ARTICLES 1458-1478
27355) with a
DIGNOS VS CA
FACTS:
Spouses Silvestre Dignos and Isabela Lumungsod de Dignos sold their
parcel of land in Opon, Lapu-Lapu to private respondent Antonio Jabil for the
sum of P28,000.00 payable for 2 installments, with an assumption of
indebtedness with the First Insular Bank of Cebu in the sum of P12,000.00
as was acknowledged by vendors in the Deed of Absolute Sale (Exh. C), and
the next installment to be paid 3 months after. But the same land was also
sold by Spouses Dignos (Exh. J) which was registered in the Registry of
Deeds. This prompted Jabil to file a civil suit against Spouses Dignos for the
2nd sale to Spouses Luciano Cabigas and Jovita de Cabigas, who were then
US citizens. CFI of Cebu rendered the 2nd sale to Spouses Cabigas null and
void, directing Spouses Dignos to return the P35,000.00 to Spouses Cabigas
and ordered Jabil to pay the remaining balance. Spouses Dignos contend
that Exh. C is a contract to sell and as such, anchored their contention on the
very terms of the contract as mentioned in ¶4, that said spouses have agreed
to sell the herein mentioned property to Alilano B. Jabil and condition in ¶5, in
which the spouses agreed to sign a final deed of absolute sale upon payment
of the remaining balance of P4,000.00.
ISSUE:
Is the contract between the parties a contract of sale or a contract to sell?
HELD:
The contract between the parties is a contract of sale. It has been held that
a deed of sale is absolute in nature although dominated as a “Deed of
Conditional Sale” where nowhere in the contract in question is a proviso or
stipulation to the effect that title to the property sold is reserved in the vendor
until full payment of the purchase price, nor is there a stipulation giving the
vendor the right to unilaterally rescind the contract the moment the vendee
fails to pay within a fixed period. All the elements of a valid contract of sale
are present in the document and that Spouses Dignos never notified Jabil by
notarial act that they were rescinding the contract, and neither did they file a
suit in court to rescind the sale. There is no showing that Jabil properly
authorized a certain Cipriano Amistad to tell petitioners that he was already
waiving his rights to the land in question.
Delfin Tan v. Erlinda Benolirao, et. al.
G.R. №. 153820 , October 16, 2009; Brion, J.
Facts: A 689 sq.m. parcel of land in Tagaytay City with TCT №. 26432, co-
owned by respondent spouses Lamberto and Erlinda Benolirao and spouses
Reynaldo and Norma Taningco, was the subject of a Deed of Conditional
Sale in favor of petitioner Delfin Tan for P 1,378,000. Pursuant to the deed,
petitioner paid the P 200,000 downpayment. Then, Lamberto Benolirao died
and an extrajudicial settlement of his estate was executed which caused the
issuance of a new certificate of title over the property (TCT №.
corresponding annotation in accordance with Section 4, Rule 74 of the Rules
of Court. Despite a second extension, petitioner failed to comply with his
obligation to pay the remaining balance due. In response to the demand
letter subsequently sent by the vendors, petitioner demanded the return of
his downpayment, contending that the annotation on the title was an
encumberance on the property that would prevent the vendors from
delivering a clear title to him. When the vendors refused, petitioner filed a
complaint for specific performance and caused the annotation of a notice of
lis pendens on the title. Respondents filed a motion for cancellation of the
notice of lis pendens and was granted. The lower court, after due
proceedings, ruled that the forfeiture was proper while the Court of Appeals
affirmed in toto hence, the present petition.
Issue: WON an annotation made pursuant to Section 3, Rule 74 of the ROC
on a COT conveying real property considered an encumberance on the
property?
Held: Court ruled in the affirmative. The litigation subject of a notice of lis
pendens must directly involve a specific property which is necessarily
affected by the judgment. While the deed does have real property for its
object, petitioner’s complaint is an in personam action since it asks the court
to compel the respondent to do something — either to rescind or reform the
contract — and enforces his personal rights against the respondent, not
against the property subject of the deed.
The contract between the parties was merely a contract to sell where the
vendor retained title and ownership to the property until petitioner has fully
paid the purchase price. Since he had no claim of ownership or title yet, he
had no right to ask for the annotation of a lis pendens notice on the title of the
property.
