sales digest

7/21/2019 Sales Digest

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Facts: Spouses Julian and Guillerma Sambaan were the registered owner of a property located inBulua, Cagayan de oro City. The respondents and the petitioner yrna Bernales are the children

of Julian and Guillerma. yrna, who is the eldest of the siblings, is the present owner andpossessor of the property in !uestion.

Julian died in an ambush in "#$%. Before he died, he re!uested that the property in !uestion beredeemed from yrna and her husband &atricio Bernales. Thus, in "#'( one of Julian)s siblingsoffered to redeem the property but the petitioners refused because they were allegedly using theproperty as tethering place for their cattle.

*n January "##", respondents recei+ed an information that the subect property was alreadytransferred to yrna Bernales. The -eed of bsolute Sale dated -ecember $, "#$/ bore the

forged signatures of their parents, Julian and Guillerma.

0n pril "##1, the respondents, together with their mother Guillerma, filed a complaint fornnulment of -eed of bsolute Sale and cancellation of TCT 2o. T3"4(/4 alleging that theirparent)s signatures were forged. The trial court rendered a decision on ugust (, (//" cancellingthe TCT and ordering another title to be issued in the name of the late Julian Sambaan.

&etitioners went to the C and appealed the decision. The C affirmed the decision of the lowercourt. motion for reconsideration of the decision was, li5ewise, denied in (//4. 6ence, this

petition for certiorari.

*ssue: 7hether or not the -eed of bsolute Sale is authentic as to pro+e the ownership of the

petitioners o+er the subect property.

6eld: *t is a !uestion of fact rather than of law. 7ell3settled is the rule that the Supreme Court isnot a trier of facts. Factual findings of the lower courts are entitled to great weight and respecton appeal, and in fact accorded finality when supported by substantial e+idence on the record.Substantial e+idence is more than a mere scintilla of e+idence. *t is that amount of rele+ante+idence that a reasonable mind might accept as ade!uate to support a conclusion, e+en if other

minds, e!ually reasonable, might concei+ably opine otherwise. But to erase any doubt on thecorrectness of the assailed ruling, we ha+e carefully perused the records and, nonetheless, arri+edat the same conclusion. 7e find that there is substantial e+idence on record to support the Courtof ppeals and trial court)s conclusion that the signatures of Julian and Guillerma in the -eed of

bsolute Sale were forged.

Conclusions and findings of fact by the trial court are entitled to great weight on appeal andshould not be disturbed unless for strong and cogent reasons because the trial court is in a betterposition to e8amine real e+idence, as well as to obser+e the demeanor of the witnesses whiletestifying in the case. The fact that the C adopted the findings of fact of the trial court ma5esthe same binding upon this court.Thus, we hold that with the presentation of the forged deed,

e+en if accompanied by the owner)s duplicate certificate of title, the registered owner did not

thereby lose his title, and neither does the assignee in the forged deed ac!uire any right or title tothe said property.


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Facts: *n "#9$, defendant Glenda and her father, el!uiades Barraca came to her residenceas5ing for help. They were borrowing one3half of land donated to her so that defendant Glenda

could obtain a loan from the ban5 to buy a dental chair. They proposed that she signs an allegedsale o+er the said portion of land.

cceding to their re!uest, she signed on ugust "(, "#9$ a prepared -eed of bsolute Sale;8hibit C< which they brought along with them TS2, p. ((, *bid 1< on ay "', "#$', petitioner mortgaged the land to the5lan -e+elopment Ban5 for a &(1,///.// loan> 4< from the time of the alleged sale, petitioner

has been in actual possession of the subect land> %< the alleged sale was registered on ay (%,"##" or about twenty four (4< years after e8ecution> 9< respondent Glenda 0ng ne+erintroduced any impro+ement on the subect land> and $< petitioner)s house stood on a part ofthe subect land. These are facts and circumstances which may be considered badges of bad faith

that tip the balance in fa+or of petitioner.

The Court is in accord with the obser+ation and findings of the ?TC,1 =alibo, 5lan< thus:

@The amplitude of foregoing undisputed facts and circumstances clearly shows that the sale of

the land in !uestion was purely simulated. *t is +oid from the +ery beginning rticle "149, 2ewCi+il Code


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"#, "##%> cited in ?uperto iloria +s. Court of ppeals, et al., G.?. 2o. ""##$4, June 1/, "### and that after hearing,a decision be rendered declaring her as the owner of the property in dispute, ordering defendantto +acate the property in !uestion and to pay her &%,///.// as attorneys fees> &",///.// aslitigation e8penses> &"/,///.// as damages and to pay the costs of suit.

*n her nswer,D%E defendant delaida eneses stated that plaintiff is the daughter of Basilio deGuAman, the +endee in the -eed of bsolute Sale dated June (/, "#99 that was purportedly

e8ecuted by her defendant< co+ering the subect property. -efendant alleged that she ne+ersigned any -eed of bsolute Sale dated June (/, "#99, and that the said deed is a forgery.-efendant also alleged that she ne+er appeared before any notary public, and she did not obtaina residence certificate> hence, her alleged sale of the subect property to Basilio de GuAman is nulland +oid ab initio. Conse!uently, the -eed of bsolute Sale dated January 1", "#$1, e8ecuted by

Basilio de GuAman in fa+or of plaintiff, co+ering the subect property, is li5ewise null and +oid.-efendant stated that she ac!uired the subect property from her deceased father and she hasbeen in possession of the land for more than 1/ years in the concept of owner. &laintiffsallegation that she defendant< forcibly too5 possession of the land is a falsehood. -efendant

stated that this is the fourth case the plaintiff filed against her concerning the land in !uestion.

*ssue: 7hether or not the -eed of bsolute Sale is a forgery.

