Yu Tek & Co. v.

Gonzales
Facts:

A contract was executed between the herein parties, whereby Mr. Basilio Gonzales acknowledges
the receipt of P3,000 from Yu Tek & Co., and that in consideration of which he obligates himself
to deliver to the latter 600 piculs of sugar of the first and second grade, according to the result of
polarization, within 3 months. There is a stipulation providing for rescission with P1,200 penalty
in case of failure to deliver. No sugar was delivered, so plaintiff filed a case praying for the
judgment of P3,000 plus P1,200. P3,000 was awarded, thus, both parties appealed.
Issues:
(1) Whether compliance of the obligation to deliver depends upon the production in defendant’s
plantation
(2) Whether there is a perfected sale
(3) Whether liquidated damages of P1,200 should be awarded to the plaintiff

Held:
(1) There is not the slightest intimation in the contract that the sugar was to be raised by the
defendant. Parties are presumed to have reduced to writing all the essential conditions of their
contract. While parol evidence is admissible in a variety of ways to explain the meaning of written
contracts, it cannot serve the purpose of incorporating into the contract additional
contemporaneous conditions which are not mentioned at all in the writing, unless there has been
fraud or mistake. It may be true that defendant owned a plantation and expected to raise the sugar
himself, but he did not limit his obligation to his own crop of sugar. Our conclusion is that the
condition which the defendant seeks to add to the contract by parol evidence cannot be
considered. The rights of the parties must be determined by the writing itself.

(2) We conclude that the contract in the case at bar was merely an executory agreement; a
promise of sale and not a sale. At there was no perfected sale, it is clear that articles 1452, 1096,
and 1182 are not applicable. The defendant having defaulted in his engagement, the plaintiff is
entitled to recover the P3,000 which it advanced to the defendant, and this portion of the judgment
appealed from must therefore be affirmed.

(3) The contract plainly states that if the defendant fails to deliver the 600 piculs of sugar within
the time agreed on, the contract will be rescinded and he will be obliged to return the P3,000 and
pay the sum of P1,200 by way of indemnity for loss and damages. There cannot be the slightest
doubt about the meaning of this language or the intention of the parties. There is no room for
either interpretation or construction. Under the provisions of article 1255 of the Civil Code
contracting parties are free to execute the contracts that they may consider suitable, provided
they are not in contravention of law, morals, or public order. In our opinion there is nothing in the
contract under consideration which is opposed to any of these principles.

Heirs of Juan San Andres vs. Rodriguez

Juan San Andres sold a portion of his property to Rodriguez as evidenced by a Deed of Sale.
Upon his death Ramon San Andres was appointed as administrator of the property. He hired a
land surveyor and found that Rodriguez enlarged the property he bought from late Juan. Ramon
demanded form the Rodriguez to vacate the portion allegedly occupied but the latter refused
hence the present action.

Rodriguez said that the excess portion was also sold to him by late Juan the following day after
the first sale. He argued that the full payment of the whole sold lot would be effected within five
years from the execution of the formal deed of sale after a survey of the property is conducted,
as evidenced by a receipt of sale. The balance of the purchase price was consigned.

RTC ruled in favor of petitioner while CA reversed the ruling. In SC petitioner argued that there
is no certain object of the contract of sale as the lot was not described with sufficiency that there
should be another contract to finally ascertain the identity.

SC: Petition has no merit. The contract of sale has the following elements: 1. consent or
meeting of the minds, 2. determinate subject matter, 3. price certain in money.

There is no dispute that Rodriguez purchased a potion of Lot 1914-B consisting of 345
square meters. The said portion is located at the middle of the lot. Since the lot
subsequently sold is said to adjoined the previously paid lot, the subject is capable of
being determined without the need of another contract.

However, there is a need to clarify what CA said is a conditional sale. CA considered as a

condition the stipulation of the parties that the full consideration, based on a survey of
the lot, would be due and payable within 5 years from the execution of the formal deed of
sale.

It is evident in the stipulation in the receipt that the vendor late Juan sold the lot to
Rodriguez and undertook the transfer of ownership without any qualification, reservation
or condition.

