CARBONELL VS CA

69 SCRA 99

DOCTRINE: CONTRACTS; PURCHASE AND SALE OF REALTY; REGISTRATION; EFFECT OF GOOD FAITH ON DOUBLE SALES. — The buyer of realty must act in good faith in
registering his deed of sale// to merit the protection of the second paragraph of Article 1544 of the New Civil Code. Unlike the first and third paragraphs of said Article
which accords preference to the one who first takes possession in good faith of personal or real property,// the second paragraph directs that ownership of immovable
property should be recognized in favor of one "who in good faith recorded" his right. Under the first and third paragraphs, good faith must characterize prior possession.
Under the second paragraph, good faith must characterize the act of anterior registration. If there is no inscription, what is decisive is prior possession in good faith. If
there is inscription, prior registration in good faith is a pre-condition to support title.||| (Carbonell v. Court of Appeals, G.R. No. L-29972, [January 26, 1976], 161 PHIL 131-
179)

DOUBLE SALE ; FIRST BUYER IN GOOD FAITH WITH SUPERIOR RIGHT OVER PROPERTY. — Where the first buyer was not aware - and could not have been aware - of any
sale to another person as there was no such sale, the buyer's prior purchase of the land was made in good faith. Her good faith subsisted and continued to exist when
she recorded her adverse claim four days prior to the registration of the second buyer's deed of sale. The first buyer's good faith did not cease after the seller told her of
his second sale of the same lot to the second buyer. By reason thereof, she has superior right to the land in question.||| (Carbonell v. Court of Appeals, G.R. No. L-29972,
[January 26, 1976], 161 PHIL 131-179)

DAGUPAN TRADING VS MACAM

14 SCRA 179

DOCTRINE: SALES; CONFLICTING SALES; ONE SALE BEFORE REGISTRATION OF LAND AND THE OTHER AN EXECUTION SALE AFTER REGISTRATION OF LAND; LAW GOVERNING.
— Where one of two conflicting sales of a piece of land was executed before the land was registered, while the other was an execution sale in favor of the judgment creditor
of the owner made after the same property had been registered, what should determine the issue are the provisions of the last paragraph of Section 35, Rule 39 of the
Rules of Court to the effect that, upon the execution and delivery of the final certificate of sale in favor of the purchaser of land sold in an execution sale, such purchaser
"shall be substituted to and acquire all the rights, title, interest and claim of the judgment debtor to the property as of the time of the levy".||| (Dagupan Trading Co. v.
Macam, G.R. No. L-18497, [May 31, 1965], 121 PHIL 983-988)

UNREGISTERED SALE CANNOT BE DEFEATED BY SUBSEQUENT EXECUTION SALE AND REGISTRATION OF LATTER. — Where for a considerable time prior to the levy on
execution the interest of the owner of the land levied upon had already been conveyed to another who took possession thereof and introduced improvements therein, the
aforesaid levy is void. The prior sale, albeit unregistered, cannot be deemed automatically cancelled upon the subsequent issuance of the Torrens title over the
land.||| (Dagupan Trading Co. v. Macam, G.R. No. L-18497, [May 31, 1965], 121 PHIL 983-988)

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 DAVID VS BANDIN
140 SCRA 179

DOCTRINE: SALES; UNREGISTERED LAND; DEFENSE OF BUYER IN GOOD FAITH CANNOT BE AVAILED IN PURCHASES OF UNREGISTERED LAND; CASE AT BAR. — As the record
shows, petitioners bought the property when it was still unregistered land. The defense of having purchased the property in good faith may be availed of only where
registered land is involved and the buyer had relied in good faith on the clear title of the registered owner. One who purchases an unregistered land does so at his peril.
His claim of having bought the land in good faith, i.e. without notice that some other person has a right to, or interest in, the property, would not protect him if it turns out
that the seller does not actually own the property.||| (David v. Bandin, G.R. No. L-48322, L-49712, L-49716, L-49687, [April 8, 1987], 233 PHIL 139-153)

OLIVAREZ VS GONZALES
159 SCRA 33

DOCTRINE: In a consolidation case where the property was subjected to two different sales, one, with pacto de retro which was unregistered and an absolute sale which
was registered, and the possession of the property is with the vendee of the latter sale, who were not included as party-defendant in the case. Justice and equity demand
that said vendees in possession of property should be heard first before adjudication of the ownership of the property. In double sale, the principle of prius tempore, patior
jure (FIRST IN TIME, STRONGER IN RIGHT) enunciates that the good faith of the first buyer remains all throughout despite his subsequent acquisition of knowledge of the
subsequent sale. Knowledge by the first buyer of the second sale cannot defeat the first buyer’s right except when the second buyer registers first in good faith the second
sale.

