Extinguishment of Sale
Quiroga vs Parsons
G.R. No. L-11491
Facts: On Jan 24, 1911, plaintiff and the respondent entered into a
contract making the latter an “agent” of the former. The contract
stipulates that Don Andres Quiroga, here in petitioner, grants
exclusive rights to sell his beds in the Visayan region to J. Parsons.
The contract only stipulates that J.Parsons should pay Quiroga
within 6 months upon the delivery of beds.
Quiroga files a case against Parsons for allegedly violating the
following stipulations: not to sell the beds at higher prices than
those of the invoices; to have an open establishment in Iloilo; itself
to conduct the agency; to keep the beds on public exhibition, and to
pay for the advertisement expenses for the same; and to order the
beds by the dozen and in no other manner. With the exception of
the obligation on the part of the defendant to order the beds by the
dozen and in no other manner, none of the obligations imputed to
the defendant in the two causes of action are expressly set forth in
the contract. But the plaintiff alleged that the defendant was his
agent for the sale of his beds in Iloilo, and that said obligations are
implied in a contract of commercial agency. The whole question,
therefore, reduced itself to a determination as to whether the
defendant, by reason of the contract hereinbefore transcribed, was
a purchaser or an agent of the plaintiff for the sale of his beds.
Issue: Whether the contract is a contract of agency or of sale.
Held: In order to classify a contract, due attention must be given to
its essential clauses. In the contract in question, what was essential,
as constituting its cause and subject matter, is that the plaintiff was
to furnish the defendant with the beds which the latter might order,
at the price stipulated, and that the defendant was to pay the price
in the manner stipulated. Payment was to be made at the end of
sixty days, or before, at the plaintiff’s request, or in cash, if the
defendant so preferred, and in these last two cases an additional
discount was to be allowed for prompt payment. These are precisely
the essential features of a contract of purchase and sale. There was
the obligation on the part of the plaintiff to supply the beds, and, on
the part of the defendant, to pay their price. These features exclude
the legal conception of an agency or order to sell whereby the
mandatory or agent received the thing to sell it, and does not pay its
price, but delivers to the principal the price he obtains from the sale
of the thing to a third person, and if he does not succeed in selling
it, he returns it. By virtue of the contract between the plaintiff and
the defendant, the latter, on receiving the beds, was necessarily
obliged to pay their price within the term fixed, without any other
consideration and regardless as to whether he had or had not sold
the beds.
In respect to the defendant’s obligation to order by the dozen, the
only one expressly imposed by the contract, the effect of its breach
would only entitle the plaintiff to disregard the orders which the
defendant might place under other conditions; but if the plaintiff
consents to fill them, he waives his right and cannot complain for
having acted thus at his own free will.
For the foregoing reasons, we are of opinion that the contract by
and between the plaintiff and the defendant was one of purchase
and sale, and that the obligations the breach of which is alleged as a
cause of action are not imposed upon the defendant, either by
agreement or by law.
Sanchez v. Rigos
G.R. No. L-25494, 14 June 1972
FACTS: Nicolas Sanchez and Severina Rigos executed an instrument
entitled “Option toPurchase” wherein Mrs. Rigos agreed, promised
and committed to sell to Mr. Sancheza parcel of land for the amount
of P1, 510. 00 within two years from the date of the instrument,
with the understanding that the said option shall be deemed
terminated and elapsed if Mr. Sanchez shall fail to exercise his right
to buy the property within the stipulated period.
Extinguishment of Sale
Mrs. Rigos agreed and committed to sell and Mr. Sanchez agreed
and committed to buy. But there is nothing in the contract to
indicate that her agreement, promise and undertaking is supported
by a consideration distinct from the price stipulated for the sale of
the land. Mr. Sanchez has made several tenders of payment in the
said amount within the period before any withdrawal from the
contract has been made by Mrs. Rigos, but were rejected
nevertheless.
ISSUE: Can an accepted unilateral promise to sell without
consideration distinct from the price be withdrawn arbitrarily?
RULING: No. An accepted promise to sell is an offer to sell when
accepted becomes a contract of sale.
Since there may be no valid contract without a cause or
consideration, the promisor is not bound by his promise and may,
accordingly, withdraw it. Pending notice of its withdrawal, his
accepted promise partakes, however, of the nature of an offer to
sell which, if accepted, results in a perfected contract of sale. This
view has the advantage of avoiding a conflict between Articles 1324
– on the general principles on contracts – and 1479 – on sales – of
the Civil Code. Article 1324 – When the offeror has allowed the
offeree a certain period to accept, the offer may be withdrawn at
any time before acceptance by communicating such withdrawal,
except when the option is founded upon a consideration, as
something paid or promised.
FIRST OPTIMA REALTY CORPORATION v. SECURITRON SECURITY
SERVICES, GR No. 199648, 2015-01-28
Facts: Petitioner First Optima Realty Corporation is a domestic
corporation engaged in the real estate business. It is the registered
owner of a 256-square meter parcel of land with improvements
located in Pasay City, covered by Transfer Certificate of Title No.
