BA 166 Notes 1 – Cases

1. Herrera vs Caguiat (GR No 139173)

https://lawphil.net/judjuris/juri2007/feb2007/gr_139173_2007.html
- RTC ruled that there was a perfected contract OF sale  Final deed of sale in favor of the respondent
o 100,000 whether down payment or earnest money = perfected contract
 Article 1482: Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and
as proof of the perfection of the contract.
o Eagerness of plaintiff to pay the balance and push thru with sale
- Court of appeals initially affirmed RTC’s decision
- Basic issue: Whether the document entitled "Receipt for Partial Payment" signed by both parties earlier mentioned is a contract to sell or
a contract of sale.
- Petitioners contend that the Receipt is not a perfected contract of sale as provided for in Article 14589 in relation to Article 147510 of
the Civil Code. The delivery to them of ₱100,000.00 as down payment cannot be considered as proof of the perfection of a contract of
sale under Article 148211 of the same Code since there was no clear agreement between the parties as to the amount of consideration.
o Earnest Money = part of purchase price and proof of contract perfection
 In this case, the earnest money was given in a contract to sell. The earnest money forms part of the consideration
only if the sale is consummated upon full payment of the purchase price.21 Now, since the earnest money was
given in a contract to sell, Article 1482, which speaks of a contract of sale, does not apply.
o Agreement was for a CONDITIONAL contract of sale, aka contract to sell
o Suspensive condition: Payment of full price
o Contract to sell  title remained with Seller (no full payment yet)
- DECISION: In this case, the "Receipt for Partial Payment" shows that the true agreement between the parties is a contract to sell.

- First, ownership over the property was retained by petitioners and was not to pass to respondent until full payment of the purchase
price. Thus, petitioners need not push through with the sale should respondent fail to remit the balance of the purchase price before
the deadline on March 23, 1990. In effect, petitioners have the right to rescind unilaterally the contract the moment respondent fails
to pay within the fixed period.18

- Second, the agreement between the parties was not embodied in a deed of sale. The absence of a formal deed of conveyance is a
strong indication that the parties did not intend immediate transfer of ownership, but only a transfer after full payment of the
purchase price

- Third, petitioners retained possession of the certificate of title of the lot. This is an additional indication that the agreement did not
transfer to respondent, either by actual or constructive delivery, ownership of the property