it would be more in keeping with substantial justice if the controversy between the parties to be resolved on the merits rather than on a procedural technicality in the light
of the express mandate of the Rules that they be "liberally construed in order to promote their object and to assist the parties in obtaining just, speedy and inexpensive
determination of every action and proceeding." The dismissal of actions is based on sound judicial discretion and such discretion "must be exercised wisely and prudently,
never capriciously, with a view to substantial justice."||| (Olivares v. Gonzales, G.R. No. L-34500, [March 18, 1988], 242 PHIL 493-497)

CARAM VS LAURETA
103 SCRA 7

DOCTRINE: Article 1544 specifically provides who shall be the owner in case of a double sale of an immovable property. To give full effect to Article 1544, one contract
must be declared valid so that one vendee may exercise all the rights of an owner, while the other contract must be declared void to cut off all the rights which may
arise from said contract.
• A buyer of real estate should exercise ordinary care in purchasing land. The rule of caveat emptor requires the purchaser to be aware of the supposed title of the vendor
and one who buys without checking the vendor’s title takes all the risks and losses consequent to such failure.

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• A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it.

One who purchases real estate with knowledge of a defect or lack of title in his vendor cannot claim that he has acquired title thereto in good faith, as against the true
owner of the land or of an interest therein, and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and
investigation as might be necessary to acquaint him with the defects in the title of his vendor. Article 1544 does not declare void a deed of sale registered in bad faith; it
does not mean, however, that the said contract is not void. The law on double sale applies only to immovable properties sold by the owner himself. The status of the 2
contracts must be determined and clarified -one must be declared valid so that one vendee may exercise all rights of an owner while the other contract must be declared
void to cut off all rights which may arise from the said contract.

CRUZ VS CABANA
129 SCRA 656

DOCTRINE: CIVIL LAW; OBLIGATIONS AND CONTRACTS; SALES; DOUBLE SALE OF REAL PROPERTY; OWNERSHIP OF PROPERTY ACQUIRED BY VENDEE WHO FIRST REGISTERS
SALE IN GOOD FAITH. — As the Court held in Carbonell vs. Court of Appeals, 69 SCRA 99 (1976), "it is essential that the buyer of realty must act in good faith in registering
his deed of sale to merit the protection of the second paragraph of Article 1544 of the Civil Code." As the writer stressed in his concurring opinion therein, "The governing
principle here is prius tempore, potior jure (first in time, stronger in right).
Knowledge gained by the first buyer of the second sale cannot defeat the first buyer's right except only as provided by the Civil Code and that is where the second buyer
first registers in good faith the second sale ahead of the first. Such knowledge of the first buyer does not bar her from availing of her rights under the law, among them to
register first her purchase as against the second buyer. But in converso knowledge gained by the second buyer of the first sale defeats his rights even if he is first to register
the second sale, since such knowledge taints his prior registration with bad faith. This is the price exacted by Article 1544 of the Civil Code of the second buyer being able
to displace the first buyer; that before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e. in ignorance of the first
sale and of the first buyer's rights) — from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession. The
second buyer must show continuing good faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration as
provided by law."||| (Cruz v. Cabana, G.R. No. 56232, [June 22, 1984], 214 PHIL 575-582)

VALDEZ VS CA
194 SCRA 360

DOCTRINE: In case of double sale of real property where both vendees registered the sales with the Register of Deeds and each produced their respective owner's duplicate
copy of the certificate of title to the property, Article 1544 is clear that a prior right is accorded to the vendee who first recoded his right in Good Faith over an immovable
property. • The ownership of an immovable property belongs to the person who acquired it in good faith and first recorded it in the registry of property. • The recording of
an adverse claim by virtue of a prior sale is considered an act of registration of the land since the prior sale is valid while the subsequent sale is fraudulent.

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-In a case where a notice of adverse claim was registered previous to the sale by the possessor, a prior right is accorded to the vendee who first recorded his right in good
faith over an immovable property. An annotation of an adverse claim made prior to a deed of assignment, establishes a superior right over the property and it was
effectively a notice to the whole world. This is equivalent to registration in good faith which Article 1544 provides.

SPS. NUGUID VS CA
171 SCRA 213

DOCTRINE: CIVIL LAW; SALE; RECONVEYANCE; NOT POSSIBLE WHERE PROPERTY WAS TRANSFERRED TO AN INNOCENT PURCHASER FOR VALUE. — An innocent purchaser
for value is protected such that when land has already passed into the hands of an innocent purchaser for value, reconveyance of the same can no longer be made.

