LEE, FRANCESCA GARNETH G.

4M5

1.) MR. SERGIO VILLADAR, JR. & MRS. CARLOTA A. VILLADAR, Petitioners, vs. ELDON
ZABALA and SAMUEL ZABALA, SR., Respondents.

THE FACTS

Covered by Transfer of Certificate of Title (TCT) No. 78269 was a parcel of land, Lot No.
5095 in Cebu city was owned by the couple Samuel Zabala Sr (Samuel Sr.), which he and his wife
Maria Luz Zabala (Maria Luz), sold one-half of Lot No. 5095 to his mother-in-law Estelita Villadar
(Estelita) for P75,000 on installment basis based on a note of partial payment of P6,500, and no
contract was executed nor was there an agreement on when Estelita shall pay all installments. The
other half was sold to respondent Eldon Zabala (Eldon). Thus Lot No. 5095 was subdivided and
two TCTs were issued in favor of Eldon and Samuel Sr. (Lot No. 5095-A under TCT No. 145182 and
Lot No. 5095-B under TCT No. 145183). Estelita made subsequent payments, leaving only a
P36,500 balance. However, Samuel Sr. and Maria Luz decided to cancel the sale after a
confrontation with Estelita at the Office of the Barangay Captain of Barangay Basak, San Nicolas,
Cebu City. Samuel Sr. and Samuel Jr. also file a complaint of ejectment against Estelita’s son,
petitioner Sergio Villadar, Jr., who occupied one of the houses that stood on the property.

THE ISSUE

 Whether or not there was a perfected contract of sale between the parties.
 Whether or not the claim of Estelita’s ownership is valid.

THE COURT RULING

Yes, there was a valid contract of sale between parties.

The contention that it was a contact to sell was not substantiated since there was no evidence to
prove and was not mentioned in the affidavits submitted before the MTTC and RTC that Samuel Sr.
reserved his title to the land he sold to Estelita. Therefore, the oral contact entered by Samuel Sr.
and Estelita is one of contract of sale since there was no condition that the transfer of ownership
will be upon the full payment of the price.

Therefore, there was a perfected contract of sale between Samuel Sr. and Estelita when they agreed
that the latter will pay P75,000 on an installment basis for the one-half of Lot No. 5095. Since it was
established that there was a perfected contract of sale among the parties, albeit an oral contract,
Estelita’s claim of ownership is also valid, absent a valid rescission or cancellation of the contract of
sale.
LEE, FRANCESCA GARNETH G.
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2.) SPOUSES DOMINGO and LOURDES PAGUYO versus Pierre Astorga and St.
Andrew Realty, Inc. G.R. No. 130982 2005 September 16

THE FACTS
Petitioners, Spouses Domingo Paguyo and Lourdes Paguyo owned a 5-storey building
located at corner Makati Avenue and Valdez Streets, Makati City.

Meanwhile, Armas Family is the third-party owner of the lot where the Paguyo Building stand was
subject for civil case which have been decided by the RTC Makati Branch 57 settling in a
compromise agreement with a prescribed amount for the consideration of its ownership in favour
of the Paguyo spouses.

On November 29, 1988, Lourdes Paguyo entered in an agreement with Pierre Astorga for
the sale of the former’s property (5 storey building) including the lot to be purchase from the
Armases. This move was done to raise fund needed to be paid for the Armases’ lot. On the same
date, the petitioner received P50,000 as earnest money for the sale of her property. Unfortunately,
despite of the full financial support given by the respondents, the petitioner failed to acquire the lot
in question.

On December 12, 1988, the petitioner asked for and were given another P50,000 by the
respondents to which was badly needed by the former to finance their construction business.
Eventually, proposed the separate sale of the building in question while the effort to purchase the
lot is on-going and the respondents were assured of its success.

On January 5, 1989, the parties executed four documents namely, Deed of Absolute Sale,
Deed of Real Estate Mortgage, Mutual Understanding, and Deed of Assignment of Rights and
Interest. Pursuant to their agreement particularly in Mutual understanding, the respondent filed for
the ejectment case before the MTC where they obtained favourable decision.

In October 1989, petitioners filed for the recession of their agreement on the contention
that the respondents led them to the wrong belief the respondents will advance the amount needed
by the petitioner to be paid for the Armases but instead the respondents stopped the said payment.
Respondents in their answer as gleaned from the agreements that their original purpose was the
purchase of the building and the lot which it stands. They added that at that time, the petitioners
are in dire need of the amount to finance their construction business and the balance to the
LEE, FRANCESCA GARNETH G.
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Armases. It was in July 1989 when the petitioner asked the respondents to execute the check
amounting to P917,470.00 for the final execution of the Deed of Conveyance of the lot. However, the
respondent stopped the payment of check upon knowing that the petitioners have no rights over
the lot in question which was already transferred to the Bacani spouses.

