Artates vs.

Urbi

Artates vs. Urbi 37 SCRA 395 January 1971 FACTS: In September 1952, the proper land authorities issued in favor of herein appellant Lino Artates and Manuela Pojas (spouses Artates) a homestead which is covered by Patent No. V-12775 and duly registered in their names (OCT No. P-572). In October 1955, Lino Artates inflicted injuries upon herein defendant Daniel Urbi who then filed Civil Case No. 40 against the former. The Justice of the Peace of Court of the CFI of Camilaniugan, Cagayan, awarded damages in favor of Urbi in the amount of P1,476.35, so in June 1962, the Provincial Sheriff of Cagayan made a public sale of the homestead to satisfy the said judgment. The spouses Artates alleged that the sale of the homestead to satisfy Lino Artates indebtedness accrued in October 1955 violated the provision of the Public Land Law exempting said property from execution for any debt contracted within five years from the date of the issuance of the patent, and that Urbi executed a deed of sale of the same parcel of land in June 1961 for the sum of P2,676.35 to herein defendant Crisanto Soliven, who was a minor, to defraud them. In March 1953, the CFI of Camilaniugan, Cagayan, upheld the execution made by the Provincial Sheriff upon the homestead, and at declared null and void the sale of the land between Urbi and Soliven. ISSUE: Do the appellants spouses Artates possess absolute ownership over the homestead which is covered by a patent? COURT RULING: The Supreme Court reversed the decision appealed from and declared the spouses Artates to be entitled to the return and possession of the subject land without prejudice to their continuing obligation to pay the judgment debt, and expenses connected therewith. Considering the protective policy of the law, the Supreme Court reiterated that the Philippines public land laws, being copied from American legislation, resort to American precedents which held that the exemption from "debts contracted" by a homesteader include freedom from money liabilities, from torts or crimes committed by him, such as from bigamy or slander, breach of contract or other torts.

Peoples Homesite vs. Court of Appeals, and Mendoza Peoples Homesite vs. Court of Appeals, and Mendoza 133 SCRA 777 December 1984 FACTS: In February 1960, herein petitioner Peoples Homesite & Housing Corporation (PHHC) passed a resolution, subject to the approval of the Court Court Council of the PHHCs consolidation subdivision plan, awarding Lot 4 with an area of 4,182.2 square meters located at Diliman, Court City to respondents Rizalino and Adelaida Mendoza (spouses Mendoza) at a price of twenty-one pesos (P21.00) per square meter. The Court Court Council disapproved the consolidation subdivision plan in August 1960 but approved in February 1964 its revised version where Lot 4 was reduced to an area of 2,608.7 square meters. Then in October 1965, the PHHC withdrew the tentative award of Lot 4 to the spouses Mendoza for the latters failure neither to pay its price nor to make a 20% initial deposit, and re-awarded said lot jointly and in equal shares to Miguela Sto. Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo Redublo and Jose Fernandez, all of whom made the initial deposit. The subdivision of Lot 4 into five lots was later approved by the Court council and the Bureau of Lands. The spouses Mendoza asked for reconsideration and for the withdrawal of the said 2nd award to Sto. Domingo and four others, and at the same time filed an action for specific performance plus damages. The trial court sustained the award but the Court of Appeals reversed the said decision, declared void the re-award to Sto. Domingo and four others, and ordered the PHHC to sell Lot 4 with an area of 2,608.7 square meters at P21.00 per square meter to spouses Mendoza. ISSUE: Was there a perfected sale of Lot 4, with its reduced area, between the parties? COURT RULING: The Supreme Court found that there was no perfected sale of Lot 4 because the said lot was conditionally or contingently awarded to the Mendozas subject to the approval by the Court council of the proposed consolidation subdivision plan and the approval of the award by the valuation committee and higher authorities. When the plan with the area of Lot 4 reduced to 2,608.7 square meters was approved in 1964, the spouses Court should have manifested in writing their acceptance of the award for the purchase of Lot 4 just to show that they were still interested in its purchase although the area was reduced. Article 1475 of the Civil Court says [t]he contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the law governing the form of contracts. Indeed, there was a no meeting of the minds between the parties on the