6eld: The necessity of a public document for contracts which transmit or e8tinguish real rights

o+er immo+able property, as mandated by rticle "1%' of the Ci+il Code,D(%E is only forcon+enience> it is not essential for +alidity or enforceability.D(9E s notariAed documents, -eedsof bsolute Sale carry

e+identiary weight conferred upon them with respect to their due e8ecutionD($E and enoy thepresumption of regularity which may only be rebutted by e+idence so clear, strong andcon+incing as to e8clude all contro+ersy as to falsity.D('E The presumptions that attach to

notariAed documents can be affirmed only so long as it is beyond dispute that the notariAationwas regular.D(#E defecti+e notariAation will strip the document of its public character and

reduce it to a pri+ate instrument.D1/E Conse!uently, when there is a defect in the notariAation ofa document, the clear and con+incing e+identiary standard normally attached to a duly3notariAed

document is dispensed with, and the measure to test the +alidity of such document ispreponderance of e+idence.

*n the -eed of bsolute Sale dated June (/, "#99, the 2otary &ublic signed his name as one ofthe two witnesses to the e8ecution of the said deed> hence, there was actually only one witnessthereto. oreo+er, the residence certificate of petitioner was issued to petitioner and then it wasgi+en to the 2otary &ublic the day after the e8ecution of the deed of sale and notariAation> hence,

the number of petitioners residence certificate and the date of issuance June (", "#99< thereofwas written on the -eed of bsolute Sale by the 2otary &ublic on June (", "#99, after thee8ecution and notariAation of the said deed on June (/, "#99.D4E Considering the defect in the

notariAation, the -eed of bsolute Sale dated June (/, "#99 cannot be considered a publicdocument, but only a pri+ate document,D1%E and the e+identiary standard of its +alidity shall be


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based on preponderance of e+idence.

Section (/, ?ule "1( of the ?ules of Court pro+ides that before any pri+ate document offered asauthentic is recei+ed in e+idence, its due e8ecution and authenticity must be pro+ed either: a< byanyone who saw the document e8ecuted or written> or b< by e+idence of the genuineness of the

signature or handwriting of the ma5er.

*n regard to the genuineness of petitioners signature appearing on the -eed of bsolute Sale

dated June (/, "#99,D19E the Court agrees with the trial court that her signature therein is +erymuch different from her specimen signaturesD1$E and those appearing in the pleadingsD1'E ofother cases filed against her, e+en considering the difference of "$ years when the specimensignatures were made. 6ence, the Court rules that petitioners signature on the -eed of bsolute

Sale dated June (/, "#99 is a forgery.


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Facts: 0n arch "$, "#$%, the petitioner and her brother Celedonio Calilap constituted a realestate mortgage o+er two parcels of land co+ered by Transfer Certificate of Title TCT< 2o. T3"94""$ and TCT 2o.T3"9/#(#, both of the ?egistry of -eeds of Bulacan, to secure the

performance of their loan obligation with respondent -e+elopment Ban5 of the &hilippines-B&


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Facts:

o *n his lifetime, lfonso reta begot "4 children. mong these "4 belong the ascendants of the

parties in this case &olicronio and Hiberato. 6ere, the descendants of &olicronio are up againstthe rest of lfonso)s children and their descendants including those of Hiberato hence, the deed of transfer is but a sham.D"%E Similarly, inthis case, lfonso simulated a transfer to &olicronio purely for ta8ation purposes, withoutintending to transfer ownership o+er the subect lands.


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FCTS:

"< 0n 2o+ember (%, "#'/ the 2ational 6ousing uthority 26< e8ecuted a -eed of Sale withortgage o+er a IueAon City lot in fa+or of the spouses *sidro and Fla+iana lfaro the lfaros


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obecti+e of pro+iding cheap housing for the homeless is not defeated by wily entrepreneurs.The restriction clause is more of a condition on the sale of the property to the lfaros rather than

a condition on the mortgage constituted on it. The Halicons claim that the 26unreasonably ignored their letters that as5ed for consent to the resale of the subect property.They also claim that their failure to get 26s prior written consent was not such a substantial

breach that warranted rescission. But the 26 had no obligation to grant the Halicons re!uestfor e8emption from the fi+e3year restriction as to warrant their proceeding with the sale when

such consent was not immediately forthcoming. nd the resale without the 26s consent is asubstantial breach. The essence of the go+ernments socialiAed housing program is to preser+ethe beneficiarys ownerships for a reasonable length of time, here at least within fi+e years fromthe time he ac!uired it free from any encumbrance.

(< ction has not prescribed.

26 sought annulment of the lfaros sale to ictor because they +iolated the fi+e3yearrestriction against such sale pro+ided in their contract. Thus, the C correctly ruled that such+iolation comes under rticle ""#" where the applicable prescripti+e period is that pro+ided in

rticle ""44 which is "/ years from the time the right of action accrues. The 26s right ofaction accrued on February "', "##( when it learned of the lfaros forbidden sale of theproperty to ictor. Since the 26 filed its action for annulment of sale on pril "/, "##', it didso well within the "/3year prescripti+e period.

1< Halicons and Chua were not buyers in good faith.

Since the fi+e3year prohibition against alienation without the 26s written consent wasannotated on the propertys title, the Halicons +ery well 5new that the lfaros sale of theproperty to their father, ictor, e+en before the release of the mortgage +iolated that prohibition.

4< Hastly, since mutual restitution is re!uired in cases in+ol+ing rescission under rticle ""#", the26 must return the full amount of the amortiAations it recei+ed for the property, plus the +alueof the impro+ements introduced on the same, with 9K interest per annum from the time of the

finality of this udgment.


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Facts:

0n -ecember (#, (//4, Citihomes and Spouses 2oynay e8ecuted a contract to sell$ co+ering the

sale of a house and lot located in San Jose -el onte, Bulacan, and co+ered by TransferCertificate of Title TCT< 2o. T34149#. nder the terms of the contract, the price of the property

was fi8ed at "%,'#%.//, with a downpayment of &"'1,"$#.//, and the remaining balance tobe paid in "(/ e!ual monthly installments with an annual interest rate of ("K commencing onFebruary ', (//% and e+ery 'th day of the month thereafter.

