compiled digest from friends (sales).pdf

7/28/2019 COMPILED DIGEST FROM friends (SALES).pdf

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Celestino v. Collector of internal RevenueFacts: Oriental Sash Factory in the previous years ,paid the higher sales tax on the gross receiptsof its sash, door, and window factory as a manufacturer-seller. The company now argues that

being a factory engaged in the sale of services, it should only taxable under 191 of the Tax Codeof 185.

It argues that it is a contractor and not a manufacturer-seller because it only makes sash,windows, and doors for limited and special customers only upon their special orders.Issue: Is the company a manufacturer or a contractor for piece of work?Held: The company is a manufacturer.

The company habitually made sash, windows, and doors , as it had presented itself in itsadvertisement to the public.

It ordinarily and habitually manufactures its products to fulfill orders. Any customer with sufficient money may order from them and that it is mechanically

equipped to mass produce its products.

CIR VS. ENGINEERING EQUIPMENT & SUPPLY Co

Facts: Engineering Equipment & Supply imports air-conditioning units and accessories andinstalls them in its clients establishments.The CIR assessed Engineering Equipment & Supply Co as a manufacturer, and therefore, liablefor a 30% tax as importation and advanced sales tax. Engineering Equipment says it is only acontractor, and therefore, only liable for a 3% tax on its imports.Issue: Is Engineering Equipment a manufacturer or a contractor?Held: It is a contractor, and therefore, only liable for 3% tax. The true test in determiningwhether a business is a manufacturer or contractor is:

It is a contractor if the thing to be delivered would not have existed if not for the order. It is amanufacturer if the thing which would have existed and has been a subject of the sale to someother persons even if the order has not been given.

If the articles ordered by the purchaser is exactly such as the business keeps and sells toeveryone, then the business is a manufacturer. If the articles ordered are specially done for thosewho order it, and that modifications can be done thereon upon the buyers request, then it is acontractor.

Engineering & Machinery Corp vs. AlmedaFacts: Engineering & Machinery Corp installed an air-conditioning system in the buildingowned by Almeda. Almeda later on sued EMC for damages because of defects of the AirConditioning System.EMC argued that the contract it entered with Almeda is of sale, and therefore, the action againstit has prescribed, because the 6 month prescriptive period had already lapsed.

Almeda argued that the contract is for piece of work, and therefore the action is still well withinthe prescriptive period of 10 years. Also, since this is a contract for piece of work, and a suit for

breach of contract and not an enforcement of warranty, the action is still well within theprescriptive period of 10 years. (it has only been 4 years).Issues : 1 .Is this a sales contract or contract for piece of work?

2. Is the action for the enforcement of the warranty or breach of contract?

Held. 1. Piece of work. The air-condition system was installed in accordance with Almedas


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preferred specifications.2. This is suit for breach of contract. It was alleged that in the installation of the air

conditioning system, did not comply with the specifications provided

Quiroga vs. Parsons Hardware Co.Facts: Quiroga and Parsons entered into a contract wherein Parsons will sell the Quiroga Bedsin the Visayan Islands.The contract had a clause that Parsons will pay for the beds received within a period of 60 days.Later on, Quiroga sued Parsons for the alleged violations of contractual obligation. However,among all those allegations, only the obligation to order the beds by the dozen and in no othermanner is expressed in the contract, and thus, gives a cause of action to the suit. Quiroga arguesthat the contract with Parsons, being a contract of agency to sell, the obligations which wereallegedly violated were implied.Issue: Is this a contract of agency to sell or contract of sale?Held: Contract of Sale. The Court looked at the essential clauses of the contract to determinewhether this is a contract of agency to sell or contract of sale.

This is a contract of agency to sell because Parsons will pay for the beds received, unlike

in an agency where the agent merely delivers the price paid by a 3rd person

Puyat vs. Arco Amusement Company

Facts: Arco Amusement contracted Puyat to purchase for it some sound equipment from StarrPiano Company. The contract provided that Arco will pay Puyat the quoted price of the soundequipment, plus 10% commission.Arco discovered that Puyat was overpricing them because Puyat was actually buying theequipment at a 25% discount from Starr. It accused Puyat of concealing the actual pricetantamount to fraud.Puyat argued that this is not a contract of agency to buy, but of sale.Issue: Is the contract of agency or of sale?Held: Of sale. A reading of the contract would mean that Puyat will have to buy equipment fromthe US and whatever unforeseen circumstances may arise, Arco can still hold Puyat to theiragreement to the fixed prices they agreed upon.In a contract of agency to buy, the agent is exempted from all liabilities in the discharge of hiscommission, provided he acts within his authority.Also, Puyat is already an agent of Starr, it would be peculiar to say that Puyat is both the agentof the vendor and vendee.As to the 10% commission, it is actually an additional price to be paid by Arco in buying theequipment from Puyat.

Ker vs LingadFacts: Ker challenged the assessment of the Internal Revenue Commissioner making it liablefor brokers tax. The assessment was made on transactions made by Ker, as distributor, of the

products of US Rubber International.The contract had a disclaimer that Ker is not a distributor or legal representative of the USRubber International.Issue: Was this a contract of sale or contract of agency to sell?Held: Contract of agency to sell. Reasons:


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Even if possession was delivered to Ker as distributor, the US company still owned theproducts.

The US company retained control over the price and terms of the products to be sold, andnot Ker.

Rubias vs. Batiller

Facts:Atty. Rubias seeks to wrest the possession of a land from defendant Batiller. Hispredecessor, Militante, in a previous case, filed for the registration of the land in the registrationcourt. Atty. Rubias was his counsel-of-record in that case. The application for registration wasdenied and during the pendency of the appeal, Militante sold the land to Atty. Rubias (who was,his counsel).One of the defenses raised by Batiller in this ejectment case against him is that Atty. Rubias hasno cause of action against him, because the sale conveyed by Militante is void, being a sale

between a client and an attorney of a land under litigation.Issue: Was the sale void?Held: The sale is void. Contracts expressly prohibited by law are void. Art. 1491 says that

lawyers cannot purchase properties which are the object of litigation in which they take part byvirtue of their profession.

Such contracts are void from the beginning and cannot be ratified The first 3 enumerations of Art 1491 which are executors or administrators, agents, and

guardians can be ratified by a new contract when the cause of nullity ceases. (There is

only private wrong). But the ratification or 2nd contract will only be valid upon itsexecution and not retroact to the date of the first contract.

The 2nd part of the enumeration which covers public officers, officers whose function areconnected to the administration of justice, lawyers cannot be ratified because public

policy and interest requires that they be prohibited permanently.

(Note: The lawyer knew the defect from the beginning, thus he is in bad faith)

Phil Trust Co. vs. RoldanFacts: The Minor Bernardo inherited properties from his father. His stepmother, Roldanassumed guardianship over him. She applied for authority to sell 17 parcels of land to her

brother-in-law, Ramos. The sale pushed through on Aug 5, 1947 and the court confirmed thissale. 1 week later (Aug 13, 1947) Ramos sold the property to Roldan. Then 4 of the 17 parcelswere sold by Roldan to Cruz, reserving to herself the right to repucrchase.Philippine Trust assumed guardianship of the minor and sought to undo the sale transactions for

being violations of ART 1459 which prohibits the purchase of a guardian, by herself or through

the mediation of another, property of her ward.Roldan argues that sale was beneficial to the minor since this resulted to higher rental earningsand the minor will be able to purchase the land from her in the future.Issue: Are the sale transactions void?Held: Yes. Even in the absence of proof showing collusion between Dr. Ramos and Roldan, thestubborn fact remains that the guardian acquired the properties of her ward. Her plan to acquirethem is very apparent because after the court-approved sale to Ramos, she purchased them in

just a week.


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-She was not entirely truthful because she sold the lands for P14,700 even if she knew theywere worth P17,000.- Annulling the sale will be most beneficial to the minor because the minor will get a betterdeal: receive all fruits of the lands from year 1947, and will return P14,700 not P15,000.Unlike if the lower courts are upheld: The contracts are valid but the minor can repurchase thelands for P15,000 within 1 year.

Fabillo vs. IAC, MurilloFacts: Florencio Fabillo sought the services of ATTY. Murillo in recovering the ownership of a

property that was bequeathed to him by his sister. Fabillo and Murillo entered into an agreementwherein it was stipulated that in case of a successful litigation, Murillo will get 40% of the

benefits Fabillo will be entitled.The litigation over the property was resolved in favor of Fabillo and Atty. Murillo sought toenforce their agreement by asserting his right as owner of 40% of the property. The Fabillosclaimed their consent was vitiated by old age, and that the contingent fee of 40% of the propertyis excessive. The Fabillo children eventually substituted their parents in this case and theyraised the argument that the contingent fee was a violation of Art 1491 which prohibits a lawyer

from purchasing a property which is the object of litigation in which he has taken part by virtueof his profession.Issue: Was the contingent fee agreement a violation of art 1491?Held: No. Contingent fees agreements do not violate art 1491 because the property is acquired

by the lawyer when judgment was already rendered and the litigation is already over. Theprohibition only applies during the pendency of the litigation. Also, the Canons of ProfResponsibility allows a lawyer to exercise lien over the properties of his client held by him tosatisfy his unpaid legal fees.In this case, though the contingent fee agreement is valid, it was vague in its terms regardingownership of the property when it is neither sold or mortgaged. The vagueness will be resolvedagainst the one who drafted the contract (Murillo), therefore he is only entitled to P3,000

attorneys fees.