purchase of Lot 4 with an area of 2,608.7 square meters at P21 a square meter and the PHHC board of directors acted within its rights in withdrawing the tentative award. Southwestern Sugar & Molasses Co. vs. Atlantic Gulf & Pacific Company 97 Phil 247 June 1955 FACTS: On March 24, 1953, defendant-appellant Atlantic granted plaintiff-appellee Southwestern an option period of ninety days to buy the formers barge No. 10 for the sum of P30,000. On May 11 of the same year, Southwestern Company communicated its acceptance of the option to Atlantic through a letter, to which the latter replied that their understanding was that the "offer of option" is to be a cash transaction and to be effected "at the time the lighter is available." On June 25, Atlantic advised the Southwestern Company that since there is still further work for it, the barge could not be turned over to the latter company. On June 27, 1953, the Southwestern Company filed this action to compel Atlantic to sell the barge in line with the option, depositing with the court a check covering the sum of P30,000, but said check was later withdrawn with the approval of the court. On June 29, the Atlantic withdrew its "offer of option" with due notices to Southwestern Company stating that the option was granted merely as a favor. The Atlantic contended that the option to sell it made to Southwestern Company is null and void because said option to sell is not supported by any consideration. The trial court granted herein plaintiff-appellee Southwestern Companys action for specific performance and ordered herein defendant-appellant Atlantic to pay damages equivalent to 6 per centum per annum on the sum of P30,000 from the date of the filing of the complaint. ISSUE: Is Atlantic liable for specific performance and to pay damages in favor of Southwestern Company? COURT RULING: The Supreme Court reversed the trial courts decision applying Article 1479 of the new Civil Code. The Court reiterated that "an accepted unilateral promise" can only have a binding effect if supported by a consideration, which means that the option can still be withdrawn, even if accepted, if said option is not supported by any consideration. The option that Atlantic had provided was without consideration, hence, can be withdrawn notwithstanding Southwestern

Companys acceptance of said option. American jurisprudence hold that an offer, once accepted, cannot be withdrawn, regardless of whether it is supported or not by a consideration, but the specific provisions of Article 1479 commands otherwise. While under the "offer of option" in question appellant Atlantic has assumed a clear obligation to sell its barge to appellee Southwestern Company and the option has been exercised in accordance with its terms, and there appears to be no valid or justifiable reason for the former to withdraw its offer, the Court cannot adopt a different attitude because the law on the matter is clear. Roman vs. Grimalt

Roman vs. Grimalt 6 Phil 96 April 1906 FACTS: In between the 13th to the 23d of June, 1904, petitioner Pedro Roman, the owner, and respondent Andres Grimalt, the purchaser, verbally agreed upon the sale of the schooner Santa Marina. In his letter on June 23, Grimalt agreed to buy the vessel and offered to pay in three installments of P500 each on July 15, September 15, and November 15, provided the title papers to the vessel were in proper form. The title of the vessel, however, was in the name of one Paulina Giron and not in the name of Roman as the alleged owner. Roman promised to perfect his title to the vessel, but failed so the papers he presented did not show that he was the owner of the vessel. On June 25, 1904, the vessel sank in the Manila harbor during a severe storm, even before Roman was able to produce for Grimalt the proper papers showing that the former was in fact the owner of the vessel in question and not Paulina Giron. As a result, Grimalt refused to pay the purchase price when Roman made a demand on June 30, 1904. On July 2, 1904, Roman filed this complaint in the CFI of Manila, which found that the parties had not arrived at a definite understanding, and later dismissed said complaint. ISSUE: Who should bear the risk of loss? COURT RULING: The Supreme Court affirmed the decision of the lower court and declared Roman as the one who should bear the risk of lost because there was no actual contract of sale. If no contract of sale was actually executed by the parties, the loss of the vessel must be borne by its owner and not by a party who only intended to purchase it and who was unable to do so on account of failure on the part of the owner to show proper title to the vessel and thus enable them to draw up the contract

of sale. Grimalt was under no obligation to pay the price of the vessel, the purchase of which had not been concluded. The conversations between the parties and the letter Grimalt had written to Roman did not establish a contract sufficient in itself to create reciprocal rights between the parties.

Addison vs. Felix

Addison vs. Felix 38 Phil 404 August 1918 FACTS: The defendants-appellees spouses Maciana Felix and Balbino Tioco purchased from plaintiffappellant A.A. Addison four parcels of land to which Felix paid, at the time of the execution of the deed, the sum of P3,000 on account of the purchase price. She likewise bound herself to the remainder in installments, the first of P,2000 on July 15, 1914, the second of P5,000 thirty days after the issuance to her of a certificate of title under the Land Registration Act, and further, within ten years from the date of such title, P10 for each cocoanut tree in bearing and P5 for each such tree not in bearing that might be growing on said parcels of land on the date of the issuance of title to her, with the condition that the total price should not exceed P85,000. It was further stipulated that Felix was to deliver to the Addison 25% of the value of the products that she might obtain from the four parcels "from the moment she takes possession of them until the Torrens certificate of title be issued in her favor," and that within 1 year from the date of the certificate of title in her favor, Marciana Felix may rescind the contract of purchase and sale. In January 1915, Addison , filed suit in the CFI of Manila to compel Felix to pay the first installment of P2,000, demandable, in accordance with the terms of the contract of sale. The defendants Felix and her husband Tioco contended that Addison had absolutely failed to deliver the lands that were the subject matter of the sale, notwithstanding the demands they made upon him for this purpose. The evidence adduced shows Addison was able to designate only two of the four parcels, and more than two-thirds of these two were found to be in the possession of one Juan Villafuerte, who claimed to be the owner of the parts he so occupied. The trial court held the contract of sale to be rescinded and ordered Addison to return to Felix the P3,000 paid on account of the price, together with interest thereon at the rate of 10% per annum. ISSUE: Was there a delivery made and, therefore, a transfer of ownership of the thing sold? COURT RULING: The Supreme Court affirmed the decision of the lower court, with modification that the interest thereon will be at the rate of 6% (instead of 10%) per annum from the date of the filing of the

complaint until payment. The thing is considered to be delivered when it is placed "in the hands and possession of the vendee." It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been made. Symbolic delivery through the execution of a public instrument is sufficient when there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such are opposed by a third persons will, then the delivery has not been effected. In the case at bar, therefore, it is evident, that the mere execution of the instrument was not a fulfillment of the vendor's obligation to deliver the thing sold, and that from such non-fulfillment arises the purchaser's right to demand, as she has demanded, the rescission of the sale and the return of the price. Fiestan vs. Court of Appeals, and Developmentt Bank of the Philippines