SALE OF IMMOVABLE PROPERTY TO DIFFERENT VENDEES; OWNERSHIP BELONGS TO VENDEE WHO FIRST RECORDED THE SALE. — It is an established fact that the first sale
to Juliana Salazar was not registered while the sale to the petitioners was registered. The disputed property being immovable property, the ownership should belong to the
vendee who in good faith first rec orded it in the Registry of Property, pursuant to the same article.
||| (Spouses Nuguid v. Court of Appeals, G.R. No. 77423, [March 13, 1989], 253 PHIL 207-217)

Good faith is deemed to be present: (a) when the original certificate of title was clean and free from any annotation or encumbrance and (b) when there is lack of
knowledge of the prior sale. An innocent purchaser for value is protected such that when land has already passed into the hands of an innocent purchaser for value,
reconveyance of the same can no longer be made.

RADIOWEALTH FINANCE COMPANY VS. PALILEO

197 SCRA 245

DOCTRINE: CIVIL LAW; DOUBLE SALE OF IMMOVABLE PROPERTY; REGISTRATION IS THE OPERATIVE ACT TO CONVEY OR AFFECT REGISTERED LANDS AS FAR AS THIRD
PERSONS ARE CONCERNED. — Article 1544 of the Civil Code provides that in case of double sale of an immovable property, ownership shall be transferred: (1) to the
person acquiring it who in good faith first recorded it in the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in
default thereof, to the person who presents the oldest title, provided there is good faith. There is no ambiguity regarding the application of the law with respect to lands
registered under the Torrens System. Section 51 of Presidential Decree No. 1529 (amending Section 50 of Act No. 496 clearly provides that the act of registration is the
operative act to convey or affect registered lands insofar as third persons are concerned. Thus, a person dealing with registered land is not required to go behind the register
to determine the condition of the property. He is only charged with notice of the burdens on the property which are noted on the face of the register or certificate of title.
Following this principle, this Court has time and again held that a purchaser in good faith of registered land (covered by a Torrens Title) acquires a good title as against all
the transferees thereof whose right is not recorded in the registry of deeds at the time of the sale.||| (Radiowealth Finance Co. v. Palileo, G.R. No. 83432, [May 20, 1991],
274 PHIL 516-522)

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 TANEDO VS CA
G.R. NO. 104482

DOCTRINE: As between two purchasers, the one who registered the sale in his favor has a preferential right over the other who has not registered his title, even if the latter
is in actual possession of the immovable property.
• Ownership in an immovable shall belong to the buyer who in good faith registers it first in the registry of property
Ownership shall belong to the buyer who in good faith registers it first in the registry of property. As between two purchasers, the one who registered the sale in his favor
has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property. When two deeds of sale for an
inherited property which were executed after the death of the decedent and after a deed of extra - judicial settlement. And which said deeds of sale where made on different
dates, the ownership would vest in the deed which was registered, even if the other deed is executed earlier. The same rule applies even if actual possession is in the vendee
of the deed executed earlier.”

OCCENA VS ESPONILLA
G.R. 156973

DOCTRINE: A buyer of real property in the possession of persons other than the seller, must be wary and should investigate the rights of those in possession. Without
such inquiry, the buyer can hardly be regarded as a buyer in Good faith and cannot have any right over the property
•Principle behind 1544.
• The defense of indefeasibility of a Torrens title does not extend to a transferee who takes the certificate of title in bad faith with notice of a flaw.
• The principle that one who deals with property registered under the Torrens title need not go beyond the same does not apply when the party has actual knowledge of
facts and circumstances that would impel a reasonably cautious man to make such inquiry or when the purchaser has knowledge of a defect or the lack of title in his vendor

Mere registration is not enough; good faith must concur with registration. To be entitled to priority, the second purchaser must also have acted in good faith -one without
knowledge of the previous alienation by the vendor to another or must not have been aware of the facts which should put him upon inquiry to acquaint him with the defect
or lack of title of his vendor. Should he find out such circumstances, it would be incumbent upon him to verify the extent of the occupant’s possessory rights. Failure to take
precautionary steps would mean negligence on his part and would preclude him from claiming or invoking the rights of a purchaser in good faith.