2. Nabus vs Pacson (GR No 161318)

https://www.lawphil.net/judjuris/juri2009/nov2009/gr_161318_2009.html
- Respondent/Defendant: Pacson, Tolero
- Petitioner: Nabus
- Nabus spouses  owner of land, who entered into a Deed of Conditional Sale with Pacsons
o Before full payment of the loan, husband Nabus died. Wife and minor daughter executed a Deed of Extra Judicial Settlement
o However, the Pacsons continued paying their balance (not in acc to agreed-upon regular payments)
- Nabus approached Pacson afterwards to collect the remaining balance; Pacson agreed to pay after four days, after which they met up
again for the Execution of the Deed of Absolute Sale  since daughter was a minor, they were told to come back again after four days
with all the necessary documents. Nabuses didn’t return after that na
- When Pacsons went to the Register of Deeds of the Province, she found out that the title was still under Nabuses. Afterwards,
Nabuses sold the land to petitioner Betty Tolero
- Pacsons filed for a Complaint of Annulment of Deeds
- Acc to Nabus: Pacsons did not proceed with the Conditional sale of property, and out of her family’s economic need, Nabus sold
property to Tolero
- Acc to Tolero: She bought the property in good faith and for value
- ISSUES: Whether the sale was a contract of sale or contract to sell
- RESOLUTION:
o Sale transaction was a CONTRACT TO SELL (Conditional Sale)
o Title remains with the seller until full payment of purchase price
 Non-fulfillment of the Suspensive Condition = No obligation created
 Failure to do is not a breach of contract
o Nabus actually approached Pacson for the full payment, but did not deliver
o Nabus sale to Tolero was absolute and Valid
o Pacsons have the right to reimbursement and nominal damages
3. Reyes vs. Tuparan (GR no 188064)
http://www.lawphil.net/judjuris/juri2011/jun2011/gr_188064_2011.html
- Petitioner: Mila Reyes
- Respondent: Victoria Tuparan
- Reyes owns a commercial building. Tuparan leased a space on the building for 4000 monthly rentals. Afterward, Reyes decided to sell
the property for 6.5M to liquidate a bank loan and finance her business. Tuparan offered to conditionally buy the real property for
4.2M on installment basis and without interest to assume the bank loan
- Conditions of contract to sell was proposed to assume the mortgage to FSL bank. Bank approved given that Reyes will remain a co-
maker of the mortgage obligation.
- Executed a Deed of Conditional Sale of Real Properties (with Assumption of Mortgage)
o Sale will be cancelled if the petitioner can find a buyer of said properties for the amount of P6.5 Million within the next three
months. All payments made by the respondent to the petitioner and the bank will be refunded to Tuparan w 6% monthly
interest.
o Reyes will continue using the space occupied by her drug store without rentals for the duration of the installment payments.
o There will be a lease for 15 years in favor of Reyes for a monthly rental of P8,000 after full payment has been made by the
defendant.
o Tuparan will undertake the renewal and payment of the fire insurance policies of the 2 buildings, following the expiration of
the current policies, up to the time Tuparan has fully paid the purchase price.
- According to their Deed of Conditional Sale, Tuparan was to pay 1.2M in 3 fixed installments, but she defaulted. To make up for it, she
agreed to pay additional interest for defaulted payments, but she wasn’t able to pay parin.
- Reyes claims that she also found a buyer but Tuparan refused to cancel the transaction
- Tuparan also neglected the payment of fire insurance policy
- Thus, Reyes filed a Complaint for Rescission of Contract with Damages
- Tuparan claims that the contract was a pure and absolute contract of sale with a term period
o It could not be considered a conditional sale because the performance of the obligation therein did not depend upon a
future and uncertain event.
o Claims that because she paid off mortgage loan, rescission cannot be resorted to because parties can no longer be restored
to their original positions.
- ISSUE: IS THE CONTRACT OF CONDITIONAL SALE RESCISSIBLE?
RTC  Deed was a Conditional Sale  Contract TO sell
o Rescission is not allowed because Tuparan’s non-payment of the purchase price is not a substantial and fundamental breach
of the contract
 Tuparan was willing to settle the obligation
o Court ordered Tuparan to pay the balance plus interest within 30 days
 Failure to pay = Automatic rescission
Court of Appeals  Ruled that rescission should not be allowed
o Claimed that Tuparan’s failure to pay the balance was not a breach of contract
o Tuparan already paid a substantial amount
o RTC ruling on automatic rescission was removed
Supreme Court  Agrees that it was a Conditional Sale
o No breach of contract  Title is still with Reyes
o Substantial amount was paid  Tuparan should still be allowed to pay the balance
 Rescission is not an option  Only a slight breach in fulfillment of the obligation

4. Medina vs Collector of Internal Revenue

https://lawphil.net/judjuris/juri1961/jan1961/gr_l-15113_1961.html
- Petitioner: Medina
- Respondent: CIR and Court of Tax Appeals
- Antonio Medina and Antonia Rodriguez, when they married, did not have properties or businesses of their own. After marriage,
Medina acquired a forest to sell logs through agent
- Antonia began engaging in business as a lumber dealer, and her husband started selling to her the logs produced, which she then sold
through the same agent
- CIR considered the sale between spouses NULL AND VOID, so they were asking for the deficient amount of taxes worth PHP4553 for
sales tax between the wife and the agent
- Medina filed a Petition for Reconsideration, showing a premarital agreement of complete separation of properties, but BIR only lessened
the amounts (not reconsidered fully)
- Medina  Court of Tax Appeals
- RULING:
o That there was no premarital agreement of absolute separation
 At the time of marriage, they neither had property or businesses personally owned by them
o Assuming there was an agreement, the sales made by Antonio to his wife were fictitious, simulated, and not bona fide.
 There cannot be sales transactions between man and wife
5. Calimlim-Canullas vs Fortun (GR no 57499)
https://www.lawphil.net/judjuris/juri1984/jun1984/gr_l57499_1984.html
- Mercedes Calimlim-Canullas was married to Fernando. Fernando inherited residential land in which the petitioner and her family
resided
- Fernando abandoned his family and lived with Corazon (later convicted of concubinage)
- Fernando sold the land with the house to Corazon. Because she was unable to take possession of the property, Corazon filed a
Complaint for Quieting of Title and damages against Mercedes
- Mercedes claimed that the sale was NULL and VOID because these were conjugal properties, and she had not given her consent.
- Respondent Court:
o Principally declared Corazon owner of land and ½ of house and improvements
o Upon reconsideration, the court amended its decision  Corazon was made the owner of the LAND, but sale of the conjugal
House and improvements was VOID
- Issues:
o Whether or not the construction of a conjugal house on the exclusive property of the husband ipso facto gave the land the
character of conjugal property
o Whether or not the sale of the lot together with the house and improvements thereon was valid under the circumstances
surrounding the transaction.
- RULING:
o Buildings made at the expense of the conjugal partnership on the land belonging to only one spouse also pertains to the
partnership
 Value of the land should be reimbursed to the husband
 Thus, both land, buildings, improvements all belong to partnership, but the partnership is in debt to husband for
the value of land
 Husband is a creditor of the partnership; which should be reimbursed at the liquidation of the conjugal
partnership
 Since Mercedes is part-owner of the property, without her consent, the sale is null and void (Fernando by himself
is not capable of alienating the land)
o Sale is null and void because it is contrary to morals and public policy
 Contracts whose object or purpose is contrary to law, morals, good customs, public order and public policy are
VOID
 Contracts with unlawful cause are VOID
 Husband abandoned his family, then sold the conjugal home and derived the family of support, which was
subversive to its stability
o Law prohibits spouses from making donations and/or selling property to each other. So the sale between husband and
Corazon still would not have been valid even if they were not legally married