Subse!uently, on ay "(, (//%, Citihomes e8ecuted the -eed of ssignment of Claims andccounts' ssignment< in fa+or of nited Coconut &lanters Ban5 C&B< on ay "(, (//%.nder the said agreement, C&B purchased from Citihomes +arious accounts, including theaccount of Spouses 2oynay, for a consideration of &"//,///,///.//. *n turn, Citihomes assigned

its rights, titles, interests, and participation in +arious contracts to sell with its buyers to C&B.

*n February of (//$, Spouses 2oynay allegedly started to default in their payments. onths later,

Citihomes decided to declare Spouses 2oynay delin!uent and to cancel the contract consideringthat nine months of agreed amortiAations were left unpaid. 0n -ecember ', (//$, the notariAed2otice of -elin!uency and Cancellation of the Contract To Sell,# dated 2o+ember (", (//$, wasrecei+ed by Spouses 2oynay. They were gi+en 1/ days within which to pay the arrears and failure

to do so would authoriAe Citihomes to consider the contract as cancelled.

0n June "%, (//#, Citihomes sent its final demand letter as5ing Spouses 2oynay to +acate the

premises due to their continued failure to pay the arrears. Spouses 2oynay did not heed thedemand, forcing Citihomes to file the complaint for unlawful detainer before the TCC on July(#, (//#.

*n the said complaint, Citihomes alleged that as per Statement of ccount as of arch "', (//#,Spouses 2oynay had a total arrears in the amount of &($(,4$$.//, inclusi+e of penalties. Thus,Citihomes prayed that Spouses 2oynay be ordered to +acate the subect property and pay theamount of &',$"%.#$ a month as a reasonable compensation for the use and occupancy to

commence from January ', (//$ until Spouses 2oynay +acate the same.

*ssue:ether Citihomes has a cause of action for eectment against Spouses 2oynay.

6eld:in &agtalunan +. anAano,(/ the Court stressed the importance of complying with thepro+isions of the aceda Haw as to the cancellation of contracts to sell in+ol+ing realtyinstallment schemes. There it was held that the cancellation of the contract by the seller must bein accordance with Section 1 b< of the aceda Haw, which re!uires the notarial act of rescissionand the refund to the buyer of the full payment of the cash surrender +alue of the payments

made on the property. The actual cancellation of the contract ta5es place after thirty 1/< daysfrom receipt by the buyer of the notice of cancellation or the demand for rescission of thecontract by a notarial act and upon full payment of the cash surrender +alue to the buyer, to wit:

b second, the seller must gi+e the buyer a notice ofcancellationMdemand for rescission by notarial act if the buyer fails to pay the installments due at

the e8piration of the said grace period> and third, the seller may actually cancel the contract onlyafter thirty 1/< days from the buyer)s receipt of the said notice of cancellationMdemand forrescission by notarial act. *n the present case, the 9/3day grace period automatically operated4(in fa+or of the buyers, Sps. Jo+ellanos, and too5 effect from the time that the maturity dates ofthe installment payments lapsed. 7ith the said grace period ha+ing e8pired bereft of any

installment payment on the part of Sps. Jo+ellanos,41 0ptimum then issued a notariAed 2otice of-elin!uency and Cancellation of Contract on pril "/, (//9. Finally, in proceeding with theactual cancellation of the contract to sell, 0ptimum ga+e Sps. Jo+ellanos an additional thirty 1/ (< ngela elchor ngela and 1< the

spouses elecio and ictoria elchor Spouses elchor


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The right of redemption of co3owners e8cludes that of adoining owners. emphasis supplied &ro+ided, That the actual cancellation or the demand for rescission ofthe contract by a notarial act and upon full payment of the cash surrender +alue to the buyer.


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-own payments, deposits or options on the contract shall be included in the computation of thetotal number of installment payments made.

S;CT*02 4. *n case where less than two years of installments were paid, the seller shall gi+e thebuyers a grace period of not less than si8ty days from the date the installment become due.

*f the buyer fails to pay the installments due at the e8piration of the grace period, the seller maycancel the contract after thirty days from receipt by the buyer of the notice of cancellation or thedemand for rescission of the contract by a notarial act.

S;CT*02 %. nder Section 1 and 4,the buyer shall ha+e the right to sell his rights or assign thesame to another person or to reinstate the contract by updating the account during the grace

period and before actual cancellation of the contract. The deed of sale or assignment shall be

done by notarial act.

6a+ing paid monthly amortiAations for two years and four months, the petitioners now insist thatthey were entitled to the grace period within which to settle the unpaid amortiAations withoutinterest pro+ided under Section 1, supra.(' 0therwise, the foreclosure of the mortgagedproperty should be deemed premature inasmuch as their obligation was not yet due and

demandable.(#

The petitioners) insistence would ha+e been correct if the monthly amortiAations being paid to B&*

Family arose from a sale or financing of real estate. *n their case, howe+er, the monthlyamortiAations represented the installment payments of a housing loan that B&* Family hade8tended to them as an employee)s benefit. The monthly amortiAations they were liable for wasderi+ed from a loan transaction, not a sale transaction, thereby gi+ing rise to a lender3borrowerrelationship between B&* Family and the petitioners. *t bears emphasiAing that ?epublic ct 2o.

9%%( aimed to protect buyers of real estate on installment payments, not borrowers ormortgagors who obtained a housing loan to pay the costs of their purchase of real estate andused the real estate assecurity for their loan. The Lfinancing of real estate in installmentpaymentsL referred to in Section 1, supra, should be construed only as a mode of payment +is3Q3

+is the seller of the real estate, and e8cluded the concept of ban5 financing that was a type ofloan. ccordingly, Sections 1, 4 and %, supra, must be read as to grant certain rights only todefaulting buyers of real estate on installment, which rights are properly demandable only against

the seller of real estate.


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he petition for re+iew has no merit.