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 MOLES VS IAC
169 SCRA 777

CIVIL LAW; SPECIAL CONTRACTS; SALES; IMPLIED WARRANTY; DOES NOT APPLY TO SECONDHAND ARTICLES SUBJECT TO INSPECTION AT THE TIME OF THE SALE. — It is
generally held that in the sale of a designated and specific article sold as secondhand, there is no implied warranty as to its quality or fitness for the purpose intended, at
least where it is subject to inspection at the time of the sale. On the other hand, there is also authority to the effect that in a sale of a secondhand articles there may be,
under some circumstances, an implied warranty of fitness for the ordinary purpose of the article sold or for the particular purpose of the buyer. In a line of decisions rendered
by the United States Supreme Court, it had theretofore been held that there is no implied warranty as to the condition, adaptation, fitness, or suitability for the purpose
for which made, or the quality, of an article sold as and for a secondhand article. Thus, in finding for private respondent, the respondent court cited the ruling in Sison vs.
Ago, et al. to the effect that unless goods are sold as to raise an implied warranty, as a general rule there is no implied warranty in the sale of secondhand articles.||| (Moles
v. Intermediate Appellate Court, G.R. No. 73913, [January 31, 1989], 251 PHIL 711-725)

EXCEPTIONS. — The general rule, however, is not without exceptions. Article 1562 of our Civil Code, which was taken from the Uniform Sales Act, provides: "Art. 1562. In a
sale of goods, there is an implied warranty or condition as to the quality or fitness of the goods, as follows: (1) Where the buyer, expressly or by implication, makes known
to the seller the particular purpose for which the goods are acquired, and it appears that the buyer relies on the seller's skill or judgment (whether he be the grower or
manufacturer or not), there is an implied warranty that the goods shall be reasonably fit for such purpose;" Furthermore, and of a more determinative role in this case, a
perusal of past American decisions likewise reveals a uniform pattern of rulings to the effect that an express warranty can be made by and also be binding on the seller even
in the sale of a secondhand article||| (Moles v. Intermediate Appellate Court, G.R. No. 73913, [January 31, 1989], 251 PHIL 711-725)

ENGINEERING AND MACHINERY CORP. VS CA

GR NO 52267

DOCTRINE: Where there is an express warranty in the contract, the prescriptive period is the one specified in the express warranty; and in the absence of such period, the
general rule on rescission of contract, which is four years, shall apply.
• The remedy against violations of the warranty against hidden defects is either to: a) withdraw from the contract (redhibitory action) or; (b) to demand a proportionate
reduction of the price (accion quanti minoris), with damages in either case
• In determining the prescriptive period in filing an action for breach of contract, the general law on prescription, which is Article 1144 of the Civil Code, which provides that
actions based upon a written contract prescribes in 10 years, will apply

The mere fact that the employer accepted the work does not, ipso facto, relieve the petitioner from liability for deviations from and violations of the written contract, as
the law gives him ten (10) years within which to file an action based on breach thereof

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 CATUNGAL VS RODRIGUEZ
G.R. NO 146839

DOCTRINE: Failure to comply with a condition imposed on the perfection of a contract results in the failure of the contract, while failure to comply with a condition
imposed merely on the performance of an obligation merely gives the other party the option to either refuse to proceed with the sale or to waive the condition, as
evident in Article. 1545.
• In conditional sales, the acquisition of rights as well as extinguishment or loss of those already acquired, shall depend upon the happening of the event w/c constitutes
the condition.

From the moment the contract is perfected, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage and law. In accordance with Article 1545 of the Civil Code, one must distinguish: failure to
comply with a condition imposed on the perfection of a contract results in the failure of the contract; while failure to comply with a condition imposed merely on the
performance of an obligation merely gives the other party the option to either refuse to proceed with the sale or to waive the condition. Moreover, where the so-called
'potestative condition' is imposed not on the birth of the obligation but on its fulfillment, only the condition is avoided, leaving unaffected the obligation itself.

LO VS CA
G.R. No 149420

DOCTRINE: From the provision of Article 1628 paragraph 1, the vendor-assignor is bound to warrant the existence and legality of the credit at the time of the sale or
assignment.
• An assignment of credit is in the nature of a sale of personal property. As in any contract of sale, the vendor is bound by certain warranties.
• The petitioner, as vendor or assignor, is bound to warrant the existence and legality of the credit at the time of the sale or assignment. This is another example of implied
warranty in a contract of sale

An assignment of credit, which is in the nature of a sale of personal property, produces the effects of dacion en pago which may extinguish the obligation. Article 1628
opines that the vendor in good faith shall be responsible for the existence and legality of the credit at the time of the sale, unless it should have been sold as doubtful; but
not for the solvency of the debtor, unless it has been so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge. The vendor/assignor
is bound to warrant the existence and legality of the credit of the time of the sale or assignment. By warranting the existence of the credit, the vendor should be deemed to
have ensured the performance in case the credit is later found to be inexistent. He should be liable to pay the vendee the amount of his indebtedness.

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 RAMOS VS CA
180 SCRA 635

DOCTRINE: Whenever it is clearly shown that a deed of sale with pacto de retro, regular on its face, is given as security for a loan, it must be regarded as an equitable
mortgage. The existence of one circumstance in Article 1602 is enough to create the presumption that such transaction is an equitable mortgage.