In can be gainsaid from the facts that the contract of sale is absolute, and not
conditional. There is no reservation of ownership nor stipulation providing for a
unilateral rescission by either party. In fact the sale was consummated upon the delivery
of the lot to Rodriguez. Art.1477 provides that the ownership of the thing sold shall be
transferred to the vendee upon the actual or constructive deliver thereof.
The stipulation that the payment of the full consideration based on a survey shall be due
and payable in 5 years from the execution of the formal deed of sale is not a condition
which affects the efficacy of contract.
CA decision is AFFIIRMED.
Pichel v. Alonzo
Facts:
Respondent Prudencio Alonzo was awarded by the Government that parcel of land in Basilan
City in accordance with Republic Act No. 477. The award was cancelled by the Board of
Liquidators on January 27, 1965 on the ground that, previous thereto, plaintiff was proved to
have alienated the land to another, in violation of law. In 1972, plaintiff's rights to the land were
reinstated.
On August 14, 1968, plaintiff and his wife sold to defendant Luis Pichel all the fruits of the
coconut trees which may be harvested in the land in question for the period, September 15,
1968 to January 1, 1976, in consideration of P4,200.00. Even as of the date of sale, however,
the land was still under lease to one, Ramon Sua, and it was the agreement that part of the
consideration of the sale, in the sum of P3,650.00, was to be paid by defendant directly to
Ramon Sua so as to release the land from the clutches of the latter. Pending said payment
plaintiff refused to allow the defendant to make any harvest. In July 1972, defendant for the first
time since the execution of the deed of sale in his favor, caused the harvest of the fruit of the
coconut trees in the land.
Alonzo filed for the annulment of the contract on the ground that it violated the provisions of R.A.
477, which states that lands awarded under the said law shall not be subject to encumbrance or
alienation, otherwise the awardee shall no longer be entitled to apply for another piece of land.
The lower court ruled that the contract, which it held as a contract of lease, is null and void.
Issues:
(1) Whether the respondent had the right or authority to execute the "Deed of Sale" in 1968, his
award having been cancelled previously by the Board of Liquidators on January 27, 1965
(2) Whether the contract is one for lease of the land, or for sale of coconut fruits
(3) Whether the contract is an encumbrance as contemplated by R.A. 477
Held:
(1) Until and unless an appropriate proceeding for reversion is instituted by the State, and its
reacquisition of the ownership and possession of the land decreed by a competent court, the
grantee cannot be said to have been divested of whatever right that he may have over the same
property. Herein respondent is not deemed to have lost any of his rights as grantee during the
period material to the case at bar, i.e., from the cancellation of the award in 1965 to its
reinstatement in 1972. Within said period, respondent could exercise all the rights pertaining to
a grantee.
(2) A perusal of the deed fails to disclose any ambiguity or obscurity in its provisions, nor is
there doubt as to the real intention of the contracting parties. The terms of the agreement are
clear and unequivocal, hence the literal and plain meaning thereof should be observed. The
document in question expresses a valid contract of sale. It has the essential elements of a
contract of sale. The subject matter of the contract of sale in question are the fruits of the
coconut trees on the land during the years from September 15, 1968 up to January 1, 1976,
which subject matter is a determinate thing. Under Article 1461 of the New Civil Code, things
having a potential existence may be the object of the contract of sale. Pending crops which
have potential existence may be the subject matter of sale. The essential difference between a
contract of sale and a lease of things is that the delivery of the thing sold transfers ownership,
while in lease no such transfer of ownership results as the rights of the lessee are limited to the
use and enjoyment of the thing leased.
The contract was clearly a "sale of the coconut fruits." The vendor sold, transferred and
conveyed "by way of absolute sale, all the coconut fruits of his land," thereby divesting himself
of all ownership or dominion over the fruits during the seven-year period. The possession and
enjoyment of the coconut trees cannot be said to be the possession and enjoyment of the land
itself because these rights are distinct and separate from each other, the first pertaining to the
accessory or improvements (coconut trees) while the second, to the principal (the land). A
transfer of the accessory or improvement is not a transfer of the principal. It is the other way
around, the accessory follows the principal. Hence, the sale of the nuts cannot be interpreted
nor construed to be a lease of the trees, much less extended further to include the lease of the
land itself.
The grantee of a parcel of land under R.A. No. 477 is not prohibited from alienating or disposing
of the natural and/or industrial fruits of the land awarded to him. What the law expressly
disallows is the encumbrance or alienation of the land itself or any of the permanent
improvements thereon. Permanent improvements on a parcel of land are things incorporated or
attached to the property in a fixed manner, naturally or artificially. They include whatever is built,
planted or sown on the land which is characterized by fixity, immutability or immovability.
Houses, buildings, machinery, animal houses, trees and plants would fall under the category of
permanent improvements, the alienation or encumbrance of which is prohibited. The purpose of
the law is not violated when a grantee sells the produce or fruits of his land. On the contrary, the
aim of the law is thereby achieved, for the grantee is encouraged and induced to be more
industrious and productive, thus making it possible for him and his family to be economically
self-sufficient and to lead a respectable life. At the same time, the Government is assured of
payment on the annual installments on the land. We agree with herein petitioner that it could not
have been the intention of the legislature to prohibit the grantee from selling the natural and
industrial fruits of his land, for otherwise, it would lead to an absurd situation wherein the
grantee would not be able to receive and enjoy the fruits of the property in the real and complete
sense.
EDCA PUBLISHING & DISTRIBUTING CORP. vs. THE SPOUSES LEONOR and GERARDO
SANTOS, doing business under the name and style of "SANTOS BOOKSTORE," and THE
COURT OF APPEALS
G.R. No. 80298 April 26, 1990
FACTS:
Petitioner EDCA prapared 406 books amounting P8,995.65 for delivery to one Professor Jose
Cruz.
Subsequently, the latter sold 120 of the said books to the respondent.
Petitioner became suspicious when Professor Cruz, placed another order without settling his
previous account. EDCA find out that the check released by the same does not have funds and
that no Professor under the name of Jose Cruz works for De La Salle College.
Over investigation it was made known that Jose Cruz's real name is Tomas de la Peña.
Petitioners with the assistance of authority, seized without warrant the books sold to the
respondent Leonor Santos and delivered it to the petitioners.
ISSUE:
Whether or not the petitioner may seize the books from private respondent because it has been
unlawfully deprived of the books due to the dishonored check issued by the impostor.
HELD:
NO
In its extended memorandum, EDCA cites numerous cases holding that the owner who has
been unlawfully deprived of personal property is entitled to its recovery except only where the
property was purchased at a public sale, in which event its return is subject to reimbursement of
the purchase price. The petitioner is begging the question. It is putting the cart before the horse.
Unlike in the cases invoked, it has yet to be established in the case at bar that EDCA has been
unlawfully deprived of the books.
Actual delivery of the books having been made, Cruz acquired ownership over the books which
he could then validly transfer to the private respondents. The fact that he had not yet paid for
them toEDCA was a matter between him and EDCA and did not impair the title acquired by the
private respondents to the books.
It would certainly be unfair now to make the private respondents bear the prejudice sustained by
EDCA as a result of its own negligence. We cannot see the justice in transferring EDCA's loss
to the Santoses who had acted in good faith, and with proper care, when they bought the books
from Cruz.
TRINIDAD TAGATAC v. LIBERATO JIMENEZ
1957 / Ocampo / Appeal from CFI judgment
Trinidad Tagatac bought a car for $4,500 in the US, and seven months later, she brought the
car to the Philippines. When her friend Joseph Lee came to see her, he was with one Warner
Feist who posed as a wealthy man. Seeing that Tagatac seemed to believe him, he offered to
buy her car for P15,000, and Tagatac was amenable to the idea. The deed of sale was made,
Feist paid by means of a postdated check, and the car was delivered to Feist. When Tagatac
tried to encash the check, PNB refused to honor it and told her that Feist had no account in said
bank. Tagatac notified the law enforcement agencies of the estafa committed on her by Feist,
but he was not apprehended and the car disappeared.
Meanwhile, Feist managed to have the private deed of sale notarized, so he succeeded in
having the car’s registration certificate [RC] transferred in his name. He sold the car to Sanchez,
who was able to transfer the RC to his name. He offered to sell the car to defendant Liberato
Jimenez, who bought the car for P10,000 after investigating in the Motor Vehicles Office.
Jimenez delivered the car to the California Car Exchange so that it may be displayed for sale.
Masalonga offered to sell the car for Jimenez, so the car was transferred to the former, but
when Masalonga failed to sell it right away, he transferred it to Villanueva so he could sell it for
Jimenez. Tagatac discovered that the car was in California Car Exchange’s possession, so she
demanded from the manager for the delivery of the car, but the latter refused. The RC was
retransferred to Jimenez.
Tagatac filed a suit for the recovery of the car’s possession, and the sheriff, pursuant to a
warrant of seizure that Tagatac obtained, seized and impounded the car, but it was delivered
back to Jimenez upon his filing of a counter-bond. The lower court held that Jimenez had the
right of ownership and possession over the car.