6. Philippine Trust Co. vs. Roldan (GR No L-8477)

- Petitioners: Philippine Trust Co (Guardian of the property of the minor, Mariano Bernardino)
- Respondents: Socorro Roldan, Francisco Hermoso, Fidel C Ramos, Emilio Cruz
- The minor inherited 17 parcels of land from his deceased father. Socorro Roldan, his step-mother, was judicially declared his legal
guardian
- Socorro filed a motion asking for authority to sell the parcels of land to her brother-in-law, apparently because Mariano wanted to
invest the money in a residential house. The court allowed the motion.
- Deed of sale was executed was Socorro
- A week after the sale to the brother in law, Socorro bought back the land. In effect, she became the new owner of the 17 parcels of land
- Subsequently, she sold 4/17 parcels to a third party, Emilio Cruz
- Phil Trust Co replaced Socorro as guardian a year later, and tried to undo the sale executed by Socorro of 4/17 parcels of land
o Claimed that she was in bad faith
o Sold and re-bought the land so that she could become the new owner of the land
- RTC  Held that sales were valid, because PTC was not able to show evidence that sales were made in bad faith
- Court of Appeals  Affirmed the RTC judgment, adding that Mariano knew what was going on and approved the transactions.
o Only clear evidence of fraud and/or bad faith (and not mere insinuations) will overcome the presumption was made in good
faith and for value
- ISSUE  Whether or not the sales to Emilio Cruz were valid
- RULING: All sales (S  BIN, BIN  S, S  EC) were NOT VALID
o Court was not convinced of Socorro’s defense (that she bought the land to preserve it until such time that Mariano can
repurchase the land together with improvements and its fruits)
o She bought the land from BIN at a much lower price than what she paid for, suspicious because she bought it one week
after the sale. Short time between both sales = assumption that she really wanted the property for herself, and not for
Mariano’s benefit
o All three contracts of sale were annulled
o Mariano is still the legal owner of the land
7. Distajo vs. CA (GR no 112954)
https://www.lawphil.net/judjuris/juri2000/aug2000/gr_112954_2000.html
- Petitioners: Distajos
- Respondents: Court of appeals and Lagrimas Distajo
- Iluminada assigned Rufo Distajo (one of her sons) to be administrator of her land
- ISSUES:
o Whether or not Iluminada exclusively owns 7 parcels of land, which should have been partitioned among her heirs  NO
o Whether or not Rufo can acquire Iluminada’s land given that he’s an administrator  YES
o Whether or not Rufo was fraudulous in obtaining consent of his mother to the sale, or forged her signature on the deeds of
sale of the parcels of land in question  NO
- RULING: Court affirms the decision of the court of appeals
o Sale transactions entered by rufo are not void
 Void unless consent of the principal was given (not an absolute prohibition)
 Deeds of the sale were signed by Iluminada

8. Rubias vs. Batiller (GR No L-35702)

https://www.lawphil.net/judjuris/juri1973/may1973/gr_35702_1973.html
- Petitioners: Domingo Rubias
- Respondents: Isaias Batiller
- Rubias bought land from his father in law. At the time, Batiller was the occupant of the land. Thus, Rubias filed a suit to recover
ownership and possession of certain portions of the lot
- Suit was denied; Claimed that Rubias’ complaint was unjustified, intended to harass Batiller, and that Batiller had a better right to
possess the land (having possessed it years even before it was sold to Rubias)
- ISSUE: Whether or not the sale of the land to Rubias violated Article 1491
- RULING: Dismissal of the complaint was held
o Rubias had no cause of action; In 1952, his father-in-law’s application for registration of the land was dismissed. So no title
of the land could actually be sold
o Batiller had better right to possess the land, having actually possessed it years before the father-in-law sold the land to
Rubias
o Even assuming Militante had the right to sell, the deed of sale executed was where Rubias was his counsel of record in a case
of land registration involving the same plot of land  Therefore VOID