Since sales with right to repurchase are not favoured, such are instead construed to be equitable mortgages. To create the presumption enunciated by Article 1602, the
existence of one circumstance is enough. Where contracts purporting to be pacto de retros were actually executed in consideration of the aforesaid loans, said
contracts are indubitably equitable mortgages. The rule is firmly settled that whenever it is clearly shown that a deed of sale with pacto de retro, regular on its face, is
given as security for a loan, it must be regarded as an equitable mortgage. More so, an order granting the vendee's petition for consolidation of ownership, without the
vendor a retro being named as respondent, summoned and heard, is a patent nullity for want of jurisdiction of the court over the person of the latter

DE LEON VS CA
36 SCRA 567

DOCTRINE: Where there is the right to redeem, inadequacy of the price should not be material because the judgment debtor may reacquire the property or also sell his
right to redeem and thus recover the loss he claims to have suffered by reason of the price obtained at the auction sale.
• But even if the foregoing requisites are shown, a judicial sale will not be set aside by the court when there is a right of redemption, since the more inadequate the winning
bid at public sale, the more easily it is for the owner to redeem the property.
While in ordinary sales, for reasons of equity, a transaction may be invalidated on the ground of inadequacy of price, or when such inadequacy shocks one's conscience as
to justify the courts to interfere, such does not follow when the law gives to the owner the right to redeem, as when a sale is made at public auction, upon the theory that
the lesser the price the easier it is for the owner to effect the redemption. When there is the right to redeem, inadequacy of price should not be material, because the
judgment debtor may reacquire the property or also sell his right to redeem and thus recover the loss he claims to have suffered by reason of the price obtained at the
auction sale

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 FLORES VS SO
162 SCRA 117

DOCTRINE: In a sale with the right of redemption, the ownership over the thing sold is transferred to the vendee upon the execution of the contract, “subject only to the
resolutory condition that the vendor exercise his right of repurchase within the period agreed upon.
• In a sale under a right of redemption, ownership over the thing sold is transferred to the vendee upon execution of the contract subject only to the resolutory condition
that the vendor exercise his right of redemption within the period agreed upon.

The new Civil Code shall not be applicable to a pacto de retro sale executed before it was enacted, hence the old civil code governs. It is provided in Article 1509 thereof
that if the vendor does not comply with the provisions of Article 1518, (i.e. to return the price, plus expenses) the vendee shall acquire irrevocably the ownership of the
thing sold. Under the old Civil Code, the ownership was consolidated in the vendee a retro by operation of law. Articles 1606 and 1607 of the new Civil Code which require
registration of the consolidation of ownership in the vendee a retro only by judicial order, do not apply

ALONZO VS IAC
150 SCRA 259

DOCTRINE: A written notice to co -owners is mandatory notwithstanding actual knowledge of the other co -owners of the sale. However, in exceptional cases, actual
knowledge may be deemed equivalent to a written notice of sale.
• Where the co -heirs filed an action for redemption of co -heir’s sold share only after thirteen years had elapsed from the sale, they are deemed to have been informed
sometime during those years although no written notice of sale was given to them

Under Article 1623, the right of legal pre -emption or redemption shall not be exercised except within thirty days from the notice in writing by the prospective vendor, or
by the vendors, as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given
written notice thereof to all possible redemptioners. An exception to the mandatory written rule is when the co -heirs only brought an action for redemption of hereditary
right sold by another co -heir only after so many years, after having actual knowledge thereof, by their actuations, with other circumstances such as being neighbors with
the purchaser. While the general rule is, that to charge a party with laches in the assertion of an alleged right it is essential that he should have knowledge of the facts
upon which he bases his claim, yet if the circumstances were such as should have induced inquiry, and the means of ascertaining the truth were readily available upon
inquiry, but the party neglects to make it, he will be chargeable with laches, the same as if he had known the facts.

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 LAO VS CA
275 SCRA 237

DOCTRINE: Where the borrower's urgent need for money places the latter at a disadvantage vis-a-vis the lender who can thus dictate the terms of their contract, the
court in case of ambiguity, deems the contract to be one which involves the lesser transmission of rights and interest over the property in controversy.
• In determining the nature of a contract, the Court looks at the intent of the parties and not the nomenclature used to describe it.
• A pacto de retro sale should be treated as equitable mortgage where the property sold never left the possession of the vendors.
• Necessitious men are not, truly speaking, free men; but to answer a present emergency, will submit to any terms that the crafty may impose upon them.

