1.

 Toyota Shaw, Inc. vs. Court of Appeals

FACTS:
in June of 1989, Luna L. Sosa wanted to purchase a Toyota Lite Ace. It was then a seller's market and Sosa had
difficulty finding a dealer with an available unit for sale. But upon contracting Toyota Shaw, Inc., he was told that
there was an available unit. So on 14 June 1989, Sosa and his son, Gilbert, went to the Toyota Shaw Boulevard,
Pasig, Metro Manila. There they met Popong Bernardo, a sales representative of Toyota.

- he needed the Lite Ace not later than 17 June 1989

- he, his family, and a balikbayan  guest would use it on 18 June 1989 to go to Marinduque, to celebrate his
bday
- "laughing stock."
- Bernardo assured Sosa that a unit would be ready for pick up at 10:00 a.m. on 17 June 1989.
- Bernardo then signed the aforequoted "Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw,
Inc." It was also agreed upon by the parties that the balance of the purchase price would be paid by
credit financing through B.A. Finance.
- Next day. Sosa and Gilbert went to Toyota to deliver the downpayment of P100,000.00.
- They met Bernardo who then accomplished a printed Vehicle Sales Proposal (VSP) No. 928
- Rodrigo Quirante, the Sales Supervisor of Bernardo, checked and approved the VSP.
- June 17, ready for pick up
- After waiting for about an hour, Bernardo told them that the car could not be delivered because "nasulot ang
unit ng ibang malakas."
TOYOTA – NOT DELIVERED
REASON: disapproval of B.A. Finance of the credit financing application
- but could not be released due to the uncertainty of payment of the balance of the purchase price
- Sosa asked that his downpayment be refunded
- Sosa sent two letters to Toyota:
he demanded the refundplus interest from the time he paid it and the payment of damages with a
warning that in case of Toyota's failure to do so he would be constrained to take legal action.

Sosa, before Regional Trial Court (RTC) of Marinduque a complaint against Toyota for damages

SOSA: They sufferesuffered embarrassment, humiliation, ridicule…..

Toyota : NO sale was entered into
- Bernardo had no authority to sign Exhibit "A" for and in its behalf
- Sosa had not completed the documents required by the financing company
- the P100,000.00 was returned to and received by Sosa;
RTC : in favor of Sosa. 
- Exhibit A was a valid perfected contract of sale
- declared suffered besmirched reputation, wounded feelings and sleepless nights for which he ought to be
compensated
Court of Appeals affirmed in toto the appealed decision.
ISSUE: WON there was a perfected contract of sale
RULING: It is not a contract of sale.
 The provision on the downpayment of P100,000.00 MADE NO SPECIFIC REFERENCE TO A SALE, it could only
refer to a sale on installment basis, as the VSP executed the following day confirmed. But nothing was
mentioned about the full purchase price and the manner the installments were to be paid.
This Court had already ruled that a definite agreement on the manner of payment of the price is an
essential element in the formation of a binding and enforceable contract of sale.  This is so because the
agreement as to the manner of payment goes into the price such that a disagreement on the manner of
payment is tantamount to a failure to agree on the price. Definiteness as to the price is an essential element of
a binding agreement to sell personal property. 19
Moreover, Exhibit "A" shows the absence of a meeting of minds between Toyota and Sosa. For one
thing, Sosa did not even sign it.
He knew that Bernardo was only a sales representative of Toyota and hence a mere agent of the latter. It was
incumbent upon Sosa to act with ordinary prudence and reasonable diligence to know the extent of Bernardo's
authority as an agent 20 in respect of contracts to sell Toyota's vehicles. A person dealing with an agent is put
upon inquiry and must discover upon his peril the authority of the agent. 21
At the most, Exhibit "A" may be considered as part of the initial phase of the generation of negotiation
stage of a contract sale. There are three stages in the contract of sale, namely:
The second phase of the generation or negotiation stage in this case was the execution of the VSP. It must be
emphasized that thereunder, the downpayment of the purchase price was P53,148.00 while the balance to be
paid on installment should be financed by B.A. Finance Corporation. It is, of course, to be assumed that B.A
Finance Corp. was acceptable to Toyota, otherwise it should not have mentioned B.A. Finance in the VSP. LLjur
Accordingly, in a sale on installment basis which is financed by a financing company, three parties are
thus involved: Buyer, Seller and financing company. Since B.A. Finance did not approve Sosa's application, there
was then no meeting of minds on the sale on installment basis.
The VSP was a mere proposal which was aborted in lieu of subsequent events. It follows that the VSP
created no demandable right in favor of Sosa for the delivery of the vehicle to him, and its non-delivery did
not cause any legally indemnifiable injury. Cdpr
[G.R. No. L-43059. October 11, 1979.]

