G.R. No.

L-10141 January 31, 1958

REPUBLIC OF THE PHILIPPINES, petitioner,

vs.

PHILIPPINE RESOURCES DEVELOPMENT CORPORATION and the COURT

OF APPEALS, respondents

FACTS:

MacarioApostol, allegedly acting for the Philippine Resources

Development Corp. (PRDC), contracted with the Bureau of Prison for the
purchase of 100 tons of designated logs, but only a small payment of the
purchase price was made. In lieu of the balance of the purchase price, he
caused to be delivered goods of the PRDC to the Bureau of Prison as payment
for the outstanding price. The Government asserted that the subject matter of
its litiga tion with Apostol was a sum of money allegedly due to the Bureau of
Prison from Apostol and not the goods reportedly turned over by Apostol in
payment of his private debt to the Bureau of Prison and the recovery of which
was sought by PRDC; and for this reason, PRDC had no legal interest in the
very subject matter in litigation as to entitle it to intervene. The Government
argued that the goods which belonged to PRDC were not connected with the
sale because “Price ... is always paid in terms of money and the supposed
payment being in kind, it is no payment at all

ISSUE: Whether PRDC had the right to intervene in the sales transaction
executed between Apostol and the Bureau of Prisons and in the suit brought
by the Government to enforce such sale.

HELD:

The Court held that the Government’s contentions were untenable,

ruling that Article 1458 provides that the purchaser may pay “a price certain
in money or its equivalent,” which means payment of the price need not be in
money. Whether the goods claimed by PRDC belong to it and delivered to the
Bureau of Prison by Apostol in payment of his account is sufficient payment
therefor, is for the court to pass upon and decide after hearing all the parties
in the case. PRDC therefore had a positive right to intervene in the case
because should the trial court credit Apostol with the value price of the
materials delivered by him, certainly PRDC would be affected adversely if its
claim of ownership to such goods were upheld.

Republic is not at all authority to say that under Article 1458, as it defi
nes a contract of sale, the term “equivalent” of price can cover other than
money or other media of exchange, since Republic covers not the perfection
stage of a contract of sale, but rather the consummation stage where the price
agreed upon (which ideally should be in money or its equivalent) can be paid
under the mutual arrangements agreed upon by the parties to the contract of
sale, even by dation in payment, as was the case in Republic.

MUNICIPALITY OF VICTORIAS, petitioner,

vs.

THE COURT OF APPEALS, NORMA LEUENBERGER and FRANCISCO

SOLIVA, respondents.

G.R. No. L-31189 March 31, 1987

FACTS:

Respondent Norma Leuenberger, married to Francisco Soliva, inherited

the whole of Lot No. 140 from her grandmother, Simeona J. Vda. de Ditching
(not from her predeceased mother Isabel Ditching). In 1952, she donated a
portion of Lot No. 140, about 3 ha., to the municipality for the ground of a
certain high school and had 4 ha. converted into a subdivision. (TSN, July 1,
1964, p. 24).
In 1963, she had the remaining 21 ha. or 208.157 sq. m. relocated by a
surveyor upon request of lessee Ramon Jover who complained of being
prohibited by municipal officials from cultivating the land. It was then that she
discovered that the parcel of land, more or less 4 ha. or 33,747 sq.m. used by
Petitioner Municipality of Victorias, as a cemetery from 1934, is within her
property which is now Identified as Lot 76 and covered by TCT No. 34546.

On January 11, 1964, Respondents filed a complaint in the Court of First

Instance of Negros Occidental, Branch 1, for recovery of possession of the
parcel of land occupied by the municipal cemetery (Record on Appeal, p. 1). In
its answer, petitioner Municipality, by way of special defense, alleged
ownership of the lot, subject of the complaint, having bought it from Simeona
Jingco Vda. de Ditching sometime in 1934 (Record on Appeal, p. 7). The lower
court decided in favor of the Municipality. On appeal Respondent appellate
Court set aside the decision of the lower court (Record on AppeaL p. 9); hence,
this petition for review on certiorari.

ISSUE:

WON the evidence presented by the petitioner municipality is sufficient to

substantiate its claim that it acquired the disputed land by means of a Deed of
Sale.

HELD:

The court held that testimonies and documentary evidence presented

sufficiently identify the land sold by the predecessors-in-interest of private
respondent. To insist on the technical description of the land in dispute would
be to sacrifice substance to form which would undoubtedly result in manifest
injustice to the petitioner.

Moreover, 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. (Civil Code Art. 1497). 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. (Kuenzle & Streiff vs. Watson & Co., 13
PhiL 26 [1909]). Delivery produces its natural effects in law, the principal and
most important of which being the conveyance of ownership, without
prejudice to the right of the vendor to payment of the price. (Ocejo, Perez &
Co. vs. International Banking Corp., 37 PhiL 631 [1918]).

