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PEOPLE’S HOMESITE & HOUSING CORP VS C.A.!
G.R. NO. L-61623!

! DECEMBER 26, 1984!

FACTS:
The PHHC board of directors passed Resolution No. 513 wherein it was stated that Lot 4, with 4182 square
meters, is awarded to Spouses Rizalino Mendoza and Adelaida Mendoza. The contract stated that
“the award shall be subject to the approval of the OEC (PHHC) Valuation Committee and higher authorities.
The city council of Quezon City disapproved the original consolidation plan including Lot 4. Another
subdivision plan was created where the subject lot 4 now contained 2609 square meters. The revised plan
was granted. PHHC thereafter passed a new resolution recalling the awarded lots from persons who do not
give a deposit. Spouses Medoza failed to pay the deposit. Thus, PHHC re-issued Lot 4 to several others.
Spouses Mendoza filed an action alleging that there was already a perfected contract of sale. The trial court
held that there was no perfected contract of sale, but the CA reversed the former’s decision.

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ISSUE:
Whether or not there was a perfected contract of sale

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HELD:
No. Under Art. 1181 of the Civil Code:
"In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already
acquired, shall depend upon the happening of the event which constitutes the condition"
In this case, the alleged perfected sale was conditionally awarded to the Mendoza’s subject to approval by
the city council of the proposed consolidation subdivision plan. Therefore, since the consolidation plan was
not approved, there was no meeting of the minds yet.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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DELTA MOTORS VS GENUINO!
G.R. NO. 55665!

! FEBRUARY 08, 1989!

FACTS:
Delta Motors and Hector Genuino, on behalf of Espana Extension Iceplant Storage, entered into two
contracts for steel pipes in July 1972. Delta would deliver the steel pipes. In the contract, it was stipulated
that “the price will be good for a period of 30 days thereafter it subject to the review and confirmation of
Delta Motors.”
Genuino made partial payments for both contracts. Delta failed to deliver the steel pipes because Genuino
refused to accept them. According to Genuino, he refused because the ice factory was not yet complete. 3
years later, Genuino demanded that delivery be made again. However, Delta refused stating that the price
in 1972 cannot be the same in 1975 and sent a new quotation. Genuino rejected it and filed a complaint for
specific performance. On the other hand, Delta prayed for the rescission of the contract. The lower court
ruled in favor of delta but the CA reversed it.

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ISSUE:

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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Whether or not there is substantial breach to warrant rescission

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HELD:
No. Under Art. 1191, the power to rescind is not absolute.
"Rescission will be ordered only where the breach complained of is substantial as to defeat the object of the
parties in entering into the agreement. It will not be granted where the breach is slight or casual."
First, Delta did not do anything when Genuino refused to accept delivery. Second, when there was another
offer to pay, Delta did not raise any argument. Third, Delta did not offer to return the price paid by Genuino.
Art. 1191 is not absolute. "[T]he act of a party in treating a contract as cancelled or resolved en account, of
infractions by the other contracting party must be made known to the other and is always provisional, being
ever subject to scrutiny and review by the proper Court."
In this case, Delta made no manifestation whatsoever that it had opted to rescind its contracts with the
Genuinos. It only raised rescission as a defense when it was sued for specific performance by private
respondents. Therefore, they must comply with the original terms of their contract.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 4

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DIGNOS VS CA!
G.R. NO. 59266 !
FEBRUARY 29, 1988

FACTS:
The Dignos spouses sold lot no. 3453 in Lapu-lapu city to Atilano Jabil for P28,000. Jabil was not able to
settle the purchase price promptly. However, Dignos again sold the same land in favor of the Cabigas
spouses, who were then US citizens. The deed of absolute sale of the 2nd sale was registered in the register
of deeds.
Jabil sought to cancel the 2nd sale in the Court of First Instance of Cebu. The court declared the 2nd sale
void but Jabil was also ordered to pay the Cabigas spouses for the fence built by the latter. On appeal to the
CA, it was affirmed with modifications. Thus, this petition on ground that the contract was a contract to
sell.

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ISSUES:
1. Whether or not the subject contract is a deed of absolute sale
2. Whether or not the sale was rescinded when it was sold to the Cabigas spouses

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HELD:
1. Yes. It is a deed of absolute sale. There is no such stipulation reserving the title of the property on
the vendors nor does it give them the right to unilaterally rescind the contract upon non-payment of the
balance thereof within a fixed period.
All the elements of a valid contract of sale under Article 1458 of the Civil Code, are present, such as: (1)
consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its
equivalent.
it has been held that a deed of sale is absolute in nature although denominated as a "Deed of Conditional
Sale" where nowhere in the contract in question is a proviso or stipulation to the effect that title to the
property sold is reserved in the vendor until full payment of the purchase price, nor is there a stipulation
giving the vendor the right to unilaterally rescind the contract the moment the vendee fails to pay within a
fixed period.
2. No. Petitioners never notified private respondents Jabil by notarial act that they were rescinding the
contract, and neither did they file a suit in court to rescind the sale.
Furthermore, "where time is not of the essence of the agreement, a slight delay on the part of one party in
the performance of his obligation is not a sufficient ground for the rescission of the agreement"

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
!!5 ! !

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
!!6 ! !

ROMERO VS CA!
G.R. NO. 107207!
NOVEMBER 23, 1995

FACTS:
Petitioner Romero sought land to be used as a central warehouse. Alfonso Flores offered to sell his land for
P800 per square meter if Romero could advance P50,000 so the former could eject the squatters. Romero
accepted it. They executed a contract denominated as “Deed of Conditional Sale.”
Flores succeeded in the ejectment case filed and obtained a writ of execution. However, he still could not
get rid of the squatter’s and offered to return the P50,000 advanced. It was refused by Romero. His counsel
replied that Romero would undertake to eject the squatters himself provided that the costs be charged from
the purchase price of the land.
Thereafter, Flores’ counsel said that their contract is already rendered null and void by virtue of his failure
to remove the squatters. Romero, through his counsel, explained “that the power to rescind belongs to the
injured party in this case his client.”
Flores filed a case in the trial court to rescind the conditional sale and consigned the P50,000. It was
dismissed and the court ordered her to comply with the contract. The Court of Appeals, however, reversed
it. Thus, this petition.

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ISSUE:
Whether or not the Flores may demand the rescission the contract of the sale

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HELD:
No. Under the law, Art. 1545, Civil Code, when ownership is retained until the fulfillment of a positive
condition the breach of the condition will simply prevent the duty to convey title from acquiring an
obligatory force. If the condition is imposed on an obligation of a party which is not complied with, the
other party may either refuse to proceed or waive said condition. Where, of course, the condition is imposed
upon the perfection of the contract itself, the failure of such condition would prevent the juridical relation
itself from coming into existence.
In determining the real character of the contract, the title given to it by the parties is not as much significant
as its substance. The term "condition" in the context of a perfected contract of sale pertains, in reality, to
the compliance by one party of an undertaking the fulfillment of which would beckon, in turn, the
demandability of the reciprocal prestation of the other party.
In this case, the ejectment of the squatters is a condition the operative act of which sets into motion the
period of compliance by petitioner of his own obligation, i.e., to pay the balance of the purchase price.
Private respondent's failure "to remove the squatters from the property" within the stipulated period gives
petitioner the right to either refuse to proceed with the agreement or waive that condition in consonance
with Article 1545 of the Civil Code. This option clearly belongs to petitioner and not to private respondent.
Therefore, Flores may not demand rescission of the contract of sale.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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CORONEL VS CA!
G.R. NO. 103577!
OCTOBER 07, 1996

FACTS:
On January 19, 1985, Coronel executed a document entitled “Receipt of Down Payment” in favor of
Alcaraz. In the document, the words, “we bind ourselves to effect the transfer in our names from our
deceased father, Constancio P. Coronel, the transfer certificate of title immediately upon receipt of the down
payment.” Alcaraz’ mother paid the downpayment on the same day. However, on February 6, 1985, the
Coronels sold the property to Mabanag. Thereafter, the Coronels deposited the downpayment to the bank
to hold it in trust on behalf of Alcaraz.
The Coronels asked for the rescission of the contract. The lower court, however, ordered that the Coronels
comply with their obligation. The CA affirmed it. Thus, this petition.

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ISSUE:
Whether or not the Receipt of Down Payment embodies a perfected contact of sale

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HELD:
Yes. Under the law, Sale, by its very nature, is a consensual contract because it is perfected by mere consent.
The essential elements of a contract of sale are the following:

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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a) Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; b)
Determinate subject matter; and
c) Price certain in money or its equivalent
In a contract to sell, the prospective seller explicitly reserves the transfer of title to the prospective buyer,
meaning, the prospective seller does not as yet agree or consent to transfer ownership of the property
subject of the contract to sell until the happening of an event, which for present purposes we shall take as
the full payment of the purchase price. In other words, full payment of the purchase price partakes of a
suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus,
ownership is retained by the prospective seller without further remedies by the prospective buyer.
A contract to sell as defined herein above, may not even be considered as a conditional contract of sale
where the seller may likewise reserve title to the property subject of the sale until the fulfillment of a
suspensive condition, because in a conditional contract of sale, the first element of consent is present,
although it is conditioned upon the happening of a contingent event which may or may not occur. If the
suspensive condition is not fulfilled, the perfection of the contract of sale is completely abated
The agreement could not have been a contract to sell because the sellers herein made no express reservation
of ownership or title to the subject parcel of land. Therefore, the conditional contract of sale between
petitioners and private respondent Ramona P. Alcaraz became obligatory, the only act required for the
consummation thereof being the delivery of the property by means of the execution of the deed of absolute
sale in a public instrument, which petitioners unequivocally committed themselves to do as evidenced by
the "Receipt of Down Payment."

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UNITED MUSLIM AND CHRISTIAN URBAN POOR ASSOCIATION, INC. VS BRYC-V
DEVELOPMENT CORPORATION!
G.R. NO. 179653!

! JULY 31, 2009!

FACTS:
Petitioners UMCUPAI initiated negotiations with Sea Foods Corporation to purchase Lot No. 300, illegally
settled on by members of the former. The parties executed a Letter of Intent to Sell by [SFC] and Letter of
Intent to Purchase by UMCUPAI. However, the intended sale was derailed due to UMCUPAI's inability to
secure the loan from NHMF as not all its members occupying Lot No. 300 were willing to join the
undertaking. UMCUPAI, in a series of conferences with SFC, proposed the subdivision of Lot No. 300 to
allow the squatter-occupants to purchase a smaller portion thereof. After subdividing the lot into 3, only Lot
300-C remained with SFC.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
!!9 ! !

