LAW 3:

Regulatory Framework
and
Legal Issues in Business

(Exit requirement)
LAW ON SALES
GR NO. 145330

SPOUSES
SPOUSES GOMER
SANTIAGO AND
AND LEONOR
MINDA
HERUELA,RAMOS (PETITIONER)
SPOUSES CHERRY AND
RAMOYND PALLORRI (RESPONDENT)

FACTS
Spouses TheRamos
case filed
dismissed
complaint
the plaintiff’s
of Recovery action
on for
therecovery
27th of
January
of ownership
1998, under
regarding
civil case
the petition
no.98-060 of Ramos
where Spouses
Heruela
againstonly
Spouses
paid P4,000
Heruelain the
and18th
Spouses
of December
Pallori which
1981 was
out
of 15300.
dated September
Due to unpaid 20, balance,
2000 of thecancellation
trial court.ofRamos
the Deed of
the Spouses
conditional
ownssale1883
was sq
mademeters
by Ramos
of land against
with a Transfer
Spouses
Heruela
certificate
in June
of title
1892.of the
Spouses
Register
Pallori
of Deeds
and Spouses
of CagayanHeruela
de
already
Oro City.
erected
An agreement
houses on the madeland,
by and
Spouses
refusedRamos
to leave
was to
despite
let Spouses
Ramos Heruela
spousescoverclaim 306
of recovery.
sq meters Spouses
of land Heruela
as a
insisted
contract
thatofthe
conditional
Contract of sale
sale
where
is onininstallment
later allegedbasis.
by
P2,000
Heruela
wasSpouses
paid as downas thepayment,
contract later
is a sale
payments
on installment
were
made.
basis.

??
??
ISSUE
Whether RA 6552 is applicable to an
absolute sale of land or Whether the
Spouses Ramos have a right to cancel the
sale.

RULING
As the ruling of the trial court, Spouses Ramos was
unable to comply with Section 4 RA 6552 regarding
grace period. Trial court denied Spouses Ramos claim
of recovery, the complaint was dismissed and the
favour is for the respondents where in Spouses Ramos
has to pay P20,000 as Attorney’s fee and P10,000 as
litigation expense.
 Credit transaction
GR NO. 168523

SPOUSES FERNANDO AND PHILIPPINES VETERANS BANKS

ANGELINA EDRALIN (PETITIONER) (RESPONDENT)

FACTS

Philippine Veterans Bank (Respondent) is a commercial
banking institution who grants the loan of Spouses
Fernando and Angelina Edralin (Petitioner) on February
5, 1976 with the amount of P270,000. In order the loan
have a guaranty and have security in the part of
Veterans Bank, the petitioner executed a Real Estate
situated in Parañaque. But the Spouses Edralin failed to
fulfil their obligation to Veterans Bank, so Veterans
Bank filed a petition for extra-judicial dated on June
28,1983.
?? ISSUE ??
There was a foreclose sale being held and the Veterans Bank
is the highest bidder and certificate of sale was issued to
them. When petitioner failed in redeeming the property during
the one year period under Act No.3135. Eventually the
Veterans Bank acquired absolute ownership of the property.
Consequently, Veterans Bank consolidates the title of
ownership of property to their name.
Despite the foregoing, Spouses Edralin failed in
surrendering the possession to Veterans Bank.
Veterans Bank filed an ex-parte petition for issuance
of a writ of possession but the trial court found no
merit in the Veterans Bank application.

Whether or not the case is involved in Pactum

commisorium that the law prohibits.

RULING
No, According to Act No.3135, any sale made under the
provision of this act, the mortgage may petition the
court of first instance where the property is situated, to
give him possession during the redemption period, to
indemnity the mortgagor in case it be shown that the
sale was made without violating the mortgage. When
the redemption period expires without the mortgagor
exercising his right of redemption, the mortgagor is
deemed to have lost all interest over the foreclosed
property, and the purchaser acquires absolute
ownership of the property
SS
 GENERAL BANKING

GR NO. 181426

GAMES AND GARMENTS ALLIED BANKING CORPORATION

DEVELOPERS INCORPORATION (RESPONDENT)
(PETITIONER)

FACTS

Bienvenida is married to Benedicto Pantaleon who agreed to
purchase a parcel of land situated at Buyanan, Muntinlupa.
With the sum of P14,000,000 payable to Games and
Garments Developers, Inc., payable to Cosay Family
P4,000,0000 and P1,000,000 for Attorney’s fee. The both
parties executed a Memorandum of Agreement dated
August 22,1996, that specify the terms by which the
payment will be satisfied and that day Mercado issued a
letter addressed to Attorney Lao of Games and Garments
Inc. On August 23,1996 the Deed of Sale is executed in favor
of Spouses Pantaleon.
On January 27,1997, Mercado executed another letter
addressed to Attorney Lao that is similar to the first
letter. RTC ruled in favor of Games and Garments
Developers Inc. CA modified the decision of RTC,
discharging Allied bank. Games and Garments
Developers Inc. appealed to the CA decision discharging
Allied Bank from liability under the deed of sale
between the corporation and the Spouses Panteleon,
for the bank was not a party to the documents.
Moreover, it ruled that Allied Bank also not liable under
the letters of guaranty that Mercado has executed
because it never ratified such letters.

??
ISSUE ??
Whether or not Allied Bank is liable as guarantor of Spouses
Pantaleon by virtue of Mercado’s letter.

RULING
The letters of Mercado does not belong to contract
of guaranty covered by the prohibition of the
Genera Banking Act. Mercado wrote two “letters of
guaranty” even though the word guarantee and
surety stated that it does not constitute with the
contracts of guaranty. According to Section 74 of
the General Banking Act, that prohibits banks from
entity into a contract of guaranty or surety.