7hen the petitioners appealed the ?TC decision to the C, their appellants) brief limited the

issues to the following:

a< 7hether or not appellee ban5 wrongfully refused to accept payments by appellants of their

monthly amortiAations.

b< 7hether or not the foreclosure of appellants) real estate mortgage was premature.(%

The C confined its resolution to these issues. ccordingly, the petitioners could not raise theapplicability of ?epublic ct 2o. 9%%(, or the strict construction of the loan agreement for being

a contract of adhesion as issues for the first time either in their motion for reconsideration or intheir petition filed in this Court. To allow them to do so would +iolate the ad+erse parties) right tofairness and due process. s the Court held in S.C. egaworld Construction and -e+elopmentCorporation +. &arada:(9

*t is well3settled that no !uestion will be entertained on appeal unless it has been raised in theproceedings below. &oints of law, theories, issues and arguments not brought to the attention of


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the lower court, administrati+e agency or !uasi3udicial body, need not be considered by the+iewing court, as they cannot be raised for the first time at that late stage. Basic considerations of

fairness and due process impel this rule. ny issue raised for the first time on appeal is barred byestoppel.

The procedural misstep of the petitioners notwithstanding, the Court finds no substantial basis tore+erse the udgments of the lower courts.

?epublic ct 2o. 9%%( was enacted to protect buyers of real estate on installment payments

against onerous and oppressi+e conditions.($ The protections accorded to the buyers wereembodied in Sections 1, 4 and % of the law, to wit:

Section 1. *n all transactions or contracts, in+ol+ing the sale or financing of real estateon

installment payments, including residential condominium apartments but e8cluding industriallots, commercial buildings and sales to tenants under ?epublic ct 2umbered Thirty3;ighthundred forty3four as amended by?epublic ct Si8ty3three hundred eighty3nine, where the buyer

has paid atleast two years of installments, the buyer is entitled to the following rights in case hedefaults in the payment of succeeding installments:

a< To pay, without additional interest, the unpaid installments due within the total grace periodearned by him which is hereby fi8ed at that rate of one month grace period for e+ery one year ofinstallment payments made> pro+ided, That this right shall be e8ercised by the Buyer only once ine+ery fi+e years of the life of the contract and its e8tensions, if any.

b< *f the contract is cancelled, the seller shall refund to the buyer the cash surrender +alue of thepayments on the property e!ui+alent to fifty percent of the total payments made, and, after fi+eyears of installments, an additional fi+e per cent e+ery year but not to e8ceed ninety per cent of

the total payments made> &ro+ided, That the actual cancellation or the demand for rescission ofthe contract by a notarial act and upon full payment of the cash surrender +alue to the buyer.

-own payments, deposits or options on the contract shall be included in the computation of thetotal number of installment payments made.

S;CT*02 4. *n case where less than two years of installments were paid, the seller shall gi+e thebuyers a grace period of not less than si8ty days from the date the installment become due.

*f the buyer fails to pay the installments due at the e8piration of the grace period, the seller maycancel the contract after thirty days from receipt by the buyer of the notice of cancellation or thedemand for rescission of the contract by a notarial act.

S;CT*02 %. nder Section 1 and 4,the buyer shall ha+e the right to sell his rights or assign the

same to another person or to reinstate the contract by updating the account during the graceperiod and before actual cancellation of the contract. The deed of sale or assignment shall be

done by notarial act.


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6a+ing paid monthly amortiAations for two years and four months, the petitioners now insist thatthey were entitled to the grace period within which to settle the unpaid amortiAations withoutinterest pro+ided under Section 1, supra.(' 0therwise, the foreclosure of the mortgaged

property should be deemed premature inasmuch as their obligation was not yet due anddemandable.(#

The petitioners) insistence would ha+e been correct if the monthly amortiAations being paid to B&*Family arose from a sale or financing of real estate. *n their case, howe+er, the monthlyamortiAations represented the installment payments of a housing loan that B&* Family hade8tended to them as an employee)s benefit. The monthly amortiAations they were liable for was

deri+ed from a loan transaction, not a sale transaction, thereby gi+ing rise to a lender3borrowerrelationship between B&* Family and the petitioners. *t bears emphasiAing that ?epublic ct 2o.9%%( aimed to protect buyers of real estate on installment payments, not borrowers ormortgagors who obtained a housing loan to pay the costs of their purchase of real estate and

used the real estate assecurity for their loan. The Lfinancing of real estate in installmentpaymentsL referred to in Section 1, supra, should be construed only as a mode of payment +is3Q3+is the seller of the real estate, and e8cluded the concept of ban5 financing that was a type ofloan. ccordingly, Sections 1, 4 and %, supra, must be read as to grant certain rights only todefaulting buyers of real estate on installment, which rights are properly demandable only against

the seller of real estate.A

0n ay (', "##1, plaintiffs spouses Faustino and Josefina Garcia and spouses eliton and 6elenGal+eA herein appellees< and defendant ;merlita dela CruA herein appellant< entered into aContract to Sell wherein the latter agreed to sell to the former, for Three illion 0ne 6undredSe+enty Thousand Two 6undred Twenty &1,"$/,((/.//< &esos, fi+e %< parcels of land situated

at TanAa, Ca+ite particularly 5nown as Hot 2os. 4$, ($9', ($$9, ($9$, ($9# and co+ered byTransfer Certificate of Title 2os. T314/9$4, T314/9$1, T3(#/(', T3(#/(9, T3(#/($, respecti+ely.t the time of the e8ecution of the said contract, three of the subect lots, namely, Hot 2os. ($$9,

($9$, and ($9# were registered in the name of one ngel belida from whom defendantallegedly ac!uired said properties by +irtue of a -eed of bsolute Sale dated arch 1", "#'#.

s agreed upon, plaintiffs shall ma5e a down payment of Fi+e 6undred Thousand &%//,///.// 0ne illion Si8 6undred Se+enty Thousand Two 6undred Twenty&",9$/,((/.//< &esos on -ecember 1", "##1.