JIMENEZ IS A PURCHASER IN GOOD FAITH; TAGATAC NOT ENTITLED TO

POSSESSION
RATIO
The disputable presumption that a person found in possession of a thing taken in the doing of a
recent wrongful act is the taker and the doer of the whole act does NOT apply in this case
because the car was not stolen from Tagatac, and Jimenez came into possession of the car two
months after Feist swindled Tagatac. In addition, when Jimenez acquired the car, he had no
knowledge of any flaw in the title of the person from whom he acquired it. It was only later that
he became fully aware that there were some questions regarding the car, when he filed a
petition to dissolve Tagatac’s search warrant which had as its subject the car in question.
Re: Tagatac’s allegation that the lower court ignored the judgment convicting Feist of estafa,
and that it erred in not declaring that restitution of the swindled property must follow, SHE IS
WRONG! The lower court noted that Feist was accused of estafa because of the check and
NOT because of the delivery of the car.
Her legal basis for the restitution of thing is RPC 104-51 . Now the question is WON she has
beenunlawfully deprived of her car. It seems like though, but it does not fall under the scope of
NCC 599. 2In this case, there is a valid transmission of ownership from true owner [Tagatac] to
the swindler [Feist], considering that they had a contract of sale.
As long as no action is taken by the entitled party [annulment / ratification], the contract of sale
remains valid and binding. Feist acquired defective and voidable title, but when he sold it to
Sanchez, he conferred a good title on the latter. Jimenez bought the car from Sanchez in good
faith, for value, and without notice of any defect in Sanchez’ title, so he acquired a good title to
the car. Good title means an indefeasible title to the car, even as against original owner
Tagatac. As between two innocent parties, the one whose acts made possible the injury must
shoulder the consequences thereof.
Alfonso Quijada vs CA, Regalado Mondejar (299 SCRA 695)

