DEMOSTHENES R.

ARBILON vs SOFRONIO MANLANGIT

G.R. No. 197920, January 22, 2018

Facts:
The respondent alleged that he purchased on credit one (1) compressor and one (1) unit of Stainless Pump, 3
horsepower, single phase for P200,000.00 and P65,000.00, respectively, from Davao Diamond Industrial Supply
(Davao Diamond). Respondent claimed that the compressor had been in the possession of petitioner from November
1997 up to the time of the filing of the complaint, that despite demand, petitioner failed to return the same to
respondent. The petitioner argued that the respondent is not the owner of the compressor. Petitioner alleged that the
ownership of the compressor was never vested to respondent since the latter failed to pay the purchase price of
P200,000.00. Petitioner alleged that he voluntarily assumed the obligation to pay the compressor to Davao Diamond
in four installments as it was indispensable in the mining operations of Double A. Lucia Sanchez Leanillo (Leanillo)
became the financier of the mining operations and paid for the installments of the compressor on account of a
separate contract of sale entered into by Davao Diamond with her. The RTC in finding for the petitioner held that:
when [respondent] wrote the [Davao Diamond], that he was voluntarily surrendering the compressor and the pump he
effectively surrendered whatever rights and interest he might have on the compressor and the pump. He was aware
that he is no longer the owner of the compressor. No evidence was adduced by [respondent] to prove that there was
a prior existing arrangement with him and Leanillo as far as the payment of the account with [Davao Diamond] was
concerned. The CA held that the transaction between respondent and Davao Diamond was a contract to sell since
the stipulation in the Sales Invoice shows that the goods listed in the invoice shall remain the property of the seller
until fully paid by the buyer. The CA further held that since Leanillo undisputedly paid the installments on the
compressor, the ownership over the compressor was automatically vested on respondent.

Issue:
Whether the petitioner has the better right to possession of the compressor

Ruling:
In a contract to sell, the seller explicitly reserves the transfer of title to the buyer until the fulfillment of a
condition, that is, the full payment of the purchase price. Title to the property is retained by the seller until the buyer
fully paid the price of the thing sold. As found by the CA and undisputed by the respondent, the Sales Invoice No.
8291 covering the disputed compressor contained the following stipulation: Note: It is hereby agreed that the goods
listed to this invoice shall remain the property of the seller until fully paid by the buyer. Failure of the buyer to pay the
goods as agreed upon, the seller may extra-judicially take possession of the goods and dispose them accordingly.

While the sales invoice is not a formal contract to sell, the sales invoice is nevertheless the best evidence of the
transaction between the respondent and Davao Diamond. Sales invoices are commonly recognized in ordinary
commercial transactions as valid between the parties and, at the very least, they serve as an acknowledgment that a
business transaction has in fact transpired. Thus, the moment respondent affixed his signature thereon, he is bound
by all the terms stipulated therein.

The sales invoice contains the earmarks of a contract to sell since the seller reserved the ownership of the thing sold
until the buyer fully paid the purchase price. We therefore agree with the CA that the agreement between respondent
and Davao Diamond is a contract to sell. As such, the mere delivery of the compressor to respondent does not make
him the owner of the same.
Spouses Steven T. Uy and Judith Uy Vs. Toyota Financial Services Corporation
G.R. No. 245427. June 17, 2019

Ruling:
Under prevailing jurisprudence, prior demand is not a condition precedent to an action for replevin. Even assuming
that a prior demand was required, the CA correctly observed that its necessity was validly dispensed with by the
parties as stipulated in the promissory notes. Likewise, the CA correctly ruled that petitioners could be held liable to
pay the balance of the promissory notes in the event that recovery of the vehicles was unsuccessful. Jurisprudence
provides that the barring effect under Article 14849 of the Civil Code operates only upon the mortgaged chattel's
actual foreclosure and eventual sale at public auction. Hence, until the vehicles are actually foreclosed and sold,
respondent may avail of the other remedies under Article 1484.
EQUITABLE SAVINGS BANK vs. ROSALINDA C. PALCES
G.R. No. 214752, March 09, 2016