Similarly, when the sale is made through a public instrument, the execution
thereof shall be equivalent to the delivery of the thing which is the object of
the contract, if from the deed, the contrary does not appear or cannot be
clearly inferred. (Civil Code Art. 1498). The execution of the public instrument
operates as a formal or symbolic delivery of the property sold and authorizes
the buyer to use the document as proof of ownership. (Florendo v. Foz, 20
PhiL 388 [1911]).

In the case at bar it is undisputed that petitioner had been in open, public,
adverse and continuous possession of the land for a period of more than thirty
years. In fact, according to the municipal treasurer there are over 1000 graves
in the cemetery.

Delta Motors Sales vs. Niu Kim Duan

G.R. No. 61043. September 2, 1992.]

Facts:

On 5 July 1975, Niu Kim Duan and Chan Fue Eng (defendants) purchased from
Delta Motor Sales
 Corporation 3 units of ‘DAIKIN’ air-conditioner all valued at P19,350.00.
The deed of sale stipulates that the defendants shall pay a down payment of
P774.00 and the balance of P18,576.00 shall be paid by them in 24
installments ; that the title to the properties purchased shall remain with
Delta Motors until the purchase price thereof is fully paid; that if any two
installments are not paid by the defendants on their due dates, the whole of
the principal sum remaining unpaid shall become due, with interest

However, after paying the amount of P6,966.00, the defendants failed to

pay at least 2 monthly installments. s of 6 January 1977, the remaining unpaid
obligation of the defendants amounted to P12,920.08. Statements of accounts
were sent to the defendants and the Delta Motors’ collectors personally went
to the former to effect collections but they failed to do so. Because of the
unjustified refusal of the defendants to pay their outstanding account and
their wrongful detention of the properties in question, Delta Motors tried to
recover the said properties extra-judicially but it failed to do so. The matter
was later referred by Delta Motors to its legal counsel for legal action.

In its verified complaint dated 28 January 1977, Delta Motors prayed for the
issuance of a writ of replevin, which the Court granted in its Order dated 28
February 1977, after Delta Motors posted the requisite bond. On 11 April
1977, Delta Motors, by virtue of the writ, succeeded in retrieving the
properties in question. The trial court promulgated its decision on 11 October
1977 ordering the defendants to pay Delta Motors the amount of P6,188.29
with a 14% per annum interest which was due on the 3 “Daikin” air-
conditioners the defendants purchased from Delta Motors under a Deed of
Conditional Sale, after the same was declared rescinded by the trial court.
They were likewise ordered to pay Delta Motors P1,000.00 for and as
attorney’s fees.

ISSUE:

WON the lower court erred in its decision to order the defendants to pay the
unpaid balance despite the fact that Delta motors already retrieved the subject
properties.
HELD:

The court held that remedies available to vendor in a sale of personal

property payable in installments The vendor in a sale of personal property
payable in installments may exercise one of three remedies, namely, (1) exact
the fulfillment of the obligation, should the vendee fail to pay; (2) cancel the
sale upon the vendee’s failure to pay two or more installments; (3) foreclose
the chattel mortgage, if one has been constituted on the property sold, upon
the vendee’s failure to pay two or more installments. The third option or
remedy, however, is subject to the limitation that the vendor cannot recover
any unpaid balance of the price and any agreement to the contrary is void
(Art. 1484).

Moreover, the 3 remedies are alternative and NOT cumulative. If the creditor
chooses one remedy, he cannot avail himself of the other two.

Thus in the case at bar, Air-conditioning units repossessed, bars action to

exact payment for balance of the price Delta Motors had taken possession of
the 3 air-conditioners, through a writ of replevin when defendants refused to
extra-judicially surrender the same. The case Delta Motors filed was to seek a
judicial declaration that it had validly rescinded the Deed of Conditional Sale.
Delta Motors thus chose the second remedy of Article 1484 in seeking
enforcement of its contract with defendants. Having done so, it is barred from
exacting payment from defendants of the balance of the price of the three air-
conditioning units which it had already repossessed. It cannot have its cake
and eat it too.
 G.R. No. 119745 June 20, 1997

POWER COMMERCIAL AND INDUSTRIAL CORPORATION, petitioner,

vs.

COURT OF APPEALS, SPOUSES REYNALDO and ANGELITA R. QUIAMBAO

and PHILIPPINE NATIONAL BANK, respondents.

FACTS:

Petitioner Power Commercial & Industrial Development Corporation entered

into a contract of sale involving a 612-sq. m. parcel of land with the spouses
Reynaldo and Angelita R. Quiambao, herein private respondents. The parties
agreed that petitioner would pay private respondents P108,000.00 as down
payment, and the balance of P295,000.00 upon the execution of the deed of
transfer of the title over the property. Further, petitioner assumed, as part of
the purchase price, the existing mortgage on the land. In full satisfaction
thereof, he paid P79,145.77 to respondent Philippine National Bank (“PNB”
for brevity).

