Aure, Christina C. Atty. Ma. Isabel D.

Publico-Romero
Sales and Lease (2D) LAW212N

Case Ruling
1. Yu Tek & Co. v, Gonzales                    The Court ruled that the contract in the case at bar was
merely an executory agreement; a promise of sale and
not a sale as there was no "appropriation" of any
particular lot of sugar. The defendant having defaulted
in his engagement, the plaintiff is entitled to recover
only the P3,000 which it advanced to the defendant
without the additional sum of P1,200 by way of
indemnity for loss and damages.
2. Compana de Tabacos v. CA The Court affirmed the Court of Appeals’ ruling for the
reason that there can be no sale simply of sugar
quota of a certain number of piculs without
specification of the land to which it relates. As the
vendor and vendee are both in pari delicto, no relief can
be granted to either party; the law will leave them where
they are.
3. Heirs of San Andres v. Rodriguez The Supreme Court ruled that since the lot subsequently
sold to respondent was said to adjoin the "previously
paid lot" on three sides thereof, the subject lot was
capable of being determined without the need of any
new contract. It cannot be gainsaid that the contract of
sale between the parties was absolute, not conditional as
there was no reservation of ownership nor a stipulation
providing for a unilateral rescission by either party.
4.  Pichel v. Alonzo  It was held that the contract was clearly a "sale of the
coconut fruits" because the vendor sold, transferred and
conveyed "by way of absolute sale, all the coconut fruits
of his land," thereby divesting himself of all ownership
or dominion over the fruits during the seven-year period.
The grantee of a parcel of land under R.A. No. 477 is
not prohibited from alienating or disposing of the natural
and/or industrial fruits of the land awarded to him.
5. EDCA Publishing v. Santos   Actual delivery of the books having been made, Cruz
acquired ownership over the books which he could then
validly transfer to the private respondents. The Court
cannot see the justice in transferring EDCA's loss to the
Santoses who had acted in good faith, and with proper
care, when they bought the books from Cruz.
6. Tagatac v. Jimenez   The Court stated that Feist acquired defective and
voidable title, but when he sold it to Sanchez, he
conferred a good title on the latter. As between two
innocent parties, the one whose acts made possible the
injury must shoulder the consequences thereof.
7. Quijada v. CA The Court ruled that the transaction was a donation
subject to a resolutory condition whereby ownership is

8. Sumaya, et al. v. IAC   The Court denied the petition stressing that the
9. Pajunar v. CA     Reversing the ruling of the Court of Appeals, the Court
10.  Tan Tiah v. Yu    The Court, taking the affirmative stance to the ruling of
11. Toyota Shaw Inc. v. CA  In its decision, the Court stated that there is no contract
12. Navarra v. Planters Bank
13. Ong v. Ong        The Court ruled that although the consideration of P1.00
immediately transferred to the latter and that ownership
will only revert to the donor if the resolutory condition is
not fulfilled. Since the municipality manifested in its
resolution that it cannot comply with the condition of
building a school, the donated property must revert to
the donor.
obligation to reserve rests upon the reservor, Consuelo
Joaquin vda. de Balantakbo as provided in Article 891 of
the New Civil Code on reserva troncal. The affidavit of
self-adjudication executed by Consuelo and registered
with the Registry would still be sufficient notice to bind
the parties. 
reiterated that respondents are not possessors in good
faith, as a possessor in good faith is one not aware that
there exists in his title or mode of acquisition any flaw
which invalidates it. The duty to make a closer inquiry
into the certificate of registration of the female carabao
which was the subject of the barter, defendant Mauro
Eluna should have performed but did not; thus his being
in bad faith.
the Court of Appeals, ruled that the price of the leased
land not having been fixed and the lessor not having
bound himself to sell it, the essential elements which
give life to the contract are lacking. It follows that the
lessee cannot compel the lessor to sell the leased land to
him.
of sale as the evidence showed there was an absence of a
meeting of minds between Toyota and Sosa. No
obligation on the part of Toyota to transfer ownership of
a determinate thing to Sosa and no correlative obligation
on the part of the latter to pay therefor a price certain
appears therein.
The Court denied the petition and reiterated that what
transpired between the parties was only a prolonged
negotiation to buy and to sell, and, at the most, an offer
and a counter-offer with no definite agreement having
been reached by them. With the hard reality that no
perfected contract of sale/repurchase exists in this case,
any independent transaction between the Planters Bank
and a third-party, like the one involving the Gatchalian
Realty, cannot be affected.
is suspicious, this circumstance, alone, does not
necessarily justify the inference that Reyes and the
Abellas were not purchasers in good faith and for value.
Bad faith and inadequacy of the monetary consideration

