Law on Sales, Agency, and Credit Transactions

Compilation of Cases
Topic: Contract of Sales, Concept (NCC 1458)
Petitioners: Silvestre Dignos and Isabel
Respondent: Court of Appeals
Lumungsod
G.R. No. L-59266 | February 29, 1988
Bidin, J.
Keynotes:
A deed of sale is absolute in nature although denominated 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.
Facts:
• The petitioners-Dignos spouses owned a parcel of land, known as Lot No. 3453, and sold it to
respondent Atilano J. Jabil for the sum of P28,000.00, payable in two installments.
• The Dignos spouses sold the same parcel of land to spouses, Luciano Cabigas and Jovita L. De
Cabigas for P35,000.00 and executed in their favor an Absolute Deed of Sale duly registered in
the Office of the Register of Deeds.
• Jabil filed a case against the petitioners in the Court of First Instance of Cebu, declaring the 2nd
sale to the spouses Cabigas null and void ab initio. The court ordered the spouses Dignos to
return P35,000.00 to Cabigas and ordered Jabil to pay the remaining balance and the Cabigas
spouses a reasonable amount for the expenses of the hollow block fence.
• Both parties appealed to the Court of Appeals, where the spouses Dignos contested that the
contract was a contract to sell, not a deed of sale. The Court of Appeals affirmed the lower court's
decision, except for the portion ordering Jabil to pay for the expenses. A motion for
reconsideration was denied by the Court of Appeals. Hence, this petition.
Issue:
1. WON the subject contract is a deed of absolute sale or a contract to sell.
2. WON the contract of sale was already rescinded when the Dignos spouses sold the land to the
Cabigas.
Disposition:
• WHEREFORE, the petition filed is hereby Dismissed for lack of merit and the assailed
decision of the Court of Appeals is Affirmed in toto.
 Law on Sales, Agency, and Credit Transactions
Compilation of Cases
Ruling:
1. The Supreme Court ruled that a deed of sale is absolute, even if it is a "Deed of Conditional
Sale." The court found that there is no proviso or stipulation stating that title to the property is
reserved in the vendor until full payment of the purchase price, nor does there a stipulation giving
the vendor the right to unilaterally rescind the contract if the vendor fails to pay within a fixed
period. The court affirmed the Court of Appeals' decision, stating that all elements of a valid
contract of sale are present in the document and that the spouses Dignos had no right to sell the
land in question because an actual delivery of its possession has already been made in favor of
Jabil as early as March 1965.
2. The court ruled that there is no valid rescession of contract in a case involving Dignos and Jabil.
The Dignos did not notify Jabil of their intention to rescind the contract or file a lawsuit to do
so. The only evidence they could provide was a letter from Cipriano Amistad, who claimed to
be an emissary of Jabil, who informed the Dignos that Jabil had no money and advised them to
sell the land in litigation. 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. The
court also found that under Article 1358 of the Civil Code, acts and contracts aimed at
extinguishing real rights over immovable property must appear in a public document. The court
also ruled that a slight delay in performance is not sufficient grounds for rescission.
 Law on Sales, Agency, and Credit Transactions
Compilation of Cases
Topic: Contract of Sales, Concept (NCC 1458)
Petitioners: Jacobus Bernhard Hulst Respondent: PR Builders, Inc.
G.R. No. 156364 | September 3, 2007
Austria-Martinez, J.
Keynotes:
In a contract of sale, the title passes to the buyer upon the delivery of the thing sold. On the other hand,
a contract to sell is akin to a conditional sale where the efficacy or obligatory force of the vendor's
obligation to transfer title is subordinated to the happening of a future and uncertain event.
Facts:
• Spouses Hulst, who are Dutch nationals, entered a contract to sell with respondent PR Builders
for the purchase of a residential unit in the latter’s townhouse project.
• The respondent failed to complete a project by 1995, leading to the spouses filing for rescission
to the Housing and Land Use Regulatory Board (HLURB) and they ruled in favor of the spouses,
rescinding the contract and ordering the respondent to reimburse the 3 million purchase price.
• The sheriff sold the 15 parcels of land of the respondent. The sum of 5 million was turned over
to the petitioner in satisfaction of the judgment award.
• Then, the HLURB issued an Order setting aside the levy. The Court of Appeals affirmed the
Order holding that the inadequacy in this case is one that shocks the senses and that the
questioned levy posited to have an aggregate value of P83,616,000.00 which
shockingly exceeded the judgment debt of only around P6,000,000.00. Hence, this petition.
Issue:
1. WON the Sheriff erred in the value that was attached to the properties during the auction and as
well as disregarding the objection made by the respondents?
2. WON the market value of the said property was inadequate?
3. WON the spouses Hulst's request for damages is act
Disposition:
• WHEREFORE, the instant petition is GRANTED. The Decision dated October 30, 2002 of the
Court of Appeals in CA-G.R. SP No. 60981 is REVERSED and SET ASIDE. The Order dated
August 28, 2000 of HLURB Arbiter Ma. Perpetua Y. Aquino and Director Belen G. Ceniza in
HLRB Case No. IV6-071196-0618 is declared NULL and VOID. HLURB Arbiter Aquino and
Director Ceniza are directed to issue the corresponding certificates of sale in favor of the winning
bidder, Holly Properties Realty Corporation. Petitioner is ordered to return to respondent the
amount of P2,125,540.00, without interest, in excess of the proceeds of the auction sale delivered
 Law on Sales, Agency, and Credit Transactions
Compilation of Cases
to petitioner. After the finality of herein judgment, the amount of P2,125,540.00 shall earn 6%
interest until fully paid.