0n its due date, -ecember 1", "##1, plaintiffs failed to pay the last installment in the amount of0ne illion Si8 6undred Se+enty Thousand Two 6undred Twenty &",9$/,((/.//< &esos.


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Sometime in July "##%, plaintiffs offered to pay the unpaid balance, which had already beendelayed by one and DaE half year, which defendant refused to accept. 0n September (1, "##%,

defendant sold the same parcels of land to inter+enor -iogenes G. Bartolome for Se+en illionSe+en 6undred 2inety Three Thousand &$,$#1,///.//< &esos.

*n order to compel defendant to accept plaintiffs payment in full satisfaction of the purchase priceand, thereafter, e8ecute the necessary document of transfer in their fa+or, plaintiffs filed beforethe ?TC a complaint for specific performance.

*n their complaint, plaintiffs alleged that they disco+ered the infirmity of the -eed of bsoluteSale co+ering Hot 2os. ($$9, ($9$ and ($9#, between their former owner ngel belida anddefendant, the same being spurious because the signature of ngel belida and his wife werefalsified> that at the time of the e8ecution of the said deed, said spouses were in the nitedStates> that due to their apprehension regarding the authenticity of the document, they withheldpayment of the last installment which was supposedly due on -ecember 1", "##1> that they

tendered payment of the unpaid balance sometime in July "##%, after ngel belida ratified thesale made in fa+or DofE defendant, but defendant refused to accept their payment for nousitifiable reason.

*n her answer, defendant denied the allegation that the -eed of bsolute Sale was spurious and

argued that plaintiffs failed to pay in full the agreed purchase price on its due date despiterepeated demands> that the Contract to Sell contains a pro+iso that failure of plaintiffs to pay the

purchase price in full shall cause the rescission of the contract and forfeiture of one3half "M(K that a notariAed letter stating the indendedrescission of the contract to sell and forfeiture of payments was sent to plaintiffs at their last5nown address but it was returned with a notation insufficient address.

*nter+enor -iogenes G. Bartolome filed a complaint in inter+ention alleging that the Contract toSell dated ay 1", "##1 between plaintiffs and defendant was rescinded and became ineffecti+e

due to unwarranted failure of the plaintiffs to pay the unpaid balance of the purchase price on orbefore the stipulated date> that he became interested in the subect parcels of land because of

their clean titles> that he purchased the same from defendant by +irtue of an bsolute -eed ofSale e8ecuted on September (1, "##% in consideration of the sum of Se+en illion Se+en6undred 2inety Three Thousand &$,$#1,///.//< &esos.D

*ssue The 6onorable Court of ppeals erred when it failed to consider the pro+isions of ?epublic

ct 9%%(, otherwise 5nown as the aceda Haw.

held

The petition has no merit.

Both parties admit the following: "< the contract between petitioners and -ela CruA was a


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contract to sell> (< petitioners failed to pay in full the agreed purchase price of the subectproperty on the stipulated date> and 1< -ela CruA did not want to accept petitioners offer of

payment and did not want to e8ecute a document of transfer in petitioners fa+or.

The pertinent pro+isions of the contract, denominated Contract to Sell, between the parties read:

Failure on the part of the +endees to comply with the herein stipulation as to the terms ofpayment shall cause the rescission of this contract and the payments made shall be returned tothe +endees subect howe+er, to forfeiture in fa+or of the endor e!ui+alent to "M(K of the total

amount paid.

8 8 8

*t is hereby agreed and co+enanted that possession shall be retained by the ;2-0? until a -eedof bsolute Sale shall be e8ecuted by her in fa+or of the endees. iolation of this pro+ision shall

authoriAeMempower the ;2-0? DtoE demolish any constructionMimpro+ement without need ofudicial action or court order.

ntracts are law between the parties, and they are bound by its stipulations. *t is clear from theabo+e3!uoted pro+isions that the parties intended their agreement to be a Contract to Sell: -elaCruA retains ownership of the subect lands and does not ha+e the obligation to e8ecute a -eedof bsolute Sale until petitioners payment of the full purchase price. &ayment of the price is a

positi+e suspensi+e condition, failure of which is not a breach but an e+ent that pre+ents theobligation of the +endor to con+ey title from becoming effecti+e. Strictly spea5ing, there can be

no rescission or resolution of an obligation that is still non3e8istent due to the non3happening ofthe suspensi+e condition.D"/E -ela CruA is thus not obliged to e8ecute a -eed of bsolute Sale in

petitioners fa+or because of petitioners failure to ma5e full payment on the stipulated date.

&etitioners ustify the delay in payment by stating that they had notice that -ela CruA is not the

owner of the subect land, and that they too5 pains to rectify the alleged defect in -ela CruAstitle. Be that as it may, ngel belidas belida< affida+itD"(E confirming the sale to -ela CruAonly ser+es to strengthen -ela CruAs claim that she is the absolute owner of the subect lands atthe time the Contract to Sell between herself and petitioners was e8ecuted. -ela CruA did not

conceal from petitioners that the title to Hot 2os. ($$9, ($9$ and ($9# still remained underbelidas name, and the Contract to SellD"1E e+en pro+ided that petitioners should shoulder theattendant e8penses for the transfer of ownership from belida to -ela CruA.

t is undeniable that petitioners failed to pay the balance of the purchase price on the stipulateddate of the Contract to Sell. Thus, -ela CruA is within her rights to sell the subect lands toBartolome. 2either -ela CruA nor Bartolome can be said to be in bad faith.


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0n (' -ecember "##4, DngelesE purchased a house under Contract to Sell 2o. (($(< and lotunder Contract to Sell 2o. (($"< from DG?*E +alued at Se+en 6undred Fifty Thousand &esos &hp

$%/,///.//< and Four 6undred Fifty Thousand &esos &hp 4%/,///.//


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order sent by DngelesE. ore so, she was re!uested to notify DG?*E of the purpose of thepayment. DngelesE was informed that if the postal money order was for her monthly

amortiAation, the same will not be accepted and she was li5ewise re!uested to pic5 it up fromDG?*)sE office. 0n (# January (//4, another mail with a postal money order was sent by DngelesEto DG?*E. *n her 9 February (//4 letter, DG?*E was informed that the postal money orders were

supposed to be payments for her monthly amortiAation. gain, in its ' February (//4 letter, itwas reiterated by DG?*E that the postal money orders will only be accepted if the same will ser+e

as payment of her outstanding rentals and not as monthly amortiAation. Four 4< more postalmoney orders were sent by DngelesE by registered mail to DG?*E.