The RTC dismissed the complaint of the petitioners dated April 21, 1994. The CA also
affirmed the decision of the lower court. The Supreme Court affirmed the decision of the appellate
court with modifications on the amounts of damages and attorney’s fee.

THE ISSUE

 Whether or not the petitioners could rescind the agreement by claiming as the injured party
or party on a disadvantage.

THE COURT RULING

Neither does the fact that the subject contracts have been prepared by respondents’ ipso
facto entail that their validity and legality be strictly interpreted against them. Petitioner Lourdes
Paguyo’s insinuation that she was disadvantaged will not hold. True, Article 24 of the New Civil
Code provides that “(i)n all contractual, property or other relations, when one of the parties is at a
disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender
age or other handicap, the courts must be vigilant for his protection.”

Thus, the validity and/or enforceability of the impugned contracts will have to be
determined by the peculiar circumstances obtaining in each case and the situation of the parties
concerned. Here, petitioner Lourdes Paguyo, being not only cultured but a person with great
business acumen as well, cannot claim to be the weaker or disadvantaged party in the subject
contract to call for a strict interpretation against respondents. More importantly, the parties herein
went through a series of negotiations before the documents were signed and executed.
LEE, FRANCESCA GARNETH G.
4M5

3.) Lifestyle Redefined Realty Corporation v. Heirs of Dennis Uvas, G.R. No. 217716.
September 17, 2018

THE FACTS
U-Bex Integrated Resources, Inc. (U-Bex), controlled by Spouses Dennis (Dennis) and Nimfa
Uvas (Nimfa) (Spouses Uvas), obtained various amounts of loans from RCBC in the amounts of P1
Million and P2 Million. To secure the said loans, Spouses Uvas executed a Real Estate Mortgage
dated October 25, 1993, over a parcel of land covered by Transfer Certificate of Title (TCT) No.
190706 pertaining to a property located at 1928 Leon Guinto Street, Malate, which also consists of a
building and apartment units (subject property).

It appears that on November 24, 2003, an auction sale was conducted where the subject
property was sold to RCBC as the highest bidder. On September 26, 2005, RCBC consolidated its
title on the subject property. TCT No. 269709 was issued in its name. Subsequently, the subject
property was sold to Lifestyle Corporation and Evelyn. Lifestyle Corporation and/or Evelyn was a
lessee of Spouses Uvas in the subject property during the time of the loan up to the time RCBC sold
the same to her.

On September 6, 2006, Heirs of Dennis Uvas (respondent Heirs) filed a Complaint for
annulment of foreclosure sale, certificate of sale, and cancellation of TCT No. 269709 with damages
against RCBC, Jennifer Dela Cruz-Buendia, Ex-Officio Sheriff of the RTC of Manila, Benjamin Del
Rosario, Jr. as Sheriff of Branch 9, RTC Manila, and the Registry of Deeds of Manila. The case was
docketed as Civil Case No. 06-115798. Respondent Heirs questioned the foreclosure stating that
they were never informed of the foreclosure, and that they were surprised that RCBC was already
the registered owner of the subject property. They claimed that the foreclosure sale is void for lack
of publication and notice to them. They pointed out that the date of auction indicated in the Notice
of Extrajudicial Sale was October 8, 2003.

Hence, the implementing officers of the court should not have allowed the auction sale to be
conducted on November 24, 2003, without republication of the notice of sale. They claimed that
RCBC was in bad faith since it sent the notices of auction sale to their former address at 9345
Dongon Street, San Antonio Village, Makati City despite knowledge that they are residing at 1928
Leon Guinto Street, Malate, Manila. DEAN’S CIRCLE 2019 – UST FCL 190 On October 20, 2013, the
RTC rendered a Decision in favor of respondent Heir and against RCBC, Lifestyle Corporation and
Evelyn. Dissatisfied, Lifestyle Corporation and Evelyn, and RCBC filed their respective Appellant's
LEE, FRANCESCA GARNETH G.
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Briefs. After the filing of the parties' respective pleadings, the CA rendered the assailed Decision
affirming the RTC Decision.

THE ISSUE

 Whether or not Lifestyle Corporation and Evelyn acted in good faith when they purchased
the subject property from RCBC. (YES)

THE COURT RULING

At the outset, this Court is cognizant of the rule that republication of the notice of sale in the
manner prescribed by Act No. 3135 is necessary for the validity of a postponed extrajudicial
foreclosure sale. A foreclosure sale which deviates from the statutory requirements constitutes a
jurisdictional defect invalidating the sale. The Court is mindful of the purpose of publication of the
notice of auction sale, which is to give the foreclosure sale a reasonably wide publicity such that
those interested might attend the public sale. Otherwise, the sale might be converted into a private
one.

However, jurisprudence is also replete with cases which relaxes the aforesaid rule in case of
a purchaser in a foreclosure sale who is in good faith and bought the property for value. As
aforesaid, it is thus relevant for this Court to make a determination on the purported good faith of
Petitioners Lifestyle Corporation and Evelyn in purchasing the subject property.