125318 (the... subject property).
Respondent Securitron Security Services, Inc., on the other hand, is
a domestic corporation with offices located beside the subject
property. Looking to expand its business and add to its existing
offices, respondent through its General Manager, Antonio Eleazar
(Eleazar) sent a December 9, 2004 Letter[7] addressed to petitioner
through its Executive Vice-President, Carolina T. Young (Young)...
offering to purchase the subject property at P6,000.00 per square
meter.
Sometime thereafter, Eleazar personally went to petitioner's office
offering to pay for the subject property in cash, which he already
brought with him. However, Young declined to accept payment,
saying that she still needed to secure her sister's advice on the...
matter.
On February 4, 2005, respondent sent a Letter[12] of even date to
petitioner. It was accompanied by Philippine National Bank Check
No. 24677 (the subject check), issued for P100,000.00 and made
payable to petitioner.
Issues: THE HONORABLE COURT OF APPEALS ERRED ON A
QUESTION OF LAW WHEN IT RULED THAT THE MONEY
RESPONDENT DELIVERED TO PETITIONER WAS EARNEST MONEY
THEREBY PROVIDING A PERFECTED CONTRACT OF SALE.
Ruling: These negotiations culminated in a meeting between Eleazar
and Young whereby the latter declined to... enter into an agreement
and accept cash payment then being tendered by the former.
Instead, Young informed Eleazar during said meeting that she still
had to confer with her sister and petitioner's board of directors; in
Extinguishment of Sale
turn, Eleazar told Young that respondent shall await... the necessary
approval.
Thus, the trial and appellate courts failed to appreciate that
respondent's offer to purchase the subject property was never
accepted by the petitioner at any instance, even after negotiations
were held between them
In a manner of speaking, respondent cannot fault petitioner for not
making a refund since it is... equally to blame for making such
payment under false pretenses and irregular circumstances, and
with improper motives. Parties must come to court with clean
hands, as it were.
Principles:
In a potential sale transaction, the prior payment of earnest money
even before the property owner can agree to sell his property is
irregular, and cannot be used to bind the owner to the obligations
of a seller under an otherwise perfected contract of sale;... to cite a
well-worn cliché, the carriage cannot be placed before the horse.
The property owner-prospective seller may not be legally obliged to
enter into a sale with a prospective buyer through the latter's
employment of questionable practices which prevent the owner
from... freely giving his consent to the transaction; this constitutes a
palpable transgression of the prospective seller's rights of
ownership over his property, an anomaly which the Court will
certainly not condone.
Martinez vs CA (56 SCRA 647)
GR No. L- 31271, April 29 1974
Esguerra, J.:
Facts:
The spouses Romeo Martinez and Leonor Suarez are the registered
owners of two (2) parcels of land located in Lubao, Pampanga. The
disputed property was originally owned by one Paulino
Montemayor, who secured a "titulo real" over it way back in 1883.
After the death of Paulino Montemayor the said property passed to
his successors-in-interest, Maria Montemayor and Donata
Montemayor, who in turn, sold it, as well as the first parcel, to a
certain Potenciano Garcia.
Because Potenciano Garcia was prevented by the then municipal
president of Lubao, Pedro Beltran, from restoring the dikes
constructed on the contested property, Garcia filed a civil case with
the Court of First Instance against Beltran to restrain the latter in his
official capacity from molesting him in the possession of said second
parcel, and on even date, applied for a writ of preliminary
injunction, which was issued against said municipal president. The
Court declared permanent the preliminary injunction.
On April 17, 1925. Potenciano Garcia applied for the registration of
both parcels of land in his name, and the Court of First Instance of
Pampanga, sitting as land registration court, granted the
registration.
Thereafter, the ownership of these properties changed hands until
eventually they were acquired by the spouses.
To avoid any untoward incident, the disputants agreed to refer the
matter to the Committee on Rivers and Streams, which, after
conducting an ocular inspection, reported that the parcel was not a
public river but a private fishpond owned by the herein spouses.
The Secretary of Public Works and Communications, ordered
another investigation of the said parcel of land, directing the
spouses to remove the dikes they had constructed, threatening that
the dikes would be demolished should the spouses fail to comply
therewith within 30 days.
Issue:
Extinguishment of Sale
Whether the spouses are purchasers for value and in good faith on
the parcel alleged to be a public river.
Held:
No, they are not. There is no weight in the spouses' argument that,
being a purchaser for value and in good faith of Lot No. 2, the
nullification of its registration would be contrary to the law and to
the applicable decisions of the Supreme Court as it would destroy
the stability of the title which is the core of the system of
registration. Appellants cannot be deemed purchasers for value and
in good faith as in the deed of absolute conveyance executed in
their favor.