14. Aguilar v. Rubiato  The Court ruled in affirmative. Where the inadequacy of
15. PNB v. Gonzales
16. De Leon v. Salvador  The Court stated that when there is the right to
17. Cometa v. CA    Whether or not petitioners can still redeem the subject
18. Heirs of Ureta v. Heirs of Ureta
19. Phil. Banking Corp. v. Dy   The Court discovered that the Dys' and Sps. Delgado's
do not render a conveyance inexistent, for the assignor's
liberality may be sufficient cause for a valid contract
(Article 1350, Civil Code), whereas fraud or bad faith
may render either rescissible or voidable, although valid
until annulled, a contract concerning an object certain
entered into with a cause and with the consent of the
contracting parties, as in the case at bar.
the price in an agreement is so great that the mind
revolts at it and is such as a reasonable man would
neither directly nor indirectly be likely to consent to, a
strong reason exists for annulling a contract.
The Court found in the instant case that there is no claim
or pretense that there was any fraud or collision, or that
in any way Gonzalez was misled or deceived. In the
absence of other evidence of its unfairness, a judicial
sale of real property will not be set aside for inadequacy
of price alone, unless the inadequacy be so great as to
shock the conscience of the court.
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. Bernabe's petition
challenging the jurisdiction of Judge Cruz' court to issue
its orders of September 5, 1969 and January 5, 1970,
must necessarily fail — since said orders were within
the exclusive competence and jurisdiction of Judge Cruz'
court.
lots of this litigation, the Court ruled in the positive.
The Court noted the fact that the lots were sold at
P57,396.85 only when the same were valued at
P500,000 at the time and while there is no dispute that
mere inadequacy of the price per se will not set aside a
judicial sale of real property, nevertheless, where the
inadequacy of the price is purely shocking to the
conscience, such that the mind revolts at it and such that
a reasonable man would neither directly or indirectly be
likely to consent to it, the same will be set aside.
The Court stated that it is clear that the parties did not
intend to be bound at all, and as such, the Deed of Sale
produced no legal effects and did not alter the juridical
situation of the parties. The Deed of Sale is, therefore,
void for being absolutely simulated pursuant to Article
1409 (2) of the Civil Code.
deliberate simulation of the sale intended to obtain loan
proceeds from and to prejudice Philbank clearly