Existence of one of the circumstances under Article 1602 is enough to purport a pacto de retro sale to be one of equitable mortgage. In the case at bar, the vendor
remained in possession of the property as a beneficial owner before, during and after the alleged sale; there was extension of the period of redemption (in fact, this was
done twice); and that the vendors were in ‘dire need of money’ which led them to mortgage their property. Given such circumstances, the contract was held to be one
of equitable mortgage

LANUZA VS DE LEON
20 SCRA 269

DOCTRINE: The stipulation in a purported pacto de retro sale that the ownership over the house sold would automatically pass to the vendee in case no redemption was
effected within the stipulated period, under which the vendee acquires ownership of the thing sold immediately upon the execution of a sale without need of foreclosure
is actually a pactum commissiorium which is void.

The stipulation in deed denominated by the parties as a "Deed of Sale With Right to Repurchase" to the effect that if the vendor fails to pay the amount agreed upon within
the stipulated period, his right to repurchase the property shall be forfeited and the ownership over the same would automatically pass to the vendee without need of court
intervention, is contrary to the nature of a true pacto de retro sale, under which a vendee acquires ownership of the thing sold immediately upon execution of the sale,
subject only to the vendor's right of redemption. Since pacto commissorium is contrary to law, such contract is deemed to be an equitable mortgage. Also, preference of
mortgage credits is determined by the priority of registration of the mortgages, following the maxim “prior tempore potior jure".

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 CAPULONG VS CA
130 SCRA 245

DOCTRINE: The deed of sale and deed of option to purchase the property at bar are in reality an equitable mortgage, as they were signed on the same day. It is also shown
by the fact that petitioner obtained a series of loans from the respondent and that the "vendor" remained in possession of the premises.
• The deed of sale and deed of option to purchase the property at bar are in reality an equitable mortgage, as they were signed on the same day. The subsequent sale of
the property to the vendee a retro’s brother and its registration the same day indicate that the said sale is not bonafide.

In practically all of the so -called contracts of sale with right of repurchase, the real intention of the parties is that the pretended purchase price is money loaned and in
order to secure the payment of the loan, a contract purporting to be a sale with pacto de retro is drawn up. If the transaction is an absolute sale of property, particularly
land, the vendee would ordinarily assume immediate possession after the execution of the deed of sale

SOLID HOMES INC VS CA

GR No. 117501

DOCTRINE: Art. 1616 is not restrictive or exclusive. It should be construed together with Art. 1601 requiring the vendor to comply with the provisions of article 1616 and
other stipulations agreed upon by the parties.
• Failure to annotate by the vendor a retro is not by itself an indication of bad faith or malice. The vendor a retro is not legally bound to cause its annotation, and the vendee
a retro could have taken steps to protect its own interests.
• In a sale under a right of redemption, ownership over the thing sold is transferred to the vendee upon execution of the contract subject only to the resolutory condition
that the vendor exercise his right of redemption within the period agreed upon.

In a contract of sale with pacto de retro, the vendee has a right to the immediate possession of the property sold, unless otherwise agreed upon. It is basic that in pacto de
retro sale, the title and ownership of the property sold are immediately vested in the vendee a retro, subject only to the resolutory condition of repurchase by the vendor
a retro within the stipulated period. When the vendor remains in actual physical possession of the land and enjoys the fruits thereof, circumstances reveal the real intention
of the parties to secure the payment of the loans with the land as security. Moreover, Article 1616 is not restrictive- the interest and penalty in the redemption price may
be considered as “other expenses”.
PRIMARY STRUCTURES CORP. VS VALENCIA
G.R. NO. 150060

DOCTRINE: The mere statement in a deed of sale to the effect that the vendor has complied with the provisions of Article 1623 does not comply with the required written
notice where the holder of the right of pre-emption or redemption is not a party to the deed of sale.
• Whenever a piece of rural land not exceeding one hectare is alienated, the law grants to the adjoining owners a right of redemption except when the grantee or buyer
does not own any other rural land.

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 • The legal right of redemption shall not be exercised except within thirty days from notice in writing by the prospective vendor, and the deed of sale shall not be recorded
in the Registry of Property unless the same is accompanied by an affidavit of the vendor that he has given notice thereof to all possible redemptioners.

Whenever a piece of rural land not exceeding one hectare is alienated, the law grants to the adjoining owners a right of redemption except when the grantee or buyer does
not own any other rural land. In order that the right may arise, the land sought to be redeemed and the adjacent property belonging to the person exercising the right of
redemption must both be rural lands. If one or both are urban lands, the right cannot be invoked. Here, the one or both are urban lands, the right cannot be invoked. Article
1621 of the Civil Code expresses that the right of redemption it grants to an adjoining owner of the property conveyed may be defeated if it can be shown that the buyer or
grantee does not own any other rural land. The statement in the deed of sale to the effect that the vendors have complied with mandatory written notice as being the
written affirmation under oath, as well as the evidence, that the required written notice to petitioner under Article 1623 has been met

