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ARTICLE 1502INDUSTRIAL TEXTILE MANUFACTURING COMPANY OF THE PHILIPPINES V. LPJ ENTERPRISES INC.

FACTS:

Campos is the vice president of petitioner Industrial Textile Manufacturing Company of the

Philippines (Itemcop) asked Panganiban the president of the respondent corporation, if he would like to

cooperate in an experiment to develop plastic bags in which Panganiban agreed.

Panganiban was accompanied by Ugarte another vice president of Itemcop to the factory of

respondents supplier to test 50 pieces of plastic cement bags. The experiment was unsuccessful. The test was

followed by second batch of plastic bags, which was likewise a failure. Finally, with three hundred improved

bags the see page was substantially reduced. Campos sent a letter proclaiming the dramatic results in the

experiment. Consequently, Panganiban agreed to use the plastic cement bags. Four purchase orders were

subsequently issued.

Petitioner delivered the orders. Respondent remitted the amounts but leaving a balance. No other

payments were made Thus, prompting petitioner to file a collection suit. Respondent admitted its liability

covered by the first purchase order. For the consecutive purchase orders respondent said that the workers ofLuzon Cement objected to the use of cement because of the serious hazards posed by cement dust.

Thereafter, petitioner was asked to take back the unused bags however, this was not done hence,

petitioner demanded for payment of the said bags.

ISSUE:

Whether or not respondent may be held liable for the bags of cement, which were not actually used

for packing cement as originally intended.

HELD:YES. It is beyond dispute that prior to respondent's transaction with petitioner, the bags were already

tested and the results thereof, albeit initially unsuccessful, were nevertheless favorably considered after due

alterations were made. Verily, it is on the basis of such experimental findings that respondent agreed to use

the plastic cement bags and thereafter issued the purchase orders heretofore mentioned. Significantly, the

quantity of bags ordered by respondent also negates its position that the bags were still under

experimentation.

We find that Article 1502 of the Civil Code, invoked by both parties herein, has no application at all to

this case. The provision in the Uniform Sales Act and the Uniform Commercial Code from which Article 1502

was taken, clearly requires an express written agreement to make a sales contract either a "sale or return" or

a "sale on approval"

Therefore, We hold that the transaction between respondent and petitioner constituted an absolute

sale. Accordingly, respondent is liable for the plastic bags delivered to it by petitioner.

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BEHN, MEYER & CO. (LTD)vs. TEODORO R. YANCO

FACTS: The plaintiff entered into a contract with defendant. It was agreed that the plaintiff will deliver 80

drums of caustic soda carabao brand to be shipped on March 1916 and shall be paid on its delivery. The

contract provided for "c.i.f. Manila, pagadero against delivery of documents.

ISSUE: Whether or not the place of delivery is in Manila.

HELD: The place of delivery was Manila and plaintiff has not legally excused default in delivery of the specified

merchandise at that place. The Court believes that the word Manila in conjunction with the letters "c.i.f." must

mean that the contract price, covering costs, insurance, and freight, signifies that delivery was to be made in

Manila. If the plaintiff company has seriously thought that the place of delivery was New York and Not Manila

it would not have gone to the trouble of making fruitless attempts to substitute goods for the merchandise

named in the contract, but would have permitted the entire loss of the shipment to fall upon the defendant.

Under plaintiffs hypothesis, the defendant would have been the absolute owner of the specific soda

confiscated at Penang and would have been indebted for the contract price of the same.

Both the terms "c.i.f." and "F.O.B." merely make rules of presumption which yield to proof of contrary

intention. As Benjamin, in his work on Sales, well says: "The question, at last, is one of intent, to be

ascertained by a consideration of all the circumstances."

JOSE FLORENDO v. EUSTAQUIO P. FOZ

Facts: Eustaquio P. Foz executed in Manila a contract, ratified before a notary, obligating himself to deliver hishouse and lot for a consideration of P6,000 to Jose Florendo. The latter already paid P2,000 of the purchase

prize. In the contract, plaintiff fixed the period of the payment of the prize wherein plaintiff has to pay the

remainder of the prize when he goes to Vigan or if not to pay to the Church wherein he has a debt and to

obtain the title of the subject matter of the sale. Defendant went to Vigan, plaintiff tendered payment of the

remainder of the prize, however, the former refused, saying that the true prize of the sale recorded in the

other instrument was P10,000. As defendant refused payment, plaintiff filed a suit to comply with the contracof absolute purchase and sale, by delivering to the plaintiff the property sold.

Issue: WON the plaintiff can compel the defendant to deliver his property pursuant to the notarized

contract.