20. People’s Homesite v. CA
21. Romero v. CA
22.  Lim v. CA   The Court ruled that in this case, there is already a
23. Recio v. Heirs of Altamirano
24. Guiang v. CA     The Court stated that in this instance, private
25. Medina v. Coll. Of Int. Rev.  The Court ruled that contracts violative of the provisions
constitutes fraudulent conduct. Accordingly, in the
interest of public policy, fair dealing, good faith and
justice, the Court accords Philbank the rights of a
mortgagee in good faith whose lien to the securities
posted must be respected and protected. 
The Court ruled that was no perfected sale of Lot 4. It
was conditionally or contingently awarded to the
Mendozas subject to the approval by the city council of
the proposed consolidation subdivision plan and the
approval of the award by the valuation committee and
higher authorities; hence, the city council’s disapproval
is tantamount to an absence of meeting of the minds of
the parties.
The Court denying the petition reiterated that private
respondent's failure to "remove the squatters from the
property" within the stipulated period gives petitioner
the right to either refuse to proceed with the agreement
or waive that condition in consonance with Article
1545 of the Civil Code. This option clearly belongs to
petitioner and not to private respondent; in any case,
private respondent's action for rescission is not
warranted.
perfected contract and petitioners have the right to
choose whether to demand the return of P200,000.00
which they have paid as earnest money or to proceed
with the sale. They have chosen to proceed with the sale
and private respondent cannot refuse to do so.
The Court declared that absent the consent of
Alejandro's co-owners, the Court holds that the sale
between the other Altamiranos and the petitioner is null
and void. But as held by the appellate court, the sale
between the petitioner and Alejandro is valid insofar as
the aliquot share of respondent Alejandro is concerned
by being a co-owner thereof.
respondent's consent to the contract of sale of their
conjugal property was totally inexistent or
absent. Furthermore, it must be noted that the fraud and
the intimidation referred to by petitioners were
perpetrated in the execution of the document embodying
the amicable settlement; hence, its execution does not
alter the void character of the deed of sale between the
husband and the petitioners-spouses.
of Article 1490 of the Civil Code are null and void, and
the sales made by the petitioner to his wife being void,
the sales made by the latter are deemed the original sales
subject to tax. The Collector of Internal Revenue is
always an interested party in all matters involving

26. Ching v. Goyanko, Jr.  The Court found that the contract of sale in favor of the
27. Cruz v. CA        The Court found that Vizconde was an innocent
28. Cook v. McMicking
29.  Matabuena v. Cervantes
30.  Rubias v. Batiller     The Court ordered dismissal of the case the object which
31. Fornilda v. Br. 164 Pasig RTC
taxable transactions and may question their validity or
legitimacy whenever necessary to block tax evasion.
defendant-appellant Maria Ching was null and void for
being contrary to morals and public policy. The
purported sale, having been made by Joseph Sr. in favor
of his concubine, undermines the stability of the family,
a basic social institution which public policy vigilantly
protects.
purchaser for value because at the time he purchased the
property he was unaware of the adverse claim of
petitioner. Although under Art. 1490 the husband and
wife cannot sell property to one another as a rule which,
for policy consideration and the dictates of morality
require that the prohibition apply to common-law
relationships, petitioner can no longer seek
reconveyance of the property to her as it has already
been acquired by respondent Vizconde in good faith and
for value from her own transferee.
The Court ruled that the creditor who became such in
1911 has no standing in an action by him to set aside a
transfer of real estate made by his debtor to his wife in
1904. Although transfers from husband to wife or from
wife to husband are prohibited, under certain
circumstances, by article 1458 of the Civil Code, the
prohibition can be taken advantage of only by persons
who bear such a relation to the parties making the
transfer or to the property itself that such transfer
interferes with their rights or interests.
The Court reversed the decision of the trial court
grounding that while Art. 133 of the Civil Code
considers as void a "donation between the spouses
during the marriage," policy considerations of the most
exigent character as well as the dictates of morality
require that the same prohibition should apply to a
common-law relationship. As provided for in the Civil
Code, Felix Matabuena is entitled to one-half of the
inheritance and the plaintiff, as the surviving sister, to
the other half. 
was illegal at the time of the first contract, may have
already become lawful at the time of the ratification or
second contract; or the service which was impossible
may have become possible; or the intention which could
not be ascertained may have been clarified by the
parties. The ratification or second contract would then
be valid from its execution; however, it does not retroact
to the date of the first contract."
Complainants' prayer for respondent's disbarment is