ECTUBAN VS CA.
148 SCRA 507

DOCTRINE: However, while it is true that written notice is required by the law (Art. 1623), it is equally true that the same Art. 1623 does not prescribe any particular form
of notice, nor any distinctive method for notifying the redemptioner. So long therefore, as the latter is informed in writing of the sale and the particulars thereof, the 30
days for redemption start running, and the redemptioner has no real cause to complain. In the case at bar, where the vendors or co-owners of petitioner stated under oath
in the deeds of sale that notice of sale had been given to prospective redemptioners in accordance with Article 1623 of the Civil Code. "A sworn statement or clause in a
deed of sale to the effect that a written notice of sale was given to possible redemptioners or co-owners might be used to determine whether an offer to redeem was made
on or out of time, or whether there was substantial compliance with the requirement of said Art. 1623."
• While written notice is required by the law in order to exercise the right of legal pre-emption or redemption, it is equally true that the same Art. 1623 does not prescribe
any particular form of notice, nor any distinctive method for notifying the redemptioner. So long therefore, as the latter is informed in writing of the sale and the particulars
thereof, the 30 days for redemption start running, and the redemptioner has no real cause to complain.
• In the case at bar, where the vendors or co-owners of petitioner stated under oath in the deeds of sale that notice of sale had been given to prospective redemptioners
in accordance with Article 1623 of the Civil Code. "A sworn statement or clause in a deed of sale to the effect that a written notice of sale was given to possible redemptioners
or coowners might be used to determine whether an offer to redeem was made on or out of time, or whether there was substantial compliance with the requirement of
said Art. 1623."

GUZMAN, BOCALINO AND CO., VS BONNEVIE

209 SCRA 668

DOCTRINE: Rescission may be impaired by the acquisition of third person of the subject property who is shown that he is in lawful possession and not acted in Bad faith.
• The fact that the Bonnevies had financial problems at that time was no justification for denying them the first option to buy the subject property. Even if the Bonnevies
could not buy it at the price qouted, Reynoso could not sell it to another for a lower price and under more favorable terms and conditions. Only if the Bonnevies failed to
exercise their right of first priority could Reynoso lawfully sell the subject property to others, and at that only under the same terms and conditions offered to the Bonnevies.

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• It was not necessary to secure the approval by the probate court of the Contract of Lease because it did not involve an alienation of real property of the estate nor did the
term of the lease exceed one year so as top make it fall under Article 1878(8) of the Civil Code. Only if Paragraph 20 of the Contract of Lease was activated and the said
property was intended to be sold would it be required of the administratrix to secure the approval of the probate court pursuant to Rule 89 of the Rules of Court

In the right of first priority, there should be identity of the terms and conditions to be offered to the lessees and all other prospective buyers. It is only when the lessees fail
to exercise the right that the property could be lawfully sold to others. Furthermore, it is only if the right of first priority would be effected and the said property is to be
sold that the administrator be required to secure the approval of the probate court pursuant to Rule 89 of the Rules of Court.

YEK SENG CO. VS CA

205 SCRA 305

DOCTRINE: At the rental in the case at bar was paid monthly and the term had not been expressly agreed upon, the lease was understood under Art. 1687 to be terminated
from month to month. Even if the contract of lease had not yet expired, its extension would still be subject to the sound discretion of the court and was by no means
obligatory upon it as a merely ministerial duty.
• As the rental in the case at bar was paid monthly and the term had not been expressly agreed upon, the lease was understood under Article 1687 to be terminable from
month to month. At the time the petitioner was asked to vacate the leased premises, the lease contract had already expired and therefore, following the abovequoted
decisions, could no longer be extended. In fact, even if such contract had not yet expired, its extension would still be subject to the sound discretion of the court and was
by no means obligatory upon it as a merely ministerial duty.
• The circumstance that the petitioner has paid its rentals religiously during the past twenty years is also not sufficient to justify the extension of the lease it demands.
Neither are the substantial improvements it allegedly made on the leased premises nor the difficulty of finding another place of business, on which it has not submitted any
evidence at all.
• Petitioner has only itself to blame if, being engaged in business, it did not take the necessary precautions against its possible and even abrupt displacement because of the
termination of the month-to-month lease.

The mere occupancy of the premises for a number of years, by itself is not sufficient. Since the contract of lease is for a definite term, the lessee cannot avail of the benefits
under Article 1687 which applies only if there is no definite term. The power of the Courts to fix a longer term for lease is potestative or discretionary, 'may' is the word—
to be exercised or not in accordance with the particular circumstances of the case; a longer term to be granted where equities come into play demanding extension, to be
denied where none appears, always with due deference to the parties freedom to contract.