Held: Yes. The contract is valid and effective. From the validity and force of the contract is derived the

obligation on the part of the vendor to deliver the thing sold. Pursuant to the contract, it cant be found that

the payment of the prize is a precondition for the delivery of the thing. There was no need, therefore, of

assent on the part of the plaintiff to pay the P4,000, the remainder of the price, in order to oblige the

defendant unconditionally to deliver the property sold. With still more reason should the defendant be

compelled to effect the material delivery of the property, since, after the lapse of the period for the delivery

of the price, the plaintiff hastened to pay it and, on account of the defendant's refusal to receive it, duly

deposited it, in order to avoid the consequences that might issue from delinquency in the payment of a sum

entrusted to him for a fixed period.

It is the material delivery of the property sold which the defendant must make in compliance with the

contract, inasmuch as the formal delivery de jure was made, according to the provisions of article 1462, 2nd

paragraph, of the same code.

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RICARDO CHENG VS RAMON GENATO, ERNESTO R. DA JOSE & SOCORRO B. DA JOSE,

G.R. No. 129760 29 December 1998Martinez,J.:

FACTS: Respondent Ramon B. Genato is the owner of two parcels of land located at Paradise Farms, San JoseDel Monte, Bulacan who entered into a Contract to Sell with respondent-spouses Ernesto R. Da Jose and

Socorro B. Da Jose for which the purchase price was P80.00 per square; P50,000.00 shall be paid as partial

down payment at the time of execution of this Contract to Sell; and that P950,000 as full payment shall be

paid 30 days after the execution of the contract to sell after the buyer has satisfactorily verified the

authenticity of the documents. The contract was in a public instrument and was duly annotated at the back of

the two certificates of title. Sps Da Jose asked for and was granted by respondent Genato an extension of

another 30 days - until November 5, 1989. Without due notice to the Da Jose spouses, Genato executed an

Affidavit to Annul the Contract to Sell. Ricardo Cheng expressed his desire to buy Genatos property. Genato

showed him the TCT with annotation of the contract with Sps Da Jose and the affidavit of cancelling such

contract. Cheng paid him P50,000 upon the assurance that the previous contract will be annulled. When

Genato was in Registry of Deeds in Meycauayan, Bulacan to register the annulment of the contract with the

Sps Da Jose, by coincidence, the two parties met and later on in the day, Genato decided to continue the

Contract he had with them. Genato returned the P50,000 to Cheng. Da Jose spouses paid Genato thecomplete down payment of P950,000.00. Cheng instituted a complaint for specific performance to compe

Genato to execute a deed of sale for check he gave was a partial payment to the total agreed purchase price

of the subject properties and considered as an earnest money for which Genato acceded. RTC ruled in favor of

Cheng which was reversed by the CA.

ISSUE: 1. WON Article 1544 is applicable2. Who has a better right to the land, Cheng or Da Jose spouses?

HELD:

1. YES Although generally, rule on Double Sales does not apply in Contract to Sell, the governing principle oArticle 1544: PRIMUS TEMPORE, PORTIOR JURE (first in time, stronger in right) should apply. For not onlywas the contract between herein respondents first in time; it was also registered long before petitioners

intrusion as a second buyer. This principle only applies when the special rules provided in the aforcited article

of Civil Code do not apply or fit the specific circumstances mandated under said law or by jurisprudence

interpreting the article.

2. SPS DA JOSE -- The rule exacted by Article 1544 of the Civil Code for the second buyer to be able to displace

the first buyer are: (1) that the second buyer must show that he acted in good faith (i.e. in ignorance of thefirst sale and of the first buyer's rights) from the time of acquisition until title is transferred to him by

registration or failing registration, by delivery of possession; (2) the second buyer must show continuing good

faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership throughprior registration as provided by law.

Although the Da Jose spouses, as first buyers, knew of the second transaction it will not bar them from availing

of their rights granted by law, among them, to register first their agreement as against the second buyer.

In contrast, knowledge gained by Cheng of the first transaction between the Da Jose spouses and Genato

defeats his rights even if he is first to register the second transaction, since such knowledge taints his prior

registration with bad faith.