Ruling:
1. NO. The Rules of Court state that the value of property levied is not the same as the judgment
debt, and the Sheriff is left to make his own judgment. He should allow a reasonable margin
between the property's value and the execution amount. The Sheriff's actions are not improper if
he levies more than necessary. Without a restraining order, the Sheriff cannot be blamed for
proceeding with the auction sale despite the motion to quash the levy filed by the respondents.
Sheriffs must act swiftly to avoid delays in the administration of justice. They cannot resolve the
respondent's objection to the auction sale's continuation, and they have no authority to suspend
the sale. As ministerial, they have no discretion to postpone the auction sale's conduct.
2. NO. The HLURB Arbiter and Director failed to determine the value of the levied property due
to a lack of factual basis. The appraisal report was based on the projected value of the townhouse
project, which did not materialize due to the project not being completed. Therefore, the appraisal
value cannot be compared to the fair market value.
3. NO. The 1987 Constitution disqualifies foreign nationals, such as the Hulst spouses, from
owning real property. However, under Article 1414 of the Civil Code, those who repudiate an
agreement and demand their money before an illegal act can recover their money. The petitioner
is entitled to recover P3,187,500.00, representing the purchase price paid to the respondent.
However, damages cannot be recovered based on a void contract, as the agreement does not
create a juridical tie between the parties involved. Additionally, the petitioner is not entitled to
actual or interests, moral and exemplary damages, or attorney's fees.
 Law on Sales, Agency, and Credit Transactions
Compilation of Cases
Topic: Contract of Sales, Concept (NCC 1458)
Petitioners: Toyota Shaw, Inc. Respondent: Court of Appeals
G.R. No. L-116650 May 23, 1995
Davide, Jr., J.
Keynotes:
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.
Facts:
• In June 1989, Luna L. Sosa sought to purchase a Toyota Lite Ace but struggled to find a dealer.
He contacted Toyota Shaw, Inc. and met with sales representative Popong Bernardo.
• Sosa needed the Lite Ace by 17 June 1989 to use it with his family and a balikbayan guest in
Marinduque, his home province. Bernardo assured Sosa that a unit would be ready for pick up
at 10AM on 17 June 1989.
• The agreement included a P100 thousand downpayment and credit financing through B.A.
Finance. However, Toyota argued that the Lite Ace was not delivered to Sosa due to B.A.
Finance's disapproval of Sosa's credit financing application.
• The company also claimed that a unit had already been reserved for Sosa but could not be
released due to the uncertainty of payment. Toyota offered Sosa the option to purchase the unit
in cash, but Sosa refused, indicating that the financing corporation had not approved Sosa's
application.
Issue:
• WON there is a perfected contract of sale between both parties?
Disposition:
• WHEREFORE, the instant petition is GRANTED. The challenged decision of the Court of
Appeals in CA-G.R. CV NO. 40043 as well as that of Branch 38 of the Regional Trial Court of
Marinduque in Civil Case No. 89-14 are REVERSED and SET ASIDE and the complaint in
Civil Case No. 89-14 is DISMISSED. The counterclaim therein is likewise DISMISSED.
Ruling:
• NO. Toyota did not have an obligation to transfer ownership of a specific item to Sosa and no
correlative obligation to pay a certain price. The downpayment provision did not specifically
 Law on Sales, Agency, and Credit Transactions
Compilation of Cases
refer to a sale of a vehicle, as confirmed by the VSP. There was also no meeting of minds between
Toyota and Sosa, as Bernardo was a sales representative and not an agent. Sosa had to act with
prudence and reasonable diligence to understand Bernardo's authority in contracts to sell Toyota's
vehicles. In an installment-based sale financed by a financing company, the financing company
is subrogated as the creditor of the installment buyer. B.A. Finance did not approve Sosa's
application, so there was no meeting of minds on the installment-based sale. The VSP was a mere
proposal that was aborted, creating no demandable right in favor of Sosa for the delivery of the
vehicle and not causing any legally indemnifiable injury.
 Law on Sales, Agency, and Credit Transactions
Compilation of Cases
Topic: Contract of Sales, Concept (NCC 1458)
Petitioners: Sps. Alfredo Edrada Respondent: Sps. Eduardo Ramos
G.R. No. 154413 | August 31, 2005
Tinga, J.
Keynotes:
A contract is perfected when there is concurrence of the wills of the contracting parties with respect to
the object and the cause of the contract. In this case, the agreement merely acknowledges that a purchase
price had been agreed on by the parties. There was no mutual promise to buy on the part of petitioners
and to sell on the part of respondents.
Facts:
• Respondent spouses Eduardo and Carmencita Ramos are the owners of two fishing vessels, the
"Lady Lalaine" and the "Lady Theresa."
• On April 1, 1996, respondents and petitioners executed an untitled handwritten document
acknowledging that the vessels were in the possession of the petitioners and that the agreed price
for the vessels was Nine Hundred Thousand Pesos (P900,000.00).
• Petitioners delivered four postdated checks to respondents as partial payment, but one of the
checks was dishonored.
Issue:
• WON there is a perfected contract of sale between both parties?
Disposition:
• WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the Court
of Appeals are REVERSED and SET ASIDE. The case before the Regional Trial Court is ordered
dismissed. no pronouncement as to costs.
Ruling:
• NO. The court ruled that a contract of sale requires consent from both parties to transfer
ownership and deliver the item, along with the buyer's obligation to pay a certain price. The
document in question did not contain an agreement to transfer ownership, but only a commitment
to follow the sale and payment terms. The court rejected the argument that the document
constituted a contract to sell, as there was no mutual promise to buy and sell. The document only
expressed an intention to enter into a contract to sell or a contract of sale, and therefore, no cause
of action existed for the enforcement of a contract that had not yet come into existence.