For her continued failure to satisfy her obligations with DG?*E and her refusal to +acate the houseand lot, DG?*E filed a complaint for unlawful detainer against DngelesE on "" 2o+ember (//1.

*ssue The court a !uo erred in holding that the actual cancellation of the contract between theparties did not ta5e place.

held ere was no actual cancellation of the contracts because of G?*)s failure to actually refund thecash surrender +alue to ngeles.

Cancellation of the contracts for the house and lot was contained in a notice of notarial rescissiondated "" September (//1.1" The registry return receipts show that ngeles recei+ed this noticeon "# September (//1.1( G?*)s demand for rentals on the properties, where G?* offset ngeles)

accrued rentals by the refundable cash surrender +alue, was contained in another letter dated (9September (//1.11 The registry return receipts show that ngeles recei+ed this letter on (#September (//1.14 G?* filed a complaint for unlawful detainer against ngeles on "" 2o+ember(//1, 9" days after the date of its notice of notarial rescission, and 49 days after the date of itsdemand for rentals. For her part, ngeles sent G?* postal money orders in the total amount of

&"(/,///.1%

The eTC ruled that it was proper for G?* to compensate the rentals due from ngeles)

occupation of the property from the cash surrender +alue due to ngeles from G?*. The eTCstated that compensation legally too5 effect in accordance with rticle "(#/ of the Ci+il Code,which reads: L7hen all the re!uisites mentioned in rticle "($# are present, compensation ta5eseffect by operation of law and e8tinguishes both debts to the concurrent amount, e+en though

the creditors and debtors are not aware of the compensation.L *n turn, rticle "($# of the Ci+ilCode pro+ides:

*n order that compensation may be proper, it is necessary:

"< That each one of the obligors be bound principally, and that he be at the same time a

principal creditor of the other>

(< That both debts consist of a sum of money, or if the things due are consumable, they be of

the same 5ind, and also of the same !uality if the latter has been stated>

1< That the two debts are due>


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4< That they be li!uidated and demandable>

%< That o+er neither of them there be any retention or contro+ersy, commenced by third personsand communicated in due time to the debtor.

6owe+er, it was error for the eTC to apply rticle "($# as there was nothing in the contractswhich pro+ided for the amount of rentals in case the buyer defaults in her installment payments.

7e cannot subscribe to G?*)s +iew that it merely followed our ruling in &ilar -e+elopmentCorporation +. Spouses illar1$ &ilar< when it deducted the cash surrender +alue from the rentalsdue. *n &ilar, the de+eloper also failed to refund the cash surrender +alue to the defaulting buyerwhen it cancelled the Contract to Sell through a 2otice of Cancellation. *t was this Court, and not

the de+eloper, that deducted the amount of the cash surrender +alue from the accrued rentals.

oreo+er, the de+eloper in &ilar did not unilaterally impose rentals. *t was the eTC that decreedthe amount of monthly rent. 2either did the de+eloper unilaterally reduce the accrued rentals bythe refundable cash surrender +alue. The cancellation of the contract too5 effect only by +irtue of

this Court)s udgment because of the de+eloper)s failure to return the cash surrender +alue


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*nterested in ac!uiring a "'/3s!uare meter lot 5nown as Hot (, Bloc5 " of etrogate Subdi+isionin -asmariRas, Ca+ite, respondent Flora . Saberon Flora< as5ed olde8, the de+eloper, toreser+e the lot for her as shown by a ?eser+ation pplication9 dated pril "", "##(. 7hile the

cash purchase price for the land is &1#9,///.//, the price if payment is made on installment basisis &%'1,4#'.(/ at monthly amortiAations of &',"4/.#$ payable in fi+e years with ("K interest perannum based on the balance and an additional %K surcharge for e+ery month of delay on themonthly installment due. Flora opted to pay on installment and began ma5ing aperiodical

payments from "##( to "##9$ in the total amount of &1$%,(#%.4#.

*n pril, ugust, and 0ctober "##9,' olde8 sent Flora notices reminding her to update her

account. pon in!uiry, howe+er, Flora was shoc5ed to find out that as of July "##9, she owedolde8 &(4$,#9#."/. *n 2o+ember "##9, the amount ballooned to &4#",(9%.#".

olde8 thus suggested to Flora to e8ecute a written authoriAation for the sale of the subect lotto a new buyer and a written re!uest for refund so that she can get half of all payments shemade. 6owe+er, Flora ne+er made a written re!uest for refund.

s of pril "##$, olde8 computed Flora)s unpaid account at &%$9,%9#.'#. *t then sent Flora a2otariAed 2otice of Cancellation of ?eser+ation pplication andMor Contract to Sell.# Flora, on

the other hand, filed before the 6ousing and Hand se ?egulatory Board 6H?B< ?egional Field0ffice * a Complaint"/ for the annulment of the contract to sell, reco+ery of all her paymentswith interests, damages, and the cancellation of olde8)s license to sell.

side from imputing bad faith on the part of olde8 in bloating her unpaid balance, Floraalleged that the contract to sell between her and olde8 is +oid from its inception. ccording toFlora, olde8 +iolated Section % of &residential -ecree &-< 2o. #%$"" when it sold the subect

lot to her on pril "", "##( or before it was issued a license to sell on September ', "##(."(Flora li5ewise claimed that olde8 +iolated Section "$ of the same law because it failed toregister the contract to sell in the ?egistry of -eeds."1