Fiestan vs. Court of Appeals, and Developmentt Bank of the Philippines 185 SCRA 751 May 1990 FACTS: For failure of petitioner spouses Dionisio Fiestan and Juanita Arconada (spouses Fiestan) to pay their mortgage indebtedness to respondent Development Bank of the Philippines (DBP), the latter was able to acquire at a public auction sale on August 6, 1979 the parcel of land (Lot No. 2-B covered by TCT No. T-13218) that the spouses Fiestan owned in Ilocos Sur after extrajudicial foreclosure of said property. The Provincial Sheriff issued a certificate of sale that same day which was registered on September 28 in the Office of the Register of Deeds of Ilocos Sur. Earlier, or on September 26, spouses Fiestan also executed a Deed of Sale in favor of DBP which was likewise registered on September 28, 1979. When spouses Fiestan failed to redeem their parcel of land within the 1 year period which expired on September 28, 1980, the Register of Deeds cancelled their title over the subject property and issued TCT No. T-19077 to DBP upon the latters duly executed affidavit of consolidation of ownership. On April 13, 1982, the DBP sold the lot to Francisco Peria, so the Register of Deeds of Ilocos Sur cancelled DBPs title over said property and issued TCT No. T-19229 to Perias name, who later secured a tax declaration for said lot and accordingly paid the taxes due thereon. He thereafter mortgaged said lot to the PNB-Vigan Branch as security for his loan of P115,000.00. Since the spouses Fiestan were still in possession of the property, the Provincial Sheriff ordered them to vacate the premises, but instead of leaving, they filed a complaint in the RTC of Vigan, Ilocos Sur for annulment of sale, mortgage and cancellation of transfer certificates of title against the DBP-Laoag City, PNB-Vigan Branch, Ilocos Sur, Francisco Peria and the Register of Deeds

of Ilocos Sur. The lower court dismissed said complaint, declaring valid the extrajudicial foreclosure sale of the mortgaged property in favor of the DBP and its subsequent sale to Francisco Peria as well as the real estate mortgage constituted in favor of PNB-Vigan. The Court of Appeals likewise affirmed said decision. The spouses Fiestan herein seek to annul the extrajudicial foreclosure sale of the mortgaged property on the ground that the Provincial Sheriff conducted the foreclosure without first effecting a levy on said property before selling the same at the public auction sale. ISSUE: Who has the right to acquire by purchase the subject property? COURT RULING: In denying the petition, the Supreme Court reiterated that the formalities of a levy, which the Provincial Sheriff of Ilocos Sur allegedly failed to comply with, are not basic requirements before an extrajudicially foreclosed property can be sold at public auction. The spouses Fiestan insisted that what prevails over the case are par. (2) of Article 1491 and par. (7) of Article 1409 of the Civil Code which prohibits agents from acquiring by purchase, even at a public or judicial auction either in person or through the mediation of another, the property whose administration or sale may have been entrusted to them unless the consent of the principal has been given. However, the Supreme Court ruled that the power to foreclose is not an ordinary agency that contemplates exclusively the representation of the principal by the agent but is primarily an authority conferred upon the mortgagee for the latter's own protection, as provided under Section 5 of Act No 3135, as amended, which is a special law that must prevail over the Civil Code which is a general law. Even in the absence of statutory provision, there is authority to hold that a mortgagee, and in this case the DBP, may purchase at a sale under his mortgage to protect his own interest or to avoid a loss to himself by a sale to a third person at a price below the mortgage debt.

Carbonell vs. Court of Appeals, and Poncio

Carbonell vs. Court of Appeals, and Poncio 69 SCRA 99 January 1976 FACTS: On January 27, 1955, respondent Jose Poncio executed a private memorandum of sale of his parcel of land with improvements situated in San Juan, Rizal in favor of petitioner Rosario Carbonell who knew that the said property was at that time subject to a mortgage in favor of the Republic Savings Bank (RSB) for the sum of P1,500.00. Four days later, Poncio, in another private memorandum, bound himself to sell the same property for an improved price to one