UMCUPAI negotiated anew with SFC and was given by the latter another three months to purchase Lot
No. 300-C. However, despite the extension, the three-month period lapsed with the sale not consummated
because UMCUPAI still failed to obtain a loan from NHMF. Thus, on July 20, 1995, SFC sold Lot No.
300-C for P2,547,585.00 to respondent BRYC-V Development Corporation (BRYC).
UMCUPAI sought the annulment of the sale based on the letter of intent by SFC. The RTC dismissed it and
the CA affirmed it.

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ISSUE:
Whether or not the letter of intent to sell and letter of intent to buy constitute a contract of sale

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HELD:
No. Under Art. 1479, Civil Code, a promise to buy and sell a determinate thing for a price certain is
reciprocally demandable. In Coronel vs Court of Appeals, the Court said that “a contract to sell may thus
be defined as a bilateral contract whereby the prospective seller, while expressly reserving the ownership
of the subject property despite delivery thereof to the prospective buyer, binds himself to sell the said
property exclusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full
payment of the purchase price.” It is not even a conditional contract of sale because there is lack of consent.
In this case, the letter of intent to buy and to sell is a manifestation of SFC's intention to sell the property
and UMCUPAI's intention to acquire the same. There is no relinquishment of the subject property.
Therefore, it is not a contract of sale.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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TAN VS BENOLIRAO!
G.R. NO. 153820!

! OCTOBER 16, 2009!

FACTS:
Spouses Benolirao and Spouses Taningco, co-owners of a property in Tagaytay City, executed a deed of
conditional sale in favor of Spouses Tan for P1,378,000. In the contract, it is stipulated that, the balance is
payable within 150 days without interest and that the contract is rescissible without judicial action upon
failure of the conditions. Furthermore, the contract stipulates that upon compliance with the contract, a deed
of absolute sale would be executed.
Tan made a down payment of P200,000 upon signing of the contract. Lamberto Benolirao died intestate and
a new certificate over subject property was issued to his widow and heirs. Tan failed to pay the balance
within the stipulated period and the extension granted. Thereafter, the vendors demanded payment within 5
days or the contract be rescinded. Tan refused to pay and filed an action for the return of his payment on
the ground that the vendors cannot deliver a clean title to him.
Respondents, then, sold the property to Hector De Guzman. The RTC ruled that the payment made by Tan
be returned, which the CA also affirmed.

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ISSUE:
Whether or not the contract is a contract to sell

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HELD:
Yes. A contract is what the law defines it to be, taking into consideration its essential elements, and not
what the contracting parties call it.
The very essence of a contract of sale is the transfer of ownership in exchange for a price paid or promised.
In contrast, a contract to sell is defined as a bilateral contract whereby the prospective seller, while expressly
reserving the ownership of the property despite delivery thereof to the prospective buyer, binds himself to
sell the property exclusively to the prospective buyer upon fulfillment of the condition agreed, i.e., full
payment of the purchase price.
In this case, the contract states that “in case buyer has complied with terms and conditions, the sellers shall
execute and deliver to buyer the appropriate deed of absolute sale.
Jurisprudence has established that where the seller promises to execute a deed of absolute sale upon the
completion by the buyer of the payment of the price, the contract is only a contract to sell. Thus, while the
contract is denominated as a Deed of Conditional Sale, the presence of the above-quoted provision identifies
the contract as being a mere contract to sell.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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DE LEON VS ONG!
G.R. NO. 170405!

! FEBRUARY 02, 2010!

FACTS:
De Leon sold 3 parcels of land to Ong with an assumption of mortgage. Ong paid P415,000 as partial
payment. She also informed RSLAI of the sale and assumption of mortgage. However, De Leon sold the
property to Viloria. RSLAI also informed Ong that De Leon already paid the amount due. Consequently,
De Leon had the Certificates of title.
Ong filed a complaint in the RTC against De Leon and Viloria. The RTC dismissed the complaint. However,
the CA reversed it.

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ISSUE:
Whether or not the contract is a contract of sale

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HELD:
Yes. In a contract of sale, the seller conveys ownership of the property to the buyer upon the perfection of
the contract. Should the buyer default in the payment of the purchase price, the seller may either sue for the
collection thereof or have the contract judicially resolved and set aside. The non-payment of the price is
therefore a negative resolutory condition.
In this case, petitioner sold the properties to respondent "in a manner absolute and irrevocable" for a sum of
P1.1 million. Nothing in said instrument implied that petitioner reserved ownership of the properties until
the full payment of the purchase price.’
Furthermore, Article 1498 of the Civil Code, provides that, as a rule, the execution of a notarized deed of
sale is equivalent to the delivery of a thing sold.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 13

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Assuming arguendo that the agreement of the parties was subject to the condition that RSLAI had to approve
the assumption of mortgage, the said condition was considered fulfilled as petitioner prevented its
fulfillment by paying his outstanding obligation and taking back the certificates of title without even
notifying respondent. In this connection, Article 1186 of the Civil Code provides:
Article 1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
Therefore, there is already a perfected contract of sale.

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LUZON DEVELOPMENT BANK VS ENRIQUEZ!
G.R. NO. 168646!

! JANUARY 21, 2011!

FACTS:
De Leon, owner of Delta, obtained a P4 million loan to develop Delta Homes I in Cavite. To secure the
loan, the spouses De Leon executed in favor of the BANK a real estate mortgage (REM) on several of their
properties, including Lot 4.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 14

In 1997, DELTA executed a Contract to Sell with respondent Enriquez Lot 4 for P614,950. Then, Enriquez
made a down payment of P114,950. However, DELTA defaulted on its loan and the bank foreclosed the

mortgaged properties including Lot 4. !


Enriquez filed a complaint against Delta and the Bank before the HLURB. It upheld the sale with Enriquez
and ordered Delta to accept the balance and deliver title to the house and lot free from liens and
encumbrances. Eventually, it reached the CA which decided that Lot 4 was relinquished to Enriquez via the
contract to sell. Thus, this petition.

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ISSUE:
Whether or not the Contract to Sell conveys ownership

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HELD:
No. Under the law, a contract to sell is one where the prospective seller reserves the transfer of title to the
prospective buyer until the happening of an event, such as full payment of the purchase price. What the
seller obliges himself to do is to sell the subject property only when the entire amount of the purchase price
has already been delivered to him. "In other words, the full payment of the purchase price partakes of a
suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus,
ownership is retained by the prospective seller without further remedies by the prospective buyer." It does
not, by itself, transfer ownership to the buyer.
In this case, the terms thereof provide for the reservation of DELTA's ownership until full payment of the
purchase price; such that DELTA even reserved the right to unilaterally void the contract should Enriquez
fail to pay three successive monthly amortizations.
However, a bank dealing with a property that is already subject of a contract to sell and is protected by the
provisions of PD 957, is bound by the contract to sell (even if the contract to sell in that case was not
registered).
It is true that persons dealing with registered property can rely solely on the certificate of title and need not
go beyond it. However, x x x, this rule does not apply to banks. Banks are required to exercise more care
and prudence than private individuals in dealing even with registered properties for their business is affected
with public interest.
Bound by the terms of the Contract to Sell, the BANK is obliged to respect the same and honor the payments
already made by Enriquez for the purchase price of Lot 4. Thus, the BANK can only collect the balance of
the purchase price from Enriquez and has the obligation, upon full payment, to deliver to Enriquez a clean
title over the subject property.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 15

!
SERRANO VS CAGUIAT!
G.R. NO. 139173!

! FEBRUARY 28, 2007!

FACTS:
Spouses Onnie Serrano and Amparo Herrera, petitioners agreed to sell their lot in Las Pinas, Metro Manila
at P1,500 per square meter to Caguiat. Respondent paid P100,000 as partial payment. Petitioners issued a
receipt where it stated that payment of the balance would be on or before March 23, 1990.
On March 28, 1990, Caguiat was ready to pay and informed petitioners to prepare deed of sale. However,
on April 4, 1990, Caguiat was informed that the transaction was getting cancelled but they could recover
the earnest money.
Caguiat filed a complaint where the court held that there was already a perfected contract. Thus, this appeal.

!
ISSUE:
Whether or not the “Receipt for Partial Payment” is a contract of sale

!
HELD:
No. A contract to sell is akin to a conditional sale where the efficacy or obligatory force of the vendor's
obligation to transfer title is subordinated to the happening of a future and uncertain event, so that if the
suspensive condition does not take place, the parties would stand as if the conditional obligation had never
existed. The suspensive condition is commonly full payment of the purchase price.
In a contract to sell, ownership is retained by the seller and is not to pass to the buyer until full payment of
the price.
In this case, the ownership was retained until full payment of the price. Nonpayment on the deadline gave
the petitioners the right to rescind the contract. Second, the document does not contain deed of conveyance.
Third Petitioners retained possession of the certificate of title.
Furthermore, Article 1482 of the Civil code, speaks of earnest money given in a contract of sale. In this
case, the earnest money was given in a contract to sell. The earnest money forms part of the consideration
only if the sale is consummated upon full payment of the purchase price. Therefore, it is not a contract of
sale but a contract to sell.

!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 16

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DARREL CORDERO, ET AL VS. F.S. MANAGEMENT & DEVELOPMENT
CORPORATION!
GR. NO. 167213!
OCTOBER 31, 2006!

!
F!ACT
S:
On or about October 27, 1994, petitioner Belen Cordero, in her own behalf and as attorney-in-fact of her
co-petitioners Darrel Cordero, Egmedio Bautista, Rosemay Bautista, Marion Bautista, Danny Boy Cordero
and Ladylyn Cordero, entered into a contract to sell with F.S. Management and Development Corporation,

here in respondent, over five parcels of land located in Nasugbu, Batangas. !


Pursuant to the terms and conditions of the contract, respondent FSMDC paid earnest money. No further
payments were made thereafter. Petitioner sent FSMDC a demand letter, revoking the contract to sell and
treating the payments already made as payment for damages suffered. FSMDC likewise demanded the

payment for actual damages suffered due to loss of income. !


Cordero thereafter filed before the Regional Trial Court of Parañaque a complaint for rescission of contract
with damages alleging FSMDC failed to comply with its obligations under the contract to sell; and that
consequently entitled to rescind the contract to sell as well as demand the payment of damages. FSMDC,
on the other hand, alleged that Cordero has no cause of action considering that they were the first to violate
the contract to sell. It was Cordero who prevented FSMDC from complying with its obligation to pay in
full by refusing to execute the final contract of sale unless additional payment of legal interest is made.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 17

!
Moreover, Cordero‘s refusal to execute the final contract of sale was due to the willingness of another buyer

to pay a higher price. !