*n its defense, olde8 a+erred that Flora was only able to pay &((',(/"./1 and thereafterdefaulted in her in payment from pril "##4 to ay "##$. 6ence, Flora)s subse!uent paymentswere applied to her delin!uencies. s regards the alleged bloating, olde8 e8plained that the

amount reflected in Flora)s Statement of ccount included the arrears and surcharges incurreddue to her non3payment of the monthly installments. nd since Flora was not able to settle heraccount, olde8 e8ercised its right under ?epublic ct ?< 2o. 9%%(,"4 or the aceda Haw, bycancelling the reser+ation greementMContract to Sell and forfeiting all payments made. Finally,

olde8 alleged that since Flora was at fault, the latter cannot be heard to ma5e an issue out ofolde8)s lac5 of license or demand relief from it.

issue olde8 only raises the matter of the +alidity of the contract to sell it entered with Flora,

contending that the same remains +alid and binding.held *n Spouses Co Chien +. Sta. Hucia ?ealty and -e+elopment Corporation, *nc.($ this Court hasalready ruled that the lac5 of a certificate of registration and alicense to sell on the part of asubdi+ision de+eloper does not result to the nullification or in+alidation of the contract to sell itentered into with a buyer. The contract to sell remains +alid and subsisting. *n said case, the Court

upheld the +alidity of the contract to sell notwithstanding +iolations by the de+eloper of thepro+isions of &- #%$. 7e held that nothing in &- #%$ pro+ides for the nullity of a contract +alidlyentered into in cases of +iolation of any of its pro+isions such as the lac5 of a license to sell. Thus:

re+iew of the rele+ant pro+isions of &.-. #%$ re+eals that while the law penaliAes the selling ofsubdi+ision lots and condominium units without prior issuance of a Certificate of ?egistration andHicense to Sell by the 6H?B, it does not pro+ide that the absence thereof will automatically

render a contract, otherwise +alidly entered, +oid. The penalty imposed by the decree is thegeneral penalty pro+ided for the +iolation of any of its pro+isions. *t is well3settled in this


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urisdiction that the clear language of the law shall pre+ail. This principle particularly enoins strictcompliance with pro+isions of law which are penal in nature, or when a penalty is pro+ided for

the +iolation thereof. 7ith regard to &.-. #%$, nothing therein pro+ides for the nullification of acontract to sell in the e+ent that the seller, at the time the contract was entered into, did notpossess a certificate of registration and license to sell. bsent any specific sanction pertaining to

the +iolation of the !uestioned pro+isions Secs. 4 and %


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Sheriff of Calamba City. The public auction sale was set on ay #, (//".

t the sale, the creditors) son -r. ?aul Hapitan and his wife ?ona spouses Hapitan< emerged asthe highest bidders with the bid amount of &(.% million. Then, they were issued a Certificate ofSale' which was registered with the

?egistry of -eeds of Calamba City and annotated at the bac5 of TCT 2o. T34"(%"( under ;ntry

2o. 9"%9'1 on 2o+ember "%, (//(.#

The one3year redemption period e8pired without the spouses FortaleAa redeeming the mortgage.

Thus, spouses Hapitan e8ecuted an affida+it of

consolidation of ownership on 2o+ember (/, (//1 and caused the cancellation of

TCT 2o. T34"(%"( and the registration of the subect property in their names under TCT 2o. T3

%1%#4%"/ on February 4, (//4. -espite the foregoing, the spouses FortaleAa refused spousesHapitan)s formal demand"" to +acate and

surrender possession of the subect property.

issue Court should allow them to e8ercise the right of redemption e+en after

the e8piration of the one3year period.

held Spouses FortaleAa)s argument that the subect property is e8empt from forced sale because it

is a family home deser+es scant consideration. s a rule, the family home is e8empt frome8ecution, forced sale or attachment.4# 6owe+er,

rticle "%%1< of the Family Code e8plicitly allows the forced sale of a family home @for debtssecured by mortgages on the premises before or after such

constitution. *n this case, there is no doubt that spouses FortaleAa +oluntarily e8ecuted onJanuary (', "##' a deed of ?eal ;state ortgage o+er the subect

property which was e+en notariAed by their original counsel of record. nd

assuming that the property is e8empt from forced sale, spouses FortaleAa did not set up andpro+e to the Sheriff such e8emption from forced sale before it was sold at the public auction. selucidated in 6onrado +. Court of ppeals:%/

7hile it is true that the family home is constituted on a house and lot from the time it is occupiedas a family residence and is e8empt from e8ecution or forced sale under rticle "%1 of the Family

Code, such claim for e8emption should be set up and pro+ed to the Sheriff before the sale of theproperty at public auction. Failure to do so would estop the party from later claimingthee8emption.s this Court ruled in GomeA +. Gealone:

lthough the ?ules of Court does not prescribe the period within which to claim the e8emption,the rule is, ne+ertheless, well3 settled that the right of e8emption is a personal pri+ilege grantedto the udgment debtor and as such, it must be claimed not by the sheriff, but by the debtor

himself at the time of the le+y or within a reasonable period thereafterD.E%" ;mphasis supplied. that =ue then sent another letter,dated January 1", "#'#, informing them that he had already ac!uired the said property and thatthey were re!uested to +acate the premises within fifteen "%< days from receipt thereof>4 andthat because of this de+elopment, on ay $, "##", petitioners filed an action for @-etermination

of True Balance of ortgage -ebt, nnulmentMSetting side of ;8traudicial Foreclosure ofortgage and -amages, with &rayer for &reliminary *nunction against &B.0n ay ($, "##9,the ?TC dismissed petitioners) complaint. *t ruled, among others, that: "< &B was not guilty ofbad faith in conducting the e8traudicial foreclosure as it, at one time, e+en suspended theconduct of the foreclosure upon the re!uest of petitioners, who, ne+ertheless, failed to e8ert

effort to settle their accounts> (< because petitioners failed to redeem their properties within theperiod allowed, &B became its absolute owner and, as such, it had the right to sell the same to=ue, who ac!uired the property for +alue and in good faith> and 1< the subse!uent foreclosureand auction sale ha+ing been conducted abo+e board and in accordance with the re!uisite legal

procedure, collusion Dbetween &B and =ueE was certainly alien to the issue.9

ggrie+ed, petitioners filed an appeal assailing the ay ($, "##9 ?TC -ecisionThe C was not

sympathetic with petitioners) position. *t held that the period of redemption was ne+er e8tended.