Lee, FLAG vs RTC, Enderes

Facts: Dr. Ortanez died, leaving behind a wife, 3 legitimate children, and 5 illegitimate children.Upon his death, 2 of his legitimate children, Rafael and Jose Ortanez were appointed as specialadministrators of the Estate. The inventory of the estate included 2,029 shares of stock inPhilinterlife Corporation.Juliana Ortanez, the decedents wife, sold half of the Philinterlife shares in the inventory to

petitioner FLAG, claiming that it is her share in the conjugal property. Jose Ortanez, acting inhis personal capacity, sold the remaining 1,011 shares to FLAG as his share of the inheritance

in the Estate.Prior to these sale transactions, Juliana Ortanez and her children entered into a memorandum ofagreement extrajudically settling the estate among themselves.Ma Divina-Ortanez, an illegitimate child, moved for the nullification of the sales of the sharesof stock, and the extrajudicial settlement.Issue: What is the status of the sales of shares of stock made by the special administratorwithout the approval of the court?Held: Void. The shares of stock were submitted in the inventory of the estate. Therefore, when


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the administrators sold them, they did not have the authority. Aproperty under administrationneeds the approval of the probate court before it can be sold. It has been held that a property ofthe deceased, which is sold by an administrator without court authority is void.

Heirs of San Andres vs. Rodriguez

Facts: Juan San Andres sold to Vicente Rodriguez a portion of his land consisting of 345 sqm.San Andres died and the administrator of his estate contracted an engineer to survey the land.The engineer found out that the land being occupied by Rodrihuez was actually 509 sqauremeters more than what he purchased.The heirs of San Andres sought to recover the excess portion, saying that the contract of sale

between San Andres and Rodriguez did not sufficiently describe the land sold. Rodriguezclaimed that it was really the intention of San Andres to sell the land occupied by him asevidenced by the receipt of payment they signed.Issue: Did the contract of sale have a determinable object?Held: Yes. The object is determinable because there is no need for a new contract between the

parties to ascertain their intention.

The receipt shows that San Andres received P500 from Rodriguez as advance payment for theresidential lot adjoining his previously paid lot on 3 sides, excepting the frontage. The fullamount of purchase price was to be based on a survey and would be due and payable in 5 yearsfrom the execution of the deed of sale. The object can be determined with the above description.-That the object of the contract needed the services of a surveyor to be ascertained does notmake invalid because the parties do not need to execute a new contract between them todetermine the object.

Pio Sian Melizza vs. City of Ilo-Ilo

Facts: Melizza conveyed portions of her land 1214 to the City of Ilo-Ilo and in the public

instrument evidencing it, specific lot numbers were expressly mentioned, along with a clausethat the conveyance includes the lots needed for the construction of the City Hall pursuant to theArellano Plan. (The City of Ilo-ilo donated the land to UP.)Melizza sold her remaining interest in lot 1214 to Villanueva, who then sold it to petitioner PioSan Melizza. Pio Sian Melizza contends that the sale of the land to the City of Ilo Ilo did notinclude lot 1214-B because it did not specifically designate it like the other lots. Pio avers thatan interpretation that the contract included the lot 1214-B, which was not specificallydesignated therein will violate the requisite that an object must be determinable.Issue: Is lot 1214-B included in the sale to the Municipality of Ilo-Ilo?Held: Yes. Despite not being mentioned, the true intention of the parties can be gleaned fromthe contract of sale. The paramount intention for the donation was to provide the City of Ilo-Ilo

a land for its City Hall pursuant to the Arellano Plan. The donation of the land before wasrevoked for not having met the required area. This contract of sale was executed to make thearea donated sufficient to meet the plan.Also, after the contract specifically designated the lots to be conveyed, the contract went onfurther to say that the lots object of the sale are those needed to meet the Arellano Plan.Also, when the city already took ownership of the land, the vendor Melizza did not object.


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Yu Tek and Co vs. Gonzales

Facts: Gonzales received from Yu Tek Co the sum of P3,000 for which he bound himself todeliver 600 piculs of sugar.Yu-Tek Co later on sued Gonzales for non-compliance and demanded its P3,000 back plusP1,200 in damages a expressed in their agreement. Gonzales said that what he promised todeliver are crops from his sugar plantation, and that since the crops were destroyed, he isalready relieved of his obligation.(Both are aggrieved by the lower court when it ruled that there was no contract of sale since theobject cannot be ascertained)Issue: Was there a perfected contract of sale?Held: None, only a promise to sell. (Article 1450) The sale shall be perfected between thevendor and vendee and shall be binding upon both of them if they agreed upon the thing whichis the object of the contract and upon the price, even when neither is delivered.There is a perfected sale with regard to the thing whenever the article of sale has been

physically segregated from all other articles. In this case, the undertaking of the defendant tosell 600 piculs of sugar of the first and second classes did designate the article to be sold. There

was no appropriation of the sugar to be sold.

NGA/NFA vs. IAC, Soriano

Facts: Soriano offered to sell his palay to NFA. NFA gave him a quote of 2,640 cavans of palay.The quota was noted in Sorianos Farmer Info Sheet and represented the maximum amount of

palay he can deliver.Soriano delivered 630 cavans of palay to the NGA warehouse. The cavans delivered were notrebagged. The Provincial Manager, Cabal wrote Soriano to withdraw his palay because of NFAfindings that he is not a bonafide farmer who sells palay not from his own plantation.

Soriano sues NFA for collection of money due to him from the delivery of the 630 palay. Heargues that there was already a contract of sale between him and NFA when the latter acceptedhis offer. NFA argues that there was no contract of sale because when Soriano delivered his

palay to the warehouse, it was only an offer to sell. Since the company did not rebag it, the offerof the palay was rejected.Issue: Was there a perfected contract of sale between the parties?Held: Yes. There was an acceptance of the offer when NFA gave Soriano a quote which wasindicated on his Farmers Info Sheet.The fact that the exact quantity of the cavans of palay to be delivered does not affect the

perfection of the contract. (Article 1349: The fact that quantity is not determinate does notprevent the perfection of the contract, provided it is possible to determine the same without a

new contract between the parties). In this case, there was no need for Soriano and NGA to enterin a new contract as Soriano can deliver cavans of Palay as long as they do not exceed the 2,640quota.

Magpalo vs. Magpalo

Facts: The simple illiterate farmers spouses Miguel and Candido Magpalo wanted to donate


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half of their land to Miguels brother, Maximo. They were made to sign a purported deed ofdonation which was actually a deed of sale. The deed of sale purports that the entire land is soldto Maximo for a consideration of P500. Maximo was able to have thel and registered to hisname, then sold it to the NarcisosMiguel Magpalo now seeks the nullification of the deed of sale, saying it was procured throughfraud, and that there was no actual consideration.Issue: Is the deed of sale void?Held: Yes. Consideration is an element of contract.

When it is a false consideration, then it is merely voidable However, when there is no consideration, the contract is void.

Ong vs. Ong.Facts: Imelda Ong executed a Quitclaim deed over a undivided portion of a parcel of land infavor of Maruzoo for the consideration of P1. Later on, she revoked this Quitclaim Deed.Maruzzo, through her guardian, filed for the recovery of the land. Ong argues that the deed ofsale is void because the consideration, which is P1 is not enough to be a valid consideration.Issue: Is the consideration of the contract valid?

Held: Yes. It has been found by the CA that the consideration is not just for P1 but also for someother valuable considerations.Bad faith and inadequacy of monetary consideration do not render a conveyance void ab initio.The assignors liberality, being enough cause for the contract.(It is a practice among Anglo-Saxons to state a consideration which is less than that actually

paid)

Bagnas vs. CA

Facts: Mateum died without ascendants or descendants and was survived only by collateral


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relatives. He left 29 parcels of land. The respondents, who were collateral relatives of thedeceased have 2 deeds of sale allegedly executed by the deceased in their favor covering 10

parcels of land for a consideration of P1.The petitioners now assail the validity of the deeds of sale, being founded on a P1 considerationas compared to their assessed value of about P10K.The respondents say that aside from the P1 price, they also rendered service to the vendor.Issue: For having a consideration which is grossly disproportionate to the assessed value, arethe deeds of sale void?Held: Yes. There is an absence of cause. The respondents cannot claim that the mere liberalityof the donor is the cause. There was also no value assigned to the service the respondentsrendered to the vendor.