Facts:
· Petitioners are heirs of the late Trinidad Quijada. Trinidad inherited a 2 hectare land. April
5,1956, Trininad along with her siblings, executed a DEED OF DONATION in favor of the
Municipality of Talacogon, with condition that the land shall be used exclusively as part of the
campus of the PROPOSED Provincial High School in Talacogon.
· Despite the donation, Trininad still has possession of the land and sold 1 hectare to
Regalado. Subsequently, Trinidad sold the remaining 1 hectare to Regalado but this time
verbally, no Deed of Sale but it evidenced by receipts of payment.
· Regalado sold portions of the land to respondents.
· The Municipality was not able to finish the school thus returning the ownership of the
property to the donors.
· July 5,1988. Petitioners (heirs) filed against the respondents stating that their late mother
did sell the property. If it was true that she (Trinidad) sold the property, it would be null and void
since it was already donated to the Municipality thus the ownership is with the Municipality.
· RTC ruled in favor of the heirs, ruling that Trinidad had no capacity to sell because the
ownership of the land was already with the Municipality. CA reversed.
Issue:
W/ON the sale is valid
Held:
Yes. When the property was donated to the Municipality, the ownership was transferred to them
but wait there’s more, there was a condition. A RESOLUTORY CONDITION, tho it was not
stated in the condition on how long the condition was, it was evident that the Municipality had
intended to build the school. Again, tho not stated how long, the Municipality still gave back the
property to the donors thus the ownership was transferred. Making the sale valid since
ownership was returned.
Sumaya v. IAC
G.R. No. 68843-44, September 2, 1991
FACTS:
Raul Balantakbo inherited from two (2) different ascendants the two (2) sets of properties
subject of this case: 1) 1/3 interest of a parcel of land from his father Jose, Sr., who died on
January 28, 1945; and 2) 1/7 interest from his maternal grandmother, Luisa Bautista, who died
on November 3, 1950. On June 13, 1952, Raul died intestate, single, without any issue, and
leaving only his mother, Consuelo Joaquin Vda. deBalantakbo, as his sole surviving heir to the
subject real properties.
Vda. de Balantakbo caused the registration of an affidavit of self-adjudication of the estate of
Raul, wherein it was clearly stated that the properties were inherited by Raul from his father
Jose, Sr. and from his maternal grandmother, Luisa Bautista.
Vda de Balantakbo sold the property to Sumaya which was subsequently sold to Villa Honorio
Development Corporation. Villa then transferred and assigned its rights over the property
to Agro Industrial Coconut Cooperative.
The parties admit that the certificates of titles covering the above described properties do not
contain any annotation of its reservable character.
On March 4, 1970,five brothers in full blood of Raul Balantakbo and three surviving children of
deceased Jose Balantakbo, Jr., another brother of the first named Balantakbos, filed
civil cases to recover the subject properties which they claimed were subject to a reservatroncal
in their favor.
ISSUE:
Whether or not the affidavit of self-adjudication executed by Consuelo stating the source of the
properties thereby showing the reservable nature of the properties is sufficient annotation of the
reservable nature of the same.
RULING:
NO. The Court disagreed with the disposition of the appellate court that there is no need to
register the reservable character of the property, if only for the protection of the reservees
(reservatarios), against innocent third persons.
In this case, the affidavit of self adjudication executed by Consuelo Vda. de Balantakbo which
contained a statement that the property was inherited from a descendant, Raul, which has
likewise inherited by the latter from another ascendant, was registered with the Registry of
Property. The failure of the Register of Deeds to annotate the reservable character of the
property in the certificate of title cannot be attributed to Consuelo.
As to the sale of subject properties, the Court affirmed the order of lower courts against
plaintiff Agro Industrial Coconut Cooperative to convey the subject properties back to
reservatarios. The Court held that there is sufficient proof that the petitioners had actual
knowledge of the reservable character of the properties before they bought the same from
Consuelo as evidenced by the Deed of Sale executed by the parties.
Moreover, the Court a quo found that the petitioners and private respondents were long time
acquaintances and that they knew all along that the properties litigated in this case were
inherited by Raul Balantakbo from his father and from his maternal grandmother, and that
Consuelo Vda. deBalantakbo inherited these properties from his son Raul.

PAJUNAR v CA [175 SCRA 464 (July 19, 1989)]

Nature: Petition for certiorari to review the decision of the CA.
Ponente: J. Paras
Facts:

 Initial case for recovery of personal property with writ of replevin filed by
Arthur and Invencia Pajunat with the RTC. RTC dismissed and CA affirmed.

 1969: Respondents Mauro and Teofila Eluna bartered a 3-year old male cow for a 1-year old
female carabao in the possession of Enopia; carabao had the brand “ART” in front and hind legs.
Mauro did not or could not register the transfer to him.
 March 1980: Arthur Pajunar learned that the carabao was in the possession of Mauro. He claims
that he is the original owner of the carabao which got lost in 1974.

 Arthur demanded the return of the carabao and the delivery of its 2 offsprings.

 Mauro refused to do so despite repeated demands and filed the initial case.

 Petitioner contends: Mauro failed to establish his ownership over the mestisa carabao found in
his possession. Failure of Mauro to register in his name said carabao, constitutes a flaw in his
ownership as required by law.

 Respondent claims: he has been in possession of the carabao for more than 10 years, by
wirtue of barter with Enopia in 1969. Hence, he acquired ownership by prescription
under NCC 1132.
Issue:
WON the transfer to Mauro of the carabao by barter was valid.
Held/Ratio:
No. Although the animal was branded “ART” at the time she was acquired by Mauro, said
respondent did not or could not register the transfer to him in accordance with Sec. 529 of the
Revised Administrative Code, which requires registration in order for a transfer to be valid. Mauro
was not able to comply with this requirement. They are not possessors in good faith as a
possessor in good faith is one not aware of that there exists in his title or mode of acquisition any
flaw that invalidates it.
The duty to make a close inquiry into the certificate of registration of the carabao should have
been performed by Mauro but he failed to do so. Thus, proving, he was in bad faith when he
acquired the said carabao from Enopia.
The possession in good faith for 4 years is NOT applicable, neither can possession in bad faith
of 8 years benefit respondent, for when the owner of a movable has lost or has been illegally
deprived of his property, he can recover the same without need to reimburse the possessor (NCC
559).
Art. 716 cannot apply since it evidently refers to a possessor in bad faith.
Dispositive: Decision reversed and set-aside.