issue76;T6;? 0? 20T T6; C ;??;- *2 20T 60H-*2G &B T0 6; *0HT;- T6;

&?*2C*&H; 0F ;ST0&&;H 76;2 T6; HTT;? C02-CT;- T6; 20;B;? 4, "#'' &BH*CSH;.

held s correctly held by the ?TC and upheld by the C, the date @-ecember 1", "#'' refers tothe last day when owners of foreclosed properties, li5e petitioners, could submit their paymentproposals to the ban5. The letter was +ery clear. *t was about the a+ailment of the liberaliAed

payment scheme of the ban5. 0n the last day for redemption, the letter was also clear. *t waspril (", "#''. *t was ne+er e8tended.

The opportunity gi+en to the petitioners was to a+ail of the liberaliAed payment scheme whichprogram would e8pire on -ecember 1", "#''. s e8plained by braham *ribani *ribani


38/46

was null and +oid for ha+ing been prematurely conducted."#

oreo+er, petitioners) allegation that they had signified their intention to a+ail of the incenti+escheme which they ha+e e!uated to their intention to redeem the property 1< the amount of any assessments or ta8eswhich the purchaser may ha+e paid on the property after the purchase> and 4< interest of "Kper month on such assessments and ta8es 8 8 8.

n ay (1, "##/, petitioners Spouses &io -ato &io< and Sonia P. Sia Spouses Sia< applied for a&(4/,///.// loan which was granted by the Ban5 of the &hilippine *slands B&*< with a term of si8months and secured by a real estate mortgage o+er a parcel of land owned by Spouses Siadenominated as Hot ", situated in Habangon, Cebu, co+ered by Transfer Certificate of Title TCT in a contract to sell, ownership is, by agreement, reser+ed in the seller and is not topass to the buyer until full payment of the purchase price. 0therwise stated, in a contract of sale,the seller loses ownership o+er the property and cannot reco+er it until and unless the contract is

resol+ed or rescinded> whereas, in a contract to sell, title is retained by the seller until full paymentof the price.(9 *n the latter contract, payment of the price is a positi+e suspensi+e condition,failure of which is not a breach but an e+ent that pre+ents the obligation of the +endor to con+eytitle from becoming effecti+e.($

*n the greement, ;ugenia, as owner, did not con+ey her title to the disputed property to *renesince the greement was made for the purpose of negotiating the sale of the '9/3s!uare meterproperty.('

0n this basis, we are more inclined to characteriAe the agreement as a contract to sell rather thana contract of sale. lthough not by itself controlling, the absence of a pro+ision in the greement

transferring title from the owner to the buyer is ta5en as a strong indication that the greementis a contract to sell.(#

*n a contract to sell, the prospecti+e seller e8plicitly reser+es the transfer of title to the prospecti+ebuyer, meaning, the prospecti+e seller does not as yet agree or consent to transfer ownership ofthe property subect of the contract to sell until the happening of an e+ent, which for presentpurposes we shall ta5e as the full payment of the purchase price.1/ 7hat the seller agrees or

obliges himself to do is to fulfill his promise to sell the subect property when the entire amountof the purchase price is deli+ered to him.1" *n other words, the full payment of the purchaseprice parta5es of a suspensi+e condition, the non3fulfillment of which pre+ents the obligation tosell from arising and thus, ownership is retained by the prospecti+e seller without furtherremedies by the prospecti+e buyer.1( contract to sell is commonly entered into in order to

protect the seller against a buyer who intends to buy the property in installment by withholdingownership o+er the property until the buyer effects full payment therefor.11


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*n this case, the greement e8pressly pro+ided that it was Lentered into for the purpose ofnegotiating the sale of the abo+e referred property between the same parties herein 8 8 8.L The

term of the negotiation shall be for a period of 1/34% days from receipt of the &4/,///.//deposit and the buyer has to pay the balance of the %/K down payment amounting to&4"/,///.// within the said period of negotiation. Thereafter, an greement to Sell shall be

e8ecuted by the parties and the remainder of the purchase price amounting to another&4"/,///.// shall be paid in "/ e!ual monthly installments from receipt of the down payment.

The assumption of both parties that the purpose of the greement was for negotiating the saleof Hot 2o. (91, in its entirety, for a definite price, with a specific period for payment of a specifieddown payment, and the e8ecution of a subse!uent contract for the sale of the same oninstallment payments leads to no other conclusion than that the predecessor3in3interest of the

herein respondents and the herein petitioner *rene entered into a contract to sell.

s stated in the greement, the payment of the purchase price, in installments within the period

stipulated, constituted a positi+e suspensi+e condition, the failure of which is not really a breachbut an e+ent that pre+ents the obligation of the seller to con+ey title in accordance with rticle""'4 of the Ci+il Code.14 6ence, for petitioners failure to comply with the terms and conditionslaid down in the greement, the obligation of the predecessor3in3interest of the respondents to

deli+er and e8ecute the corresponding deed of sale ne+er arose.

The fact that the predecessor3in3interest of the respondents failed to return the &4/,///.//

deposit subse!uent to the e8piration of the period of negotiation did not pre+ent therespondents from repudiating the greement. The obligation of the respondent to con+ey theproperty ne+er came to pass as the petitioners did not comply with the positi+e suspensi+econdition of full payment of the purchase price within the period as stipulated.

The alleged oral contract of sale for the (#13s!uare meter portion of the property was not pro+edby preponderant e+idence. 6ence, petitioners cannot compel the successors3in3interest of thedeceased ;ugenia to e8ecute a deed of absolute sale in their fa+or


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sales digest

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