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Carbonell vs. Court of Appeals, and Poncio

FACTS:

On January 27, 1955, respondent Jose Poncio executed a private memorandum of sale of his parcel of

land with improvements situated in San Juan, Rizal in favor of petitioner Rosario Carbonell who knew that the

said property was at that time subject to a mortgage in favor of the Republic Savings Bank (RSB) for the sum of

P1,500.00. Four days later, Poncio, in another private memorandum, bound himself to sell the same property

for an improved price to one Emma Infante for the sum of P2,357.52, with the latter still assuming the existing

mortgage debt in favor of the RSB in the amount of P1,177.48. Thus, in February 2, Poncio executed a formal

registerable deed of sale in her (Infante's) favor. So, when the first buyer Carbonell saw the seller Poncio a few

days afterwards, bringing the formal deed of sale for the latter's signature and the balance of the agreed cash

payment, she was told that he could no longer proceed with formalizing the contract with her (Carbonell)

because he had already formalized a sales contract in favor of Infante.

To protect her legal rights as the first buyer, Carbonell registered on February 8, 1955 with the Register

of Deeds her adverse claim as first buyer entitled to the property. Meanwhile, Infante, the second buyer, was

able to register the sale in her favor only on February 12, 1955, so that the transfer certificate of title issued in

her name carried the duly annotated adverse claim of Carbonell as the first buyer. The trial court declared the

claim of the second buyer Infante to be superior to that of the first buyer Carbonell, a decision which the

Court of Appeals reversed. Upon motion for reconsideration, however, Court of Appeals annulled and set

aside its first decision and affirmed the trial courts decision.

ISSUE: Who has the superior right over the subject property?

HELD:

The first buyer Carbonell to have the superior right over the subject property, relying on Article 1544

of the Civil Code. Unlike the first and third paragraphs of said Article 1544, which accord preference to the one

who first takes possession in good faith of personal or real property, the second paragraph directs that

ownership of immovable property should be recognized in favor of one "who in good faith first recorded" his

right. Under the first and third paragraphs, good faith must characterize the prior possession, while under the

second paragraph, good faith must characterize the act of anterior registration.

When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer thereof and

the title of Poncio was still in his name solely encumbered by bank mortgage duly annotated thereon.

Carbonell was not aware - and she could not have been aware - of any sale to Infante as there was no such

sale to Infante then. Hence, Carbonell's prior purchase of the land was made in good faith which did not cease

after Poncio told her on January 31, 1955 of his second sale of the same lot to Infante. Carbonell wanted to

meet Infante but the latter refused so to protect her legal rights, Carbonell registered her adverse claim on

February 8, 1955. Under the circumstances, this recording of Carbonells adverse claim should be deemed to

have been done in good faith and should emphasize Infante's bad faith when the latter registered her deed of

sale 4 days later.

CAs decision is reversed.

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NAVERA V. CA (April 26, 1990)

FACTS:Leocadio Navera owns a parcel of land in Albay which was inherited by his 5 children. His 3 child ren already

have their share of the inheritance from the other properties of Leocadio. The subject land was now owned by

his 2 daughters. An OCT was issued in the name of Elena Navera et.al (et.al refers to his sister Eduarda Navera)

When Elena died, his share of the land was inherited by her heirs Arsenio and Felix Narez. The other portion

was owned by Eduarda.

Eduarda sold her portion to her nephew Arsenio and then one year after to Mariano Navera. Both sales were

made in a public instrument but both sales were also not registered in the Registry of Property.

ISSUE:

WON the second sale of the property is valid.

HELD:Since the records show that both sales were not recorded in the Registry of Property, the law clearly vests the

ownership upon the person who in good faith was first in possession of the disputed lot.

The possession viewed in the law includes not only the material but also the symbolic possession, which is

acquired by the execution of a public instrument. This means that after the sale of a realty by means of a

public instrument, the vendor, who resells it to another, does not transmit anything to the second vendee,

and if the latter, by virtue of this second sale, takes material possession of the thing, he does it as mere

detainer, and it would be unjust to protect this detention against the rights of the thing lawfully acquired by

the first vendee.

In the case at bar, the prior sale of the land to respondent Arsenio Nares by means of a public instrument is

clearly tantamount to a delivery of the land resulting in the material and symbolic possession thereof by thelatter.

TEN FORTY REALTY V. CRUZ| PanganibanG.R. No. 151212 | September 10, 2003

FACTS:

Petitioner filed an ejectment complaint against Marina Cruz( respondent) before the MTC. Petitioner alleges

that the land indispute was purchased from Barbara Galino on December 1996, andthat said land was again

sold to respondent on April 1998;

On the other hand, respondent answer with counterclaim that never was there an occasion when petitioner

occupied a portion of the premises. In addition, respondent alleges that said land was a public land

(respondent filed a miscellaneous sales application with the Community Environment and Natural Resources

Office) and the action for ejectment cannot succeed where it appears that respondent had been in possession

of the property prior to the petitioner;

On October 2000, MTC ordered respondent to vacate the land and surrender to petitioner possession

thereof. On appeal, the RTC reversed the decision. CA sustained the trial courts decision.