67 Phil. 739
[ G.R. No. 45969, May 04, 1939 ]
TAN TIAH (ALIAS T. SUYA), PETITIONER, VS. YU JOSE (ALIAS JOSE Y. NAVARRO),
RESPONDENT.
This is an appeal by way of certiorari taken by Tan Tiah (alias T. Suya), wherein he prays, on
the grounds alleged therein, for the review of the decision rendered in the case by the Court of
Appeals reversing: that of the Court of First Instance of Leyte, for the reversal thereof, and for
the affirmance of the decision of said Court of First Instance.
As grounds for the allowance of the appeal, petitioner assigns the following alleged errors of law
committed by said Court of Appeals in its decision, to wit:
"1. The Court of Appeals erred in finding in its decision, subject of the present petition for
certiorari, that the 5th paragraph of the contract of lease Exhibit A establishes rights for the
petitioner and for the respondent, which are antagonistic and, therefore, unenforceable by
action.
"2. The Court of Appeals likewise erred in finding in its decision that the promise, if any, made
by respondent to sell to petitioner the land in question is not enforceable by action for lack of a
price.
"3. The Court of Appeals also erred in finding in its decision that the 5th paragraph of the
contract of lease entered into by petitioner and respondent does not state two promises to buy
and to sell which are mutually demandable.
"4. Lastly, the Court of Appeals erred in holding that the herein petitioner has no cause of action
against defendant-respondent."
On May 14, 1923 petitioner and respondent entered into a contract of lease in the fifth clause of
which, pertinent to the question at issue, provides:
"5th. That upon termination of the period of this contract, namely, ten years, the lessor shall
have the option to buy the building or improvement which the lessee may have built upon the
lots, reimbursing the latter ninety per cent (90%) of the original net cost of the construction; but
should the lessor be unable or unwilling to buy said building or improvement, the income or rent
derived therefrom shall be equally divided between said lessor and lessee, and the latter shall
no longer have the obligation to pay the rent agreed upon for the lots in the second paragraph of
this contract; provided, however, that the present contract, with the modification just mentioned,
with respect to the income from the building and the rent from the lot, shall continue in force until
the lessor buys the building or improvement or the lessee buys the land."
The judgment rendered by the Court of First Instance of Leyte and reversed by the Court of
Appeals, which absolved the defendant is as follows:
"Wherefore, judgment is rendered sentencing defendant to buy the house of plaintiff or to sell to
plaintiff the land on which the latter's house is. built. Each of the parties must submit the name
of a person to be appointed commissioner for the assessment and appraisal of the land on
which plaintiff's house is built.
"Defendant is sentenced to pay the costs of the suit."
The main question to be decided in this appeal is whether plaintiff, as lessee, has a right, by
virtue of the aforecited fifth clause of the contract of lease, to compel defendant, as lessor, to
sell to him the land on which he built hid house in accordance with said contract.
It will be seen that the lessor is given the preference of buying the building erected on the
leased land at a price equivalent to 90 per cent of the original net cost of the construction upon
the termination of the ten years fixed in the contract as the duration of the lease. As ten years
have elapsed and the lessor has not exercised his right to buy the building, and has no intention
to do so, may the lessee compel the lessor to sell to him the leased land? The lessee is not
given the option to buy the land. The grant of said right may not be inferred from the conditional
clause of paragraph 5 and from paragraph 4 of the contract since neither in the conditional
clause aforecited nor in the fourth paragraph of the contract is the lessor bound to sell the
questioned land to the lessee. Furthermore, in the said conditional clause the price which the
lessee would have to pay should he decide to buy the land is not fixed. Article 1445 of the Civil
Code provides that "By the contract of purchase and sale one of the contracting parties binds
himself to deliver a determinate thing and the other to pay a certain price therefor in money or in
something representing the same." According to article 1451, "a promise to sell or buy, when
there is an agreement as to the thing and the price, entitles the contracting parties reciprocally
to demand the fulfillment of the contract." And article 1447 of the same Code provides that in
order that the price may be considered certain, it shall be sufficient that it be so in relation to
some certain thing, or that its determination be left to the judgment of some particular person,
and should the latter be unable or unwilling to fix the price, the contract shall be inoperative. And
according to article 1449 of the same Code, the designation of the price can never be left to the
determination of one of the contracting parties.
As we have said, a price certain which the lessee should pay the lessor for the land in case he
should desire to buy it has not been fixed; neither has anything which may have a definite value
or which may serve as a basis for the fixing of the price been designated. Also, no determinate
person has been named to fix the price.
The price of the leased land not having been fixed and the lessor not having bound himself to
sell it, the essential elements which give life to the contract are lacking. It follows that the lessee
cannot compel the lessor to sell the leased land to him.
Having arrived at this conclusion, we do not find sufficient grounds for reversing the decision
appealed from, which is hereby affirmed, with costs against the appellant.
Imperial, Diaz, Laurel, and Concepcion, JJ., concur.

TOYOTA SHAW, INC. vs. CA

G.R. No. L-116650 May 23, 1995
Facts: Luna L. Sosa wanted to purchase a Toyota Lite Ace. It was difficult to find a dealer with an
available unit for sale, but upon contacting Toyota Shaw, he was told that there was an available
unit. Sosa, and his son, Gilbert went to the Toyota office at Shaw Boulevard, Pasig, Metro Manila
and met Popong Bernardo, who was a sales representative of Toyota. Sosa in- formed Bernardo
that the needed the Lite Ace not later than June 17, 1989 because it is to be used by his family,
and a balikbayan guest, in going to Marinduque where he would be celebrating his birthday on
the 19th of June. He also told Bernardo that if he won’t be arriving in his hometown with a new
car, he will become a “laughing stock.” Bernardo assured Sosa that a unit will already be available
for pick up on June 17, 1989, at 10:00 AM. Bernardo then signed a document which had the
heading “Agreements Between Mr. Sosa and Popong Bernardo of Toyota Shaw, Inc.” Sosa and
his son deliv- ered the down payment of P100,000 the next day, and Bernardo accom- plished a
printed Vehicle Sales Proposal No. 928 on which Gilbert signed. Bernardo, on June 17, called
Gilbert to inform him that the vehicle was not available for pick up at 10:00 AM, but instead, it will
be ready by 2:00 PM. Sosa and Gilbert met Bernardo, and was informed that the Lite Ace was
be- ing readied for delivery. Subsequently, Sosa was also informed that B.A. Fi- nance Corp.
denied to finance his credit financing application. Sosa, upon it being clear that the Lite Ace was
not going to be delivered to him, demanded for the refund of his down payment. Toyota refused
to accede to Sosa’s de- mand, and further alleged that they did not enter into a contract of sale
with Sosa.