Mate vs. Ca, TanFacts: Mate was convinced by her cousin Josephine , to execute a deed of sale with right torepurchase for a consideration of P1.4 M with 5% interest per month in favor of Tan. This wasfor the purpose of saving Josephine from an imminent criminal prosecution by Tan arising from

bouncing checks she issued. Josephine also undertook to provide for the repurchase price, andpay the interest, and issued to Mate checks amounting to the purchase price plus interest.When Mate deposited the checks so that he can repurchase his properties, the checks bounced.

Mate now wants to nullify the deeds of sale he executed in favor of Tan for want ofconsideration, saying no money actually exchanged hands.Issue: Was there a valid consideration in the contract?Held: Yes. The consideration was the price Josephine undertook to pay Tan. It was just sad thatMate was swindled byJosephine. Appellant was impelled to enter into the contract by theP420,000 profit he will gain.

Alino vs. Heirs of Lorenzo


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Facts: Lucia Carlos sold a land to her daughter Angelica for P10,000. Lucia remained inpossession of the land, collected its fruits, and paid its taxes. Angelica died and her heirspartitioned her estate, including the land.Lucia demanded the heirs to return to her the land, but the heirs refused. She filed a case forrecovery of the land, saying that there was really no sale between her and her daughter becausethey did it just to support Angelicas loan application. She said that the contract did not have aconsideration.Issue: Is the contract void?Held: Yes. There are indications that the contract is absolutely simulated. There was really noconsideration paid. Suffice it to say that the concept of non-payment of price is irreconcilablewith simulation. If there exits an actual consideration, however small it may be, there is a validsale. The absence of a consideration showed that the parties did not intend to be bound at all

Gonzalez vs. Trinidad

Facts: Trinidad sold his land to Gonzales for P10,000. The sale was actually fictitious as the

vendors did not really receive the purchase price. The purpose was to save the property fromattachment by Dr. Papa, to whom Trinidad executed a promissory note.Trinidad says that the consideration was illegal and the CA erred in holding that articles 1305anf 1306 are not applicable.Issue: Is the contract void?Held: Yes. The contract is void for having an absolutely simulated price.

Also the Sc, made a distinction as to the motive and consideration. Consideration is the why of contracts, the essential reason why the parties enter into a

contract.


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Macasaet vs. R Transpot

Facts: Under a deed of sale with assumption to mortgage, Respondent R Transport sold its 4buses to petitioner Macasaet for P12M . Macasaet failed to pay the price, and R. Transport suedto recover the buses.Issue: Was the rescission of the contract in order?(The CA ruled that there was no consideration, because the price was never paid and thereforethe sale is void.)Held: Yes. Failure to pay the consideration is different from lack of consideration. Failure to paythe consideration presupposes the existence of a valid contract, and therefore, the remdy isrescission. Lack of consideration prevents the existence of a contract.When a deed of sale purports that the price has been paid, but actually never been paid, the saleis void for the absence of consideration.In this case, the contract was perfected because there was a meeting of the minds. Macasaetfailed to pay the price stipulated, and so, the sale can be rescinded.

RP vs. Philippine Resources Dev Corp

Facts: Apostol owed the Bureau of Prisons money in the sum of P34K as the price of the

materials he bought. The Bureau (Through RP), sued Apostol for collection of the balance.Apostol in his defense, said that he already paid to the Bureau the balance in the form of goods( GI Sheets and GI Pipes), which the Bureau accepted. The Bureau argues that the delivery ofthese goods cannot constitute payment because they are not in money.Issue: Can the materials delivered by Apostol in payment of his debt be considered valid

payments?Held: Yes. Payment may be in the sum of money or its equivalent.While it is true that the original agreed price was in the sum of money, the goods delivered byApostol to the bureau were already assessed and their price equivalrnt in the sum of moneyhave been determined.-The issue on whether these materials belonged to Phil Resources is still to be determined


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Velasco vs. CA, Magdalena Estates

Facts: Lorenzo Velasco, requested his sister-in-law, Socorro Velasco to negotiate with MadalenaEstates the purchase of a land. Magdalena Estates said that it was willing to sell the land forP100,000. P30K will be the down payment and P70,000 will be the balance.As the P30,000 downpayment was too high for Lorenzo Velasco, he paid an earnest money ofP10,000 with the payment of the remaining balance to be agreed uponThe Velascos now sue Magdalena for specific performance to convey to them the land.Magdalena says that there was no perfected sale because the manner of payment was not agreedupon.Issue: Was there a perfected sale?Held: None. A definite agreement on he manner of payment of the purchase price is anessentiall element in the formation of a binding an enforceable contract of sale. The fact,therefore, that the Velascos delivered to the Magdalena the sum of P10,000 as part of thedownpayment that they had to pay cannot be considered as sufficient proof of the perfection ofany purchase and sale agreement between the parties. The terms of payment still had to be

agreed.

San Miguel Properties vs. HuangFacts: SMP put up for sale a property. The Huangs, through their lawyer, expressed their

intention to buy the property. They sent SMP a check worth P1M as earnest money subject tothe condition that they be given an exclusive option to purchase the property within 30 daysfrom the acceptance of the offer. During those 30 days, he parties will negotiate the terms andconditions of the purchase.This counter-offer of the Huangs was accepted by SMP and it gave them an exclusive option to

buy the property within 30 days. SMP and the Huangs failed to agree on the terms andconditions of the payment, after a series of offers and counter-offers. The option period elapsedand SMP returned to the Huangs their check of P1M which they sent as earnest money.The Huangs argue that there was already a contract of sale perfected when SMP accepted itscheck. SMP for its part say that there was no sale contract perfected, because 1.) The parties didnot agree on the payment terms. 2.) That the Huangs failed to exercise their option to buy within

the period and that the option is unenforceable for not being founded on consideration. 3.)Issue: Was there a contract of sale?Held: None. There was no perfected contract because the parties did not agree on the terms of

payment. What happened was a series of offers and counter-offers.The P1M was merely a deposit to be applied as downpayment in the event that the parties

agree on a contract of sale.The option is unenforceable for not being founded on a consideration.


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Co vs. CA, NgoFacts: Benito Ngo and Antonio Ong were both claiming to have purchased the same parcels ofland from Narciso Gonzales. To settle their dispute, the Fil-Chinese Chambers of Commercesuggested that they divide the 2 properties among themselves. Ngo and Ong later accepted thesuggestion and the properties were divided: Ong got lot 7-A and Ngo got lot 7BImportant facts starts here : Petitioner Co now claims that Ngo agreed to sell Lot 7-B to him forP49,500. Co presented evidence of purporting to be payments. Ngo denied having entered into acontract of sale with Co. Ngo said that those payments are for some other purpose.Issue: Was there a contract of sale?Held: None. A definitive agreement on the manner of payment of the price is an essentioal

element in the formation of a binding an enforceable contract of sale. The evidence of petitionerCo did not establish a definitive agreement on in the manner of payment.

Heirs of Amado vs. Salvador

Facts: The heirs of Judge Amado were seeking the recovery of a parcel of land from Salvador.Salvador claims that the land was sold to him by Amado for t P66K+. They did not agree withthe date the payment due. Salvador claimed that he delivered to Amado the payment price partlyin the form of money and construction materials.The heirs argue that there was no contract of sale, the truth being was that the paymentsSalvador delivered to Amado were part of a loan agreement they entered.Issue Was there a contract of sale?Held: None. Salvador failed to prove that the parties have an exact notion of the considerationto which they supposedly gave their consent.

Salvador failed to allege the manner of payment of the purchase price on which the partiesshould have agreed. No period was set within which the payment must be made. Of the P66K

purportedly agreed upon, the amount which should be paid in cash and the amount whichshould be paid in construction materials was not determined.


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Doromal vs. Javellana

Facts: Respondent Javellana co-owned a property together with her relatives. These relatives

sold 6/7 of the property (corresponding to their share) to the Dormals. Javellana retained 1/7 of

the property. Javellana sought to repurchase the property from the Doromals but the Doromals

refused.

Javellana sued the Doromals to resell them the property. The Doromals argued that Javallena

can no longer redeem the properties because the 30 days had already elapsed from the time

Javellana got a notice of the sale. There were 2 letters of notice to Javellana: one dated January

1968 and the one dated November 5 1967. The one dated November 1967 was informing her

that a P5,000 pesos earnest money had already been received.

Issue: Was there a perfected sale in the first place?

