private The result is that the property remains to be in a
respondents. condition of co-ownership. While a vendee a
retro, under Article 1613 of the Code, "may not
The RTC held that the land was conjugal be compelled to consent to a partial
property since the evidence presented by private redemption," the redemption by one co-heir or
respondents disclosed that the same was co-owner of the property in its totality does not
The Supreme Court held in the case of In the instant case, the offer was not a
Bodiongan vs. Court of Appeals that in order to legal and effective exercise of the right of
effect a redemption, the judgment debtor must redemption contemplated under the law, hence,
pay the purchaser the redemption price refusal of the offer by petitioner was completely
composed of the following: (1) the price which justified. The law on equity as defense, applies
the purchaser paid for the property; (2) interest only in the absence of, and never against,
of 1% per month on the purchase price; (3) the statutory law or judicial rules of procedure.
amount of any assessments or taxes which the
purchaser may have paid on the property after
the purchase; and (4) interest of 1% per month
on such assessments and taxes.
On April 30, 1981, sale bet. Ruben Jacinto, of Art. 1623. The right of legal pre-
his one-sixth pro-indiviso share, and Lee Chuy emption or redemption shall not be
was duly registered. The Bascara’s and E. exercised except within thirty days
Jacinto sold theirs to Marc Realty. The same from the notice in writing by the
was registered on Oct. 16, 1989. prospective vendor, or by the vendor,
as the case may be. The deed of sale
Lee Chuy claims it was never informed of the shall not be recorded in the Registry of
other sale. Marc Realty claims it was verbally Property unless accompanied by an
informed and was given a copy of the deed of affidavit of the vendor that he has
sale. given written notice thereof to all
possible redemptioners.
On 13 November 1989 LEE CHUY REALTY filed
a complaint for legal redemption against MARC There is actually no prescribed form for an
REALTY and consigned in court a manager's offer to redeem to be properly effected.
check for 614,400. In its Amended Answer with Hence, it can either be through a formal
Counterclaim with Motion to Dismiss, MARC tender with consignation, or by filing a
REALTY insisted that the complaint be complaint in court coupled with
dismissed for failure to state a cause of action consignation of the redemption price within
there being no allegation of prior valid tender of the prescribed period.
payment nor a prior valid notice of consignation.
A co-owner desirous of exercising his right
The trial court ruled in favour of Lee Chuy and of legal redemption is given a period of
decreed that neither a separate offer to redeem thirty (30) days from notice of the sale
nor a formal notice of consignation are within which to avail of the right to redeem.
necessary for the reason that the filing of the Under the free patent or homestead
action itself, within the period of redemption, is provisions of the Public Land Act a period
equivalent to a formal offer to redeem. of five (5) years from the date of
conveyance is provided, the five-year
period to be reckoned from the date of the
In respondents appeal to CA, CA reversed trial sale and not from the date of registration in
court’s judgment and decreed in contrary that a the office of the Register of Deeds.The
prior tender or offer of redemption is a redemption of extrajudicially foreclosed
prerequisite or precondition to the filing of an properties, on the other hand, is
action for legal redemption. Hence, the petition. exercisable within one (1) year from the
date of the auction sale as provided for in
ISSUE: W/N THE FILING OF THE ACTION Act No. 3135.
ITSELF IS EQUIVALENT TO A FORMAL
OFFER TO REDEEM
RULING:
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UST Faculty of Civil Law Page 123
2A SY 2009-2010
Primary Structures Corp. vs. Sps. Anthony
and Susan T. Valencia
Held: Petition Granted
Ponente: Vitug, J.
Issue: Interpretation of Articles 1621 and 1623 of Article 1621 of the Civil Code expresses that the
the Civil Code right of redemption it grants to an adjoining
owner of the property conveyed may be
HTP.
Issues:
Issue:
Whether or not petitioner Primary
Structures Corporation has the right of
redemption over the three parcels of land.
Ruling:
Article 1621 of the Civil Code expresses
that the right of redemption it grants to an
adjoining owner of the property conveyed may
be defeated if it can be shown that the buyer
Issue:
whether or not Caltex Philippines has a better
right over the Certificate of time deposits?
Held:
Security Bank has a better right because the
assignment of the CTDs made by Angel de la
Cruz in favor of respondent bank was embodied
When the respondent tried to collect the said From the provision of the civil code(Article
credit from the corporation. Jomero Realty 1628), petitioner, as vendor or assignor, is
Corporation refused to honor the Deed of bound to warrant the existence and legality of
Assignment because it claimed that petitioner the credit at the time of the sale or assignment.
was also indebted to it. When Jomero claimed that it was no longer
indebted to petitioner since the latter also had
The respondent filed an action for recovery of a an unpaid obligation to it, it essentially meant
sum of money before the RTC of Makati.The trial that its obligation to petitioner has been
court dismissed the complaint on the ground that extinguished by compensation. In other words,
the assignment of credit extinguished the respondent alleged the non-existence of the
obligation when they executed the Deed of credit and asserted its claim to petitioner’s
Assignment. warranty under assignment. Therefore, it
behooved on petitioner to make good its
The respondent appealed the decision to the warranty and paid the obligation.
Court of Appeals and the said court reverses the
appealed decision. Indeed by warranting the existence of the credit,
petitioner should be deemed to have ensured
Issue: the performance thereof in case the same is
Whether or not the Deed of Assignment that was later found to be inexistent. He should be held
executed extinguished the obligation of the liable to pay to respondent the amount of his
petitioner. indebtedness(Lo vs. KJS Eco-Formwork System
Phil., Inc., pp 186-188).
Ruling:
The decision of the Court of Appeals ordering
petitioner to pay the respondent the sum of