Issue: Whether or not the executed VSP, which was signed by the Toyota’s sales representative,
a perfected contract of sale binding upon the parties.

Held: No. It is not a contract of sale. The provision on the down payment of P100,000 made no
specific reference to a sale of a vehicle. If it was intended for a contract of sale, it could only refer
to a sale on installment basis as the VSP confirmed. But, nothing was mentioned about the full
purchase price and the manner the installments are to be paid. A definite agreement on the
manner of payment of the price is an essential element in the formation of a binding and
enforceable contract of sale. Moreover, there was an absence of the meeting of the minds
between Sosa and Toyota, and Sosa did not even sign it. Futhermore, Sosa was not dealing with
Toyota but with Bernardo and that the latter did not misrepresent that he had the authority to sell
a Toyota Vehicle. The VSP was a mere proposal and it created no demandable right in favor of
Sosa for the delivery of the vehicle to him.

Navarra v. Planters Development Bank

Navarras obtained a loan of P1,200,000.00 from Planters Bank and, by way of security herefor,
executed a deed of mortgage over their aforementioned five (5) parcels of land.
Unfortunately, the couple failed to pay their loan obligation. Hence, Planters Bank foreclosed on
the mortgage.
On the other hand, RRRC, a real estate company owned by the parents of Carmelita Bernardo
Navarra, obtained a loan from Planters Bank secured by a mortgage and was able to negotiate
with the Bank for the redemption of its foreclosed properties by way of a concession the foreclosed
properties of RRRC were sold to third persons whose payments therefore, directly made to the
Bank, were in excess by P300,000.00 for the redemption price. In the meantime, Jorge Navarra
sent a letter to Planters Bank, proposing to repurchase the five (5) lots earlier auctioned to the
Bank, with a request that he be given until August 31, 1985 to pay the down payment of
P300,000.00 which will come from the excess payment of P300,000.00 in connection with the
redemption made by the RRRC. Because the amount of P300,000.00 was sourced from a
different transaction between RRRC and Planters Bank and involved different debtors, the Bank
required Navarra to submit a board resolution from RRRC authorizing him to negotiate for and its
behalf and empowering him to apply the excess amount of P300,000.00 in
RRRC's redemption payment as down payment for the repurchase of the Navarras' foreclosed
properties. However, Navarra failed to comply and so the bank informed them that they could not
proceed with the documentation of the proposed repurchase of the foreclosed properties on
account of his non - compliance with the Bank's request for the submission of the needed board
resolution of RRRC.
Issue : Was there a perfected contract of sale?
While the letters of Navarras indicate the amount of P300,000.00 as down payment, they are,
however, completely silent as to how the succeeding installment payments shall be made. At
most, the letters merely acknowledge that the down payment of P300,000.00 was agreed upon
by the parties. However, this fact cannot lead to the conclusion that a contract of sale had been
perfected. Quite recently, this Court held that before a valid and binding contract of sale can exist,
the manner of payment of the purchase price must first be established since the agreement on
the manner of payment goes into the price such that a disagreement on the manner of payment
is tantamount to a failure to agree on the price. Too, the Navarras' letter/offer failed to specify a
definite amount of the purchase price for the sale/repurchase of the subject properties. It merely
stated that the "purchase price will be based on the redemption value plus accrued interest at the
prevailing rate up to the date of the sales contract." The ambiguity of this statement only bolsters
the uncertainty of the Navarras' so-called "offer" for it leaves much rooms for such questions, as:
what is the redemption value? what prevailing rate of interest shall be followed: is it the rate
stipulated in the loan agreement or the legal rate? when will the date of the contract of sale be
based, shall it be upon the time of the execution of the deed of sale or upon the time when the
last installment payment shall have been made? To our mind, these questions need first to be
addressed, discussed and negotiated upon by the parties before a definite purchase price can be
arrived at. Again, the offer was not clear insofar as concerned the exact number of years that will
comprise the long-term payment scheme. As we see it, the absence of a stipulated period within
which the repurchase price shall be paid all the more adds to the indefiniteness of the Navarras'
offer. Clearly, then, the lack of a definite offer on the part of the spouses could not possibly serve
as the basis of their claim that the sale/repurchase of their foreclosed properties was perfected.
The reason is obvious: one essential element of a contract of sale is wanting: the price certain.
There can be no contract of sale unless the following elements concur: (a) consent or meeting of
the minds; (b) determinate subject matter; and (c) price certain in money or its equivalent. Such
contract is born or perfected from the moment there is a meeting of minds upon the thing which
is the object of the contract and upon the price. Here, what is dramatically clear is that there was
no meeting of minds vis-a-vis the price, expressly or impliedly, directly or indirectly.