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ISSUE/S:

Whether or not petitioner should be declared the rightful owner of the property.

HELD:

No. Respondent is the true owner of the land.1) The action filed by the petitioner, which was an action for

unlawful detainer, is improper. As the bare allegation of petitioners tolerance of respondents occupation of

the premises has not been proven, the possession should be deemed illegal from the beginning. Thus, the CA

correctly ruled that the ejectment case should have been for forcible entry. However, the action had already

prescribed because the complaint was filed on May 12, 1999 a month after the last day forfiling;2) The

subject property had not been delivered to petitioner; hence, it did not acquire possession either materially or

symbolically. As between the two buyers, therefore, respondent was first in actual possession of the property.

As regards the question of whether there was good faith in the second buyer. Petitioner has not proven that

respondent was aware that her mode of acquiring the property was defective at the time she acquired it from

Galino. At the time, the property which was public land had not been registered in the name of Galino;

thus, respondent relied on the tax declarations thereon. As shown, the formers name appeared on the tax

declarations for the property until its sale to the latter in 1998. Galino was in fact occupying the realty whenrespondent took over possession. Thus, there was no circumstance that could have placed the latter upon

inquiry or required her to further investigate petitioners right of ownership.

DOCTRINE/S:

Execution of Deed of Sale; Not sufficient as delivery. Ownership is transferred not by contract but by tradition

or delivery. Nowhere in the Civil Code is it provided that the execution of a Deed of Sale is a conclusive

presumption of delivery of possession of a piece of real estate. The execution of a public instrument gives rise

only to a prima facie presumption of delivery. Such presumption is destroyed when the delivery is not

effected, because of a legal impediment. Such constructive or symbolic delivery, being merely presumptive,

was deemed negated by the failure of the vendee to take actual possession of the land sold. Disqualification

from Ownership of Alienable Public Land.

Private corporations are disqualified from acquiring lands of the public domain, as provided under Section 3 of

Article XII of the Constitution. While corporations cannot acquire land of the public domain, they can however

acquire private land. However, petitioner has not presented proof that, at the time it purchased the property

from Galino, the property had ceased to be of the public domain and was already private land. The established

rule is that alienable and disposable land of the public domain held and occupied by a possessor personally

or through predecessors-in-interest, openly, continuously, and exclusively for 30 years is ipso jure

converted to private property by the mere lapse of time.

RULING:

The Supreme Court DENIED the petition.

TAEDO V. CA (January 22, 1996)

FACTS:

Lazaro Taedo executed a deed of absolute sale in favor of Ricardo Taedo and Teresita Barrera in which he

conveyed a parcel of land which he will inherit. Upon the death of his father he executed an affidavit of

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conformity to reaffirm the said sale. He also executed another deed of sale in favor of the spouses covering

the parcel of land he already inherited. Ricardo registered the last deed of sale in the registry of deeds in their

favor.

Ricardo later learned that Lazaro sold the same property to his children through a deed of sale.

ISSUE:

WON the Taedo spouses have a better right over the property against the children of Lazaro Taedo.

HELD:Since a future inheritance generally cannot be a subject of a contract, the deed of sale and the affidavit of

conformity made by Lazaro has no effect. The subject of dispute therefore is the deed of sale made by him in

favor of spouses Taedo and another to his children after he already legally acquired the property.

Thus, although the deed of sale in favor of private respondents was later than the one in favor of petitioners,

ownership would vest in the former because of the undisputed fact of registration. On the other hand,

petitioners have not registered the sale to them at all.

Petitioners contend that they were in possession of the property and that private respondents never tookpossession thereof. As between two purchasers, the one who registered the sale in his f avor has a preferred

right over the other who has not registered his title, even if the latter is in actual possession of the immovable

property.

FACTS:

On October 20, 1962, Lazardo Taedo executed a notarized deed of absolute sale in favor of his eldest

brother, Ricardo Taedo, and the latter's wife, Teresita Barera, private respondents herein, whereby he

conveyed to the latter in consideration of P1,500.00, "one hectare of whatever share I shall have over Lot No.