Held: None. The letters sent to Javellana did not amount to a notice of a perfected sale because

the price is indefinite. The earnest money stated therein is not the earnest money being

contemplated in the New Civil Code, which is part of the purchase price and an indication of a

perfected sale. The earnest money stated therein was more of an earnest money being

contemplated in the Old Civil Code which is a guarantee that the vendee will not back out from

the transaction. This is so because there appears to be no clear agreement as to the price and

that the petitioners were decided to buy 6/7 only of the property should Javellana refuse to sell

her 1/7 shar

Serrano vs. Caguiat

Facts: The spouses Serrano owned a property (439 sqm). Caguiat offered to buy the property at

P1,500/sqm. Caguian gave the Serranos P100,000 as partial payment. The Serranos issued a

receipt for the P100,000 to the effect that it was received as a partial payment for the property

with the balance payable by March 23, 1990, and that upon the payment of the balance, a deed

of sale will be excuted.

On March 28,1990, the respondent expressed his willingness topay the balance. The Serrano

said they are canceling the transaction and are returning the P100,000 downpayment.

Caguiat sued the Serranos for specific performance. The Serranos averred that there was no

contract of sale between them and Caguiat because there was no clear agreement between the

parties as to the amount of consideration

Issue: Is this a contract of sale or contract to sell?


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Held: Contract to sell because the property remained with the Serranos pending the full

payment of the price.

In a contract to sell, full payment is a suspensive condition that will give rise to the obligation.

In this case, since there was no full payment of the balance, the Serranos were entitled to

rescind the contract. Since this is a contract to sell, the earnest money given can only form part

of the consideration only if the sale is consummated upon full payment of the purchase price.

Article 1482, which speaks of earnest money in a contract of sale does not apply.

Dailon vss. CA, Sebasaje

Facts: Sebasaje sued Dailon for recovery of ownership of a parcel of land he allegedly bought

as evidenced by a deed of sale. Sebasaje denied executing such deed of sale and further argued

that granting such deed of sale is authentic, the same cannot be enforced for not being in a

public document as required by Article 1358 of the Civil Code.

Issue: Can the deed of sale be enforced despite not being in a public instrument?

Held: Yes. A contract of sale is a consensual contract which is perfected upon the meeting of the

minds.

Article 1358 merely requires the sale of real property to be in a public document for

convenience purposes. The fact that a deed of sale is not in a public document will not really

render the deed invalid or unenforceable.

Secuya vs. Selma

Facts: In this case, Secuya filed an action for quieting of title against Selma. It is contended by

the Secuyas that the subject property was sold to Damacio Secuya by Pacencia Sabellona by

means of a private document. This private document, however, they cannot produce. They claim

that through an Agreement of Partition, Pacencia Sabellona that property was ceded to Pacencia

by a Maximo Caballero.

Selma on the other hand claims that she bought the property from A Cesara Caballero as

evidenced by a notarized deed of sale.


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Issue: Is the deed of confirmation of sale in favor of the petitioners valid?

Held: The purported deed of sale was not produced. While a sale of a piece of land appearing in

a private deed of sale is binding between the parties, it cannot be considered binding to 3rd

persons if it is not embodied in a public instrument and recorded in the Registry of Deeds.

Selma on the other hand, has all the necessary documents to prove her claim.

Yuvienco vs. Dacuycuy

Limketai Sons Milling vs. CA, et Al

Facts: BPI put a property it was holding up for sale. Limketai sent a letter expressing its offer to

buy the property and the price it was willing to pay. BPI rejected it. Limketai sent another letter

of offer which BPI likewise rejected.


17/89

Limketai sent a letter expressing that there was already a perfected contract of sale between it

and BPI. It presented as evidence the correspondence with BPI.

Issue: Was there a valid sale?

Held: No. It failed to hurdle the strict requirement of the Statute of Frauds which require that

the not ot memorandum evidencing the sale must establish the perfection of the contract.

Also: During the trial, the respondents counsel persistently objected when the trial court

allowed the presentation of oral testimony to prove the existence of the contract. Despite the

presentation of oral testimony and the respondents counsel cross-examination of the witness,

this cannot be considered as a waiver of the parole evidence rule (nor a waiver of their right to

object on the ground of Statute of Frauds.)

Ortega vs. Leonardo

Facts: Oretega and Leonardo were claiming ownership over the same property. Ortega and

Leonardo later on agreed that Ortega will desist from pressing her claim and that Leonardo will

just sell to her a portion of the land, after he acquired title thereto, provided that Ortega will pay

for the survey and subdivision of the land, and provided further that she could continue holding

on the land as tenant by paying a monthly rental.

Leonardo eventually acquired title over the land. Ortega had the land surveyed, built

improvements thereon, and paid Leonardo the monthly rentals corresponding to his portion over

the land. Ortega tendered the purchase price for the land but Leonardo refused without reason.

Both parties admit that an oral agreement to sell a piece of land is unenforceable. However,

Ortega argued that this sale is partially executed, and therefore, already enforceable.

Issue: Is the sale partially executed?

Held: Yes. The making of valuable improvements on the land with the knowdlege of the vendor

is the strongest indication of partial performance in this case as it indicates delivery of

possession.

Also: the surveying of the land, and the tender of the purchase price pursuant to the agreement

can also indicate partial performance.


18/89

Heirs of Claudel vs. CA, Siblings of Claudel

Facts: The heirs of Claudel inherited a property from Claudel. They were able to secure title

over the property to their names. Later on, the Siblings of Claudel filed for cancellation of these

titles claiming that they are the rightful owners of the property by virtue of a sale Claudel

executed in favor of their parents. The sale they allege was verbal only.

Issue: Can a contract of sale of land may be proven orally?

Held: No. The Statute of Frauds was designed to protect the parties. The contract of sale cannot

be enforced unless the required proof are met.

-Also, action has already presctibed. Alleged sale 1930; the date the titles were issued to the

heirs 1976

Spouses Alfredo vs. Spouses Borras

Facts: The spouses Afredo sold a land to the spouses Borras. The Boras paid the purchase price

(receipt) and took over the land. Later on however, the Borras spouses discovered that the

spouses Alfredos resold it to other persons.

The Borras spouses sued the Boras spouses for specific performance against the Alredos and the

subsequent buyers.

The spouses Alfredos and the subsequent buyers argued that the sale to the Borras spouses is

unenforceable because it was not in a written instrument.

Issue: Whether or not the sale to the spouses Borras is valid and enforceable?

Held: Yes. The Statue of Frauds does not apply anymore because this contract has already been

executed.

The spouses Alfredos already turned over the property to the Borras and the Borras already paid

the price, as evidenced by the receipt. Also, the receipt serves as a memorandum of sale.


19/89

Xentrex Automotive vs. CA, Samson

Facts: Petitioner Xentrex sold a car to the respondents Samsons. The Samson spouses paid an

intitial deposit. The remaining balance was to be paid thru bank financing. The Spouses Samson

then decided to pay the balance in full because there were delays in the bank financing.

The Samsons then discovered that Xentrex sold the car to someone else. The Samsons sued

Xentrex for breach of damages. Xentrex argued that there was no perfected contract between it

and the Samsons because the Samsons failed to comply with their obligation to pay the price in

full.

Issue: Was there a perfected contract?

Held: Yes. There was a meeting of the minds on the car to be old and the price.

Cebu Winland vs. Ong Siao Hua -2 topics

Facts: Cebu Winland, a real estate developer sold to Ong Siao Hua condominium units. The

possession of the properties were turned over to Ong on October 10, 1996. When Ong requested

for the cono certificates, Cebu Winland sold to Ong documents denominated as Deeds of

Absolute sale for the two condos. Ong was surprised to see that the stated floor area in the deed

of sale is only is 127 sqm, contrary to what was indicated in the price list which is 155 sqm. He

had the condo surveyed and found out that it was only 110 sqm.

He later on sued Cebu Winland for refund of the amount proportional to the discrepancies of the

floor areas. One of the arguments raised by Cebu Winland is that the action has prescribed

because 6 months had already elapsed since it delivered the units. Ong however argued that the

action has not yet prescribed because they have not yet executed a deed of sale.

Issue: Was there a delivery of the properties?

Held: None. Under the law on Sales, delivery happens when the ff concur:

Transfer of possession

Transfer of ownership

In this case, even though there was a transfer of possession, there was no transfer of ownership

yet because the there was no execution of deed of sale.

Note: If vendee is placed in actual possession of the property, but by agreement of the parties

ownership of the same is retained by the vendor until the vendee has fully paid the price, the

mere transfer of possession of the property is not the delivery contemplated under the Law on

Sales.

Therefore, there was no delivery yet and the action has not yet prescribed.

ARTICLE 1542. In the sale of real estate, made for a lump

sum and not at the rate of a certain sum for a unit of

measure or number, there shall be no increase or decrease

of the price, although there be a greater or lesser area or

number than that stated in the contract.