Emma Infante for the sum of P2,357.52, with the latter still assuming the existing mortgage debt in favor of the RSB in the amount of P1,177.48. Thus, in February 2, Poncio executed a formal registerable deed of sale in her (Infante's) favor. So, when the first buyer Carbonell saw the seller Poncio a few days afterwards, bringing the formal deed of sale for the latter's signature and the balance of the agreed cash payment, she was told that he could no longer proceed with formalizing the contract with her (Carbonell) because he had already formalized a sales contract in favor of Infante. To protect her legal rights as the first buyer, Carbonell registered on February 8, 1955 with the Register of Deeds her adverse claim as first buyer entitled to the property. Meanwhile, Infante, the second buyer, was able to register the sale in her favor only on February 12, 1955, so that the transfer certificate of title issued in her name carried the duly annotated adverse claim of Carbonell as the first buyer. The trial court declared the claim of the second buyer Infante to be superior to that of the first buyer Carbonell, a decision which the Court of Appeals reversed. Upon motion for reconsideration, however, Court of Appeals annulled and set aside its first decision and affirmed the trial courts decision. ISSUE: Who has the superior right over the subject property? COURT RULING: The Supreme Court reversed the appellate courts decision and declared the first buyer Carbonell to have the superior right over the subject property, relying on Article 1544 of the Civil Code. Unlike the first and third paragraphs of said Article 1544, which accord preference to the one who first takes possession in good faith of personal or real property, the second paragraph directs that ownership of immovable property should be recognized in favor of one "who in good faith first recorded" his right. Under the first and third paragraphs, good faith must characterize the prior possession, while under the second paragraph, good faith must characterize the act of anterior registration. When Carbonell bought the lot from Poncio on January 27, 1955, she was the only buyer thereof and the title of Poncio was still in his name solely encumbered by bank mortgage duly annotated thereon. Carbonell was not aware - and she could not have been aware - of any sale to Infante as there was no such sale to Infante then. Hence, Carbonell's prior purchase of the land was made in good faith which did not cease after Poncio told her on January 31, 1955 of his second sale of the same lot to Infante. Carbonell wanted to meet Infante but the latter refused so to protect her legal rights, Carbonell registered her adverse claim on February 8, 1955. Under the circumstances, this recording of Carbonells adverse claim should be deemed to have been done in good faith and should emphasize Infante's bad faith when the latter registered her deed of sale 4 days later. Dagupan Trading vs. Macam

Dagupan Trading vs. Macam

14 SCRA 99 May 1965 FACTS: Sammy Maron and his seven brothers and sisters were pro-indiviso owners of a parcel of unregistered land located in barrio Parayao, Binmaley, Pangasinan. In 1955, while their application for registration of said land under Act No. 496 was pending, they executed, on June 19 and on September 21, two deeds of sale conveying the property to herein respondent Rustico Macam who thereafter took possession of the property and made substantial improvements upon it. On October 14, 1955, OCT No. 6942 covering the land was issued in the name of the Marons, free from all liens and encumbrances. On August 4, 1956, however, by virtue of a final judgment of the Municipal Court of Manila in a civil case in favor of Manila Trading and Supply Co. (Manila Trading) against Sammy Maron, levy was made upon whatever interest he had in the subject property. Thereafter, said interest was sold at public auction to the judgment creditor Manila Trading. The corresponding notice of levy, certificate of sale and the sheriff's certificate of final sale in favor of Manila Trading because nobody exercised the right of redemption - were duly registered, and on March 1, 1958, the latter sold all its rights and title in the property to herein petitioner Dagupan Trading Company (Dagupan Trading). On September 4, 1958, Dagupan Trading filed an action against Macam, praying that it be declared owner of one-eighth portion of the subject property. The CFI of Pangasinan dismissed the said complaint, and the Court of Appeals affirmed its decision. ISSUE: Who has the superior right over the one-eight portion of the subject property? COURT RULING: The Supreme Court likewise affirmed both decisions of the lower courts. At the time of the levy, Sammy Maron already had no interest on the one-eight portion of the property he and his siblings have inherited because for a considerable time prior to the levy, said interest had already been conveyed upon Macam "fully and irretrievably" - as the Court of Appeals held. Consequently, the subsequent levy made on the property for the purpose of satisfying the judgment rendered against Sammy Maron in favor of the Manila Trading Company was void and of no effect. The unregistered sale and the consequent conveyance of title and ownership in favor Macam could not have been cancelled and rendered of no effect upon the subsequent issuance of the Torrens title over the entire parcel of land. Moreover, upon the execution of the deed of sale in his favor by Sammy Maron, Macam had immediately taken possession of the land conveyed as its new owner and introduced considerable improvements upon it himself. To deprive him, therefore, of the same by sheer force of technicality would be against both justice and equity.