SAMPAGUITA PICTURES, INC., plaintiff-appellant, vs. JALWINDOR MANUFACTURERS, INC., defendant-

appellee.
FACTS:
Plaintiff-appellant Sampaguita Pictures, Inc. (hereinafter referred to as Sampaguita) is the owner
of the Sampaguita Pictures Building located at the corner of General Araneta and General Roxas Streets,
Cubao, Quezon City. The roofdeck of the building and all existing improvements thereon were leased by
Sampaguita to Capitol "300" Inc. (Capitol for short), and it was agreed, among other things, that the
premises shall be used by said club for social purposes exclusively for its members and guests; that all
permanent improvements made by the lessee on the leased premises shall belong to the lessor
IMporovements:
without any obligation on the part of the lessor to reimburse
- paid by the lessee
Capitol "300" purchased on credit from defendant-appellee Jalwindor Manufacturers, Inc.
(hereinafter referred to as Jalwindor) glass and wooden jalousies which were delivered and installed in the
leased premises by Jalwindor, replacing the existing windows.
CFI, RIZAL, QC
- action for collection of a sum of money with a petition for preliminary attachment against Capitol for
its failure to pay its purchases
 - COMPROMISE AGREEMENT : pending liquidation of the said obligation, all the materials purchased by
Capitol will be considered as security for such undertaking. (p. 13, Record on Appeal)
In the meantime, Capitol "300" was not able to pay rentals to Sampaguita from March 1, 1964
to April 30, 1965, water, electric and telephone services. Sampaguita filed a complaint for ejectment and
for collection of a sum of money against Capitol
judgment : ordering Capitol to vacate the premises and to pay Sampaguita. LibLex
LIKEWISE FAILED TO COMPLY WITH THE TERMS OF THE COMPROMISE AGREEMENT the Sheriff made
levy on the glass and wooden jalousies in question.
Sampaguita ( third-party claim) - it is the owner of said materials and not Capitol. Jalwindor- higest
bidder
CFI: Sampaguita filed an action to nullify the Sheriff's Sale
On October 20, 1967, based on said Stipulation of Facts, the lower court dismissed the complaint
and ordered Sampaguita to pay Jalwindor the amount of P500.00 as attorney's fees.

ISSUE: WHO was the owner of glass and wooden jalousie.