20/89

The same rule shall be applied when two or more

immovables are sold for a single price; but if, besides

mentioning the boundaries, which is indispensable in every

conveyance of real estate, its area or number should be

designated in the contract, the vendor shall be bound to

deliver all that is included within said boundaries, even

when it exceeds the area or number specified in thecontract; and, should he not be able to do so, he shall

suffer a reduction in the price, in proportion to what is

lacking in the area or number, unless the contract is

rescinded because the vendee does not accede to the

failure to deliver what has been stipulated. (1471)

[Emphasis supplied]

ARTICLE 1543. The actions arising from Articles 1539 and 1542 shall prescribe in six

months, counted from the day of delivery

Chua vs. CA, Valdes-Choi

Facts: Valdez-Choi owned a real estate property. He put the property up for sale. He and Chua

agreed on a purchase price of P10M+. Valdes Choi received from Chua P100,000 as earnest

money, which can be forfeited should Chua fail to pay the balance by July 15, 1989.

2 days before the due date of the balance, Chua was able to secure a managers check for the

payment but nevertheless refused to hand it over to Valdes-Choi until a TCT is issued to his

name. This angered Valdes Choi who said that this was not part of their agreement. Valdes-Choi

was unwilling to be cause the issuance of a transfer certificate of title until he is paid the full

balance and Chua was unwilling to pay the balance until the TCT is issued to him.

Chua filed a case for specific performance against Valdes-Choi.

Issues: 1. Whether the transaction betweet them is a Contract of Sale or Contract to sell?

Whether Chua can compel Valdes to cause the issuance of a TCT in Chuas name even

before the payment of the purchase price.

Held 1. Contract to Sell. Because ownership of the property remained with Valdez as can be

gleaned from:

Earnest money can be forfeited should Chua fail to pay the balance. The right to sell the

property to some other person was reserved to the vendor should the vendee fail to pay

the balance

The absence of a deed of sale indicates that the parties did not intend an immediate

transfer of ownership but only a transfer after full payment of the price.

The ownership of the property was not transferred to Chua either by constructive or

actual delivery because the Valdez Choi retained possession of the certs of title and other

documents.

2. Chua cannot compel Valdes to cause the issuance of a TCT in his name because this is

a contract to sell. In a contract to sell, the obligation of the seller to sell becomes

demandable only upon the happening of the suspensive condition, which in this case, is


21/89

the full payment of the purchase price by Chua. If such full payment is done, then Chua

can demand the execution of a contract of sale.

- In a contract of sale, the vendor is bound o ransfer the ownership of, and deliver, as well

as warrant the thing which is the object of the sale.

Ownership is transferred upon the delivery of the thing sold. In a contract of sale of real

property, delivery is effected when the instrument of sale is executed in a public

document. When the deed of sale is signed by the parties and notarized, the delivery of

the property is deemed made by the seller to the buyer.

Chua had no right to compel Valdez to transfer the ownership because the suspensive

condition, which is the full payment of the price, did not happen.

Addison vs. Felix

Facts: In a public instrument, Addison sold to Felix four parcels of land. At the time of the

execution, Felix paid P3,000 and the remaining balance of P7,000 was to be paid later on

(P2,000 on july 15, 1914 and the (P5,000 after 30 days from the issuance of certificate of title.)

Addison filed a complaint against Felix for the payment of the first installment of P2K, in

accordance with their contract. Felix prayed to be absolved on the ground that the plaintiff

failed to deliver the lands. She also prayed for recission.

The evidence showed that the when Addison and a representative of Felix went to see the lands

to be delivered to the actual possession of Felix, only 2 out of the 4 lands were designated and

more that 2/3 of these 2 lands were occupied by a 3rd

person. Addison admitted that Felix will

still have to resort to judicial means to obtain the possession of the land.

Issue: Granting that there was a symbolic delivery of the land which is subject matter of the

sale, but the land was not placed under the control of the vendee because it was being adversely

occupied by a 3rd

person, was there a delivery?

Held: There was no delivery. In order for symbolic delivery to produce the effect of delivery,

the vendor must have control over the thing sold that , at the moment of the sale, the material

delivery can be made. When there is no impediment whatever to prevent the thing sold passing

to the control of the purchaser by the sole will of the vendor, symbolic delivery through the

execution of a public instrument is sufficient.

In this case, the symbolic delivery cannot suffice as delivery because the land cannot be placed

by the vendor under the control of the vendee by reason of an adverse possessor.


22/89

Pasagui vs. Villablanca

Facts: The Villablancas executed a public instrument selling a land to Pasagui and Mosar.

Later on, Pasagui filed a complaint against the Villablancas for allegedly illegally taking

possession of the property and prayed that the Villablancas be ordered to surrender the land. The

Villablancas argued that the lower court had no jurisdiction, the being an action for forcible

entry. The plaintiffs argued that this was not for forcible entry, because it was not alleged that

they have been deprived possession of the land by force, stealth, intimidation or stealth.

Issue: Did the plaintiffs acquire possession of the land by virtue of the execution of the sale in a

public instrument despite the fact that they were not placed in material possession of the land?

Held: No. When there is no impediment ot prevent the thing sold passing to the control of the

purchaser by the sole will of the vendor, symbolic delivery through the execution of a public

instrument can suffice. However, if the purchaser cannot have material tenancy of the thing, the

execution of sale in a public instrument cannot produce delivery.

In this case, the plaintiffs do not alleged that they were placed in the possession of the land prior

to the alleged take over by the defendants. This is not case for forcible entry. They were seeking

return of the price as an alternative if the possession cannot be given to them. (Case remanded)

Power Commercial and Industrial Corporation vs. CA, Quiambao, PNB

Facts: Power Corp bought the land of the spouses Quaimbao and assumed the mortgage over it

in favor of PNB. The land was being occupied by 3rd

persons.

Power Corp later on filed a complaint against the spouses Quiambao for recission of the

contract on the ground that the land was being occupied by 3rd

persons.. Power Corp also

demanded the PNB to return to it the payments for the mortgage because the mortgage was

never approved.

Issue: One of the issues in this case is was there an effective symbolic delivery of the land given

that the land was being occupied by 3rd

persons?

Held: Yes. The execution of a public instrument cannot produce the effect of symbolic delivery

if the vendor does not possess control over the thing sold. The key word is control, not

possession. When there is no impediment ot prevent the thing sold passing to the control of

the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public

instrument can suffice. However, if the purchaser cannot have material tenancy of the thing, the


23/89

execution of sale in a public instrument cannot produce delivery.

In this case, lot sold was placed under the control of Power Corp, as can be evidenced by its

filing of an ejectment suit. Prior physical delivery is not legally required.

Behn, Meyer vs. Yanco

Facts: Pursuant to their contract, Behn from New York, shipped to Yanco, in Manila Soda cans

which Yanco will buy. However, the ship was detained n Penang before it reached Manila, and

some of its cargo was seized. When the ship arrived in Manila, Yanco refused to accept the

remaining soda on the ground that they were in poor condition and that it was not of the

Carabao brand.

Behn sued Yanco for damages arsing from breach of contract.

Issue: What was the contract between the parties? And who owned the goods at the time it was

shipped? (If the plaintiff owned the goods, then there was no breach of contract because the

buyer, Yanco, cannot be forced to pay for the goods when it arrived at him in poor condition

after the incidents; If the buyer Yanco owned the goods, then Behn would be excused by

circumstances that transpired and so, Yanco would still be liable to pay for the goods that

arrived at him.

Held: The plaintiff owned the goods. This was determined by the place of delivery.

Place: The place of delivery was Manila, as can be gleaned from the payment of the freight. If

the seller pays for the freight, then int can be inferred that it was his duty to see to it that the

good reach their destination and that title to the property does not pass until the goods have

reached their destination. On the other hand, if the buyer pays for the freight, it can be inferred

that the goods were already his at the point of Shipment (in this case, New York).

The plaintiff paid for the freight, therefore it can be inferred that he still owned the goods before

it reached Manila.

Santa Ana vs. Hernandez

Facts: The Sta. Ana Spouses sold 2 separate portions of their property to Hernandez. In the

instrument of sale, it was indicated the total price and areas of the sold portions totaling 17,000

sqm, plus an indication of the boundaries.

The spouses filed a suit against Hernandez claiming she was occupying 17,000 square meters in

excess from what she bought from them. Hernandez claimed the area within the boundaries

defined in the instrument.

Issue: Is this a lump-sum sale or a sale by unit of measure?


24/89

Held: Lump-sum sale, and therefore the buyer was entitled to occupy the all portions within the

boundaries stated in the instrument, even if they exceeded 17,000 sqm. This is because the sale

was of a definite and indentified tract (corpus certum), which obligated the vendor to deliver to

the buyer all the land within the boundaries, irrespective of whether the real area is greater or

smaller than that recited in the deed.

Also, it was held that if the defendant intended to buy by the meters, she should have stated so

in the contract.

Doctrine: If the price per unit of measure or number is not expressly provided for in the

contract, the rules of lump sum shall prevail in the sale of real property.