Cruz vs. Cabaa / Cruz vs. Cabana

Cruz vs. Cabaa 129 SCRA 656 June 1984 FACTS: In June 1965, respondent Leodegaria Cabaa sold the subject property to respondent spouses Teofilo Legaspi and Iluminada Cabaa (spouses Legaspi) under their contract entitled Bilihang Muling Mabibili which stipulated that Cabaa can repurchase the land within one year from December 31, 1966. The said land was not repurchased, however, so the spouses Legaspi took possession of the said property. Later, Cabaa requested that the land title be lent to her in order to mortgage the property to the Philippine National Bank (PNB), to which the spouses Legaspi yielded. On October 21, 1968, Cabaa formally sold the land to spouses Legaspi by way of an absolute sale. The spouses Legaspi then attempted to register the deed of sale, but failed because they could not present the owner's duplicate of title which was still in the possession of the PNB as mortgage. Subsequently, they were able to register the document of sale on May 13, 1969 under Primary Entry No. 210113 of the Register of Deeds of Quezon Province. On November 29, 1968, Cabaa sold the same property to herein petitioner Abelardo Cruz (now deceased), who, in turn, tried to register the deed of sale on September 3, 1970. However, he was informed that Cabaa had already sold the property to the spouses Legaspi, so he was only able to register the land in his name on February 9, 1971. The CFI of Quezon Province declared the spouses Legaspi as the true and rightful owners of the subject property and the land title that Cruz had acquired as null and void. The Court of Appeals affirmed said decision, but ordered Cabaa reimburse to Cruz's heirs the amounts of P2,352.50, which the late petitioner Abelardo Cruz paid to PNB to discharge the mortgage obligation of Cabaa in favor of said bank, and the amount of P3,397.50, representing the amount paid by said Abelardo Cruz to her as consideration of the sale with pacto de retro of the subject property. ISSUE: Who is the rightful owner of the subject property? COURT RULING: The Supreme Court affirmed the decision of the appellate court with modification ordering and sentencing respondent Leodegaria Cabaa to reimburse and pay to petitioner's heirs the total sum of P5,750.00. There is no question that spouses Legaspi were the first buyers, first on June 1, 1965 under a sale with right of repurchase and later on October 21, 1968 under a deed of absolute sale and that

they had taken possession of the land sold to them; that Abelardo Cruz was the second buyer under a deed of sale dated November 29, 1968, which to ail indications, contrary to the text, was a sale with right of repurchase for ninety (90) days. There is no question, either, that spouses Legaspi were the first and the only ones to be in possession of the subject property. The knowledge of the first sale Abelardo Cruz had gained defeats his rights even if he is first to register the second sale, since such knowledge taints his prior registration with bad faith. This is the price exacted by Article 1544 of the Civil Code. Before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e. in ignorance of the first sale and of the first buyer's rights) - from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession. The second buyer must show continuing good faith and innocence or lack of knowledge of the first sale until his contract ripens into full ownership through prior registration as provided by law."

Nuguid vs. Court of Appeals, and Guevarra

Nuguid vs. Court of Appeals, and Guevarra 171 SCRA 213 March 1989 FACTS: The deceased spouses Victorino and Crisanta dela Rosa (spouses dela Rosa) were registered owners of a parcel of land in Orani, Bataan, and covered by OCT No. 3778. On or about May 4, 1931, Victorino dela Rosa (widowed by then) sold one-half of the said property to Juliana Salazar for P95.00. This sale between him and Salazar, though evidenced by a document, was not registered. Nevertheless, Juliana Salazar constructed a house on the lot she purchased immediately after the sale. On March 10, 1964, petitioner spouses Diosdado Nuguid and Marqiueta Venegas (spouses Nuguid) caused the registration of a document entitled "Kasulatan ng Partihan at Bilihan" (Kasulatan) dated June 6, 1961. In this document, Marciana dela Rosa, together with the heirs of Victorino and Crisanta dela Rosa, sold to spouses Nuguid the entire area of the property for the sum of P300.00. Subsequently, OCT No. 3778 was cancelled by the Register of Deeds of Bataan, and TCT No. T-12782 was issued in the spouses Nuguids names. Private respondents claimed that the presented by spouses Nuguid was forged. They also allegedly discovered the forged deed as well as the certificate of title in the name of the petitioners much later, that is, on February 28, 1978, when respondents Amorita Guevarra and Teresita Guevarra thought of having the title of their grandmother Juliana Salazar, registered. On the other hand, spouse Nuguid assert that in the latter part of 1960, Nicolas dela Rosa, uncle of respondent Marciana dela Rosa and grandfather of the other heirs-signatories, offered to sell the subject land to them. Apparently, Nicolas dela Rosa claimed that he had already purchased the shares of the heirs over the subject property as evidenced by a private document entitled "Kasunduan" (Kasunduan) dated August 31, 1955, and as a matter of fact, he had in his possession the original certificate of title covering the property in the name of the deceased

Victorino and Crisanta dela Rosa. The CFI of Bataan dismissed the complaint filed by private respondents, but the Court of Appeals reversed said decision and ordered the spouses Nuguid to execute a deed of reconveyance in favor of herein respondents. ISSUE: Who is the rightful owner of the subject property? COURT RULING: The Supreme Court reinstated the decision of the CFI of Bataan. The basis for the Court of Appeals' conclusion that petitioners were buyers in bad faith is ambiguous because said court relied on the singular circumstance that the petitioners are from Orani, Bataan, and should have personally known that the private respondents were the persons in actual possession. However, at the time of the purchase, the spouses Nuguid dealt with Pedro Guevarra and Pascuala Tolentino, the latter being the actual occupants. The respondents Guevarras, children of the said Pedro and Pascuala Guevarra, came into the picture only after their parents died. As for the respondent heirs of Victorino dela Rosa, their being in actual possession of any portion of the property was, likewise, simply presumed or taken for granted by the Court of Appeals. The private respondents cannot also honestly claim that they became aware of the spouses Nuguids title only in 1978, because ever since the latter bought the property in 1961, the spouse Nuguid have occupied the same openly, publicly, and continuously in the concept of owners, even building their house thereon. For seventeen years they were in peaceful possession, with the respondents Guevarras occupying less than one-half of the same property. TAEDO V. CA (January 22, 1996) FACTS: Lazaro Taedo executed a deed of absolute sale in favor of Ricardo Taedo and Teresita Barrera in which he conveyed a parcel of land which he will inherit. Upon the death of his father he executed an affidavit of conformity to reaffirm the said sale. He also executed another deed of sale in favor of the spouses covering the parcel of land he already inherited. Ricardo registered the last deed of sale in the registry of deeds in their favor.