RULING:
When the glass and wooden jalousies in question were delivered and installed in the leased
premises, Capitol became the owner thereof. Ownership is not transferred by perfection of the contract
but by delivery, either actual or constructive. This is true even if the purchase has been made on credit, as
in the case at bar. Payment of the purchase price is not essential to the transfer of ownership as long as
the property sold has been delivered. Ownership is acquired from the moment the thing sold was
delivered to vendee, as when it is placed in his control and possession. (Arts. 1477, 1496 and 1497, Civil
Code of the Phil.)
Capitol entered into a lease contract with Sampaguita in 1964, and the latter became the owner of
the items in question by virtue of the agreement in said contract "that all permanent improvements made
by lessee shall belong to the lessor and that said improvements have been considered as part of the
monthly rentals." When levy or said items was made on July 31, 1965, Capitol, the judgment debtor,
was no longer the owner thereof. 
It is, likewise, recognized in the case of Bayer Phil., Inc. vs. Agana, et al., 63 SCRA 358, wherein the Court
declared, "that the rights of third party claimants over certain properties levied upon by the Sheriff to
satisfy the judgment, may not be taken up in the case where such claims are presented but in a separate
and independent action instituted by claimants . . . and should a third-party appear to claim the property
levied upon by the Sheriff and the claim is denied,
REMEDY contemplated by the rules is the filing by said party of a reivindicatory
The items in question were illegally levied upon since they do not belong to the judgment debtor.
The power of the Court in execution of judgment extends only to properties unquestionably belonging to
the judgment debtor. The fact that Capitol failed to pay Jalwindor the purchase price of the items levied
upon did not prevent the transfer of ownership to Capitol. The complaint of Sampaguita to nullify the
Sheriff's sale is well-founded, and should prosper. Execution sales affect the rights of judgment debtor
only, and the purchaser in the auction sale acquires only the right as the debtor has at the time of sale.
Since the items already belong to Sampaguita and not to Capitol, the judgment debtor, the levy and
auction sale are, accordingly, null and void. It is well-settled in this jurisdiction that the sheriff is not
authorized to attach property not belonging to the judgment debtor. (Arabay, Inc. vs. Salvador, et al., 3
PHILAJUR, 413 [1978], Herald Publishing vs. Ramos, 88 Phil. 94, 100)
Additional assignment:
I. Formation / Perfection of Contract of Sale, Parties to a sale contract (Articles 1479-1494 except 1484-1486, and 1504 Civil Code)
Cases:
1. Limson vs. CA, 357 SCRA 209;
FACTS:

In her complaint, petitioner Lourdes Limson alleged that the De Vera spouses (herein private respondent), through their agent
Sanchez, offered to sell to her a parcel of land in Parañaque.

Receipt therefor and gave her a 10-day option period to purchase the property.
Respondent Mr. De Vera then informed her that the subject property was already mortgaged to Emilio and Isidro Ramos (Ramoses)
and then asked her to pay the balance of the purchase price to settle their obligation –with the Ramoses.
3 meetings
- Did not appear
- Backtaves
- Given 3 checks worth 36k
SURPRISE:property was the subject of a negotiation for the sale between private respondent and Sunvar Realty Corp (co-
respondent) represented by co-respondent Cuenca

RTC: LIMSON. MAG EXECUTE NG DEED OF SALE

Ca: REVERSED
Respondent: mere option lang
RULING:
Whether or not there was a perfected contract to sell.
HELD: NO, there was no perfected contract to sell. The agreement was a contract of option.
An option is not of itself a purchase, but merely secures the privilege to buy. It is not a sale of property but a sale of the right to
purchase.
. There was no perfected contract to sell between the parties. The option period expired and the exclusive right of petitioner to buy
the property of respondent spouses ceased.RECEIPT. there was no concurrence of private respondent spouses’ offer and petitioner’s
acceptance thereof within the option period.
Verily, the commencement of negotiations between Spouses D Vera and respondent SUNVAR clearly manifested that their offer to
sell subject property to petitioner was no longer exclusive to LImson

CASE:

Sann Miguel Properties vs. Huang

Facts:   San Miguel Properties offered two parcels of land for sale and the offer was made to an agent of the
respondents. An “earnest-deposit” of P1 million was offered by the respondents and was accepted by the
petitioner’s authorized officer subject to certain terms.
Petitioner, through its executive officer, wrote the respondent’s lawyer that because ethe parties failed to
agree on the terms and conditions of the sale despite the extension granted by the petitioner, the latter was
returning the “earnest-deposit”.
The respondents demanded execution of a deed of sale covering the properties and attempted to return the
“earnest-deposit” but petitioner refused on the ground that the option to purchase had already expired.
A COMPLAINT FOR SPECIFIC PERFORMANCE was filed against the petitioner and the latter filed a MOTION TO
DISMISS the complaint because the alleged “exclusive option” of the respondents lacked a consideration
separate and distinct from the purchase price and was thus unenforceable; the complaint did not allege a
cause of action because there was no “meeting of the mind” between the parties and therefore the contact of
sale was not perfected.
TC: granted the petitioner’s motion and dismissed the action.
Court of Appeals – reversed decision of the trial court and held that a valid contract of sale had been complied
Issue:   WON there was a perfected contract of sale between the parties
Ruling:            Yes. Perfected.
Ratio Decidendi:         It is not the giving of earnest money , but the proof of the concurrence of all the
essential elements of the contract of sale which establishes the existence of a perfected sale.
The P1 million “earnest-deposit” could not have been given as earnest money because at the time when
petitioner accepted the terms of respondents’ offer, their contract had not yet been perfected. This is evident
from the following conditions attached by respondents to their letter.

2. Atkins, Kroll & Co. vs. Cua Hian Tek, 102 Phil 948
Petitioner Atkins, Kroll & Co. sent to respondent Cua Hian Tek a letter dated 13 September 1951 offering 1,000 cartons of Luneta
brand Sardines subject to reply by 23 September 1951. However, due to shortage of catch of sardines by the packers in California,
petitioners failed to deliver the said commodities. Respondent sued petitioner.

CFI ordered petitioner Atkins to pay damages to respondent.

CA affirmed the CFI Decision but reduced the payment
Petitioner : there was no contract of sale but only an option to buy which was not enforceable for lack of consideration.
RULING: there was perfected contract of sale.
If an option is given without consideration, it is a mere offer of contract of sale, which is not binding until accepted. If, however,
acceptance is made before a withdrawal, it constitutes a binding contract of sale, even though the option was not supported by a
sufficient consideration. Same in this
3. Bible Baptist Church vs. CA, 26 November 2004
4. Osmeña III vs. Power Sector Assets and Liabilities Management Corporation, 771 SCRA 559, G.R. No. 212686 September 28,
2015

Respondent Power Sector (PSALM) is a GOCC with the purpose of managing the orderly sale, disposition and privatization of the
National Power Corporation’s (NPC) generation assets, real estate and other disposable assets.
Respondent Ledesma is the President and CEO of PSALM. The two facilities subject to the present controversy are two Gas Turbines
inside the NPC’s compound. SPC is a joint venture corporation and TPVI is a subsidiary of Aboitiz Power, a power generation
company.
In 2009, PSALM PRIVATIZED the Naga Land-Based Gas Turbine (LBGT) Power Plant by way of negotiated sale after a failed bidding.
This bidding resulted in SPC’s acquisition of the LBGT through an Asset Purchase Agreement and lease of the land under a Land
Lease Agreement (LLA). The LLA contained a provision for SPC’s right to top in the event of lease or sale of property which is not part
of the leased premises.
In 2013, PSALM commenced the 3rd round of bidding for the sale of another power plant. Only SPC and TPVI submitted bids. TPVI
was declared as the highest bidder. Notice of Award was
PSALM notified SPC of TPVI’s winning bid which covers the purchase of the NPPC and the lease of the land. It also advised SPC that
under the terms of the Land Lease Agreement, the lease of the land will expire on 2020. In a letter, SPC confirmed that it is
exercising the right to top the winning bid by paying a higher price. The Office of the Government Corporate Counsel (OGCC)
upheld PSALM’s position that SPC may exercise the right to top the bid. The present petition was filed praying that the right to top
be declared void.
ISSUE:
Whether or not the right to top provisions in the land lease agreements entered into by PSALM contravene public policy on
competitive bidding.
RULING:
YES, the right to top provisions in the LLA contravene public policy on competitive bidding.
A right to top is a variation of the right of first refusal often incorporated in lease contracts. When a lease contract contains a right
of first refusal, the lessor is under a legal duty to the lessee not to sell to anybody at any price until after he has made an offer to
sell to the latter at a certain price and the lessee has failed to accept it. The lessee has a right that the lessor’s first offer shall be in
his favor. A right of first refusal is not an option contract