Jurisprudence has established that where the seller promises to execute a
deed of absolute sale upon the completion by the buyer of the payment of the
price, contract is only a contract to sell.
An annotation is placed on new certificates of title issued pursuant to the
distribution and partition of a decedent’s real properties to warn third persons
on the possible interests of excluded heirs or unpaid creditors in these
properties. The annotation, therefore, creates a legal encumbrance or
lien on the real property in favor of the excluded heirs or
creditors. Where a buyer purchases the real property despite the
annotation, he must be ready for the possibility that the title could be
subject to the rights of excluded parties.
The remedy of rescission under Art. 1191 cannot apply to mere contracts to
sell. In a contract to sell, the vendor remains the owner for as long as the
vendee has not complied fully with the condition of paying the purchase
price. If the vendor should eject vendee for failure to meet the condition
precedent, he is enforcing the contract and not rescinding it. (Termination is resort to American precedents which held that the exemption from "debts
the proper remedy.) contracted" by a homesteader include freedom from money liabilities, from
Unless time is of the essence to the contract, slight delay is not a ground for torts or crimes committed by him, such as from bigamy or slander, breach of
rescission. contract or other torts.

Artates vs. Urbi  "in its wider sense, (it) includes all that is due to a man under any form or
obligation or promise, and covers not only obligations arising under contract,
but also those imposed by law without contract."
FACTS: 
Section 118 of the Public Land law (Commonwealth Act 141) provides as
In September 1952, the proper land authorities issued in favor of herein follows:jgc:chanrobles.com.ph
appellant Lino Artates and Manuela Pojas (spouses Artates) a homestead
which is covered by Patent No. V-12775 and duly registered in their names "Sec. 118. Except in favor of the Government or any of its branches, units, or
(OCT No. P-572). In October 1955, Lino Artates inflicted injuries upon herein institution, or legally constituted banking corporations, lands acquired under
defendant Daniel Urbi who then filed Civil Case No. 40 against the former. free patent or homestead provisions shall not be subject to encumbrance or
The Justice of the Peace of Court of the CFI of Camilaniugan, Cagayan, alienation from the date of the approval of the application and for a term of
awarded damages in favor of Urbi in the amount of P1,476.35, so in June five years from and after the date of issuance of the patent or grant, nor shall
1962, the Provincial Sheriff of Cagayan made a public sale of the homestead they become liable to the satisfaction of any debt contracted prior to the
to satisfy the said judgment.  expiration of said period, but the improvements or crops on the land may be
mortgaged or pledged to qualified persons, associations or
The spouses Artates alleged that the sale of the homestead to satisfy Lino corporations."cralaw virtua1aw library
Artates’ indebtedness accrued in October 1955 violated the provision of the
Public Land Law exempting said property from execution for any debt Heirs of Enrique Zambales vs. Court of Appeals & Nin Bay Mining Corp. 
contracted within five years from the date of the issuance of the patent, and 120 SCRA 897 
that Urbi executed a deed of sale of the same parcel of land in June 1961 for February 1983
the sum of P2,676.35 to herein defendant Crisanto Soliven, who was a
minor, to defraud them.  FACTS: 

In March 1953, the CFI of Camilaniugan, Cagayan, upheld the execution The spouses Enrique Zambales and Joaquina Zambales (the Zambaleses),
made by the Provincial Sheriff upon the homestead, and at declared null and who are illiterate, were the homestead patentees of a parcel of land in the
void the sale of the land between Urbi and Soliven.  Municipality of Del Pilar, Roxas, Palawan, pursuant to Homestead Patent No.
V-59502 dated September 6, 1955. They claimed in November 1956 that
ISSUE:  respondent Nin Bay Mining Corporation (Corporation) had removed silica
sand from their land and destroyed the plants and other improvements
Do the appellants spouses Artates possess absolute ownership over the thereon, to which said Corporation denied to have done so. On October 29,
homestead which is covered by a patent?  1959, the Zambaleses, duly assisted by their counsel, Atty. Perfecto de los
Reyes, and the Corporation, entered into a Compromise Agreement which
COURT RULING:  state, among others, that the Zambaleses are giving the Corporation full
power and authority to sell, transfer and convey on September 10, 1960 or at
The Supreme Court reversed the decision appealed from and declared the any time thereafter the whole or any part of herein subject property. 