The RTC issued its decision, finding in favor of Cordero et al. and ordered FSMDC to pay damages and
attorney‘s fees. The Court of Appeals affirmed the decision of the lower court and denied their motion for

reconsideration. !
!
I SSUE:

!
Whether or not contract to sell may be subject to rescission under Article 1191 of the Civil Code. !
HELD: !
No. Under a contract to sell, the seller retains title to the thing to be sod until the purchaser fully pays the
agreed purchase price. The full payment is a positive suspensive condition, the non-fulfillment of which is
not a breach of contract but merely an event that prevents the seller from conveying title to the purchaser.

The non-payment of the purchase price renders the contract to sell ineffective and without force and effect. !
Since the obligation of seller did not arise because of the failure of buyer to fully pay the purchase price,

Article 1191 of the Civil Code would have no application, where rescission is not available. !
The properties subject of the contract having been intended for commercial, and not for residential,
purposes, petitioners are entitled to retain the payments already made by the buyer. RA 6552 (Maceda Law)
expressly recognizes the vendor’s right to cancel contracts to sell on installment basis industrial and
commercial properties with full retention of previous payments. But even assuming that the properties were
not intended for commercial or industrial purpose, since respondent paid less than two years of installments,

it is not entitled to any refund. !


DAO HENG BANK INC. VS SPOUSES LAIGO !
GR NO 173856 !
NOVEMBER 20, 2008!
FACTS:
Spouses Laigo obtained a loan from Dao Heng Bank Inc. As a security 3 real estate mortgages were
executed. As of 2000, the Laigos failed to pay on time so as a remedy, they verbally agreed to cede one of
the mortgaged property to Dao Heng by way of dacion en pago (dation in payment). In August 2000, Dao
Heng, thru a letter informed the Laigos that there total obligation amounts to 10.8 million.The Laigos took
no action so their property was foreclosed. They now contend that the foreclosure was illegal since there
was a verbal agreement for dacion en pago. Dao Heng however contends that the dacion en pago falls under
the statute of fraud therefore it is not enforceable. The Laigo’s counter this by stating that the dacion is an
exception since it is no longer executory but had undergone partial performance when the titles to the
property were delivered to Dao Heng.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 18

!
ISSUES:
(1) Is the dacion en pago covered by the Statues of Fraud?
(2) Is the foreclosure valid?

HELD:
1. There is no showing that the dacion en pago has been accepted by both parties. Since there is no mutual
consent, there is no dacion
Dacion en pago as a mode of extinguishing an existing obligation partakes of the nature of sale whereby
property is alienated to the creditor in satisfaction of a debt in money. It is an objective novation of the
obligation, hence, common consent of the parties is required in order to extinguish the obligation. Being
likened to that of a contract of sale, dacion en pago is governed by the law on sales. The partial execution
of a contract of sale takes the transaction out of the provisions of the Statute of Frauds so long as the essential
requisites of consent of the contracting parties, object and cause of the obligation concur and are clearly
established to be present. In the case at bar, the titles to the property were delivered as a security for the
mortgage.
2. The foreclosure is valid.
It is the proper remedy for securing payment for a mortgage. The law clearly provides that the debtor of a
thing cannot compel the creditor to receive a different one, although the latter may be of the same value, or
more valuable than that which is due (Article 1244, New Civil Code). The obligee is entitled to demand
fulfillment of the obligation or performance as stipulated. The power to decide whether to foreclose on the
mortgage is the sole prerogative of the mortgagee.

!
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!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 19

!
!
DEVELOPMENT BANK OF THE PHILIPPINES VS. COURT OF APPEALS AND
LYDIA P. CUBA!
G.R. NO. 118342!
JANUARY 5, 1998!

!
FACTS:
Plaintiff Lydia P. Cuba is a grantee of a Fishpond Lease Agreement No. 2083 dated May 13, 1974 from the
Government. Cuba obtained loans from the Development Bank of the Philippines in the amounts of
P109,000.00, P109,000.00, and P98,700.00 under the terms stated in the Promissory Notes dated September
6, 1974; August 11, 1975; and April 4, 1977. As security for said loans, Cuba executed two Deeds of
Assignment of her Leasehold Rights.
Cuba failed to pay her loan on the scheduled dates thereof in accordance with the terms of the Promissory
Notes. Without foreclosure proceedings, defendant DBP appropriated the Leasehold Rights of Cuba over
the fishpond in question. DBP then executed a Deed of Conditional Sale of the Leasehold Rights in favor
of Cuba over the same fishpond in question.
In the negotiation for repurchase, Cuba addressed two letters to the Manager DBP, Dagupan City. DBP
thereafter accepted the offer to repurchase in a letter addressed to Cuba. After the Deed of Conditional Sale
was executed in favor of Cuba, a new Fishpond Lease Agreement No. 2083-A was issued by the Ministry
of Agriculture and Food in favor of Cuba only, excluding her husband. Cuba failed to pay the amortizations
stipulated in the Deed of Conditional Sale.
After Cuba failed to pay the amortization as stated in Deed of Conditional Sale, she entered with the DBP
a temporary arrangement whereby in consideration for the deferment of the Notarial Rescission of Deed of
Conditional Sale, Cuba promised to make certain payments as stated in temporary Arrangement dated
February 23, 1982.
Defendant DBP thereafter sent a Notice of Rescission thru Notarial Act, which was received by plaintiff
Lydia Cuba. After the Notice of Rescission, defendant DBP took possession of the Leasehold Rights of the
fishpond in question.
After defendant DBP took possession of the Leasehold Rights over the fishpond in question, DBP advertised
in the SUNDAY PUNCH the public bidding dated June 24, 1984, to dispose of the property. DBP thereafter
executed a Deed of Conditional Sale in favor of defendant Agripina Caperal on August 16, 1984. Thereafter,
defendant Caperal was awarded Fishpond Lease Agreement No. 2083-A on December 28, 1984 by the
Ministry of Agriculture and Food.
Petitioner sought the annulment of the Deed of Conditional Sale executed in her favor by DBP, and the
annulment of DBPs sale of the subject fishpond to Caperal. The trial court ruled that the Deed of Conditional
Sale in favor of CUBA, the notarial rescission of such sale, and the Deed of Conditional Sale in favor of
defendant Caperal, as well as the Assignment of Leasehold Rights executed by Caperal in favor of DBP,
were also void and ineffective.

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 20

!
On appeal, the CA ruled that the following are valid: 1) the deeds of assignment executed by Cuba in favor
of DBP; 2) the deed of conditional sale between CUBA and DBP; and (3) the deed of conditional sale
between DBP and Caperal, the Fishpond Lease Agreement in favor of Caperal, and the assignment of
leasehold rights executed by Caperal in favor of DBP. The CA also stated that contrary to the claim of DBP,
the assignment was not a cession under Article 1255 of the Civil Code because DBP appeared to be the sole
creditor to CUBA - cession presupposes plurality of debts and creditors.

!
ISSUE:
Whether or not the assignment was not a cession under Article 1255 of the Civil Code because DBP
appeared to be the sole creditor to CUBA - cession presupposes plurality of debts and creditors

!
HELD:
No, the assignment amount to payment by cession under Article 1255 of the Civil Code for the plain and
simple reason that there was only one creditor–the DBP. Article 1255 contemplates the existence of two or
more creditors and involves the assignment of all the debtor’s property.
The assignment of leasehold rights was a mortgage contract. The deeds of assignment constantly referred
to the assignor (Cuba) as borrower; the assigned rights, as mortgaged properties; and the instrument itself,
as mortgage contract. Also, in their stipulation of facts the parties admitted that the assignment was by way
of security for the payment of the loans

!
!
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!
!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 21

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ANDRES QUIROGA, VS. PARSONS HARDWARE CO.,
! G.R. NO. L-11491! AUGUST 23, 1918!

!
FACTS:
On January 24, 1911, in this city of manila, a contract in the following tenor was entered into by and between
the plaintiff, as party of the first part, and J. Parsons (to whose rights and obligations the present defendant
later subrogated itself), as party of the second part: CONTRACT EXECUTED BY AND BETWEEN
ANDRES QUIROGA AND J. PARSONS, BOTH MERCHANTS ESTABLISHED IN MANILA, FOR
THE EXCLUSIVE SALE OF "QUIROGA" BEDS IN THE VISAYAN ISLANDS.
ART 1. Don Andres Quiroga grants the exclusive right to sell his beds in the Visayan Islands to J. Parsons
under the stipulated conditions, one of which is to “furnish beds of his manufacture to Mr. Parsons for the
latter's establishment in Iloilo, and shall invoice them at the same price he has fixed for sales, in Manila,
and, in the invoices, shall make and allowance of a discount of 25 per cent of the invoiced prices, as

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 22

!
commission on the sale; and Mr. Parsons shall order the beds by the dozen, whether of the same or of
different styles”, Mr. Parsons binds himself not to sell any other kind except the "Quiroga" beds.
ART. 2. In compensation for the expenses of advertisement which, for the benefit of both contracting parties,
Mr. Parsons may find himself obliged to make, Mr. Quiroga assumes the obligation to offer and give the
preference to Mr. Parsons in case anyone should apply for the exclusive agency for any island not comprised
with the Visayan group.
ART. 3. Mr. Parsons may sell, or establish branches of his agency for the sale of "Quiroga" beds in all the
towns of the Archipelago where there are no exclusive agents, and shall immediately report such action to
Mr. Quiroga for his approval.
But the plaintiff alleged that the defendant was his agent for the sale of his beds in Iloilo, and that said
obligations are implied in a contract of commercial agency.

ISSUE:
Whether or not the defendant was a purchaser or an agent of the plaintiff for the sale of his beds

HELD:
In order to classify a contract, due regard must be given to its essential clauses. In the contract in question,
what was essential, as constituting its cause and subject matter, It would be enough to hold, as we do, that
the contract by and between the defendant and the plaintiff is one of purchase and sale, in order to show that
it was not one made on the basis of a commission on sales, as the plaintiff claims it was, for these contracts
are incompatible with each other. But, besides, examining the clauses of this contract, none of them is found
that substantially supports the plaintiff's contention. Not a single one of these clauses necessarily conveys
the idea of an agency.
The words commission on sales used in clause (A) of article 1 mean nothing else, as stated in the contract
itself, than a mere discount on the invoice price. The word agency, also used in articles 2 and 3, only
expresses that the defendant was the only one that could sell the plaintiff's beds in the Visayan Islands. With
regard to the remaining clauses, the least that can be said is that they are not incompatible with the contract
of purchase and sale.
For the foregoing reasons, we are of opinion that the contract by and between the plaintiff and the defendant
was one of purchase and sale, and that the obligations the breach of which is alleged as a cause of action
are not imposed upon the defendant, either by agreement or by law.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 23

!
KERR & CO., LTD VS. LINGAD!
GR NO. L-20871!