Facts:
On August 15, 2005, respondent purchased a Hyundai Starex GRX Jumbo through a loan granted by
petitioner in the amount of P1,196,100.00. Respondent executed a Promissory' Note with Chattel Mortgage in favor of
petitioner, stating, inter alia, that: (a) respondent shall pay petitioner the aforesaid amount in 36-monthly installments
of P33,225.00 per month; (b) respondent's default in paying any installment renders the remaining balance due and
payable; and (c) respondent's failure to pay any installments shall give petitioner the right to declare the entire
obligation due and payable and may likewise, at its option, x x x foreclose this mortgage; or file an ordinary civil action
for collection and/or such other action or proceedings as may be allowed under the law. Respondent failed to pay the
monthly installments in January and February 2007. Petitioner filed a Complaint for Recovery of Possession with
Replevin with Alternative Prayer for Sum of Money and Damages against respondent before the RTC, praying that
the court a quo: (a) issue a writ of replevin ordering the seizure of the subject vehicle and its delivery to petitioner; or
(b) in the alternative as when the recovery of the subject vehicle cannot be effected, to render judgment ordering
respondent to pay the remaining balance of the loan, including penalties, charges, and other costs appurtenant
thereto. The RTC ruled in petitioner's favor and, accordingly, confirmed petitioner's right and possession over the
subject vehicle and ordered respondent to pay the former the amount of P15,000.00 as attorney's fees as well as the
costs of suit. The CA affirmed the RTC ruling with modification: (a) ordering petitioner to return the amount of
P103,000.00 to respondent; and (b) deleting the award of attorney's fees in favor of petitioner for lack of sufficient
basis. It held that while respondent was indeed liable to petitioner under the Promissory Note with Chattel Mortgage,
petitioner should not have accepted respondent's late partial payments in the aggregate amount of P103,000.00.

Issue:
Whether or not the CA correctly ordered petitioner to return to respondent the amount of P103,000.00
representing the latter's late installment payments

Ruling:
The petition is partly meritorious. In this case, there was no vendor-vendee relationship between respondent
and petitioner. A judicious perusal of the records would reveal that respondent never bought the subject vehicle from
petitioner but from a third party, and merely sought financing from petitioner for its full purchase price. In order to
document the loan transaction between petitioner and respondent, a Promissory Note with Chattel Mortgage29 dated
August 18, 2005 was executed wherein, inter alia, respondent acknowledged her indebtedness to petitioner in the
amount of P1,196,100.00 and placed the subject vehicle as a security for the loan.30 Indubitably, a loan contract with
the accessory chattel mortgage contract - and not a contract of sale of personal property in installments - was entered
into by the parties with respondent standing as the debtor-mortgagor and petitioner as the creditor-mortgagee.
Therefore, the conclusion of the CA that Article 1484 finds application in this case is misplaced, and thus, must be set
aside.
STAR ASSET MANAGEMENT ROPOAS, INC. vs. REGISTER OF DEEDS OF DAVAO CITY
G.R. No. 233737, February 03, 2021

Facts:
The case involves three parcels of land located in Barangay Baliok, Talomo, Davao City previously
registered in the name of Star Asset with a combined area of 300,000 square meters. Star Asset asserted that the
subject properties were previously owned by Davao Goldland Development Corporation (Goldland). The properties
were foreclosed by PBCOM and later, the ownership of the same was transferred to Unimark Investments
Corporation (Unimark). Star Asset claimed that it eventually acquired the properties from Unimark. Goldland
impugned the validity of the foreclosure proceedings which prompted Star Asset to enter into a Compromise
Agreement with the former. Star Asset claimed that Goldland failed to comply with its obligation under the
compromise agreement, and was constrained to cancel said compromise agreement. Foothills Realty argued that the
cancellation of the compromise agreement should have complied with Republic Act No. (R.A.) 6552, otherwise known
as the "Realty Installment Buyer Act" or the "Maceda Law." The RTC held that the compromise agreement between
the parties partakes of the nature of contract to sell which is covered by the Maceda Law. According to the RTC, the
compromise agreement was improperly cancelled because Star Asset, substituted later by Dallas Energy, failed to:
(1) send a notarized notice of cancellation to Goldland (Foothills Realty's transferor); and (2) refund the cash
surrender value to the latter. The CA affirmed the denial of the petition for cancellation of the adverse claim banking
on the same conclusion that the Maceda Law is applicable to cancel the contract to sell embodied in the compromise
agreement.

Issue:
Whether or not the Maceda Law is applicable in this case

Ruling:
The Maceda Law is not applicable in this case. The compromise agreement entered into between the
parties involved a "buy-back of foreclosed property" arrangement, to enable the original mortgagor who lost the
property in the foreclosure sale to acquire it back even after the ownership had been consolidated to the buyer (or his
successor-in-­interest) who bought the property in the foreclosure sale. In this case, Star Asset acquired the subject
properties from the buyer thereof in the foreclosure sale and it was succeeded in its rights as such by Dallas Energy.
Meanwhile, under the compromise agreement, Foothills Realty, as the successor-in-interest of Goldland, undertook to
buy-back the property from Star Asset and/or Dallas Energy. The parties stipulated that such "buy-back of foreclosed
property" arrangement will be governed by a schedule of payments wherein Foothills Realty would pay Star Asset
and/or Dallas Energy through installments; and in the event that the former would default in any of its installment
payment, the following consequences would ensue: 3) Failure on the part of the [Foothills Realty] to comply with the
requirements detailed above shall constitute an event of default after formal notice or demand has been made and
received by the [Foothills Realty] from the [Star Assets and/or Dallas Energy]. In such an event, the [Star Assets
and/or Dallas Energy] may exercise its right to foreclose the mortgaged properties. In this case, while Section 3 of the
compromise agreement gives Star Asset and/or Dallas Energy the right to foreclose the mortgaged properties in case
of default and after formal notice or demand has been served and received by Foothills Realty, nevertheless, the
correct interpretation should be that, in case of default, Star Asset and/or Dallas Energy should be given the right to
cancel the compromise agreement. This is in keeping with the nature of the compromise agreement as a buy-back of
foreclosed property arrangement. Besides, the subject property has already been foreclosed and its ownership was
transferred to Star Asset and/or Dallas Energy. There is no reason for the latter to foreclose the subject property
anew.
PRYCE PROPERTIES CORP. VS. NARCISO R. NOLASCO, JR.
G.R. No. 203990, August 24, 2020