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

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

HELD: Since a future inheritance generally cannot be a subject of a contract, the deed of sale and the affidavit of conformity made by Lazaro has no effect. The subject of dispute therefore is the deed of sale made by him in favor of spouses Taedo and another to his children after he already legally acquired the property.

Thus, although the deed of sale in favor of private respondents was later than the one in favor of petitioners, ownership would vest in the former because of the undisputed fact of registration. On the other hand, petitioners have not registered the sale to them at all.

Petitioners contend that they were in possession of the property and that private respondents never took possession thereof. As between two purchasers, the one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property. Radiowealth Finance Co. vs. Palileo

Radiowealth Finance Co. vs. Palileo 197 SCRA 245 May 1991 FACTS: In April 1970, defendant spouses Enrique Castro and Herminio R. Castro (spouse Castro) sold to herein respondent Manuelito Palileo a parcel of unregistered coconut land in Surigao del Norte. The sale is evidenced by a notarized Deed of Absolute Sale, but the deed was not registered in the Registry of Property for unregistered lands in the province of Surigao del Norte. Since the execution of the deed of sale, Palileo who was then employed in Lianga, Surigao del Sur, exercised acts of ownership over the land through his mother Rafaela Palileo, as administratrix or overseer. Manuelito Palileo has continuously paid the real estate taxes on said land from 1971 until the present. In November 1976, the CFI of Manila rendered a judgment was rendered against defendant Enrique T. Castro to pay herein petitioner Radiowealth Finance Company (Radiowealth), the sum of P22,350.35 with interest rate of 16% per annum from November 2, 1975 until fully paid, and upon the finality of the judgment, a writ of execution was issued. The Provincial Sheriff Marietta E. Eviota, through defendant Deputy Provincial Sheriff Leopoldo Risma, levied upon and finally sold at public auction the subject land that defendant Enrique Castro had sold to Palileo in 1970. The said Provincial Sheriff executed a certificate of sale was by the in favor of

Radiowealth as the only bidder, and upon expiration of the redemption period, she also executed a deed of final sale. Both documents were registered with the Registry of Deeds. Learning of what happened to the land, Palileo filed an action for recovery of the subject property. The court a quo rendered a decision in favor of Palileo, which the Court of Appeals affirmed. ISSUE: Who is the rightful owner of the subject property? COURT RULING: The Supreme Court likewise affirmed the appellate courts decision on this case. There is no doubt that had the subject property been a registered land, this case would have been decided in favor of Radiowealth since it was the company that had its claim first recorded in the Registry of Deeds for it is the act of registration that operates to convey and affect registered land. Therefore, a bonafide purchaser of a registered land at an execution sale acquires a good title as against a prior transferee, if such transfer was unrecorded. However, a different set of rules applies in the case at bar which deals with a parcel of unregistered land. Under Act No. 3344, registration of instruments affecting unregistered lands is "without prejudice to a third party with a better right." The aforequoted phrase has been held by the Supreme Court to mean that the mere registration of a sale in one's favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded. Applying this principle, the Court of Appeals correctly held that the execution sale of the unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale. Radiowealth Finance Co. vs. Palileo

Radiowealth Finance Co. vs. Palileo 197 SCRA 245 May 1991 FACTS: In April 1970, defendant spouses Enrique Castro and Herminio R. Castro (spouse Castro) sold to herein respondent Manuelito Palileo a parcel of unregistered coconut land in Surigao del Norte. The sale is evidenced by a notarized Deed of Absolute Sale, but the deed was not registered in the Registry of Property for unregistered lands in the province of Surigao del Norte. Since the execution of the deed of sale, Palileo who was then employed in Lianga, Surigao del Sur, exercised acts of ownership over the land through his mother Rafaela Palileo, as administratrix or overseer. Manuelito Palileo has continuously paid the real estate taxes on said land from 1971