! APRIL 30, 1971!

FACTS:
Petitioner was assessed by the Commissioner of Internal Revenue an amount representing commercial
broker’s percentage tax. The petitioner requested for its cancellation, which request was turned down.
Petitioner filed a petition for review with the Court of Tax Appeals, which subsequently held the petitioner
to be taxable.
The liability was based on a contract between the petitioner and the United States Rubber International
where the petitioner was referred to as the distributor and the latter the Company. In the contract, it was
agreed that the agreement did not constitute Distributor the agent or legal representative of the Company.
The following stipulations are contained in the contract, which supports the decision of the CTA to affirm
the imposition of tax.
1.) That the petitioner Kerr & Co., Ltd. is, by contractual stipulation, an agent of U.S. Rubber International
is borne out by the facts that petitioner can dispose of the products of the Company only to certain
persons or entities and within stipulated limits, unless excepted by the contract or by the Rubber
Company (Par. 2);
2.) That it merely receives, accepts and/or holds upon consignment the products, which remain properties
of the latter company (Par. 8);
3.) That every effort shall be made by petitioner to promote in every way the sale of the products (Par. 3);
4.) That sales made by petitioner are subject to approval by the company (Par. 12);
5.) That on dates determined by the rubber company, petitioner shall render a detailed report showing sales
during the month (Par. 14);
6.) That the rubber company shall invoice the sales as of the dates of inventory and sales report (Par. 14);
7.) That the rubber company agrees to keep the consigned goods fully insured under insurance policies
payable to it in case of loss (Par. 15);
8.) That upon request of the rubber company at any time, petitioner shall render an inventory of the existing
stock which may be checked by an authorized representative of the former (Par. 15);
9.) That upon termination or cancellation of the Agreement, all goods held on consignment shall be held
by petitioner for the account of the rubber company until their disposition is provided for by the latter
(Par. 19).
All these circumstances are irreconcilably antagonistic to the idea of an independent merchant."

!
ISSUE:

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 24

!
Whether the relationship created between United States Rubber International and petitioner is one of vendor
and vendee or of broker and principal.

!
!
HELD:
It is a relationship between one of brokerage or agency. The Court of Appeals’ decision is affirmed.
According to the National Internal Revenue Code, a commercial broker "includes all persons, other than
importers, manufacturers, producers, or bona fide employees, who, for compensation or profit, sell or bring
about sales or purchases of merchandise for other persons or bring proposed buyers and sellers together, or
negotiate freights or other business for owners of vessels or other means of transportation, or for the
shippers, or consignors or consignees of freight carried by vessels or other means of transportation. The
term includes commission merchants.”
The controlling decision as to the test to be followed as to who falls within the above definition of a
commercial broker is that of Commissioner of Internal Revenue v. Constantino. In the language of Justice
J.B.L. Reyes, who penned the opinion: "Since the company retained ownership of the goods, even as it
delivered possession unto the dealer for resale to customers, the price and terms of which were subject to
the company's control, the relationship between the company and the dealer is one of agency, * * *.”
An excerpt from Salisbury v. Brooks cited in support of such a view follows: '" The difficulty in
distinguishing between contracts of sale and the creation of an agency to sell has led to the establishment
of rules by the application of which this difficulty may be solved. The decisions say the transfer of title or
agreement to transfer it for a price paid or promised is the essence of sale. If such transfer puts the transferee
in the attitude or position of an owner and makes him liable to the transferor as a debtor for the agreed price,
and not merely as an agent who must account for the proceeds of a resale, the transaction is a sale; while
the essence of an agency to sell is the delivery to an agent, not as his property, but as the property of the
principal, who remains the owner and has the right to control sales, fix the price, and terms, demand and
receive the proceeds less the agent's commission upon sales made. The opinion relied on the work of
Mechem on Sales as well as Mechem on Agency. Williston and Tiedman, both of whom wrote treatises on
Sales, were likewise referred to.

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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 25

!
!
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!
LOURDES VALERIO LIM VS. PEOPLE OF THE
PHILIPPINES! G.R. NO. L-34338! NOVEMBER 21, 1984!

!
FACTS:

!
On January 10, 1966, the appellant went to the house of Maria Ayroso and proposed to sell Ayroso's tobacco.
Ayroso agreed to the proposition of the appellant to sell her tobacco consisting of 615 kilos at P1.30 a kilo.
The appellant was to receive the overprice for which she could sell the tobacco. This agreement was made
in the presence of plaintiff's sister, Salud G. Bantug. Salvador Bantug drew the document, a receipt of the
leaf tobacco.

!
Demands for the payment of the balance of the value of the tobacco were made upon the appellant by
Ayroso, and particularly by her sister, Salud Bantug. Salud Bantug further testified that she had gone to the
house of the appellant several times, but the appellant often eluded her; and that the "camarin" the appellant
was empty. Although the appellant denied that demands for payment were made upon her, it is a fact that
on October 19, 1966, she wrote a letter to Salud Bantug which stated she would, for the mean time, pay her
in small amounts.

!
The appellant sent a money order for P100.00 on October 24, 1967, Exh. 4, and another for P50.00 on March
8, 1967; and she paid P90.00 on April 18, 1967 as evidenced by the receipt Exh. 2, dated April 18, 1967, or
a total of P240.00. As no further amount was paid, the complainant filed a complaint against the appellant
for estafa.

!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 26

!
ISSUE: !
The question involved in this case is whether the receipt in question is a contract of agency to sell or a
contract of sale.

!
HELD: !
The agreement constituted her as an agent with the obligation to return the tobacco if the same was not sold.

The Court of Appeals correctly resolved the matter as follows:

!
“... Aside from the fact that Maria Ayroso testified that the appellant asked her to be her agent in selling
Ayroso's tobacco, the appellant herself admitted that there was an agreement that upon the sale of the
tobacco she would be given something. The appellant is a businesswoman, and it is unbelievable that she
would go to the extent of going to Ayroso's house and take the tobacco with a jeep which she had brought
if she did not intend to make a profit out of the transaction. Certainly, if she was doing a favor to Maria
Ayroso and it was Ayroso who had requested her to sell her tobacco, it would not have been the appellant
who would have gone to the house of Ayroso, but it would have been Ayroso who would have gone to the
house of the appellant and deliver the tobacco to the appellant.”

!
The fact that appellant received the tobacco to be sold at P1.30 per kilo and the proceeds to be given to
complainant as soon as it was sold, strongly negates transfer of ownership of the goods to the petitioner.
The agreement constituted her as an agent with the obligation to return the tobacco if the same was not
!
sold. !

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 27

!!
SPOUSES FERNANDO AND LOURDES VILORIA V. CONTINENTAL AIRLINES,
INC.! G.R. NO. 188288! JANUARY 16, 2012!

!
FACTS:
Fernando purchased for himself and his wife, Lourdes, two (2) round trip airline tickets from San Diego,
California to Newark, New Jersey on board Continental Airlines. Fernando purchased the tickets at US
$400.00 each from a travel agency called “Holiday Travel” and was attended to by a certain Margaret Mager
(Mager). According to Spouses Viloria, Fernando agreed to buy the said tickets after Mager informed them
that there were no available seats at Amtrak, an intercity passenger train service provider in the United
States.
Subsequently, Fernando requested Mager to reschedule their flight to Newark to an earlier date or August
6, 1997. Mager informed him that flights to Newark via Continental Airlines were already fully booked and
offered the alternative of a round trip flight via Frontier Air. Since flying with Frontier Air called for a
higher fare of US$526.00 per passenger and would mean traveling by night, Fernando opted to request for
a refund. Mager, however, denied his request as the subject tickets are non-refundable and the only option
that Continental Airlines can offer is the re-issuance of new tickets within one (1) year from the date the
subject tickets were issued. Fernando decided to reserve two (2) seats with Frontier Air. As he was having
second thoughts on traveling via Frontier Air, Fernando went to the Greyhound Station where he saw an
Amtrak station nearby. Fernando made inquiries and was told that there are seats available and he can travel
on Amtrak anytime and any day he pleased. Fernando then purchased two (2) tickets for Washington, D.C.
From Amtrak, Fernando went to Holiday Travel and confronted Mager with the Amtrak tickets, telling her
that she had misled them into buying the Continental Airlines tickets by misrepresenting that Amtrak was
already fully booked. Fernando reiterated his demand for a refund but Mager was firm in her position that
the subject tickets are non-refundable.
Upon returning to the Philippines, Fernando sent a letter to CAI on February 11, 1998, demanding a refund
and alleging that Mager had deluded them into purchasing the subject tickets. Continental Micronesia
informed Fernando that the subject tickets may be used as a form of payment for the purchase of another
Continental ticket, albeit with a re-issuance fee. Fernando went to Continental’s ticketing office at Ayala
Avenue, Makati City to have the subject tickets replaced by a single round trip ticket to Los Angeles,
California under his name. Therein, Fernando was informed that Lourdes’ ticket was non-transferable, thus,
cannot be used for the purchase of a ticket in his favor. He was also informed that a round trip ticket to Los
Angeles was US$1,867.40 so he would have to pay what will not be covered by the value of his San Diego
to Newark round trip ticket.

ISSUE:
Whether or not a contract of agency exists between Continental Airlines and Mager HELD:
The Court, citing Rallos v. Felix Go Chan & Sons Realty Corporation, explains:
“ Out of the above given principles, sprung the creation and acceptance of the relationship of agency
whereby one party, called the principal (mandante), authorizes another, called the agent (mandatario), to act
for and in his behalf in transactions with third persons. The essential elements of agency are: (1) there is
consent, express or implied of the parties to establish the relationship; (2) the object is the execution of a
juridical act in relation to a third person; (3) the agent acts as a representative and not for himself, and (4)
the agent acts within the scope of his authority.”