On June 1, 1979, respondent spouses mortgaged again said land to PNB to

guarantee a loan of P145,000.00, P80,000.00 of which was paid to respondent
spouses. Petitioner agreed to assume payment of the loan. On February 15,
1980, PNB informed respondent spouses that, for petitioner’s failure to
submit the papers necessary for approval pursuant to the former’s letter
dated January 15, 1980, the application for assumption of mortgage was
considered withdrawn.

On February 19, 1982, PNB sent petitioner informing him that the loan has
been past due from last maturity with interest arrearages amounting to
P25,826.08 as of February 19, 1982. PNB further requested petitioner to remit
payments to cover interest, charges, and at least part of the principal.

On March 17, 1982, petitioner filed Civil Case No. 45217 against respondent
spouses for rescission and damages before the Regional Trial Court of Pasig,
Branch 159. Then, in its reply to PNB’s letter of February 19, 1982, petitioner
demanded the return of the payments it made on the ground that its
assumption of mortgage was never approved. On May 31, 1983, while this
case was pending, the mortgage was foreclosed. The property was
subsequently bought by PNB during the public auction.

On July 12, 1990, the trial court ruled that the failure of respondent spouses to
deliver actual possession to petitioner entitled the latter to rescind the sale,
and in view of such failure and of the denial of the latter’s assumption of
mortgage, PNB was obliged to return the payments made by the latter. On
appeal by respondent-spouses and PNB, Respondent Court of Appeals
reversed the trial court.

ISSUES

1. Whether or not there was a substantial breach of the contract between the
parties warranting rescission

2. Whether or not there was a “mistake in payment” made by petitioner,

obligating PNB to return such payments.
HELD

1. The alleged “failure” of respondent spouses to eject the lessees from the lot
in question and to deliver actual and physical possession thereof cannot be
considered a substantial breach of a condition for two reasons: first, such
“failure” was not stipulated as a condition — whether resolutory or
suspensive — in the contract; and second, its effects and consequences were
not specified either.

If the parties intended to impose on respondent spouses the obligation to

eject the tenants from the lot sold, it should have included in the contract a
provision similar to that referred to in Romero vs. Court of Appeals, where the
ejectment of the occupants of the lot sold by private respondent was the
operative act which set into motion the period of petitioner’s compliance with
his own obligation.

As stated, the provision adverted to in the contract pertains to the usual

warranty against eviction, and not to a condition that was not met. The terms
of the contract are so clear as to leave no room for any other interpretation.

2. Contrary to the contention of petitioner that a return of the payments it

made to PNB is warranted under Article 2154 of the Code, solutio indebiti
does not apply in this case. This doctrine applies where: (1) a payment is
made when there exists no binding relation between the payor, who has no
duty to pay, and the person who received the payment, and (2) the payment is
made through mistake, and not through liberality or some other cause.

In this case, petitioner was under obligation to pay the amortizations on the
mortgage under the contract of sale and the deed of real estate mortgage.
Under the deed of sale, both parties agreed to abide by any and all the
requirements of PNB in connection with the real estate mortgage. Petitioner
was aware that the deed of mortgage made it solidarily and, therefore,
primarily liable for the mortgage obligation. Therefore, it cannot be said that it
did not have a duty to pay to PNB the amortization on the mortgage.
Also, petitioner insists that its payment of the amortization was a mistake
because PNB disapproved its assumption of mortgage after it failed to submit
the necessary papers for the approval of such assumption. But even if
petitioner was a third party in regard to the mortgage of the land purchased,
the payment of the loan by petitioner was a condition clearly imposed by the
contract of sale. This fact alone disproves petitioner’s insistence that there
was a “mistake” in payment. On the contrary, such payments were necessary
to protect its interest as a “the buyer(s) and new owner(s) of the lot.”

GERARDA A. DIZON-ABILLA and the HEIRS OF RONALDO P. ABILLA v. SPS.

CARLOS
AND THERESITA GOBONSENG
577 SCRA 401 (2009

FACTS:

Gerarda A. Dizon-Abilla and the Heirs of Ronaldo P. Abilla extended to

Spouses Carlos and Theresita Gobonseng a loan in the amount of Five
Hundred Fifty Thousand Pesos (P550, 000.00). Spouses Gobonseng, however,
failed to settle the same. They then executed a ―Deed of Sale‖ covering
Seventeen (17) lots in favor of Dizon-Abilla and Heirs of Abilla. The Deed
provides an option to buy the lots within six (6) months in favor of Spouses
Gobonseng which they failed to exercise.