Esguerra vs. Trinidad

Facts: The Esguerra spouses sold to their grandchildren (The petitioners, Esguerra

grandchildren) a parcel of land. They also sold a parcel of land to their other grandchildren, the

Trinidads. The petitioners later on sold to respondents spouses a portion of about 5000 sqm of

the 23,489 sqm land which they acquired from the Esguerra spouses.

When a cadastral survey was conducted on the land In the late 1960s, it was discovered that the

lot they sold actually measures 6,268 sqm. The parties agreed on a purchase pprice of P1,000

for a predetermined, unserveyed area of 5000sqm more or less.

The Trindidad spouses died and the respondents took over the land.

The petitioners filed a complaint against the respondents wherein they sought the cancellation

of certain titles of land on the ground of fraud.

Issue: Is the pricing agreement of the parties in this sale of real estate a unit price contract or a

lump sum contract?

Held: lump sum contract. In sales involving real estate, the parties may choose between 2 types

of pricing agreement: Unit price contract, wherein the purchase price is determined by way of

reference to a stated rate per unit area, or a lumpsum contract which states a full purchase price

for the immovable, the area of which may be declared based on the estimate or where both area

and boundaries are stated, the boundaries shall prevail over the stated area.

In this case, the pricing agreement is of lumpsum because the parties agreed on a purchase price

of P1,000 for the unsurveyed area of 5000 sq and not on a particular unit area.

Carceller vs. CA, State Investment Houses

Facts: STIH leased its property to Carceller with an option to purchase. 3 weeks before the

option to purchase expired, STIH informed Carceller of the impeding expiration. Carceller, in a

letter requested that STIH extend the contract of lease, which STIH refused. 18 days later,


25/89

Carceller manifested his desire to exercise his option to buy the property. However, STIH

refusaed, saying the option had already expired. STIH also said that it is willing to sell the

property at a price 90% higher than what they have agreed in the option to purchase.

Carceller prays for specific performance to compel STIHI to sell him the property.

Issue: Can Carceller still exercise the option?

Held: Yes. Carceller had already manifested his desire to purchase the property when he

requested STHI to extend the lease. Also, it will be highly iniquitous if he will not be allowed to

purchase it given the unsubstantial delay of 18 days from which he can purchase the property.

Soriano vs. Bautista

Facts: The Spouses Bautista mortgaged their land in favor of Soriano and Olimpia de Jesus. The

mortgage contract has a stipulation that the mortgagees are given the option to buy the property

within the 2 year term of the mortgage.

The mortgages (Soriano et al) decided to exercise their right the land. The Bautista spouses

refused, saying such is immoral for depriving them as mortgagors of their right to redeem the

property.

Issue: Can the spouses Soriano exercise their right to repurchase?

Held: Yes. There is nothing illegal or immoral about the stipulation granting a mortgagee the

right to purchase a mortgaged land. It renders the right to redeem of a mortgagor defeasible.

The mortgagors promise was in the nature of a continuing offer, non-withrawable suring a


26/89

period of 2 years, which upon acceptance by the mortgagees gave rise to a perfected sale.

Limson vs. Spouses De Vera, Cuenca, and Sunvar Corp

Facts: The spouses de Vera offered to sell their land to Limson. Limson sent them an earnest

money of P20,000., which was evidenced by a receipt that such money is earnetst payment

with an option to purchase the land in 10 days.

The 10 days elapsed without Limson exercising her right. De Vera demanded payment of the

purchase price of the land, but Limson did nnot pay. De Vera then sold the land to Sunvar Corp.

Limson later on assailed the sale on the ground that there was a perfected sale between her andDe Vera. De Vera argued that there was no perfected sale, but rather, there was only an option to

buy which Limson failed to exercise.

Issue: Was the contract between Limson and De Vera an option to buy or a contract of sale?

Held: An option to buy. The receipt shows that is an option contract that gave Limson the right

to buy the property witin 10 days.

An option is a continuing offer by which the owner stipulates with another that the latter shall

have the right to buy the property at a fixed price within a certain time. It is not a purchase but

merely secures the right to purchase.

The earnest money paid here is not really an earnest money but a separate consideration for the

option contract. Difference: earnest money is part of the purchase price ption money is a

separate consideration ; earnest money is given only when there is a sale, option money applies

to a sale not yet perfected; when earnest money is paid, the buyer is bound to pay the balance.

An option money paid does not make the payer obliged to pay the purchase price.


27/89

Sanchez vs. Rigos

Facts: Rigos and Sanchez executed an instrument with a caption Option to purchase wherein

Rigos gave Sanchez the option to purchase her land for P1,510 within 2 years. There was no

separate consideration distinct from the purchase price.

Sanchez later on sued Rigos for specific performance saying he exercised his . Rigos said that

the contract is void for not having a valid consideration (not important fact, useless argument).

Issue: As the option did not have a consideration distinct from the purchase price, but was

accepted and such acceptance was communicated by the offeree to the offerror, did it make theoption enforceable?

Held: Yes. Where an option to buy which is not founded on a distinct consideration from the

purchase price, is accepted and such acceptance is communicated by the offeree to the offeror,

the same shall give rise to a perfected contract of sale.

An option not founded on consideration can be withdrawn anytime by the offeror even without

notice to the offeree. However, if such offeree decides to exercise his right before the option is

withrawm, the same shall give rise to a valid contract of sale.

Yao Ka Sin vs. CA, White Cement Corp

Facts: The Chairman and President of WCC sent Yao Ka Sin a letter-offer for the sale of some

P45,000 bags of cement. The letter offer also gave Yao Ka Sin an option to renew the contract

under the same terms, prices, and conditions. This transaction was not approved by the Board of

Directors of White Cement Corp. Yao Ka Sin accepted the offer.


28/89

The Board of Director of White Cement Corp learned about this and informed Tao Ka Sin that

the offer was not authorized and therefore unenforceable. It sent another offer of 10,000 bags of

cement to Yao Ka Sin (which was paid for by Yao Ka Sin).

Yao Ka Sin sued White Cement Corp. White Cement Corp said the contract was unenforceable

for being entered into by its President without the approval of the Board. Also, the optio torenew it is also unenforceable?

Issue: Is the contract unenforceable?

Held: Yes. Lack of authority. Also an option to renew a contract, in order to be valid, must have

a consideration.

The option to renew the contract herein has no consideration.

Ang Yu Asuncion, Go, Keh Tiong vs. CA, Buen Realty

Facts: The petitioners were lessees in the property of the Cu Unijieng. The Cu Unijieng offered

to sell the property to the petitioners and the petitioner counter-offered.

Cu unijieng sold the property to Buen Realty for P15M. The petitioners later on sued Keh Tiong

for specific performance to sell them the property. Judgment was rendered dismissing the

complaint, but upheld the right of first refusal of the petitioners to buy the property should Cu

Unijieng decide to sell it for P11M or less.

When Buen Realty asked the petitioners to vacate the property, the petitioners prayed the court

for a writ of execution of the judgment rendered.

Issue: Is a writ of execution in order?

Held: No. The petitioners were only given a right of first refusal if the land is sold for P11M or

less. The land was sold for P15M. A writ of execution is not proper because they have no cause

of action.


29/89

Discussion of court: ROFR, Options are new developments in real estate.

An option is an offer to buy or sell. It is an imperfect offer (policitiacion). Where a period is

given to the offerre within which to accept the offer, the ff rules shall apply:

If the period is not founded on consideration, the offeror has the right to withdraw it before

acceptance by the offeree. He may also withdraw it even if the offerree has accepted but such

acceptance has not yet been communicated to him.

If the period is founded on separate consideration, an option contract is deemed perfected. If the

offeror withdraws it before acceptance, the offeree may not sue for specific performance but

only for damages because since there was no acceptance of offer, no contract of sale was

perfected. If the offer was accepted but the offeror withdraws the option, spec perfrom.

Eulogio vs. Spouses Apeles

Facts: The spouses Apeles owned a property, which is being leased by Eulogio (car business).

Euglogio alleged that the spouses entered into a 3-year contract of lease with him in which hewas given an option to buy the property within the 3 year period for a price not more than

P1.5M. Eugolio decided to exercise his purported option to purchase the property.

The spouses Apeles denied signing the contract. Eugolio sued for specific performance.

Issue: Is the option valid?

Held: No. An option in order to be valid, must be founded on a consideration separate and

distinct from the price.


30/89

Villamor vs. Reyes

Facts: The spouses Reyes sold a property (paraphernal) to the Villamors @ 7O pesos/ sqm. Thisproperty was a the half-portion of a property Reyes owns. Reyes and the Villamors later on

executed an option contract wherein it was stated that the reason why the Villamors agreed to

buy the property at a higher price of P70 as compared to its market value (P25 or P17) is

because Reyes agreed to sell them the other half for the same price should the need arises from

Villamor or Reyes. The option did not contain a period.