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 28

!
Contrary to the findings of the CA, all the elements of an agency exist in this case. The first and second
elements are present as CAI does not deny that it concluded an agreement with Holiday Travel, whereby
Holiday Travel would enter into contracts of carriage with third persons on CAI’s behalf. The third element
is also present as it is undisputed that Holiday Travel merely acted in a representative capacity and it is CAI
and not Holiday Travel who is bound by the contracts of carriage entered into by Holiday Travel on its
behalf. The fourth element is also present considering that CAI has not made any allegation that Holiday
Travel exceeded the authority that was granted to it. In fact, CAI consistently maintains the validity of the
contracts of carriage that Holiday Travel executed with Spouses Viloria and that Mager was not guilty of
any fraudulent misrepresentation. That CAI admits the authority of Holiday Travel to enter into contracts
of carriage on its behalf is easily discernible from its February 24, 1998 and March 24, 1998 letters, where
it impliedly recognized the validity of the contracts entered into by Holiday Travel with Spouses Viloria.
When Fernando informed CAI that it was Holiday Travel who issued to them the subject tickets, CAI did
not deny that Holiday Travel is its authorized agent.
Prior to Spouses Viloria’s filing of a complaint against it, CAI never refuted that it gave Holiday Travel the
power and authority to conclude contracts of carriage on its behalf. As clearly extant from the records, CAI
recognized the validity of the contracts of carriage that Holiday Travel entered into with Spouses Viloria
and considered itself bound with Spouses Viloria by the terms and conditions thereof; and this constitutes
an unequivocal testament to Holiday Travel’s authority to act as its agent. This Court cannot therefore allow
CAI to take an altogether different position and deny that Holiday Travel is its agent without condoning or
giving imprimatur to whatever damage or prejudice that may result from such denial or retraction to Spouses
Viloria, who relied on good faith on CAI’s acts in recognition of Holiday Travel’s authority.

!
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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 29

!!

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COMMISSIONER VS. ENGINEERING EQUIPMENT AND SUPPLY
COMPANY! G.R. NO. L-27044! JUNE 30, 1975 !
FACTS:

!
Engineering Equipment and Supply Company is a domestic corporation engaged in, among others, in the
design and installation if central type air conditioning system, pumping plants and steel fabrications. On 27
July 1956, a certain unnamed individual wrote to the Commissioner, indicating that Engineer Equipment
has evaded its tax liabilities by misdeclaring imported articles by failing to pay the correct percentage taxes

due thereon. In view of such allegations, the NBI conducted a raid and seized records of the firm. !
Revenue examiners reported and recommended that Engineer Equipment be assessed for Php480,912.01
as deficient sales tax on the theory that it misdeclared its importations of airconditioning units and parts

and accessories. !
Respondent contended the tax assessment and so it appealed to the CTA, which ruled that Engr. is a
contractor and not a manufacturer, and declared it exempt from manufacturer's sales tax from June 1 1948
to Sept 2 1956. The Commissioner appealed and contends that the CTA erred in ruling that Engineer
Equipment is a contractor and not manufacturer, that they’re a seller and manufacturer of aircon units hence

subject to 30% sales tax under Sec 185 (m) of the the Tax Code. !
!
!
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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 30

!
Respondent contends that it is not a manufacturer and setter of aircon units but rather a contractor engaged

!
in the design of aircon units. !

!
I SSUE:

!
Whether respondent should be liable to pay manufacturer's sales tax. !
HELD ! :
No, respondent was held by the Court to be a contractor hence not subject to manufacturer's sales tax. A
contractor has come to be used with reference to a person who in the pursuit of the independent business,
undertakes to do a specific job or piece of work for other persons using his own means and methods. Engr.
did not manufacture aircon units for sale to general public but imported some units which were used in
executing contracts entered info by it.

!!
!
!
!
!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 31

!!
DEL MONTE PHILIPPINES, INC. VS. NAPOLEON N.
ARAGONES! G.R. NO. 153033! JUNE 23, 2005!

!
FACTS:
Del Monte entered into a contract with MEGA-WAFF whereby the latter undertook the supply and
installation of modular pavement at DMPIs condiments warehouse at Cagayan de Oro City within 60
calendar days from signing of the agreement. MEGA-WAFF (Contractor) then entered into a supply
agreement with Dynablock Enterprises (Supplier) represented by herein respondent. In said contract,
defendant is obligated to produce S-shaped blocks for MEGA-WAFF and assemble machines used for
casting/fabrication of said concrete blocks (this was duly complied with).
When respondent failed to collect from MEGA-WAFF the full payment of the concrete blocks, he then sent
a letter to DMPI informing them of the outstanding obligation of MEGA-WAFF and requested direct
payment to him. It turns out that DMPI already paid MEGA-WAFF for the work done, because of this
respondent was prompted to file an action in the RTC for recovery for a sum of money and damages.
Defendant impleaded DMPI on the strength of Articles 1729 and 1467 of the Civil Code, contending that it
was liable to him who put labor upon or furnished materials for a piece of work. MEGA-WAFF argued that
respondent defaulted under the supply agreement, while DMPI argued that it was not liable to respondent
since they already paid MEGA-WAFF the amount and they are not privies to the supply agreement.
The RTC ruled in favor of respondent on the basis of Article 1729 of the Civil Code, which states: “Those
who put their labor upon or furnish materials for a piece of work undertaken by the contractor have an action
against the owner up to the amount owing from the latter to the contractor at the time the claim is made.
However, the following shall not prejudice the laborers, employees and furnishers of materials: (1)
Payments made by the owner of the contractor before they are due; (2) Renunciation by the contractor of
any amount due him from the owner.” The CA affirmed the RTC’s decision.
Petitioner then appealed to the SC, contending that the CA failed to apply the “nature of the object” test, he
also insists that the supply agreement was a contract of sale because the concrete blocks were capable of
being mass produced and that there was no consideration of any special needs or requirements of DMPI
taken into account in the design or manufacture of the concrete paving blocks.

ISSUE:
Whether or not the supply agreement is that of a contract for a piece of work.

HELD:

!
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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 32

!
!
The supply agreement is a contract for a piece of work. The supply agreement was replete with specification,
terms or conditions showing that it was for a piece of work. The machines respondent fabricated were those
for casting the concrete blocks specified by MEGA-WAFF. Respondent did not have those machines in his
usual business, hence it was a special order. That MEGA-WAFF supplied the cement and aggregates and
that the entire made-to-order casting machines and accessories used in the manufacture of those unusual
shaped blocks were agreed upon to be devoted only for the exclusive use of MEGA-WAFF should belie
petitioners contention that the concrete blocks were mass-produced and catered to the general market in the
ordinary course of respondent’s business. Respondent having specially fabricated three casting machines
and furnished some materials for the production of the concrete blocks specially ordered and specified by
MEGA-WAFF which were to be and indeed they were for the exclusive use of MEGAWAFF, he has a
cause of action upon petitioner up to the amount it owed MEGA-WAFF at the time respondent made his
claim to petitioner.

ANTONIO S. LIM, JR. PAZ S. LIM VS. VICTOR K. SAN AND ELINDO
LO! G.R. NO. 159723! SEPTEMBER 9, 2004!

!
FACTS:
Petitioner Antonio S. Lim, Jr., represented by his mother, Paz S. Lim, as attorney-in-fact, filed a complaint4
before the Regional Trial Court of Davao City seeking the annulment of a Deed of Absolute Sale involving
a parcel of land purportedly executed by Paz S. Lim in favor of her brother, respondent Victor K. San. The
petitioner alleged that the signature of the Attorney-in-Fact in the aforecited Deed of Absolute Sale was
obtained through fraud and trickery employed by the herein defendant and that she never appeared before
the Notary Public, who notarized the said deed and that no consideration was ever paid, much less received
by the plaintiff or by his Attorney-in-Fact. Simply put, the Deed of Absolute Sale was void ab initio for lack
of consideration and for lack of a valid consent; ISSUE:

Whether or not the Deed of Absolute Sale obtained by the defendant was void HELD:
A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other,
to give something or to render some service. It has three essential elements, or those without which there
can be no contract consent, subject matter and cause. A knowledge of these essential elements is material
because the perfection stage or the birth of the contract only occurs when the parties to a contract agree
upon the essential elements of the same.
A contract of sale is consensual, as such it is perfected by mere consent.16 Consent is essential for the
existence of a contract, and where it is wanting, the contract is non-existent.17 Consent in contracts
presupposes the following requisites: (1) it should be intelligent or with an exact notion of the matter to
which it refers; (2) it should be free; and (3) it should be spontaneous. Intelligence in consent is vitiated by
error; freedom by violence, intimidation or undue influence; and spontaneity by fraud. Thus, a contract
where consent is given through mistake, violence, intimidation, undue influence or fraud is voidable. In
determining whether consent is vitiated by the circumstances provided for in Article 1330 of the Civil Code
of the Philippines, courts are given a wide latitude in weighing the facts or circumstances in a given case
and in deciding in favor of what they believe to have actually occurred, considering the age, physical
infirmity, intelligence, relationship and the conduct of the parties at the time of making the contract and
subsequent thereto, irrespective of whether the contract is in a public or private writing. The petition is

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 33

!!
DENIED. !
!
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!
!
SWEDISH MATCH VS. COURT OF APPEALS, ALS MANAGEMENT &
DEVELOPMENT CORPORATION AND ANTONIO K. LITONJUA! G.R. NO.
128120!
OCTOBER 20, 2004!
FACTS:
Swedish Match, AB (SMAB) is a corporation organized under the laws of Sweden, however, had 3
subsidiary corporations in the Philippines organized under Philippine laws: Phimco, Provident Tree Farms,
Inc, and OTT/Louie (Phils), Inc.
In 1988, STORA, its parent company, decided to sell SMAB and the latter’s worldwide match, lighter and
shaving products operation to Swedish Match NV (SMNV). Enriquez, VP of SMSA (management company
of SMAB), was held under special instructions that the sale of Phimco shares should be executed on or
before June 30, 1990. Respondent GM Antonio Litonjua of ALS Management and Development Corp. was
one of the interested parties to acquire Phimco shares, offering $36 million. After an exchange of
information between CEO Rossi of SMAB and Litonjua, the latter informed that they may not be able to
submit their final bid on the given deadline considering that the acquisition audit of Phimco and the review
of the draft agreements have not been completed.
In a letter dated July 3, 1990, Rossi informed Litonjua that on July 2, SMAB signed a conditional contract
with a local group for the disposal of Phimco and that the latter’s bid would no longer be considered unless
the local group would fail to consummate the transaction on or before September 15, 1990. Irked by
SMAB’s decision to junk his bid, Litonjua asserted that the $36 million bid was final, thus finalizing the
terms of the sale.