G.R. No. L-8169 December 29, 1913ANTONIO M. A. BARRETTO,plaintiff-appellant,vs.JOSE

SANTA MARINA,defendant-appellee.TORRES,J.:
FACTS:
The plaintiff, Antonio M.A. Barretto, was an agent and manager of Jose Santa Marina, the
defendant, a resident of Spain and the owner and proprietor of the business known as the La
Insular Cigar and Cigarette Factory. The petitioner alleged that the defendant, without reason,
justification, or pretext and in violation of the contract of agency, summarily and arbitrarily
dispensed with the plaintiff's services and removed him from the management of the business.
The evidence showed that the plaintiff Barretto's renunciation or registration of the position he
held as agent and manager of the said factory was freely and voluntarily made by him on the
occasion of the insolvency and disappearance of a Chinese man who had bought from the factory
products and, without paying this large debt, disappeared and has not been seen since. Barretto
sent a letter of resignation to Santa Marina and Santa Marina did not immediately reply and tell
him of his decision on the matter. After several months, Barretto was informed that the power
conferred upon him by the defendant has been revoked and the latter had already appointed J.
McGavin to substitute him.
ISSUE: Whether the contract of agency was validly revoked.
RULING:
Yes, the contract of agency between the plaintiff and the defendant is validy revoked. Barretto
was not really dismissed or removed by Santa Marina. Rather, Barretto resigned as the
defendants agent and manager as evidenced by the letter he sent to the defendant. Article 1733
of the civil Code, applicable to the case at bar, according to the provisions of article 2 of the Code
of Commerce, prescribes: "The principal may, at his will, revoke the power and compel the agent
to return the instrument containing the same in which the authority was given."Article 279 of the
Code of Commerce provides: "The principal may revoke the commission intrusted to an agent at
any stage of the transaction, advising him thereof, but always being liable for the result of the
transactions which took place before the latter was informed of the revocation."1awphi1.netThe
contract of agency can subsist only so long as the principal has confidence in his agent, because,
from the moment such confidence disappears and although there be a fixed period for the
exercise of the office of agent, the principal has a perfect right to revoke the power that he had
conferred upon the agent owing to the confidence he had in him and which for sound reasons
had ceased to exist. The fixing of the period by the Courts in their contracts cannot be invoked
since the rights and obligations existing between Barretto and Santa Marina are absolutely
different from those to which it refers, for, according to article 1732 of the Civil Code, agency is
terminated:1. By revocation.2. By withdrawal of the agent.3. By death, interdiction, bankruptcy, or
insolvency of the principal or of the agent. It is not incumbent upon the courts to fix the period
during which contracts for services shall last. Their duration is understood to be implicity fixed, in
default of express stipulation, by the period for the payment of the salary of the employee. Article
302 of the Code of Commerce reads thus: In cases in which no special time is fixed in the
contracts of service, any one of the parties thereto may dissolve it, advising the other party thereof
one month in advance. The factor or shop clerk shall be entitled, in such case, to the salary due
for one month. From the mere fact that the principal no longer had confidence in the agent, he is
entitled to withdraw it and to revoke the power he conferred upon the latter, even before the
expiration of the period of the engagement or of the agreement made between them; but, in the
present case, once it has been shown that, between the deceased Joaquin Santa Marina and the
latter's heir, now the defendant, on the one hand, and the plaintiff Barretto, on the other, no period
whatever was stipulated during which the last-named should hold the office and manager of the
said factory, it is unquestionable that the defendant, even without good reasons, could lawfully
revoke the power conferred upon the plaintiff and appoint in his place Mr. McGavin, and thereby
contracted no liability whatever other than the obligation to pay the plaintiff the salary pertaining
to one month and some odd days.
MELDA ONG, ET AL., petitioners,
vs.
ALFREDO ONG, ET AL., respondents.
G.R. No. L-67888 October 8, 1985
Facts:
On February 25, 1976 Imelda Ong, for and in consideration of One (P1.00) Peso and other
valuable considerations, executed in favor of private respondent Sandra Maruzzo, then a minor,
a Quitclaim Deed whereby she transferred, released, assigned and forever quit-claimed to Sandra
Maruzzo, her heirs and assigns, all her rights, title, interest and participation in the ONE-HALF
(½) undivided portion of the parcel of land.
On November 19, 1980, Imelda Ong revoked the aforesaid Deed of Quitclaim and, thereafter, on
January 20, 1982 donated the whole property described above to her son, Rex Ong-Jimenez.
Sandra Maruzzo, through her guardian (ad litem) Alfredo Ong, filed with the Regional Trial Court
of Makati, Metro Manila an action against petitioners, for the recovery of ownership/possession
and nullification of the Deed of Donation over the portion belonging to her and for Accounting.
Petitioners claimed that the Quitclaim Deed is null and void inasmuch as it is equivalent to a Deed
of Donation, acceptance of which by the donee is necessary to give it validity. Further, it is averred
that the donee, Sandra Maruzzo, being a minor, had no legal personality and therefore incapable
of accepting the donation.
The trial court rendered judgment in favor of respondent Maruzzo and held that the Quitclaim
Deed is equivalent to a Deed of Sale and, hence, there was a valid conveyance in favor of the
latter.
Petitioners appealed to the respondent Intermediate Appellate Court. They reiterated their
argument below and, in addition, contended that the One (P1.00) Peso consideration is not a
consideration at all to sustain the ruling that the Deed of Quitclaim is equivalent to a sale.
Respondent Intermediate Appellate Court promulgated its Decision affirming the appealed
judgment and held that the Quitclaim Deed is a conveyance of property with a valid cause or
consideration; that the consideration is the One (P1.00) Peso which is clearly stated in the deed
itself; that the apparent inadequacy is of no moment since it is the usual practice in deeds of
conveyance to place a nominal amount although there is a more valuable consideration given.
Issue:
Whether a Quitclaim Deed is equivalent to a Deed of Sale
Held:
A careful perusal of the subject deed reveals that the conveyance of the one- half (½) undivided
portion of the above-described property was for and in consideration of the One (P 1.00) Peso
and the other valuable considerations (emphasis supplied) paid by private respondent Sandra
Maruzzo through her representative, Alfredo Ong, to petitioner Imelda Ong. Stated differently, the
cause or consideration is not the One (P1.00) Peso alone but also the other valuable
considerations.
The execution of a deed purporting to convey ownership of a realty is in itself prima facie evidence
of the existence of a valuable consideration, the party alleging lack of consideration has the
burden of proving such allegation.
Even granting that the Quitclaim deed in question is a donation, Article 741 of the Civil Code
provides that the requirement of the acceptance of the donation in favor of minor by parents of
legal representatives applies only to onerous and conditional donations where the donation may
have to assume certain charges or burdens (Article 726, Civil Code).
The donation to an incapacitated donee does not need the acceptance by the lawful
representative if said donation does not contain any condition. In simple and pure donation, the
formal acceptance is not important for the donor requires no right to be protected and the donee
neither undertakes to do anything nor assumes any obligation. The Quitclaim now in question
does not impose any condition.
Bad faith and inadequacy of the monetary consideration do not render a conveyance inexistent,
for the assignor’s liberality may be sufficient cause for a valid contract (Article 1350, Civil Code),
whereas fraud or bad faith may render either rescissible or voidable, although valid until annulled,
a contract concerning an object certain entered into with a cause and with the consent of the
contracting parties, as in the case at bar.”
WHEREFORE. the appealed decision of the Intermediate Appellate Court should be, as it is
hereby AFFIRMED, with costs against herein petitioners.