spouses Artates to be entitled to the return and possession of the subject
land without prejudice to their continuing obligation to pay the judgment debt, On September 10, 1960, the Corporation sold the disputed property to
and expenses connected therewith.  Joaquin B. Preysler for the sum of P8,923.70 fixed in the Compromise
Agreement. On December 6, 1969, or ten (10) years after the Trial Court's
Considering the protective policy of the law, the Supreme Court reiterated Decision based on the Compromise Agreement, and nine (9) years after the
that the Philippines’ public land laws, being copied from American legislation, sale to Preysler, the Zambaleses filed a civil action in the CFI of Palawan for
"Annulment of a Deed of Sale with Recovery of Possession and Ownership
with Damages”, alleging that Atty. de los Reyes and the Corporation induced
them through fraud, deceit and manipulation to sign the Compromise
Agreement.  their consideration is necessary in arriving at a just decision of the case. The
The trial court declared null and void the deed of sale executed between
Preysler and the Corporation, but the Court of Appeals reversed the said
decision after finding that the alleged fraud or misrepresentation in the
execution of the Compromise Agreement had not been substantiated by
evidence.  38 Phil 501
ISSUE: 
Are the compromise agreement and the subsequent deed of sale valid and
legal?  On January 24, 1911, plaintiff Andres Quiroga and J. Parsons (to whose
COURT RULING:  subrogated itself) entered into a contract, where it was stated among others
The Supreme Court sustained the finding of the appellate court that fraud
and misrepresentation did not vitiate petitioners' consent to the Agreement
because the latter were not as ignorant as they themselves tried to show.
The Zambaleses were political leaders who speak in the platform during
political rallies, and the lawyers they have hired belong to well-established
law firms in Manila, which show that although they were illiterate, they are still
well-informed. 
The general rule is that whoever alleges fraud or mistake must substantiate
his allegation, since the presumption is that a person takes ordinary care of
his concerns and that private transactions have been fair and regular. The
rule admits of an exception in Article 1332 of the Civil Code which provides:
When one of the parties is unable to read, or if the contract is in a language
not understood by him, and mistake or fraud is alleged, the person enforcing
the contract must show that the terms thereof have been fully explained to
the former.
However, although we find that the Zambaleses were not misled into signing
the Compromise Agreement, we hold that there has been violation of the
Public Land Act. The evidence on record shows that the land in question was
awarded t the Zambaleses as a homestead on September 6, 1955 (Exhibit
"A"). Before us, the Zambaleses now argue that the Compromise Agreement
executed on October 29, 1959 is in violation of the Public Land Act, which
prohibits alienation and encumbrance of a homestead lot within five years
from the issuance of the patent. 6
However, while the Compromise Agreement was held to be in violation of the
Public Land Act, which prohibits alienation and encumbrance of a homestead
lot within five years from the issuance of the patent. Although the issue was
not raised in the Courts below, the Supreme Court has the authority to review
matters even if they are not assigned as errors in the appeal, if it is found that
bilateral promise to sell between the Zambaleses and the Corporation, and
the subsequent deed of sale between Preysler and the latter were declared
null and void. 
Quiroga vs. Parsons Hardware 
 
August 1918 
FACTS: 
rights and obligations the present defendant Parsons Hardware Co. later
that Quiroga grants in favor of Parsons the exclusive rights to sell his beds in
the Visayan Islands under some conditions. One of the said conditions
provided that “Mr. Parsons may sell, or establish branches of his agency for
the sale of "Quiroga" beds in all the towns of the Archipelago where there are
no exclusive agents, and shall immediately report such action to Mr. Quiroga
for his approval” while another one passed on to Parsons the obligation to
order by the dozen and in no other manner the beds from Quiroga. 
Alleging that the Parsons was his agent for the sale of his beds in Iloilo,
Quiroga filed a complaint against the former for violating the following
obligations implied in what he contended to be a contract of commercial
agency: 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. 
ISSUE: 
Is the defendant, by reason of the contract, a purchaser or an agent of the
plaintiff for the sale of the latter’s beds in Iloilo? 
COURT RULING: 
The Supreme Court declared 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. 
In order to classify a contract, due regard 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. 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.