!
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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 34

!
!
After 2 months from receipt of Litonjua’s letter, Enriquez informed the former that the proposed sale with
the local buyers did not materialize and invited to resume negotiations for the sale of Phimco shares based
on a new set of conditions, as to reducing the period of sale from 30-day to 15, to which Litonjua expressed
objections and emphasized that the new offer constituted an attempt to reopen the already perfected contract
of sale.
Respondents prayed that petitioners be enjoined from selling or transferring the Phimco shares, or otherwise
implementing the sale or transfer thereof, in favor of any person or entity other than respondents, and that
any such sale to third parties be annulled and set aside. Respondents also asked that petitioners be ordered
to execute all documents or instruments and perform all acts necessary to consummate the sales agreement
in their favor.
Traversing the complaint, petitioners alleged that respondents have no cause of action, contending that no
perfected contract, whether verbal or written, existed between them. Petitioners added that respondents
cause of action, if any, was barred by the Statute of Frauds since there was no written instrument or
document evidencing the alleged sale of the Phimco shares to respondents.

ISSUE:
(1) Whether the appellate court erred in reversing the trial courts decision dismissing the complaint for
being unenforceable under the Statute of Frauds; and
(2) Whether there was a perfected contract of sale between petitioners and respondents with respect to the
Phimco shares.

HELD:
YES. Evidently, the trial courts dismissal of the complaint on the ground of unenforceability under the
Statute of Frauds is warranted. The term Statute of Frauds is descriptive of statutes which require certain

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 35

!
classes of contracts to be in writing. The Statute does not deprive the parties of the right to contract with
respect to the matters therein involved, but merely regulates the formalities of the contract necessary to
render it enforceable. Consequently, the effect of non-compliance with the requirement of the Statute is
simply that no action can be enforced unless the requirement is complied with. Clearly, the form required
is for evidentiary purposes only. Hence, if the parties permit a contract to be proved, without any objection,
it is then just as binding as if the Statute has been complied with.
No, there was no perfected contract of sale since Litonjua’s letter of proposing acquisition of the Phimco
shares for US$36 million was merely an offer. Consent in a contract of sale should be manifested by the
meeting of the offer and acceptance upon the thing and the cause which are to constitute the contract. The
lack of a definite offer on the part of the respondents could not possibly serve as the basis of their claim that
the sale of the Phimco shares in their favour was perfected, for one essential element of a contract of sale
needed to be certain --- the price in money or its equivalent. Obviously, there can be no sale without a price.
Respondents’ attempt to prove the alleged verbal acceptance of their US$36 million bid becomes futile
since there was in the first place no meeting of the minds with respect to the price, and such was merely a
preliminary offer. Respondents’ failure to submit their final bid on the deadline set by the petitioners
prevented the perfection of the contract of sale.
Petition was GRANTED. The appealed Decision is hereby MODIFIED insofar as it declared the agreement
between the parties enforceable under the Statute of Frauds

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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 36

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TRADERS ROYAL BANK V. CUISON LUMBER
CO.
 JUNE 5, 2009 !
G.R. NO. 174286!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 37

!
FACTS:

!
On July 14, 1978 and December 9, 1979, respectively, CLCI, through its then president, Roman Cuison Sr.,
obtained two loans from the bank. CLCI failed to pay the loan, prompting the bank to extrajudicially
foreclose the mortgage on the subject property. The bank was declared the highest bidder at the public
auction that followed, conducted on August 1, 1985. A Certificate of Sale and a Sheriffs Final Certificate
of Sale were subsequently issued in the banks favor. In a series of written communications between CLCI
and the bank, CLCI manifested its intention to restructure its loan obligations and to repurchase the subject
property. On July 31, 1986, Mrs. Cuison, the widow and administratrix of the estate of Roman Cuison Sr.,
wrote the banks Officer-in-Charge, Remedios Calaguas, a letter indicating her offered terms of repurchase.
CLCI paid the bank P50,000.00 (on August 8, 1986) and P85,000.00 (on September 3, 1986). The bank
received and regarded these amounts as earnest money for the repurchase of the subject property. On
October 20, 1986, the bank sent Atty. Roman Cuison, Jr. (Atty. Cuison), as the president and general
manager of CLCI, a letter informing CLCI of the banks board of directors resolution of October 10, 1986
(TRB Repurchase Agreement), laying down the conditions for the repurchase of the subject property. CLCI
failed to comply with the conditions nor did it make any express acceptance.

!!
ISSUE:

!
Whether or not there was a perfected contract of sale.

!! HELD: !
Yes. A reading of the petitioners letter of October 20, 1986 informing CLCI that the banks board of directors
passed a resolution for the repur- chase of [your] property shows that the tenor of acceptance, except for the
repurchase price, was subject to conditions not identical in all respects with the CLCIs letter-offer of July
31, 1986. In this sense, the banks October 20, 1986 letter was effectively a counter-offer that CLCI must be
shown to have accepted absolutely and unqualifiedly in order to give birth to a perfected contract. Evidence
exists showing that CLCI did not sign any document to show its conformity with the banks counter-offer.
Testimony also exists explaining why CLCI did not sign. Atty. Cuison testified that CLCI did not agree
with the implementation of the repurchase transaction since the bank made a wrong computation. These
indicators notwithstanding, we find that CLCI accepted the terms of the TRC Repurchase Agreement and
thus unqualifiedly accepted the banks counter-offer under the TRB Repurchase Agreement and, in fact,
partially executed the agreement,

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 38

!
!

!!!!!!!!!!!!!
!!
ARTURO R. ABALOS vs. DR. GALICANO S. MACATANGAY,
JR.! G.R. No. 155043! September 30, 1994!

!
FACTS:
Spouses Arturo and Esther Abalos are the registered owners of a parcel of land with improvements located
at Azucena St., Makati City. With a Special Power of Attorney dated June 2, 1988, purportedly issued by
his wife, Arturo executed a Receipt and Memorandum of Agreement (RMOA) dated October 17, 1989, in
favor of respondent, binding himself to sell to respondent the subject property and not to offer the same to
any other party within thirty (30) days from date. Arturo received thereafter and acknowledged the receipt
of a check from respondent in the amount of P5,000.00, representing earnest money for the subject
property to be deducted from the purchase price of P1,300,000.00. The RMOA further stated that full
payment would be effected as soon as possession of the property shall have been turned over to
respondent.
Arturo’s wife, Esther, executed a Special Power of Attorney dated October 25, 1989, appointing her sister,
Bernadette Ramos, to act for and in her behalf relative to the transfer of the property to respondent.
Respondent then proceeded to cause the annotation of his adverse claim at the back of the TCT of the
spouses’ property. On November 16, 1989, respondent sent a letter to Arturo and Esther informing them of
his readiness and willingness to pay the full amount of the purchase price. The letter contained a demand
upon the spouses to comply with their obligation to turn over possession of the property to him. During the
same day, Ester executed a contract to sell with respondent to sell the property to the extent of her conjugal
interest therein for the sum of P650,000.00 less the sum already received by her and to cause the delivery
of an absolute deed of sale upon full payment.
In December 1989, respondent sent another letter to the spouse signifying that he had set aside his fund for
which to purchase the land and he demands that the property be delivered to him.
The RTC dismissed the complaint for specific performance. It ruled that the Special Power of Attorney
(SPA) ostensibly issued by Esther in favor of Arturo was void as it was falsified. Hence, the court concluded
that the SPA could not have authorized Arturo to sell the property to respondent.
The CA reversed the decision of the trial court. It ruled that the SPA in favor of Arturo, assuming that it was
void, cannot affect the transaction between Esther and respondent.

ISSUE:
Whether petitioner may be compelled to convey the property to respondent under the terms of the RMOA
and the Contract to Sell?

HELD:

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 39

No. The Court finds that the petitioner cannot be compelled to convey the property to the respondent. Under
the Civil Code, as the spouses were married prior to the Family Code, the spouse were governed by the
conjugal partnership of gains and under it, husband has sole administration of the conjugal partnership. The
husband, even if he is statutorily designated as administrator of the conjugal partnership, cannot validly
alienate or encumber any real property of the conjugal partnership without the wife’s consent. Similarly,
the wife cannot dispose of any property belonging to the conjugal partnership without the conformity of the
husband. The law is explicit that the wife cannot bind the conjugal partnership without the husbands consent,
except in cases provided by law. The sale by the husband of property belonging to the conjugal partnership
without the consent of the wife when there is no showing that the latter is incapacitated is void ab initio
because it is in contravention of the mandatory requirements of Article 166 of the Civil Code.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 40

!
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Moreover, the RMOA signifies a unilateral offer of Arturo to sell the property to respondent for a price
certain within a period of thirty days. The RMOA does not impose upon respondent an obligation to buy
petitioners property, as in fact it does not even bear his signature thereon. There is nothing in the RMOA
which indicates that Arturo agreed therein to transfer ownership of the land which is an essential element
in a contract of sale. Unfortunately, the option is not binding upon the promissory since it is not supported
by a consideration distinct from the price. Moreover, the nullity of the RMOA as a contract of sale emanates
not only from lack of Esther’s consent thereto but also from want of consideration and absence of
respondents signature thereon. Such nullity cannot be obliterated by Esther’s subsequent confirmation of
the putative transaction as expressed in the Contract to Sell. Under the law, a void contract cannot be ratified.
The congruence of the wills of the spouses is essential for the valid disposition of conjugal property.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 42

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XYST CORPORATION v. DMC URBAN PROPERTIES DEVELOPMENT
INC.! G.R. No. 171968! July 30, 2009!