17 years later, Villamor decided to exercise her option but the Reyes spouses refused to honor it.

Issue: Did the option have a valid, distinct, consideration separate from the purchase price?

Held: Yes. The consideration was the premium the Villamors were willing to pay on top of themarket value (P70 as compared to P25) to secure the option.

However, since the option did not contain a period, it became ineffective after 10 years.

Nietes vs. CA, Dr. Garcia

Facts: On October 1959, Dr. Garcia leased his property (a land with school building) to Nietes

for a term of 5 years with an option to purchase before the expiration of the contract.

The lease price was P5K per year or a total of P25,000 for the entire term. Nietes paid Garcia a

total of P24,757 as of August 1961. Dr. Garcia sent a demand letter to Nietes for the unpaid

balance and threatened him with rescission. Nietes replied that he had sent additional sums of

P3,000 and P2,000 which Dr. Garcia accepted. He also signified his willingness exercise his

option to purchase the property. Dr. Garcia argued that these amounts were part of the rentals


31/89

and not part of the payment of the purchase price, and therefore, Nietes did not validly exercise

his right to purchase.

Issue: Did Nietes validly exercise his right to purchase the property?

Held: Yes. In an option to buy, the creditor may validly exercise his right by merely advising the

debtor of the formers decision to by and expressing his readiness to pay the price stipulated,

provided that the same is available for delivery to the debtor upon the execution of a deed of

sale in his favor by the debtor.

Notice of desire to exercise the option to buy need not be coupled with a payment of the price.

Nietes had manifested his desire to exercise his right.

Sales Digest 5

PAGE \* MERGEFORMAT 9

Carbonell vs. CA, INfante, Poncio

Facts: Carbonnell, Infante, and Poncio are neighbors. Carbonell agreed to buy the land ofPoncio and agreed to assumed the mortgage over the property. When a deed of sale was brought

by Carbonells counsel to Poncio, Poncio refused to sign it because he sold the same land toInfante. Carbonell sought a dialogue with Infante, but Infante refused to see her.Carbonell, informed that the sale to yet registered, caused his counsel to register his adverseclaim over the land in the Register of Deeds on Feb 8, 1995. Infante registered the deed of saleon Feb 12, 1955. She thereafter took possession of the land.Carbonell sought the nullification of the second sale to Infante on the ground of the prior sale toher. ( Infante put up the defense of unenforceability of the sale to Carbonell under the Statute ofFrauds, but this was brushed aside by the SC since the sale to Carbonell was partially executed).

Issue: Who has a superior right over the land?Held: Carbonell because she registered her claim over the land first, and she was in good faith.Art 1544: Should it be immovable property, the ownership shall belong to the person acquiringit who in good faith first recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faithwas first in possession, and in the absence thereof, to the person who presents the oldest title,

provided there is good faith.Carbonnel was the first buyer and she was in good faith because there was no other buyer


32/89

during that time. She was able register her claim over the property 4 days before Infante. Her

good faith did not cease when she was informed of the 2nd sale to Infante.Infante, on the other hand, is in bad faith as can be gleaned from the ff:

She refused to see Carbonell, her neighbor, which indicates that she knew of the priorsale

Carbonell was already in possession of the mortgage book, which should have compelledher to inquire why the mortgage book was not with the seller

Most important: When she registered her deed of sale, the adverse claim of Carbonell wasalready inscribed in the title, so she was therefore informed that there was a prior sale.

Consolidated Rural Bank vs. CA, heirs of Dela Cruz

Facts: The Madrid brothers owned a land. On Aug 15, 1957, Rizal Madrid, with the conformityof his brothers, sold to Gamio and Dayag a part of his share in the land. The deed of sale wasnot registered. On May 26, 1964, Gamiao and Dayag sold the southern half of a lot they boughtto Teodero dela Cruz. Dela Cruz took possession and cultivated the land.Teodoro Dela Cruz died and his heirs continued the possession of the land.The Madrid Brothers sold a land (which included the portion sold to Gamiao and Dayag whosold it to Dela Cruz) to Marquez. The Deed of Sale was registered on May 2, 1982.Marquez mortgaged portions of the land to petitioner Consolidated Rural Bank to secure a loan.He defaulted, and CRB bought the land in a foreclosure sale.The heirs now filed for the nullification of the sale to CRB and the certificates of titles held byMarquez. Marquez claimed to be a buyer in good faith and pointed out that the sale to Dela

Cruz was not registered. CRB interposed the defense of good faith and reliance on the titlesheld by Marquez which were free from encumbrance and liens. CRB also asserted that itacquired the property from Marquez, who was the registered owner.Issue: Given that the sale to Dela Cruz was not registered and the sale to Marquez wasregistered, who has a superior right?Held: The heirs of Dela Cruz has superior right even if the sale to them was not registered.Article 1544 which says that where a property is sold twice, the one who registered it first will

be upheld is only applicable if the double (or more) sale was done by the same vendor. It cannot


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be invoked where 2 contracts of sale was done by 2 different persons.In this case, the vendors in the first deed of sale were Gamiao and Dayag (who sold the land toDela Cruz) who acquired the land from Rizal Madrid, with the conformity of all the MadridBrothers. The vendors in the later deed were the Madrid brothers, but at the time they executedthe sale, they were no longer the owners because they already disposed the land to Gamaio andDayag.In order that tradition/delivery may be considered performed, the requisites are:

The vendor had the right to convey the property The vendor had the will to convey the property.

Intention to convey is insufficient, for it only constitutes will.In a situation where not all the requisites are present, which would warrant the application ofArticle 1544, the rule he who is first in time is preferred in right shall apply. This means thatthe first vendee has the superior right because he is undisputedly in good faith as there were noother vendees prior to him.In this case, the sale to the heirs by Dayag and Gamiao, who first bought the land from RizalMadrid, was anterior to the sale by the Madrid brothers to Marquez. It was also the heirs who

possessed the property first in time.

Also, it is a principle that one cannot give what he does not have. Therfore, when the MadridBrothers sold the land, they were no longer the owners.Also, granting that article 1544 is applicable, the heirs will still have a superior right becauseMarquez was not a buyer in good faith, even if he registered the sale. The fact that the land wasin possession by people who were not the vendor negates his good faith because he should haveinquired about their possible claim. Article 1544, in the double sale of immovable lays down therules of preference:

The first registrant in good faith Should there be no entry, the first in possession in good faith In the absence thereof, the buyer who presents the oldest title in good faith.

(Reference by SC: Carpio vs. Exevea)

Cheng vs. Genato, Da JoseFacts: Genato owned a lot. He entered into a contract to sell with the Da Jose Spouses. The DaJose spouses paid partially the price and the balance was to be 30 days after the execution of thecontract or on or before October 6, 1989. The contract was executed in a public instrument andwas registeredThe vendees failed to pay the balance, and Genato executed an affidavit to annul the contract tosell. Later on, Cheng offered to buy the land. He was made aware of the contract to sell in favorof the but he nevertheless pushed through with his desire to purchase and gave Genato P50,000

as partial payment.When Genato went to the Register of Deeds, he encountered the Da Jose spouses and informedthem of his plan to rescind the contract to sell and to sell the land to Cheng. The spousesreminded him of the extension he granted them to settle the remaining balance and reiteratedtheir willingness to buy the land.Cheng filed a complaint for specific performance and damages to compel Genato to sell theland to him. The Da Jose spouses, intervened saying they have a superior right.Issue: Who has a superior right?


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Held: The Da Jose Spouses under the principle first time, stronger right.The contract between Genato and Cheng was a contract to sell, which was subject to asuspensive condition that never took place, therefore, there was no double sale in this case andare:

2 or more sales transactions in issue pertaining to the same subject matter 2 or more buyers at odds over the rightful ownership of the subject matter must each

reflect conflicting interests 2 or more buyers must have bought the subject matter from the same seller.

In a contract to sell, the above-mentioned situations cannot take place because there was notransfer of ownerhip. However, the governing principle of article 1544, which is first in time,stronger in right shall apply.Also, the spouses Da Jose registered their deed of sale first.

San Lorenzo Dev Corp vs. CA, Babasanta, LuFacts: The Spouses Lu owned the land which was the subject of the controversy in this case.It was purported that the land was sold to Babasanta. Later on, they sold the land to SanLorenzo Dev Corporation, which sale was consummated on May 3,1989.