Dizon-Abilla and Heir of Abilla filed a case of specific performance and

damages for the expenses attendant to the ―Preparation and Registration‖ of
the Deed of Sale. The RTC of Dumaguete City ruled the option to buy was null
and void. On appeal, the Court of Appeals affirmed the trial court‘s
decision. Nineteen (19) days after the decision of the CA became final, an
―Urgent Motion to Repurchase‖ was filed to the trial court by Spouses
Gobonseng alleging that they made a tender of payment to RCBC Dumaguete
Branch, but was denied. The case was raffled to a new judge which ordered
the release of the deposited money as payment for the repurchase. Dizon-
Abilla and Heirs of Abilla filed a Petition for Review on Certiorari challenging
the trial court‘s decision allowing Spouses Gobonseng‘s repurchase.

The Supreme Court denied their petition. Dizon-Abilla and Heirs of Abilla
subsequently filed another case to the trial court asserting that they are
entitled to 2% monthly interest. The trial court ruled in favor of Spouses
Gobonseng which was affirmed by the CA. The appellate court ruled that the
case has already been closed and terminated.
ISSUE: Whether or not the Court of Appeals erred in its decision to consider
the case closed and terminated

HELD: The amount tendered by Spouses Domonseng, the correctness of

which had already been passed upon by the appellate court, has been
determined with finality.

Every litigation must necessarily come to an end. Access to courts is

guaranteed, but once a litigant‘s right has been adjudicated in a valid final
judgment of a competent court, he should not be granted an unbridled license
to go back for another try. The prevailing party should not be harassed by
subsequent suits. For, if endless litigations were to be encouraged,
unscrupulous litigations would multiply in number to the detriment of the
administration of justice.

SORIANO V. BAUTISTA 6 SCRA 946 (1962)

FACTS: Spouses Bautista are the absolute and registered owners of a parcel of
land. In May 30, 1956, the said spouses entered into an agreement entitled
Kasulatan ng Sanglaan (mortgage) in favor of spouses Soriano for the amount
of P1,800. Simultaneously with the signing of the deed, the spouses Bautista
transferred the possession of the subject property to spouses Soriano. The
spouses Soriano have, since that date, been in possession of the property and
are still enjoying the produce thereof to the exclusion of all other persons

1. Sometime after May 1956, the spouses Bautista received from spouses
Soriano the sum of P450 pursuant to the conditions agreed upon in the
document. However, no receipt was issued. The said amount was returned by
the spouses Bautista

2. In May 13, 1958, a certain Atty. Ver informed the spouses Bautista that the
spouses Soriano have decided to purchase the subject property pursuant to
par. 5 of the document which states that “…the mortgagees may purchase the
said land absolutely within the 2-year term of the mortgage for P3,900.”

3. Despite the receipt of the letter, the spouses Bautista refused to comply
with Soriano’s demand
4. As such, spouses Soriano filed a case, praying that they be allowed to
consign or deposit with the Clerk of Court the sum of P1,650 as the balance of
the purchase price of the land in question

5. The trial court held in favor of Soriano and ordered Bautista to execute a
deed of absolute sale over the said property in favor of Soriano.

6. Subsequently spouses Bautista filed a case against Soriano, asking the

court to order Soriano to accept the payment of the principal obligation and
release the mortgage and to make an accounting the harvest for the 2 harvest
seasons (1956-1957).

7. CFI held in Soriano’s favor and ordered the execution of the deed of sale in
their favor

8. Bautista argued that as mortgagors, they cannot be deprived of the right to

redeem the mortgaged property, as such right is inherent in and inseparable
from a mortgage.

ISSUE: WON spouses Bautista are entitled to redemption of subject property

HELD:

No. While the transaction is undoubtedly a mortgage and contains the

customary stipulation concerning redemption, it carries the added special
provision which renders the mortgagor’s right to redeem defeasible at the
election of the mortgagees. There is nothing illegal or immoral in this as this is
allowed under Art 1479 NCC which states: “A promise to buy and sell a
determinate thing for a price certain is reciprocally demandable. An accepted
unilateral promise to buy or to sell a determinate thing for a price certain is
binding upon the promissor if the promise supported by a consideration apart
from the price.”

In the case at bar, the mortgagor’s promise is supported by the same

consideration as that of the mortgage itself, which is distinct from the
consideration in sale should the option be exercised. The mortgagor’s promise
was in the nature of a continuing offer, non-withdrawable during a period of 2
years, which upon acceptance by the mortgagees gave rise to a perfected
contract of sale.

Furthermore, the tender of P1,800 to redeem the mortgage by spouses

Bautista was ineffective for the purpose intended. Such tender must have been
made after the option to purchase had been exercised by spouses Soriano.
Bautista’s offer to redeem could be defeated by Soriano’s preemptive right to
purchase within the period of 2 years from May 30, 1956. Such right was
availed of and spouses Bautista were accordingly notified by Soriano. Offer
and acceptance converged and gave rise to a perfected and binding contract of
purchase and sale.