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FACTS:
DMC Urban Properties Development, Inc (hereinafter DMC) and Citibank N.A. entered into an agreement
whereby the former would take part in the construction of Citibank Tower. The said agreement allocated in
favor of DMC the 18th floor of the building with the condition that DMC shall not transfer any portion of
the floor or rights or interests thereto prior to the completion of the building without the written consent of
Citibank N.A.
Later, DMC, through intervenor Fe Aurora Castro, found a prospective buyer, Saint Agen Et Fils Limited
(hereinafter SAEFL), which is a foreign corporation represented by one William Seitz. This was done
despite the fact that construction was not yet completed. In a letter dated September 14, 1994, SAEFL
accepted
DMC’s offer to sell. The letter included a property description and terms of payment.
In September 16, 1994, SAEFL sent a letter obliging DMC to cause Citibank N.A. to give its consent and
enter into a contract to sell with SAEFL. Seitz was informed that the 18th floor is not available for foreign
acquisition and so XYST Corporation (hereinafter XYST), a domestic corporation and where Seitz is a
director and shareholder was substituted.
XYST then paid reservation fee but was later advised by DMC that the signing of the formal contract will
not take place since Citibank N.A. opted to exercise its right of first refusal. XYST and DMC agreed that if
Citibank N.A. fails to purchase the 18th floor on the agreed date, the same should be sold to XYST.
Citibank N.A. did not exercise its right of first refusal but it reminded DMC that the sale of the floor must
be consistent with the documents adopted by the co-founders of the project. Hence a copy of a pro-forma
Contract to Sell was given to DMC and a copy of this was forwarded to XYST.
XYST made amendments to the pro-forma contract and was allowed by DMC to directly negotiate with
Citibank N.A. to facilitate the transaction. But Citibank N.A. refused to concur with the changes imposed
by XYST hence DMC decided to call off the deal and returned the reservation fee of P1,000,000.00 to
XYST.
A complaint was filed in the RTC by XYST for specific performance but this was dismissed. A motion for
reconsideration was filed but was likewise denied. Hence, the instant petition in the Supreme Court.

ISSUE:
Whether there is a perfected contract between DMC and XYST.

HELD:
No contract was perfected, petition DENIED

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 43

XYST argues that there exists a perfected contract of sale between the parties. This was perfected from the
moment there was a meeting of the minds upon the thing which is the object of the contract and upon the
price as manifested by the Sept 14, 1994 letter. Further, XYST contends that the P1,000,000.00 reservation
fee it pad is actually in the nature of earnest money or down payment and shall be considered part of the
price and proof of perfection of contract. On the other hand,

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DMC insists that a contract to sell was entered into by the parties. In contract to sell, the element of consent
is lacking and since the acceptance by XYST is not absolute, no contract of sale existed between the parties.
It claims that the terms, conditions, and amendments, which XYST tried to impose, were proof of qualified
acceptance. Supreme Court found the petition of XYST bereft of merit

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 45

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 46

ROMAN VS.
GRIMALT
 G.R.NO
. 2412 !
APRIL 11, 1906!

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FACTS:
Pedro Roman, the owner of the schooner Sta. Maria and Andres Grimalt had been negotiating for several
days for the purchase of the schooner. They agreed upon the sale of the vessel for the sum of P1500 payable
on three installments, provided the title papers to the vessel were in proper form. The sale was not perfected
and the purchaser did not consent to the execution of the deed of transfer for the reason that the title of the
vessel was in the name of one Paulina Giron and not in the name of Pedro Roman. Roman promised
however, to perfect his title to the vessel but he failed to do so. The vessel was sunk in the bay in the
afternoon of June 25, 1904 during a severe storm and before the owner had complied with the condition
exacted by the proposed purchaser. On the 30th of June 1904, plaintiff demanded for the payment of the
purchase price of the vessel in the manner stipulated and defendant failed to pay.

!
ISSUE:
Whether there was a perfected contract of sale and who will bear the loss.

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HELD:
There was no perfected contract of sale because the purchase of which had not been concluded. The
conversations had between the parties and the letter written by defendant to plaintiff did not establish a
contract sufficient in itself to create reciprocal rights between the parties.
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 the 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 contract of sale.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 47

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CIRILO PAREDES V.
ESPINO
 GR NO. L-23351!
MARCH 13, 1969!

FACTS:
Appellant Cirilo Paredes had filed an action to compel defendant Jose Espino to execute a deed of sale and
to pay for damages. The complaint alleged that the defendant "had entered into a sale" to plaintiff of Lot.
No. 67 of the Puerto Princesa Cadastr at P4.00 per square meter and that the deal had been closed by letter
and telegram but the actual execution of the deed of sale and payment of the price were deferred to the
arrival of defendant of Puerto Princesa; that the defendant upon arrival had refused to execute the deed of
sale although plaintiff was able and willing to to lay the price, and continued to refuse despite written
demands of plaintiff; that as a result, plaintiff had lost expected profits from a resale of the property, and
caused the plaintiff mental anguish and suffering, for which reason the complaint prayed for specific
performance and damages. Defendant filed a motion to dismiss upon the ground that the complaint stated
no cause of action andthe plaintiff's claim upon which the action was founded unenforceable under the
statute of frauds

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ISSUE:
Whether there is a perfected contract of sale through letter or telegram

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HELD:
The letter and telegram constitute an adequate memorandum of the transaction. They are signed by the
defendant and all essential terms of the contract are present and they satisfy the requirements of the statute
of frauds.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 48

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REGINA P. DIZON vs. COURT OF APPEALS and OVERLAND EXPRESS LINES,
INC., !
G.R. No. 122544!
January 28, 2003!
FACTS:
Overland Express Lines, Inc. (lessee) entered into a Contract of Lease with Option to Buy with Fidelina
Dizon (lessors) involving a 1,755.80 square meter parcel of land situated in Quezon City.
The term of the lease was for one (1) year. During this period, private respondent was granted an option to
purchase for the amount of P3,000.00 per square meter.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 49

For failure of Overland Express Lines, Inc to pay the increased rental of P8,000.00 per month effective June
1976, petitioners filed an action for ejectment.
Metropolitan Trial Court of Quezon City rendered judgment ordering Overland Express Lines, Inc. to
vacate the leased premises and to pay the sum of P624,000.00 representing rentals in arrears and/or as
damages.
Overland Express Lines Inc. contends that the payment of P300,000.00 on June 20, 1975 as partial payment
for the leased property, which petitioners accepted (through Alice A. Dizon/ not a co-owner/ not a party to
the contract) and for which an official receipt was issued, was the operative act that gave rise to a perfected
contract of sale, and that for failure of petitioners to deny receipt thereof, private respondent can therefore
assume that Alice A. Dizon, acting as agent of petitioners, was authorized by them to receive the money in
their behalf.
Overland Express Lines filed before RTC of Quezon City an action for Specific Performance and Fixing of
Period for Obligation. It is sought to compel the execution of a deed of sale pursuant to the option to
purchase and the receipt of the partial payment, and to fix the period to pay the balance.

ISSUE:
Whether or not there is a meeting of the minds between the parties?

HELD:
No. There is no meeting of the mind. First of all, Alice Dizon was not even a co-owner of the property.
Neither was she empowered by the co-owners to act on their behalf.
The acceptance of the amount of P300,000.00, purportedly as partial payment of the purchase price of the
land, was an act integral to the sale of the land. As a matter of fact, Overland Express Lines Inc. invokes
such receipt of payment as giving rise to a perfected contract of sale.
In this connection, Article 1874 of the Civil Code is explicit that:
"When a sale of a piece of land or any interest therein is through an agent, the authority of the latter shall
be in writing; otherwise, the sale shall be void."
That petitioners cannot be deemed to have received partial payment of the supposed purchase price for the
land through Alice Dizon. It cannot even be said that Alice Dizon's acceptance of the money bound at least
the share of Fidela Dizon, in the absence of a written power of attorney from the latter. It should be borne
in mind that the Receipt dated June 20, 1975, while made out in the name of Fidela Dizon, was signed by
Alice Dizon alone.

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Moreover, there could not have been a perfected contract of sale. As we held in our Decision dated January
28, 1999, the implied renewal of the contract of lease between the parties affected only those terms and
conditions which are germane to the lessee's right of continued enjoyment of the property. The option to
purchase afforded private respondent expired after the one-year period granted in the contract. Otherwise
stated, the implied renewal of the lease did not include the option to purchase.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 50

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! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 51

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TOYOTA SHAW, INC. VS.
CA
 G.R. NO. L-
116650
 MAY 23, 1995!

FACTS: !
Luna L. Sosa wanted to purchase a Toyota Lite Ace. It was difficult to find a dealer with an available unit
for sale, but upon contacting Toyota Shaw, he was told that there was an available unit. Sosa, and his son,
Gilbert went to the Toyota office at Shaw Boulevard, Pasig, Metro Manila and met Popong Bernardo, who
was a sales representative of Toyota. Sosa informed Bernardo that the needed the Lite Ace not later than
June 17, 1989 because it is to be used by his family, and a balikbayan guest, in going to Marinduque where
he would be celebrating his birthday on the 19th of June. He also told Bernardo that if he won’t be arriving
in his hometown with a new car, he will become a “laughing stock.” Bernardo assured Sosa that a unit will
already be available for pick up on June 17, 1989, at 10:00 AM. Bernardo then signed a document which
had the heading “Agreements Between Mr. Sosa and Popong Bernardo of Toyota Shaw, Inc.” Sosa and his
son delivered the down payment of P100,000 the next day, and Bernardo accomplished a printed Vehicle
Sales Proposal No. 928 on which Gilbert signed. Bernardo, on June 17, called Gilbert to inform him that
the vehicle was not available for pick up at 10:00 AM, but instead, it will be ready by 2:00 PM. Sosa and
Gilbert met Bernardo, and was informed that the Lite Ace was being readied for delivery. Subsequently,
Sosa was also informed that B.A. Finance Corp. denied to finance his credit financing application. Sosa,
upon it being clear that the Lite Ace was not going to be delivered to him, demanded for the refund of his
down payment. Toyota refused to accede to Sosa’s demand, and further alleged that they did not enter into

a contract of sale with ! Sosa.


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I SSUE:
Whether or not the executed VSP, which was signed by the Toyota’s sales representative, a perfected

contract of sale binding upon the parties. !


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H ELD:
No. It is not a contract of sale. The provision on the down payment of P100,000 made no specific reference
to a sale of a vehicle. If it was intended for a contract of sale, it could only refer to a sale on installment
basis as the VSP confirmed. But, nothing was mentioned about the full purchase price and the manner the
installments are to be paid. A definite agreement on the manner of payment of the price is an essential
element in the formation of a binding and enforceable contract of sale. Moreover, there was an absence of
the meeting of the minds between Sosa and Toyota, and Sosa did not even sign it. Futhermore, Sosa was

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 52

not dealing with Toyota but with Bernardo and that the latter did not misrepresent that he had the authority
to sell a Toyota Vehicle. The VSP was a mere proposal and it created no demandable right in favor of Sosa
for the delivery of the vehicle to him.

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VIRGINIA PAGCO & GAUDENCIO PAGUIO V. CA!
GR NO L-109236!

! MARCH 18, 1994!