Before purchasing a parcel of land, it cannot be contended that the
spouses did not know exactly the condition of the land that they
were buying and the obstacles or restrictions thereon that may be
put up by the government in connection with their project of
converting Lot No. 2 in question into a fishpond. Nevertheless, they
willfully and voluntarily assumed the risks attendant to the sale of
said lot. One who buys something with knowledge of defect or lack
of title in his vendor cannot claim that he acquired it in good faith.
The ruling that a purchaser of a registered property cannot go
beyond the record to make inquiries as to the legality of the title of
the registered owner, but may rely on the registry to determine if
there is no lien or encumbrances over the same, cannot be availed
of as against the law and the accepted principle that rivers are parts
of the public domain for public use and not capable of private
appropriation or acquisition by prescription.
Mapalo vs Mapalo
G.R. No. L-21489 and L-21628 May 19, 1966
Facts:
The spouses Miguel Mapalo and Candida Quiba were the registered
owners of a residential land located in Pangasinan. The spouses
donated the eastern half of the land to Miguel’s brother – Maximo
Mapalo who was about to get married. However, they were
deceived into signing, on October 15, 1936, a deed of absolute sale
over the entire land in Maximo’s favor. Their signatures were
procured by fraud because they were made to believe by Maximo
and the lawyer who acted as notary public who “translated” the
document, that the same was a deed of donation in Maximo’s favor
covering one-half of their land. (It must be noted that the spouses
are illiterate farmers).Although the document of sale stated a
consideration of Five Hundred (P500.00) Pesos, the aforesaid
spouses did not receive anything of value for the land.
In 1938, Maximo Mapalo, without the consent of the spouse,
registered the sale in his favor. After thirteen years (1951), he sold
the land to the Narcisos, who thereafter registered the sale and
obtained a title in their favor. In 1952, the Narcisos filed a complaint
with the CFI to be declared owners of the entire land, for possession
of its western portion; for damages; and for rentals. The Mapalo
spouses filed a counterclaim seeking cancellation of the the
Narcisos’ titles as to the western half of the land. They said that
their signatures to the deed of sale of 1936 was procured by fraud
and that the Narcisos were buyers in bad faith.They also filed
another complaint wherein they asked the court to declare deeds of
sale of 1936 and of 1951 over the land in question be declared null
and void as to the western half of said land.
CFI ruled in favor of the Mapalo spouses. Upon appeal filed by
Narcisos, CA reversed the lower court’s ruling solely on the ground
that the consent of the Mapalo spouses to the deed of sale of 1936
having been obtained by fraud, the same was voidable, not void ab
initio, and, therefore, the action to annul the same, within four
Extinguishment of Sale
years from notice of the fraud, had long prescribed. (From March
15, 1938). Hence, this appeal.
Issues:
1. Whether the deed of absolute sale executed in 1936 was null and
void.
2. Whether Narcisos were purchasers in good faith.
Held:
1st issue: YES, the sale was void.
The Civil Code governs the transaction because it was executed in
1936. Accordingly, since the deed of sale of 1936 is governed by the
Old Civil Code, it should be asked whether its case is one wherein
there is no consideration, or one with a statement of a false
consideration. If the former, it is void and inexistent; if the latter,
only voidable, under the Old Civil Code. There is lack of
consideration
As observed earlier, the deed of sale of 1936 stated that it had for
its consideration Five Hundred (P500.00) Pesos. In fact, however,
said consideration was totally absent. The problem, therefore, is
whether a deed which states a consideration that in fact did not
exist, is a contract without consideration, and therefore void ab
initio, or a contract with a false consideration, and therefore, at
least under the Old Civil Code, voidable.
When there is no consideration, the contract is null and void.
According to Manresa, what is meant by a contract that states a
false consideration is one that has in fact a real consideration but
the same is not the one stated in the document. A contract of
purchase and sale is null and void and produces no effect
whatsoever where the same is without cause or consideration in
that the purchase price which appears thereon as paid has in fact
never been paid by the purchaser to the vendor.
2nd issue: No, they were no purchasers in good faith.
Narcisos were not buyers in good faith. Aside from the fact that all
the parties in these cases are neighbors, except Maximo Mapalo the
foregoing facts are explicit enough and sufficiently reveal that the
Narcisos were aware of the nature and extent of the interest of
Maximo Mapalo their vendor, over the above-described land before
and at the time the deed of sale in their favor was executed.
The Narcisos were purchaser-in-value but not purchasers in good
faith.What was the necessity, purpose and reason of Pacifico
Narciso in still going to the spouses Mapalo and asked them to
permit their brother Maximo to dispose of the above-described
land? To this question it is safe to state that this act of Pacifico
Narciso is a conclusive manifestation that they (the Narcisos) did not
only have prior knowledge of the ownership of said spouses over
the western half portion in question but that they also have
recognized said ownership. It also conclusively shows their prior
knowledge of the want of dominion on the part of their vendor
Maximo Mapalo over the whole land and also of the flaw of his title
thereto. Under this situation, the Narcisos may be considered
purchasers in value but certainly not as purchasers in good faith.