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 CLUTARIO VS CA
216 SCRA 341

DOCTRINE: Acceptance by lessor of back rentals does not constitute abandonment of their cause of action for ejectment. For the lessor to be able to validly eject the lessee
on the ground of need for the leased property. It must be shown that there is no other available residential unit to satisfy that need. The non-availability must exist at the
time of the demand by the lessor on the lessee to vacate the property
. • B.P. Blg. 25 (1979), which was the governing law at the time of the filing of the complaint, provides, in section 5, six (6) grounds for ejectment. In seeking to oust petitioners
from the leased premises, private respondents invoke two of those six grounds, namely: (1) arrears in payment of rent for three (3) months at any one time; and (2) need
of the lessors to repossess their property for their own use or for the use of any immediate member of their family as residential unit
. • The acceptance by private respondents of the petitionerslessees' back rentals did not constitute a waiver or abandonment of their cause of action for ejectment against
the latter.

Acceptance by the lessor of the payment by the lessee of the rentals in arrears does not constitute a waiver of the default in the payment of rentals as a valid cause of action
for ejectment. For the lessor to be able to validly eject the lessee on the ground of need for the leased property, it must be shown that there is no other available residential
unit to satisfy that need. The non-availability must exist at the time of the demand by the lessor on the lessee to vacate the property waiver of the default in the payment
of rentals as a valid cause of action for ejectment. For the lessor to be able to validly eject the lessee on the ground of need for the leased property, it must be shown that
there is no other available residential unit to satisfy that need. The non-availability must exist at the time of the demand by the lessor on the lessee to vacate the property

YAP VS CRUZ
208 SCRA 692

DOCTRINE: The lease on a month-to-month basis may be terminated at the end of any month after proper notice or demand to vacate has been given. In the absence of
such notice, the lease of private respondent continues to be in force and cannot be deemed to have expired as of the end of the month automatically.
• When the petitioners and the landlord executed a new contract of lease, the lease of private respondent was still valid and subsisting. private respondent has not effectively
relinquished his leasehold rights over the premises in question in view of the failure of negotiations for the sale of the goodwill.
• The transfer of the leasehold rights is conditional in nature and has no force and effect if the condition is not complied with.
• The lack of proper notice or demand to vacate upon Dr. Cruz is evident. In the absence of such notice, the lease of private respondent Dr. Cruz continues to be in force
and cannot be deemed to have expired as of the end of the month automatically. Neither can the non-payment of the rent for the month of August, 1985 be a ground for
termination of the lease without a demand to pay and to vacate.

The transfer of the leasehold rights is conditional in nature and has no force and effect if a service of notice of demand to pay and to vacate is not complied with. In the
absence of such notice, the lease continues to be in force and cannot be deemed to have expired as of the end of the month automatically. Neither can the nonpayment of
the monthly rent be a ground for termination of the lease without a demand to pay and to vacate.

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 UNITED REALTY CORP. VS CA
183 SCRA 725

DOCTRINE: In a lease with a definite period lessee has the right to judicially eject lessor has the right to judicially eject Lessor upon expiration of the period as an exception
to the general rule provided for in Sec. 4, PD 20. PD 20 covers dwelling units only.
• Since the lease agreement in question is for a definite period it follows that petitioner has a right to judicially eject private respondent from the premises as an exception
to the general rule provided for in Section 4 of P.D. No. 20.
• Moreover, under Section of 5(f) of B.P. Blg. 25 one of the grounds for ejectment is the expiration of the period of a written lease contract. In this case, because of the
failure of the private respondent to pay the increased rental demanded by petitioner, petitioner elected to terminate the contract and asked the private respondent to
vacate the premises. A lease contract may be terminated at the end of any month, which shall be deemed terminated upon the refusal to pay the increased monthly rental
demanded by the petitioner, provided the same is not exorbitant.

LEGAR MGNT AND REALTY CORP VS CA

G.R. NO. 117423

DOCTRINE; In lease of residential property covered by the Rent Control Law and Where rentals are paid monthly, ejectment is proper upon expiration of the verbal lease
contract on the last day of any given 30-day period upon proper demand and notice.
• In a month to month lease situation, when petitioners (lessor) gave private respondent (lessee) notice to vacate the premises in question, the contract of lease is deemed
to have expired as of the end of the month.
• A month to month lease under Article 1687 is a lease with a definite period, the expiration of which upon previous demand by the lessor to vacate, can justify ejectment.

Lease agreements with no specified period, but in which rentals are paid monthly, are considered to be on a month-to-month basis. They are for a definite period and expire
after the last day of any given thirty-day period, upon proper demand and notice by the lessor to vacate even if the lease agreement was verbal in nature.

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