until the present. In November 1976, the CFI of Manila rendered a judgment was rendered against defendant Enrique T. Castro to pay herein petitioner Radiowealth Finance Company (Radiowealth), the sum of P22,350.35 with interest rate of 16% per annum from November 2, 1975 until fully paid, and upon the finality of the judgment, a writ of execution was issued. The Provincial Sheriff Marietta E. Eviota, through defendant Deputy Provincial Sheriff Leopoldo Risma, levied upon and finally sold at public auction the subject land that defendant Enrique Castro had sold to Palileo in 1970. The said Provincial Sheriff executed a certificate of sale was by the in favor of Radiowealth as the only bidder, and upon expiration of the redemption period, she also executed a deed of final sale. Both documents were registered with the Registry of Deeds. Learning of what happened to the land, Palileo filed an action for recovery of the subject property. The court a quo rendered a decision in favor of Palileo, which the Court of Appeals affirmed. ISSUE: Who is the rightful owner of the subject property? COURT RULING: The Supreme Court likewise affirmed the appellate courts decision on this case. There is no doubt that had the subject property been a registered land, this case would have been decided in favor of Radiowealth since it was the company that had its claim first recorded in the Registry of Deeds for it is the act of registration that operates to convey and affect registered land. Therefore, a bonafide purchaser of a registered land at an execution sale acquires a good title as against a prior transferee, if such transfer was unrecorded. However, a different set of rules applies in the case at bar which deals with a parcel of unregistered land. Under Act No. 3344, registration of instruments affecting unregistered lands is "without prejudice to a third party with a better right." The aforequoted phrase has been held by the Supreme Court to mean that the mere registration of a sale in one's favor does not give him any right over the land if the vendor was not anymore the owner of the land having previously sold the same to somebody else even if the earlier sale was unrecorded. Applying this principle, the Court of Appeals correctly held that the execution sale of the unregistered land in favor of petitioner is of no effect because the land no longer belonged to the judgment debtor as of the time of the said execution sale. Villostas vs. Court of Appeals, and Tensuan

Villostas vs. Court of Appeals, and Tensuan 210 SCRA 490 June 1992

FACTS: Petitioner Natividad Villostas and her husband decided to buy a water purifier. Private respondent Electrolux Marketing, Inc.'s (Electrolux) sales agents assured Villostas of the very special features of their brand of water purifier so she ordered one unit. On September 13, 1986, an Electrolux Aqua Guard water purifier was delivered and installed at Villostas's residence. Consequently, petitioner Villostas signed the Sales Order and the Contract of Sale with Reservation of Title in October 1986. Electrolux issued a warranty certificate which provided that it warrants the quality product to perform efficiently for 1 full year from the date of its original purchase. The purchase of said unit was on installment basis under which Villostas would pay the amount of P16,190.00 in 20 monthly installments of P635.00 per month. After two weeks, the unit began to perform badly and dirty water started coming out of it. Upon Villostas complaint, Electroluxs technician changed the units filter, without any charge. Villostas, then, paid the amount of P1,650.00 on November 18, 1986 which included the first amortization of P700.00. However, dirty water still came out of the unit after the replacement of the filter. Villostas complained for the 2nd and the 3rd time, and, after being advised that the filter should be changed every 6 months which costs P300, she finally decided to return the unit as early as December 9, 1986 and demand a refund for the amount paid. Electrolux offered to change the water purifier with another brand of any of its appliance of the unit in her favor, but Villostas did not accept it as she was disappointed with the original unit which did not perform as warranted. Consequently, Villostas refused pay any more the subsequent installments in the amount of P14,540.00 exclusive of interests when Electrolux demanded her payment. Electrolux filed a complaint against Villostas with the MTC of Makati for the recovery of the sum of P14,540.00 as the unpaid balance of the purchase price of the water purifeir plus interest at the rate of 42% per annum. The MTC rendered its judgment in favor of Electrolux, and upon appeal, the RTC of Makati affirmed said decision, and the Court of Appeals denied her petition for review. ISSUE: Is the petitioner entitled to rescind the contract on the basis of a violation of the warranty of the article delivered by the respondent? COURT RULING: The Supreme Court dismissed the complaint of private respondent and declared the contract of sale of the water purifier as rescinded. Electroluxs contention that the action for rescission is barred by prescription under Article 1571 of the Civil Code providing for a prescriptive period of six months is bereft of merit. A cursory reading of the ten preceding articles to which Article 1571 refers will reveal that said rule may be applied only in cases of implied warranties. The Warranty Certificate that Electrolux issued to Villostas when the unit was delivered is an example of an express warranty, and consequently,

the general rule on rescission of contracts, which is four years (Article 1389, Civil Code) should apply in the case at bar. Flores vs. So