32. Lao v. Genato   The Court ruled that the P300,000 price stated in the
33. Maharlika Broadcasting v. Tagle
34. Paragas v. Heirs of Balacano  The Court held that Gregorio was an octogenarian at the
35. Mercado v. Espiritu    The Court reiterated that annulment of the sale cannot be
36. Fabillo v. IAC  The Court stated that contract of services did not violate
37. Ravina v. Villa Abrille
denied but with the observation that respondent could
have been more circumspect in dealing with the
properties in litigation of his clients instead of one-
sidedly concentrating on and ensuring the collection of
his attorney's fees. A lawyer is prohibited from acquiring
either by purchase or assignment the property or rights
involved which are the object of the litigation in which
they intervene by virtue of their profession. and ensuring
the collection of his attorney's fees.
assailed Compromise Agreement is decidedly more
beneficial and advantageous not only to the estate, the
heirs of the decedents, but more importantly to its
creditors, for whose account and benefit the sale was
made. No satisfactory and convincing reason appeared
given for the rejection and/or non-acceptance of said
offer thus giving rise to a well-grounded suspicion that a
collusion of some sort exists between the administrator
and the heirs to defraud the creditors and the
government; thereby rendering such agreement null and
void.
The Court declared the sale as against public policy. As
an employee of the GSIS, Edilberto Tagle and his wife
are disqualified from bidding on the property belonging
to the GSIS because it gives the impression that there
was politics involved in the sale.
time of the alleged execution of the contract and
suffering from liver cirrhosis — circumstances which
raise grave doubts on his physical and mental capacity to
freely consent to the contract. The present petition was
denied.
invoked on the ground of minority, since at the time of
the perfection of the contract; Domingo and Josefa
presented themselves to be of legal age.  The judgment
that holds such sale to be valid and absolves the
purchaser from the complaint filed against him does not
violate the laws relative to the sale of minor’s property,
nor the judicial rules established in consonance
therewith.
Art. 1491 of the Civil Code. A contract between a
lawyer and his client stipulating a contingent fee is not
covered by said prohibition under Article 1491 (5) of the
Civil Code because the payment of said fee is not made
during the pendency of the litigation but only after
judgment has been rendered in the case handled by the
lawyer
The Court found that while respondent was out and her

38. Jader-Manalo v. Camaisa
39. Abalos v. Macatangay, Jr.
40. Sumbad v. CA  The Court ruled that the petition has no merit.
41.  Iglesia Filipina v. Heirs of Taeza
42. Bautista v. Jalandoni
children were in school, Pedro Villa Abrille acting in
connivance with the petitioners surreptitiously
transferred all their personal belongings to another place.
Thus, being the case, any person who willfully causes
loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate
the latter for the damages caused. 
According to the Court, the properties subject of the
contract in this case were conjugal; hence, for the
contract to sell to be effective, the consent of both the
husband and wife must concur. In the absence of proof
that the wife was incapacitated to give her consent to the
contract, a court authorization cannot be sought in this
case.
The Court found that Arturo’s action for specific
performance must fail; there being no indication that
they have adopted a different property regime, their
property relations would automatically be governed by
the regime of conjugal partnership of gains. Even on the
supposition that the parties only disposed of their
respective shares in the property, the sale, assuming that
it exists, is still void for the right of the husband or the
wife to one-half of the conjugal assets does not vest until
the liquidation of the conjugal partnership.  
Forgery of the donation had not been proved by
petitioner by clear and convincing evidence as well as
the fact that petitioners were guilty of laches by waiting
for twelve (12) years before claiming their inheritance.
The Court found that when the Supreme Bishop
executed the contract of sale of petitioner’s lot despite
the opposition made by the laymen’s committee, he
acted beyond his powers. This case clearly falls under
the category of unenforceable contracts mentioned in
Article 1403, paragraph (1) of the Civil Code and is
therefore invalid.
The Court stated that well settled is the rule that persons
dealing with an assumed agency are bound at their peril,
if they would hold the principal liable, to ascertain not
only the fact of agency but also the nature and extent of
authority, and in case either is controverted, the burden
of proof is upon them to establish it. Spouses Bautista's
failure to observe the required degree of caution in
ascertaining the genuineness and extent of Nasino's
authority is tantamount to bad faith that precludes them
from claiming the rights of a purchaser in good faith.