DE LEON v. SALVADOR GR No. L-30871, December 28, 1970

FACTS:
Eusebio Bernabe’s (judgment debtor) properties were garnished and sold in an auction sale to
satisfy ajudgment in favor of EnriqueDe Leon. The highest bidder for the total sum of P30,194.00
was Aurora de Leon, sister of judgmentcreditor. Bernabe was given a redemption period of 1 year
commencing from thetime of the auction sale. However, instead of redeeming his properties, he
filed a case to annul theauction sale on the ground of gross inadequacy of price and ordered a
new auction sale. Heclaimed that his properties can cost around P400,000.00. The court of Judge
Serafin Salvador issued a writ of injunction against respondents andsummarily granted the
motions of Bernabe.
ISSUE:
WON the auction sale be annulled on the ground of inadequacy of price.
HELD:
No.In ordinary sales, by reasons of equity, a transaction may be invalidated on the ground
ofinadequacy of price. In forced sales, as when a sale is made at a public auction, the owner has
theright to redeem. When there is a right to redeem, inadequacy of price is immaterial because
judgmentdebtor can better acquire the property or also sell his right to redeem and thus recover
the loss heclaims to have suffered by reason of the price obtained from the auction sale.
Heirs of Ureta v. Heirs of Ureta
G.R. No. 165748, 14 September 2011
FACTS:
Alfonso Ureta was financially well-off and owned several properties. He begot fourteen children,
including herein petitioners and Policronio, father of respondents. For taxation purposes, Alfonso
sold, without monetary consideration, several parcels of land to four of his children, including
Policronio. Alfonso continued to own, possess and enjoy the lands and their produce. Upon his
death, Liberato acted as the administrator. The Fernandez Family rented the portion transferred
to Policronio. But even after the fact, the tenants never turned over the produce of the lands to
Policronio or any of this heirs, but to Alfonso and, later, to the administrators of his estate. When
Policronio died, except for a portion of one of the parcels of land, neither Policronio nor his heirs
ever took possession of the subject lands. Alfonso’s heirs executed a Deed of Extra-Judicial
Partition,8 which included all the lands that were covered by the four (4) deeds of sale that were
previously executed by Alfonso for taxation purposes. Conrado, Policronio’s eldest son,
representing the Heirs of Policronio, signed the Deed of Extra-Judicial Partition in behalf of his
co-heirs. Heirs of Policronio allegedly learned about the Deed of Extra-Judicial Partition involving
Alfonso’s estate when it was published in the July 19, 1995 issue of the Aklan Reporter. The Heirs
of Policronio averred that the extra-judicial partition is void because Conrado signed the same
without written authority form his siblings.
ISSUE:
WON Conrado Ureta’s lack of capacity to give his co-heirs’ consent to the Extra-Judicial Partition
rendered the same voidable.
RULING:
No. Article 1390 is not applicable in this case. Article 1390 (1) contemplates the incapacity of a
party to give consent to a contract. What is involved in the case at bench though is not Conrado’s
incapacity to give consent to the contract, but rather his lack of authority to do so. Instead, Articles
1403 (1), 1404, and 1317 of the Civil Code find application to the circumstances prevailing in this
case. The Deed of Extrajudicial Partition and Sale is not a voidable or an annullable contract
under Article 1390 of the New Civil Code. Article 1390 renders a contract voidable if one of the
parties is incapable of giving consent to the contract or if the contracting party’s consent is vitiated
by mistake, violence, intimidation, undue influence or fraud. Therefore, Conrado’s failure to obtain
authority from his co-heirs to sign the Deed of Extra-Judicial Partition in their behalf did not result
in his incapacity to give consent so as to render the contract voidable, but rather, it rendered the
contract valid but unenforceable against Conrado’s co-heirs for having been entered into without
their authority.