Flores vs. So 162 SCRA 117 June 1988 FACTS: On August 2, 1958, plaintiff-appellee Johnson So filed an action for specific performance before the CFI of Sorsogon, against defendant-appellant Alfonso Flores to effect the redemption of a parcel of coconut and rice land in Matnog, Sorsogon. It was alleged that one Valentin Gallano sold to Flores the said parcel of land on February 27, 1950, with right of repurchase within 4 years from the date of the sale, for a price of P2,550.00. Valentin Gallano sold in an absolute manner the same land to Johnson So on February 26, 1958 for the price of P5,000.00. On the allegation that the Pacto de Retro Sale did not embody the real intent and nature of the agreement between the parties, the transaction being a mere mortgage to secure a loan, Johnson So prayed that the court declare the said Pacto de Retro Sale as a mere equitable mortgage and order Alfonso Flores to receive the sum of P2,550.00 deposited with the court and to consider the land in question as redeemed from the latter for all legal purposes. The lower court ruled that there was a indeed a contract of sale of a parcel of land with the reservation in favor of Gallano a retro of the right to repurchase it within a period of four (4) years from execution thereof; that Flores execution of the affidavit of consolidation of ownership on March 6, 1958 and its subsequent registration in the Office of the Register of Deeds of Sorsogon did not make his ownership over the subject land absolute for noncompliance with Articles 1606 and 1607 of the New Civil Code; and that Johnson So has already acquired the right of redemption belonging to Valentin Gallano when he bought the subject property. Thus, the Court ordered Alfonso Flores to deliver the possession of the land in question to Johnson So and to execute the necessary deed of resale in favor of the latter and authorized Flores to withdraw for his own use and benefit the redemption money in the sum of P2,550.00. Valentin Gallano was absolved from liability. The Court of Appeals certified the instant case to the Supreme Court for it involves purely a question of law. ISSUE: Who should be the absolute owner of the subject property? COURT RULING: The Supreme Court reversed the decision appealed from and declared Alfonso Flores the absolute owner of the subject property. In a sale with the right of redemption, the ownership over the thing sold is transferred to the vendee upon execution of the contract, "subject only to the

resolutory condition that the vendor may exercise his right of repurchase within the period agreed upon." Consequently, since the pacto de retro sale in question, which was executed in February of 1950 before the effectivity of the New Civil Code in August of 1950, was a contract with a resolutory condition, and the condition was still pending at the time the new law went into effect, the provisions of the old Civil Code should still apply. The trial court erred in allowing Johnson So to redeem the subject property. Valentin Gallano was no longer the owner of the same at the time of sale to Johnson So, thus, no right whatsoever was transmitted to the latter, except the right to redeem the property. Ownership over the subject property had long vested upon the defendant-appellant Alfonso Flores. Etcuban vs. Court of Appeals, and Songalia

Etcuban vs. Court of Appeals, and Songalia 148 SCRA 507 March 1987 FACTS: Petitioner Dominico Etcuban (petitioner) inherited a piece of land together with his co-heirs (the spouse of the deceased, Demetria Initan, and Pedro, Vicente, Felicitas, Anastacio, Froilan, Alfonso. Advincula, Anunciacion, Jesus, Aguinaldo, all surnamed Etcuban) from their deceased father. Said piece of land was declared in their names as the heirs of Eleuterio Etcuban under Tax Declaration No. 06837. Thereafter the eleven co-heirs executed in favor of Jesus C. Songalia and Guadalupe S. Songalia (private respondents Songalia) eleven deeds of sale of their respective shares in the co-ownership for the total sum of P26,340.00. The earliest of the eleven deeds of sale was made on December 9, 1963 and the last one in December 1967. In his complaint before the trial court, petitioner alleged that his coowners leased and / or sold their respective shares without giving due notice to him as a co-owner notwithstanding his intimations to them that he was willing to buy all their respective shares. Private respondents Songalia, in denying the material allegations of the complaint, argued that petitioner came to know of the sale of the subject property to them in August 1968 or sometime earlier; that acting on this knowledge, petitioner thru his lawyers wrote private respondents Songalia on August 15, 1968 about the matter; that Jesus Songalia personally went to the office of Atty. Vicente Faelner or counsel for petitioner to inform him of the sale of the subject property; that petitioner took no action despite the information he received from private respondents Songalia thru his counsel; and that, consequently, petitioner lost his right to redeem under Art. 1623 of the new Civil Code because the right of redemption may be exercised only within 30 days from notice of sale and petitioner was definitely notified of the sale years ago as shown by the records. The trial court allowed petitioner his right of redemption over the subject property and ordered the private respondents Songalia to accept the redemption price of P26,340.00. The Court of Appeals, on the other hand, ruled that petitioner is barred from redeeming the subject property for his failure to make a valid tender of the sale price of the land paid by the defendants within

the period fixed by Art. 1623 of the Civil Code. ISSUE: Who has the right of redemption over the subject property? COURT RULING: The Supreme Court dismissed herein petition and affirmed the decision of the appellate court. Petitioner contends that vendors (his co-heirs) should be the ones to give him written notice and not the vendees (defendants or private respondent herein). However, while it is true that written notice is required by the law (Art. 1623), it is equally true that the same Art. 1623 does not prescribe any particular form of notice, nor any distinctive method for notifying the redemptioner. So long therefore, as the latter is informed in writing of the sale and the particulars thereof, the 30 days for redemption start running, and the redemptioner has no real cause to complain. In the case at bar, where the vendors or co-owners of petitioner stated under oath in the deeds of sale that notice of sale had been given to prospective redemptioners in accordance with Article 1623 of the Civil Code. "A sworn statement or clause in a deed of sale to the effect that a written notice of sale was given to possible redemptioners or co-owners might be used to determine whether an offer to redeem was made on or out of time, or whether there was substantial compliance with the requirement of said Art. 1623."