Ang Yu Asuncion vs CA

On August 30, 1991, the RTC ordered the Cu

Unjiengs to execute the necessary Deed of Sale of
G.R. No. 109125, December 2, 1994
the property in litigation in favor of plaintiffs Ang
Yu Asuncion, Keh Tiong and Arthur Go for the
FACTS:
consideration of P15 Million pesos in recognition
Petitioners allege that they are tenants or lessees
of petitioners’ right of first refusal and that a new
of residential and commercial spaces owned by
Transfer Certificate of Title be issued in favor of
defendants in Ongpin Street, Binondo, Manila
the buyer. The court also set aside the title issued
since 1935 and that on several occasions before
to Buen Realty Corporation for having been
October 9, 1986, defendants informed plaintiffs
executed in bad faith. On September 22, 1991, the
that they are offering to sell the premises and are
Judge issued a writ of execution.
giving them priority to acquire the same. During
the negotiations, Bobby Cu Unjieng offered a
On 04 December 1991, the appellate court, on
price of P6-million while petitioners made a
appeal to it by private respondent, set aside and
counter offer of P5-million. On October 24, 1986,
declared without force and effect the above
petitioners asked the respondents to specify the
questioned orders of the court a quo.
terms and conditions of the offer to sell.
Petitioners now raise that since respondents failed
ISSUE 1:
to specify the terms and conditions of the offer to
Whether or not Buen Realty can be bound by the
sell and because of information received that the
writ of execution by virtue of the notice of lis
latter were about to sell the property, plaintiffs
pendens, carried over on TCT No. 195816 issued
were compelled to file the complaint to compel
in the name of Buen Realty, at the time of the
defendants to sell the property to them.
latter’s purchase of the property on 15 November
1991 from the Cu Unjiengs.
The trial court found that the respondents’ offer to
sell was never accepted by the petitioners for the
RULING 1:
reason that they did not agree upon the terms and
No. An obligation is a juridical necessity to give,
conditions of the proposed sale, hence, there was
to do or not to do (Art. 1156, Civil Code).
no contract of sale at all. The Court of Appeals
affirmed the decision of the lower court. This
The obligation is upon the concurrence of the
decision was brought to the Supreme Court by
essential elements thereof, viz:
petition for review on certiorari which
(a) the vinculum juris or juridical tie which is the
subsequently denied the appeal on May 6, 1991
efficient cause established by the various sources
“for insufficiency in form and substance”.
of obligations; (b) the object which is the
prestation or conduct, required to be observed;
On November 15, 1990, while CA-G.R. CV No.
and (c) the subject-persons who, viewed
21123 was pending consideration by this Court,
demandability of the obligation are the active
the Cu Unjieng spouses executed a Deed of Sale
(oblige) andthe passive (obligor) subjects.
transferring the property in question to herein
respondent Buen Realty and Development
Among the sources of an obligation is a contract
Corporation, for P15,000,000.00. On July 1, 1991,
(Art. 1157), which is a meeting of minds between
respondent as the new owner of the subject
two persons whereby one binds himself, with
property wrote a letter to the petitioners
respect to the other, to give something or to render
demanding that the latter vacate the premises. On
some service.
July 16, 1991, the petitioners wrote a reply to
respondent corporation stating that the latter
A contract undergoes various stages that include
brought the property subject to the notice of lis
its negotiation or preparation, its perfection and,
pendens regarding Civil Case No. 87-41058
finally, its consummation. Until the contract is
annotated on TCT No. 105254/T-881 in the name
perfected, it cannot, as an independent source of
of the Cu Unjiengs.
obligation, serve as a binding juridical relation. In
sales, particularly, to which the case at bench
The lessees filed a Motion for Execution dated
belongs, the contract is perfected when a person,
August 27, 1991 of the Decision in Civil Case No.
called the seller, obligates himself, for a price
87-41058 as modified by the Court of Appeals in
certain, to deliver and to transfer ownership of a
CA-G.R. CV No. 21123.
thing or right to another, called the buyer, over
which the latter agrees.
The registration of lis pendens must be
independently addressed in appropriate
proceedings. Therefore, Buen Realty cannot be
held subject to the writ of execution issued by the
respondent Judge, let alone ousted from the
ownership and possession of the property, without
first being duly afforded its day in court.
ISSUE 2: WON the contract between petitioner
and Buen Realty was perfected
RULING 2: NO. In the law on sales, the so-called
“right of first refusal” is an innovative juridical
relation. Needless to point out, it cannot be
deemed a perfected contract of sale under Article
1458 of the Civil Code.
In a right of first refusal, while the object might
be made determinate, the exercise of the right,
however, would be dependent not only on the
grantor’s eventual intention to enter into a binding
juridical relation with another but also on terms,
including the price, that obviously are yet to be
later firmed up. Prior thereto, it can at best be so
described as merely belonging to a class of
preparatory juridical relations governed not by
contracts (since the essential elements to establish
the vinculum juris would still be indefinite and
inconclusive) but by, among other laws of general
application, the pertinent scattered provisions of
the Civil Code on human conduct.
The final judgment in Civil Case No. 87-41058, it
must be stressed, has merely accorded a “right of
first refusal” in favor of petitioners. The
consequence of such a declaration entails no more
than what has heretofore been said. In fine, if, as it
is here so conveyed to us, petitioners are
aggrieved by the failure of private respondents to
honor the right of first refusal, the remedy is not a
writ of execution on the judgment, since there is
none to execute, but an action for damages in a
proper forum for the purpose.
Furthermore, Buen Realty, not having been
impleaded in Civil Case No. 87-41058, cannot be
held subject to the writ of execution issued by
respondent Judge, let alone ousted from the
ownership and possession of the property, without
first being duly afforded its day in court.
Sagrada Orden vs NACOCO
G.R. NO. L-3756 JUNE 30, 1952
FACTS:
The land in question belongs to plaintiff Sagrada
Orden in whose name the title was registered