191", the said property being his "future inheritance" from his parents. Upon the death of his father, Lazaroexecuted an "Affidavit of Conformity" to "re-affirm, respect, acknowledge and validate the sale I made in

1962." On January 13, 1981, Lazaro executed another notarized deed of sale in favor of Ricardo and Teresita,

covering his "undivided ONE TWELVE (1/12) of a parcel of land known as Lot 191 ". He acknowledged his

receipt of P10,000 as consideration. Ricardo learned that Lazaro sold the same property to his children,

petitioners herein, through another deed of sale. On June 7, 1982, private respondents recorded the Deed of

Sale in their favor in the Registry of Deeds and entry was made in the TCT.

Petitioners on July 16, 1982 filed a complaint for rescission (plus damages) of the deeds of sale executed by

Lazaro in favor of private respondents. Petitioners claimed that their father, Lazaro, executed an "Absolute

Deed of Sale" conveying to his ten children his allotted portion from the extrajudicial partition executed by the

heirs of Matias. Petitioners also presented in evidence: (1) a private writing purportedly prepared and signed

by Matias, stating that it was his desire that whatever inheritance Lazaro would receive from him should be

given to his (Lazaro's) children; (2) a typewritten document signed by Lazaro wherein he confirmed that he

would voluntarily abide by the wishes of his father; and (3) a letter of Lazaro to his daughter, Carmela, stating

that his share in the extrajudicial settlement of the estate of his father was intended for his children,

petitioners herein.

Private respondents, however presented in evidence a "Deed of Revocation of a Deed of Sale", wherein Lazaro

revoked the sale in favor of petitioners for the reason that it was "simulated or fictitious without any

consideration whatsoever". Shortly after the case a quo was filed, Lazaro executed a sworn statement which

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virtually repudiated the contents of the Deed of Revocation of a Deed of Sale and the Deed of Sale in favor of

private respondents. However, Lazaro testified that he sold the property to Ricardo, and that it was a lawyer

who induced him to execute a deed of sale in favor of his children after giving him five pesos (P5.00) to buy a

"drink".

TC: decided in favor of private respondents, holding that petitioners failed "to adduce a proponderance ofevidence to support (their) claim. CA: affirmed the decision of the TC, ruling that the Deed of Sale dated

January 13, 1981 was valid and that its registration in good faith vested title in said respondents.

ISSUES:I. Is the sale of a future inheritance valid?II. Was the subsequent execution on January 13, 1981 (and registration with the Registry of Property) of a

deed of sale covering the same property to the same buyers valid?

HELD:I

The sale made in 1962 involving future inheritance is not really at issue here. In context, the assailed Decision

conceded "it may be legally correct that a contract of sale of anticipated future inheritance is null and void."But to remove all doubts, we hereby categorically rule that, pursuant to Article 1347 of the Civil Code, "(n)o

contract may be entered into upon a future inheritance except in cases expressly authorized by law."

Consequently, said contract made in 1962 is not valid and cannot be the source of any right nor the creator of

any obligation between the parties.

Hence, the "affidavit of conformity" dated February 28, 1980, insofar as it sought to validate or ratify the 1962

sale, is also useless and, in the words of the respondent Court, "suffers from the same infirmity." Even private

respondents in their memorandum4concede this.

II

However, the documents that are critical to the resolution of this case are: (a) the deed of sale of January 13,

1981 in favor of private respondents covering Lazaro's undivided inheritance of one-twelfth (1/12) share in Lot

No. 191, which was subsequently registered on June 7, 1982; and (b) the deed of sale dated December 29,

1980 in favor of petitioners covering the same property. These two documents were executed after the death

of Matias (and his spouse) and after a deed of extra-judicial settlement of his estate was executed, thus

vesting in Lazaro actual title over said property. In other words, these dispositions, though conflicting, were no

longer infected with the infirmities of the 1962 sale.

The CA correctly identified the subject matter of the January 13, 1981 sale to be the entire undivided 1/12

share of Lazaro in Lot No. 191 and which is the same property disposed of on December 29, 1980 in favor of

petitioners. Critical in determining which of these two deeds should be given effect is the registration of thesale in favor of private respondents with the register of deeds on June 7, 1982.

Article 1544 of the Civil Code governs the preferential rights of vendees in cases of multiple sales. The

property in question is land, an immovable, and following the above-quoted law, ownership shall belong to

the buyer who in good faith registers it first in the registry of property. Thus, although the deed of sale in favor

of private respondents was later than the one in favor of petitioners, ownership would vest in the former

because of the undisputed fact of registration. On the other hand, petitioners have not registered the sale to

them at all. Petitioners contend that they were in possession of the property and that private respondents

never took possession thereof. As between two purchasers, the one who registered the sale in his favor has a

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preferred right over the other who has not registered his title, even if the latter is in actual possession of the

immovable property.