9. Macariola vs. Asuncion (AM No 133-J)

https://www.lawphil.net/judjuris/juri1982/may1982/am_133_j_1982.html
- Civil case 3010  Complaint for partition of land of deceased Reyes
o Pet  daughter of Reyes
o Luz, Anacortia, Ruperto, Adel, Priscilla  legitimate children from 2nd marriage
o Lot 1184 was awarded to the 5 children  Lot D and E eventually became the property of Res Judge (sold to TRADERS
company, where Res Judge and his wife were president and secretary)
- CURRENT: Pet filed an administrative complaint against the residing judge
o In violation of Article 1491
o Disregard for judicial ethics and defiance of the law, by associating himself with TRADERS while a judge
- ISSUES:
o Whether or not there was a violation of Article 1491
o Whether or not Res Judge violated the Code of Commerce  Association with Traders
- RULING: Article 1491 was not violated, but sale was improper based on Canons of Judicial Ethics
o Prohibition applies to sale of the property which is the subject of litigation
o Sale during pendency of a case of the subject property  Prohibited
o Sale to Res Judge was made 2 years after civil case 3010
 None of the parties appealed within reglementary period
 Lot was not directly bought from plaintiffs, but from other 3rd parties
 No scheme/collusion between 5 legitimate children, Dr. Galapon, and Res Judge
 No evidence that Galapon was a middle man
 Project for partition (which was erroneously signed by each party’s counsel, not the parties themselves),
was an error signed in good faith
o However, it was unwise for the judge to purchase property which was under his litigation
 Duty to maintain trust of the citizens in the court of justice
 Must not give cause of doubt or mistrust
o Res Judge cannot be held liable under the Code of Commerce  he was not acting in his official capacity as a member of
the jury when the sale was made
10. Director of Lands vs Ababa (GR No L26096)
https://lawphil.net/judjuris/juri1979/feb1979/gr_l_26096_1979.html
- Petitioner: Director of Lands
- Respondent: Silveretra Ababa
- Case: Maximo Abarquez vs. Agripina Abarquez
o Maximo was litigating as a pauper
o His lawyer was on a contingent basis  shall receive ½ of lots 5600 and 5602 if appeal prospers
o Court of appeals: Ruled for Maximo Abarquez regarding pacto de retro, land title was given to him
- Adverse-Claimant: Lawyer of Maximo Abarquez
o Abarquez did not want to comply with obligation to lawyer, wanted to sell land to 3rd party
o Maximo conveyed a deed of absolute sale of 2/3 of the lands to Larrazabals
- ISSUES:
o Whether or not the contract for contingent fee is valid under Article 1491
o Whether or not the contract was against Canons of Professional Ethics  NO, permitted
o Whether or not the adverse claim was valid
- RULING:
1. Contract for contingent fee was valid
o Contingent fee not a sale during the pendency of the litigation (which is prohibited)
o Contingent fee takes effect only after litigation of favorable judgment
2. No violation of Ethical Laws
o No proof that his lawyer had undue influence or fraud to take advantage of Maximo
o ½ of the lots is not excessive considering the contingent nature of the fees (he would not have received anything if the case
was lost)
3. Registration of adverse claim was valid  lawyer had an interest in the land’s registration

11. Maharlika Publishing vs Tagle (GR No L-65594)

https://www.lawphil.net/judjuris/juri1986/jul1986/gr_65594_1986.html
- Petitioner: Maharlika Publishing
- Spouses Luz and Edilberto Tagle
- GSIS had a conditional contract to sell its land to Maharlika, but it was annulled because of failure to pay
- GSIS placed the property in question for bidding; Maharlika put in an imperfect bid “I bid to match the highest bid”
o Luz Tagle won the bid  Deed of conditional sale from GSIS
o However, Maharlika did not want to surrender the property
- Tagles filed a Case for Recovery of Possession with Damages  Maharlika was made to vacate the property
- Maharlika raises a new issue: that Tagle was a GSIS officer at the time of bid and sale
o Indirect participation of Tagle in the public bidding  conflict of interest
o Bid will be VOID  contrary to morals, good customs, public policy
- ISSUE: Whether or not Tagle wife can bid to acquire the property foreclosed by GSIS
- RULING: Tagle may not bid (Transaction is VOID  against public policy and public order)
o Public officers who hold positions of trust may not bid directly or indirectly to acquire properties foreclosed by their offices
and sold at public auctions