before the war
On January 4, 1943, during the Japanese military
occupation, the land was acquired by a Japanese
corporation by the name of Taiwan Tekkosho
After liberation on April 4, 1946, the Alien
Property Custodian of the United States of
America took possession, control, and custody of
the property pursuant to the Trading with the
Enemy Act
The property was occupied by the Copra Export
Management Company under a custodian
agreement with US Alien Property Custodian.
When it vacated the property, it was occupied by
defendant National Coconut Corporation
The plaintiff made claim to the said property
before the Alien Property Custodian. Alien
Property Custodian denied such claim
It bought an action in court which resulted to the
cancellation of the title issued in the name of
Taiwan Tekkosho which was executed under
threats, duress, and intimidation; reissuance of the
title in favor of the plaintiff; cancellation of the
claims, rights, title, interest of the Alien property
Custodian; and occupant National Coconut
Corporation’s ejection from the property. A right
was also vested to the plaintiff to recover from the
defendants rentals for its occupation of the land
from the date it vacated.
Defendant contests the rental claims on the
defense that it occupied the property in good faith
and under no obligation to pay rentals.
Issue: Whether or not the defendant is obliged to
pay rentals to the plaintiff
Ruling: No. Nacoco is not liable to pay rentals
prior the judgment. If defendant-appellant is liable
at all, its obligations, must arise from any of the
four sources of obligations, namley, law, contract
or quasi-contract, crime, or negligence. (Article
1089, Spanish Civil Code.) Defendant-appellant is
not guilty of any offense at all, because it entered
the premises and occupied it with the permission
of the entity which had the legal control and
administration thereof, the Allien Property
Administration. Neither was there any negligence
on its part.
Francisco Pe vs IAC
(Pe vs. CA, 195 SCRA 137 (1991)
G.R. No. 74781, March 13, 1991
Facts: Spouses Francisco and Anita Monasterio Pe
were the registered owners of several parcels of land,
designated as Lots Nos. 40, 41, 42, 45 and 47 of the
Cadastral Survey of Iloilo and two buildings on Lot 40
and 41, all situated in the City of Iloilo, Philippines.
The above-mentioned parcels of land were mortgaged
with different banking institutions. Lots Nos. 40 and
41 were mortgaged to the Philippine Veterans Bank
for P351,162.59; Lots Nos. 42 and 45 were mortgaged
to the Development Bank of the Philippines for
P189,322.49; and Lot No. 47 to Philippine
Commercial and Industrial Bank for P57,000.00. Also
mortgaged with the same bank were a tractor and one
set of "Ransomed Model II, Offset Discharrow
Category II-18-24 diameter" for P118,242.00.
Sometime in September 1976, the Pe spouses and the
spouses Ong Su Fu alias Ong To An and Luisa Yu
negotiated for the purchase of the five (5) parcels of
land.
On September 14, 1976, Ong Su Fu issued in favor of
Francisco Pe a check for P 30,000.00 as earnest money
and as partial payment for the price of the lots.
Thereafter, on September 20, 1976 ,the Pe spouses as
First Party, executed a contract to sell, but it was in
favor of defendant Domingo Sy (son-in-law of Ong Su
Fu). Said contract was prepared by the Ong Su Fu's
counsel.
Thereafter, Domingo Sy transferred his rights under
the contract to sell to Jose Juan Tong with respect to
Lots Nos. 40 and 41.
On October 4, 1976, after payment by Jose Juan Tong
of the Pe spouses' account with the Philippine Veterans
Bank in the amount of P 351,162.59, pursuant to the
contract, the latter executed in favor of the former a
deed of sale covering Lots Nos. 40 and 41 and the two
buildings thereon.
However, the deed of sale stated that the consideration
was P 95,000.00. The titles to the two parcels of land
were subsequently transferred to spouses Jose Juan
Tong and Lily Lim.
On the same date, the Pe spouses executed in favor of
Domingo Sy a deed of sale over Lots Nos. 42 and 45,
after payment by the latter of the former's account with
the Development Bank of the Philippines in the
amount of P189,322.49.
Again, the deed of sale stated a different consideration
which is P30,000.00 and thereafter, the respective
titles were issued in favor of Domingo Sy and his
spouse.
Consequently, a contract to sell and a corresponding
deed of sale covering Lot No. 47 were prepared for
Dionisio Sy (brother of Domingo Sy), but the deed did
not materialize as the former's offer of P 49,454.92, as
payment for the remaining parcel of land (Lot No. 47)
was rejected by the Pe spouses, the latter insisting on
the full payment of their obligation with the Philippine
Commercial and Industrial Bank (PCIB) in the amount
of P383,615.97 and P620,000.00 as the alleged
consideration stipulated in the Contract to Sell.
Thereafter, the Pe spouses failed to settle their account
with the PCIB, hence, the mortgages on Lot No. 47,
the tractor and the "Offset Discharrow" were
foreclosed and the properties were sold at public
auction. After the foreclosure and sale of the
properties, the Pe spouses were asked to pay the
deficiency in the amount of P 110,095.08 as of April 5,
1979, and the overdue balance in several promissory
notes.
Issue: WON the entire consideration of the contract to
sell is Php 620,000.00 or Php 1,544,161.05
Ruling: The amount to be paid should be Php
620,000.00. Article 1370 of the New Civil Code
provides that:
If the terms of a contract are clear and leave no
doubt upon the intention of the contracting
parties, the literal meaning of its stipulation
shall control.
If the words appear to be contrary to the
evident intention of the parties, the latter shall
prevail over the former.
After a thorough examination of the provisions of the
Contract to Sell, the Court finds petitioners' contention
devoid of merit. The words of the contract are clear
and leave no doubt upon the true intention of the
contracting parties. The condition laid down in
paragraph (2) of the Contract to Sell does not provide
for an additional consideration but only provides for The liability of Saturnino Cortez, the owner of the
the manner in which the consideration is to be applied. truck, and his chauffeur Abelardo Velasco rests on a
It clearly provides that the payment shall be applied to different basis, namely, that of contract.
petitioners' obligations with the bank where the
respective properties were mortgaged and upon their
release, petitioners shall execute the final deed of sale.
The subsequent acts of the parties conformed with this
condition. Thus, the parties should be bound by such
written contract.