The law requires competitive bidding to give the public the best possible advantages thru open competition. Notwithstanding
compliance with the conduct of bidding and procedures, we hold that SPC’s right to top under the LBGT-LLA is void for lack of a valid
interest or right to the object over which the right of first refusal is to be exercised. First, the property subject of the right of first
refusal is outside the leased premises covered by the LBGT-LLA. Second, the right of first refusal refers not only to land but to any
property within the vicinity of the leased premises, as in this case

5. Ayala Land, Inc. vs. ASB Realty Corporation, G.R. No. 210043, September 26, 2018
6. Norkis Distributors, Inc. v. Court of Appeals, G.R. No. 91029, [February 7, 1991], 271 PHIL 726-732) TRINE

The critical factor which gives legal effect to the act is the actual intention of the vendor to deliver, and its
acceptance by the vendee. Without that intention, there is no tradition.

FACTS:
Alberto Nepales bought from Norkis Distributors, Inc. a brand-new Yamaha motorcycle payable by a means of Letter of
Guaranty from the Development Bank of the Philippines (DBP). As security, Alberto executed a chattel mortgage on the
motorcycle in favor of DBP. To facilitate the chattel mortgage, Norkis Distributors issued a sales invoice showing that the
contract of sale was perfected. Further, the motorcycle was registered with the Land Transportation Office (LTO) in the
name of Alberto. The motorcycle was delivered to a certain Julian Nepales who allegedly was an agent of Alberto, which
the latter denied being his agent.

Later on, the motorcycle met an accident which resulted to its total wreck. DBP released the loan
proceeds to Norkis Distributors, which prompted Alberto to demand the delivery of the motorcycle.
When Norkis Distributor could not deliver, Alberto filed an action for specific performance with
damages before the Regional Trial Court (RTC). Norkis Distributor answered that the motorcycle had
been delivered already. The RTC ruled in favor of Alberto, which was affirmed by the Court of
Appeals (CA).

Hence, Norkis Distributor filed a Petition before the Supreme Court averring that the motorcycle has
already been delivered as evidenced by the issuance of the Sales Invoice and registration of the
motorcycle under the name of Alberto.

ISSUE Whether or not Norkis Distributor shall bear the loss of the motorcycle.
HELD The Supreme Court ruled in the affirmative. The act of delivery whether constructive or actual, must
be coupled of delivering the thing, without which the act is insufficient. In other words, the critical factor
which gives legal effect to the act is the actual intention of the vendor to deliver, and its acceptance by the
vendee. Without that intention, there is no tradition.
In the present case, the issuance of sales invoice did not prove the transfer of ownership as it is nothing, but a
detailed statement of the thing sold. It is also not considered as a bill of sale. Further, with the said issuance
and the subsequent registration in the name of Alberto, Norkis Distributor did not intend to transfer the title
to Alberto. It only made so to facilitate the execution of the chattel mortgage in favor of DBP. Hence, there
was no tradition.As such, the Civil Code provides that the things sold remain at the seller’s risk until
ownership thereof is transferred to the buyer, in the absence of an express assumption of risk by the buyer,
for there was neither an actual or constructive delivery of the thing.

7. Equatorial Realty Development v. Mayfair Theater, Inc., G.R. No. 106063, [November 21, 1996
8. Fullido vs. Grilli, 785 SCRA 278, G.R. No. 215014 February 29, 2016
9. Melecio Domingo v. Spouses Genaro Molina and Elena Molina, substituted by Ester Molina, G.R. No. 200274, April 20, 2016