Facts:
The case stemmed from a complaint for recovery of a sum of money (Complaint) filed by Nolasco before the
RTC against Pryce Corporation. Nolasco alleged the following in his Complaint: in 1995, he purchased three lots
located in Cagayan de Oro City from Pryce; also in 1995, he deposited a total amount of P393,435.00 through check
payments in favor of Pryce; the latter did not deliver to Nolasco the copies of the lots' certificates of title and their
sales agreement; he was surprised, frustrated, and dismayed when he finally received the sales agreement, as it
contained unacceptable conditions to which he conveyed his objections to Pryce; since he had not yet signed the
sales agreement, there was still no meeting of the minds between him and Pryce; and that despite demands for
refund of his deposit payments, Pryce failed to comply. Pryce countered that Nolasco could not yet be issued
certificates of title since their transaction was not a contract of sale but a contract to sell. Nolasco, under Republic Act
No. 6552 (RA 6552) or the Maceda Law, was not entitled to a refund of his deposits since he failed to complete the
payments within the grace period provided by Pryce, resulting in their forfeiture and the rescission of the contract to
sell. The RTC ruled in favor of Nolasco. It found that there had been a perfected contract of sale between Nolasco
and Pryce pursuant to Article 1482 of the Civil Code. It also ruled that under RA 6552 or the Maceda Law, Pryce can
rescind the contract of sale for failure of Nolasco to pay at least two (2) years of installments to Pryce. The latter,
however, did not rescind the contract.The CA affirmed the RTC in part. The CA found that the contract entered into by
Pryce and Nolasco was a contract to sell. The CA nonetheless upheld Nolasco's entitlement to a refund, as Pryce did
not exercise the remedy of cancellation under RA 6552 and under equity considerations.

Issue:
Whether the contract between Pryce and Nolasco was rescinded in accordance with RA 6552 and whether
petitioner Pryce should refund respondent Nolasco

Ruling:
We affirm with modification the CA ruling. Section 4 of RA 6552 requires four (4) conditions before the seller
may actually cancel the contract thereunder: first, the defaulting buyer has paid less than two (2) years of
installments; second, the seller must give such defaulting buyer a sixty (60)-day grace period, reckoned from the date
the installment became due; third, if the buyer fails to pay the installments due at the expiration of the said grace
period, the seller must give the buyer a notice of cancellation and/or a demand for rescission by notarial act; and
fourth, the seller may actually cancel the contract only after the lapse of thirty (30) days from the buyer's receipt of the
said notice of cancellation and/or demand for rescission by notarial act.Nonetheless, Pryce must be enlightened that
the written Contract to Sell did not and does not bind Nolasco for the following reasons: First, the highlighted
conditions in the Contract to Sell conflict with RA 6552, which dictates "receipt" and not "service" of the notice of
rescission to the buyer as the reckoning point of the thirty (30)-day period before actual cancellation. Pryce's Contract
to Sell even dispensed with this legal requirement of receipt by deeming mere service by registered mail as sufficient
proof of service and constructive receipt. For being contrary to Section 4 of RA 6552, these stipulations are rendered
null and void,16 and the general provisions governing a contract to sell under RA 6552 shall govern. Moreover, it was
not signed by Nolasco. Even if so signed, the Contract to Sell was not worded to effect its automatic cancellation
upon Nolasco's default. While the word automatic cancellation implies unconditionality, the body of the above
contractual stipulation betrays its title. The entire provision practically mirrored the demands of Section 4 of RA 6552:
defaulting buyer paid less than two (2) years of installments, a grace period of sixty (60) days, a service of a notarial
notice of cancellation or rescission, and a lapse of thirty (30) days from the said service of notice of cancellation or
rescission.

There was compliance with the first and second requisites when Pryce sent Nolasco, a defaulting buyer whose
payments did not amount to two years' worth of installments, its December 5, 1998 letter giving him sixty (60) days to
make good on his obligation. Pryce, however, did not meet the last two conditions. As properly determined by the CA,
there was no notice of notarial rescission served upon Nolasco. Necessarily, thirty (30) days could not have lapsed
from a non-existent service of such notice.