It should also be noted that at the time of the execution

of the Contract to Sell, the total obligation due to the
PCIB as regards Lot No. 47 was only P99,374.89. The
rise of the same obligation to P 383,615.96 (Record on
Appeal, p. 98) was brought about by subsequent loans
the petitioners obtained with the same bank for which
the tractor and an "Offset Discharrow" were given as
additional security.

Gutierrez vs. Gutierrez, 56 Phil. 177

Facts: On February 2, 1930, a passenger truck and an
automobile of private ownership collided while
attempting to pass each other on a bridge. The truck
was driven by the chauffeur Abelardo Velasco, and
was owned by saturnine Cortez. The automobile was
being operated by Bonifacio Gutierrez, a lad 18 years
of age, and was owned by Bonifacio’s father and
mother, Mr. and Mrs. Manuel Gutierrez. At the time of
the collision, the father was not in the car, but the
mother, together with several other members of the
Gutierrez family were accommodated therein.

The collision between the bus and the automobile

resulted in Narciso Gutierrez suffering a fractured right
leg which required medical attendance for a
considerable period of time.

Issue: Whether or not both the driver of the truck and

automobile are liable for damages and indemnification
due to their negligence. What are the legal obligations
of the defendants?

Ruling: Bonifacio Gutierrez’s obligation arises from

culpa aquiliana. On the other hand, Saturnino Cortez’s
and his chauffeur Abelardo Velasco’s obligation rise
from culpa contractual.

The youth Bonifacio was na incompetent chauffeur,

that he was driving at an excessive rate of speed, and
that, on approaching the bridge and the truck, he lost
his head and so contributed by his negligence to the
accident. The guaranty given by the father at the time
the son was granted a license to operate motor vehicles
made the father responsible for the acts of his son.
Based on these facts, pursuant to the provisions of Art.
1903 of the Civil Code, the father alone and not the
minor or the mother would be liable for the damages
caused by the minor.