12. Mangayao vs De Guzman (GR No L24787)

https://www.lawphil.net/judjuris/juri1974/feb1974/gr_l_24787_1974.html
- Petitioner: Tumipus Mangayao
- Defendant: Hon. Doroteo De Guzman, Lasuds
- Petitioners are non-Christian Filipinos of the Subano tribe
- Filed for Recovery of Property, and Declaration of Nullity of Contract against Lasuds (Case 575)
o Decision was in their favor
- Subsequently, private respondents filed for annulment of previous decision
- Respondent Judge surprisingly issued a restraining order on subsequent petitioners (Mangayaos)
o SC Judgment must be final and executory
- ISSUE: Is the restraining order valid?
- RULING: Yes, the order is valid
o Intent of the state to guard the patrimony of illiterate non-Christians from those who want to pre on their ignorance
o Once SC judgment is final, it should have been binding on all inferior courts

13. De Leon vs CA (Gr No 88788)

https://lawphil.net/judjuris/juri1983/mar1983/gr_l_31606_1983.html
- Petitioner: Restituto De Leon
- Respondents: CA, Juanita Ramos, Maximo Perez
- De Leon is challenging the sale of land (which should be his by right of inheritance) to Ramos and Perez
- Property: Purchased by Republic of the PH for distribution among landless tenants and farmers
- In 1955, the land was sold to Manuel de Leon by the Dept of Agriculture
 o Land shall not be sold, assigned, mortgaged or transferred in 5 yrs w/o consent of Secretary of Agriculture and Natural
Resources
o Except by hereditary succession, it shall not be conveyed, transferred, or assigned to any person who is not landless and
disqualified to acquire or own land in the PH
- In 1969, lot 43 was sold to the heirs of De Leon
o Except by hereditary succession, land shall not be subdivided, sold, or transferred within 15 years of execution without
obtaining the written consent of the Governor of the Land Authority
- Respondents filed a complaint against De Leon for partition of the lands and accounting of income from the property
o Said that ½ of the land was bought from the widow of Manuel de Leon
o De Leon (Grandson of Manuel De Leon) said that the land is his by hereditary succession
 Claims that the widow of manuel de leon had no authority to convey the properties (within the prohibited period),
and thus the sale is NULL AND VOID
o Initial ruling: Tuluyang Bilihan was valid. But De Leon again filed a petition against the validity decision
- ISSUE: Whether or not “Tuluyang Bilihan” is valid  Was the sale valid?
o Argues that the sale should be void
- RULING: Tuluyang Bilihan Sale was NULL and VOID
o Maria de los Santos was the heir for the land as Manuel’s spouse
o However, as transferee of the land, she should still have obtained govt consent in her subsequent sale of the land to private
respondents through “Tuluyang Bilihan”  not a case of hereditary succession, which is the only exempted case for consent
 Transfer was still within the prohibited period
o Possession should still be to de Los Santos as the heir of the land
 Defendants should still get back the purchase price of the land with legal interest (REFUND)
 Although sale was deficient for lack of consent, it was still validly executed

14. Yap vs Grageda (GR No L-31606)

https://lawphil.net/judjuris/juri1983/mar1983/gr_l_31606_1983.html
- Petitioner: Donato Yap and Melitona Maravillas
- Respondent: Hon. Ezekiel Grageda, Jose Rico
- A Deed of absolute sale over a plot of land was executed in favor of Donato Yap, a Chinese National
o Jose Rico, respondent, was the eldest son of the seller of the land, Maximino Rico
- 15 years after the execution of the sale, Donato Yap became a Filipino Citizen
- Donato Yap later transferred some portion of the land to his son, who was a Filipino Citizen
- Respondent heir most likely filed a case to annul the sale to Donato Yap, 30 years after it was sold
- Trial Courts  Ruled that Contract of Sale is NULL AND VOID
o Even subsequent naturalization of Donato Yap should not have altered the VOID nature of the transaction
- ISSUE: Whether or not the naturalization of Donato Yap would validate the previously void sale?  YES
- RULING: Donato Yap, a naturalized citizen, was qualified to own property as a naturalized citizen
o Litigated property is now in his hands
o No public policy will be served in allowing Jose Rico to recover the land, as it is already owned by a qualified person