Babasanta filed a complaint for specific performance against the Lus to compel them to sellthe land to him, but the Lu averred that the sale did not push through for failure of Babasantato pay the price on time.SLDC intervened, saying it had superior right over the property because it was able toregister it on June 2, 1989. Babasanta say that SLDC was not a buyer in good faith becausewhen it registered the property, the notice of lis pendens was already annotated.Issue: Who between Babasanta and SLDC had a superior right over the property?Held: SLDC, because it was the first vendee that registered the property and took possessionof the property.First of all, the contract between Babasanta and the Lus is a contract to sell and not acontract of sale, because it can be gleaned from their actions that ownership was reserved

with the seller until full payment of the price. Therefore, the land was not really sold toBabasanta.Also, granting that the contract with Babasanta was of sale, SLDC still had a better right

because it took possession of the property and had it registered and a public instrument wasexecuted it its favor. The property was never delivered to the ownership of Babasanta.Also, even if Babasantas claim was inscripted in the title before SLDC had it registered inJune 2, 1989, the same cannot negate SLDCs good faith because the sale in its favor wasconsummated on May 3, 1989 or before the annotation of the adverse claim.Taredo/ Tanedo vs. CA, Taredo,

Facts: On October 1962, Lazaro Taredo executed a notarized deed of absolute sale in favor ofhis brother, Ricardo Taredo and his wife (respondents) covering whatever his future inheritance

share in a land. Upon the death of their parents, Lazaro executed an Affidavit of Conformityon Feb 28, 1980, reaffirming the sale he made 1962.January 13, 1981, Lazaro executed another notarized deed of sale in favor of the respondentswherein he conveyed his undivided share in another land left by their parents. The respondentslearned that Lazaro his share in the same property to his children through a deed of sale datedDecember 1980. On June 7, 1982, the respondents registered their deed of sale in the Registerof Deeds.Petitioners filed a complaint for rescission of the deeds of sale to the respondents, on the ground


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that the sale in 1962 was void for being a sale of future inheritance, and that the sale on 1981was registered in bad faith because they were already in possession f the land and that therespondents knew of the sale.Respondents averred that the sale in 1961 was reaffirmed and that the sale in 1982 wasregistered ahead of the petitioners claim.Issue: Who has a better right?Held: As for the sale in 1961, the sale is void for being a sale of future inheritance. The affidavitthat reaffirms it shall also be void.As for the double sale of the inherited land which happened after the death of the parents, therespondents have a better right because they registered the sale first on June 7, 1982. (The SCaffirmed the findings of the CA which found that the respondents were registrants in good faithand that the petitoners testimony was self-serving).

Raymundo vs. De Leon

Facts: On March 1993, Raymundo sol 3 parcels of land to Respondent Ong. The Deed of Saesays that the petitioner absolutely and irrevocably sells to De Leon the properties. De Leon alsoagreed to assume the mortgage. Persuant to this, the mortgagee bank conducted to a creditinvestigation on De Leon to determine her fitness to assume the mortgage. Raymundo informedthe bank that he authorizes it to accept payment from De Leon and he also delivered the keys tothe locks of the properties.After the sale on March 1993, Raymundo sold the same properties to Viloria. De Leon learnedabout this and learned further that Raymundo paid the amount due on the mortgage.Respondent filed a case for specific performance against Raymundo. Raymundos defense wasthat the contract between him and De Leon was a contract to sell subject to the suspensivecondition of approval by the bank of the application for assumption of mortgage.

Issue: Who has a better right over the property-De Leon or Viloria?Held: De Leon because she took possession of the properties first There was a double sale (The

CA erred in holding that the 2nd sale to Viloria is void. ) It can be gleaned that the propertieswas delivered to her when Raymundo gave her the keys and authorized the bank to accept

payments from her.Also, this is a contract of sale because the deed of sale says that the land was being conveyedabsolutely and irrevocably, meaning ownership was not reserved with the seller.Also, granting that this was a contract to sell, the sale was deemed perfected when thesuspensive condition, which is that in case the bank approves the application for assumption ofmortgage by De Leon, was deemed fulfilled when Raymundo rendered its happeningimpossible by paying the amount due on the mortgage.

Agricultural and Home Extn Dev Corp (petitioner) vs. CA, Librado CabatuanFacts: On March 29, 1972, the Diaz spouses sold a parcel of land to Gundran. The ownersduplicate was turned over to Gundran. The sale was not registered however, because Gundranwas advised by the Register of Deeds of the existence of lis pendens on the title.On August 30, 1976, petitioner entered into a join venture agreement for the improvement ofthe land. This agreement was not registered as well.


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On August 30, 1976, Josefa Mia-Diaz (one of the Diaz spouses), sold the same land torespondent Cabatuan. Cabatuan was able to register the sale on Sep 3, 1976.Gundran sued for reconveyance of the property and Petitioner intervened to protect its interest.Petitioenr argued, among others the Cabautuan was not a buyer in good faith and therefore,even if he had the sale registered, he should not have a superior right over Gundran.Issue: Is Cabatuan a buyer in good faith?Held: Yes. A buyer in good faith is defined as one who buys the property of another withoutnotice that some other person has a right to or interest in such property and pays a full and fair

price for the same at the time of such purchase or before he has notice of the claim of interest ofsome other person.The claims and interests of Gundran and the petitioner were not registered, and the certificate oftitle issued to Cabatuan was free from adverse claims. Therefore, Cabatuan is in good faith.

Navera and Amador vs. Nares, Nares CAFacts: Lot 1460 was co-owned by Elena Navera-Nares and Eduarda Navera. Elena died in 1924,and her heirs, including respondents Arsenio Nares, and Felix Nares acquired her share in the

property as inheritance. On May 14, 1947, Eduarda Navera executed a sale of her share theproperty in a public instrument in favor of Aresenio Nares. This sale was not registeredA second sale covering the same property was executed in a public instrument by Eduarda infavor of Mariano Navera (predecessor-interest of petitioner) on June 26, 1948. This sale was notregistered as well.The respondents Nares filed a complaint against the petitioners saying that they are the absoluteowners of lot 1460.

Issue: Given that both sales were not registered, who has a better right over the property?Held: The respondents Nares. Since both sales were not registered, ownership shall be vestedupon the person who in good fath, was first in possession of the disputed lot.Possession can be actual or symbolic. Symbolic possession is acquired by the execution of a

public instrument. This means that after the sale of a real property by means of a publicinstrument the vendor who resells it to another, does not transmit anything to the secondvendee.In this case, the prior sale of the land to the respondent Nares by means of a public instrumentwas tantamount to delivery resulting in material and symbolic possession of Nares. Therefore,

Nares had a better right over Navera because Narres possessed the land first.

Naawan Community Rural Bank vs. CA, Lumo spousesFacts: On May 17, 1988, the Comayas executed a deed of sale in favor of the Lumo spousescovering a parcel of land. This deed was registered on June 9, 1988. A new title was registeredto the spouses.After obtaining their TCT, the spouses requested for issuance of tax declaration certificates in


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unregistered land. The deed of sale was notarized but not registered.On November 29, 1976, a judgment was rendered against Castro in a civil case, wherein he wasordered to pay Radiowealth a sum of money. The subject land was levied upon execution andsold to Radiowealth. On April 13, 1970, a certificate of sale was executed by the sheriff in favorof Radiowealth. The period of redemption expired and a deed of final sale was executed infavor of Radiowealth. Radiowealth registered both deeds.When the Palilio learned about the status of the land, he filed an action for quieting of title.Radiowealth argued that it had a better right over the land because it was able to register thedeeds of sale.Issue: Who between Radiowealth and Palileo had a better right over the unregistered land?Held: Palileo. In the sale of unregistered land, mere registration of a sale in ones favor does notgive him any right over the land if the vendor was not anymore the owner of the land, having

previously sold the same to someone else, even if the earlier slae was unrecorded.In this case, when the land was levied upon execution it was no longer owned by the judgmentdebtor. It was already owned by the Palileo spouses who purchased it from Castro before.(SC took reference to the case of Carumba vs. CA, where it was held that Article 1544 does notapply to double sale of unregistered land)

Paulmitan and Fanesa vs. CA, Paulmitan

Facts: Agatona Paulmitan died, leaving among others, lot 1091 as part of her estate. She wassurvived by 2 heirs, Petitioner Donato and Pascual Paulmitan. Shortly after her death, PascualPaulmitan died, and he was survived by his heirs (respondents herein).Petitioner Donato sold the subject land to her daughter, Petitioner Fanesa. The land was later onsold in a public auction for failure of the owner to pay the realty taxes therein. Fanesa was ableto redeem the land.The respondents learned about this transaction and filed for the partition of the property. Fanesaargued that she acquired absolute ownership over the and when her co-owners failed to join her

in redeeming the property.Issue: What is the effect of the sale of Donato to Fanesa, given the fact that he was not theabsolute owner of the property at the time of the sale?Held: The sale merely transferred of Donatos pro indiviso (undivided) share to Fanesa.A sale of the entire property by one co-owner without the consent of the other co-owners is notnull and void. However, only the rights of the co-owner-seller are transferred, making the buyera co-owner of the property.When Donato sold the property, it was co-owned by him and the respondents (who were theheirs of Pascual Paulmitan). Therefore, what he transferred was his undivided share of theland. After the sale, the buyer Fanesa became a co-owner with the respondents.Als

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