FACTS:
Peter Quimson, private respondent, is the owner of a parcel of land with an area of 1,000 sq. m. located in
Singalong,Manila which he acquired through a public auction. Upon acquisition of the property, 11
occupants, petitioners included among others, were in possession of the property with their respective
residential houses built thereon. Quimson earlier negotiated with the petitioners for the latter to buy the
portions they occupy. But petitioners backed off. Quimson subsequently informed the lessees to pay their
back rentals and to remove their houses because he needed the family property for his own use. Petitioners
did not follow through hence Quimson filed a complaint for ejectment against petitioners. Petitioners and
other defendants filed their answer and denied having such negotiations with the property.
The MTC dismissed the case on the ground that there was a perfected sale over the property and that the
MTC had no jurisdiction over it as it was governed by the Law on Sales. Quimson appeald the MTC’s
decision to the RTC which reversed the MTC’s decision. Petitioners thereafter brought an appeal to the
Court of Appeals which found that there was no contract of sale. It was found that Quimson agreed to sell

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 53

the land for 970 Php per square meter but the petitioners agreed only to pay 850 Php. Furthermore,
defendants and petitioners never alleged that there was a perfected contract of sale.

ISSUE:
Whether or not there exists a contract of sale

HELD:
NO. THERE IS NO CONTRACT OF SALE.
Art. 1475 of the Civil Code provides that “A contract of sale is perfected from the time there exists and
agreement upon the thing which is the object of the contract and upon the price.
There was no meeting of minds between the parties regarding the offer by private respondent to sell his
property to the occupants. Petitioner’s refusal to continue negotiation with Quimson has no other meaning
except that there was a negotiation regarding the offer to sell, but the negotiation fell through because of
their refusal to talk further. It can therefore be implied that there was subsequently a mutual withdrawal or
“mutual backing out” from the contract.
A contract of sale is a consensual contract and is henceforth perfected by mere consent. In this case, there
was no meeting of minds. Thus, no contract of sale exists.

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FACTS:

RAET VS. CA !
G.R. NO. 128016!
SEPTEMBER 17, 1998!
In 1984, the petitioners, spouses Cesar and Elvira Raet and spouses Rex and Edna Mitra negotiated with
Amparo Gatus concerning the possibility of buying the rights of the latter to certain units at the Las Villas
de Sto Nino Subdivision in Meycauayan, Bulacan. Such subdivision was developed by respondent, PhilVille

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 54

Development and Housing Corporation (PVDHC) primarily for parties qualified to obtain loans from the
Government Service Insurance System (GSIS). The spouses Raet and the spouses Mitra paid Gatus the total
amount of P40,000 and P35,000, respectively, and Gatus, as an agent of PVDHC, issued receipts in her own
name.
Since they were not GSIS members, they looked for members who could act as accommodation parties by
allowing them to use their policies. The spouses Raet presented Ernesto Casidsid’s GSIS policy, and spouses
Mitra used Edna Lim’s.
The spouses Raet paid P32,653 while the spouses Mitra paid P27,000 to respondent PVDHC on
understanding that such amounts will be credited to purchase prices of the units which will be determined
after the approval of their loan applications with the GSIS. The spouses Raet and Mitra were given units to
occupy for the meantime. Subsequently, GSIS disapproved the loan applications of the spouses and were
advised by PVDHC to seek other sources of financing while being allowed to remain in the premises. Due
to the failure of the petitioners to raise money, PVDHC filed ejectment cases against them. The spouses
Mitra and Raet also filed complaints against PVDHC and Amparo Gatus, for the recovery of the
supplemental costs they had paid and for specific performance and damages.

ISSUE:
Whether or not there were perfected contracts of sale between petitioners and private respondent PVDHC
over the subject units

HELD:
No.The parties had not reached any agreement with regard to the sale of the units in question. The parties’
transactions lacked the requisites essential for the perfection of contracts. The records do not show the total
costs of the units and the payment schemes therefor. The figures referred to by Petitioners were mere
estimates given by Gatus.
Furthermore, petitioners dealt with Gatus, who was not the agent of respomdent PVDHC. PVDHC also had
no knowledge of the figures Gatus gave to petitioners as estimates, so it could not have ratified the same at
the time the latter applied for the purchase of the units. At any rate, PVDHC was to enter into agreements
with petitioners only upon the approval of the GSIS loans which was denied.
Moreover, no written deed of conveyance has been executed by respondent in favor of petitioners involving
the units in question. If petitioners and respondent entered into contracts involving the units, it is strange
that contracts of such importance have not been reduced to writing.
The Court found that there was no contract of sale perfected between the private parties over the said
property, there being no meeting of the minds as to terms, especially on the price thereof. As it were,
petitioners and respondents have not hurdled the negotiation phase of a contract, which is the period from
the time the prospective contracting parties indicate interest on the contract to the time the contract comes
into existence - the perfection stage - upon the concurrence of the essential elements thereof.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 55

PEOPLE’S HOMESITE & HOUSING CORP. VS. CA


GR NO L-61623
DECEMBER 26, 1984 !
FACTS:
February 1960 - The PHHC board of directors passed a resolution wherein it stated "that subject to the
approval of the Quezon City Council of the above-mentioned Consolidation Subdivision Plan, Lot 4.
Containing 4,182.2 square meters be, as it is hereby awarded to Spouses Rizalino Mendoza and Adelaida
Mendoza, at a price of twenty-one pesos (P21.00) per square meter" and "that this award shall be subject to
the approval of the OEC (PHHC) Valuation Committee and higher authorities".
August 1961 - The city council disapproved the proposed consolidation subdivision plan. The said spouses
were advised by registered mail of the disapproval of the plan.
April 1965 - The PHHC board of directors passed a resolution recalling all awards of lots to persons who
failed to pay the deposit or down payment for the lots awarded to them. The Mendozas never paid the price
of the lot nor made the 20% initial deposit.
October 1965 - The PHHC board of directors passed a resolution, withdrawing the tentative award of Lot 4
to the Mendoza -spouses and re-awarding said lot jointly and in equal shares to Miguela Sto. Domingo,
Enrique Esteban, Virgilio Pinzon, Leonardo Redublo and Jose Fernandez, subject to existing PHHC rules
and regulations.
March 1966 - The Mendoza spouses asked for reconsideration of the withdrawal of the previous award to
them of Lot 4 and for the cancellation of the re-award of said lot to Sto. Domingo and four others. Before
the request could be acted upon, the spouses filed the instant action for specific performance and damages.
The trial court sustained the withdrawal of the award. The Mendozas appealed. The Appellate Court
reversed that decision and declared void the re-award of Lot 4 and the deeds of sale and directed the PHHC
to sell to the Mendozas.

ISSUE:
Whether or not there has been a perfected contract of sale between PHHC and Spouses Mendoza.

HELD:
NO. We hold that there was no perfected sale of Lot 4. It was conditionally or contingently awarded to the
Mendozas subject to the approval by the city council of the proposed consolidation subdivision plan and
the approval of the award by the valuation committee and higher authorities.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 56

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"In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already
acquired, shall depend upon the happening of the event which constitutes the condition. (Art. 1181, Civil
Code). "The 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." (Art. 1475, Civil Code). Under the facts
of this case, we cannot say there was a meeting of minds on the purchase of Lot 4.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 57

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ARTATES AND POJAS VS URBI ET AL.!
GR NO. L-29421

JANUARY 30, 1971!

FACTS

: !
On September 1952, a homestead was granted and registered under the names of spouses Artates and Pojas.
On Oct. 1955 however, the court ordered the execution sale of the said homestead in favor of Daniel Urbi
for the satisfaction of Artates’ indebtedness for the physical injuries that he inflicted upon Urbi. Urbi
subsequently sold the homestead to a Crisanto Soliven, a minor, hence, the spouses Artates and Pojas sought
annulment of the execution of the homestead and its subsequent sale on the ground that it violated the Public

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 58

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Land Law exempting said property from excution for any debt contracted within 5 years from the issuance

of the patent and that the contract of sale between Urbi and Soliven is null and void. !! ISSUE:
! Whether or not there is a perfected contract of sale between Urbi and
Soliven.

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HELD:

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No, there was no perfected contract of sale for the reason that the sale is null and void being in violation of
Sec. 118 of the Public Land Law. Under said provision, for a period of 5 years from the date of the
government grant, lands acquired by free or homestead patent shall not only be incapable of being
encumbered or alienated except in favor of the government itself or any of its institutions, but also, they
shall not be liable to the satisfaction of any debt contracted within the said period. This provision is
mandatory and intended to preserve and keep for the homesteader or his family, the land given to him
gratuitously by the State, so that being a property owner, he may become and remain a contented and useful
member of our society. In the case at bar, the land in question was issued on Sept. 1952 to Artates spouses
and was sold at public auction on March 1956 which in no doubt, is within the 5 year prohibition period.
Furthermore, the sale is simulated and is only intended to place the property beyond the reach of the
judgment debtor. The execution sale being null and void, the contract of sale never perfected and the
possession of the land should be returned to the owners without prejudice to their continuing obligation to
pay the judgment debt and expenses connected therewith.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 59

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CAVITE DEVELOPMENT BANK AND FAR EAST BANK AND TRUST COMPANY!
VS. SPOUSES CYRUS LIM!
GR NO. 131679!

! FEBRUARY 1, 2000!

FACTS:
On June 15, 1983, Rodolfo Guansing obtained a loan in the amount of P90,000.00 from Cavite Development
Bank (CDB) to secure which he mortgaged a parcel of land situated at No. 63 Calavite Street, La Loma,
Quezon City and covered by TCT No. 300809 registered in his name. Guansing defaulted and CDB
foreclosed the mortgage. A foreclosure sale was held and the mortgaged property was sold to CDB as the
highest bidder. Guansing failed to redeem the property. Thus, CDB consolidated title to the property in its
name.
On June 16, 1988, private respondent Lolita Chan Lim offered to purchase the property from CDB. She
subsequently paid CDB P30,000.00 as Option Money, for which she was issued an official receipt.
However, after some time following up the sale, Lim discovered that the subject property was originally
registered in the name of Perfecto Guansing, father of mortgagor Rodolfo Guansing, who instituted a civil
case for the cancellation of his sons title in the RTC. To which, the RTC rendered judgment in his (Perfecto)
favor and that such has become final and executory.
Thus, due to what she considered a serious misrepresentation by CDB on their ability to sell the subject
property, Lim with her spouse filed an action for specific performance and damages against CDB.The trial
court rendered judgment favoring the Lims and ruling there was a perfected contract of sale contrary to
CDB’s contention that the written offer to purchase and the payment of P30,000.00 were merely pre-
conditions to the sale and still subject to the approval of FEBTC and that the letter-offer clearly states that
the sum of P30,000.00 was given as option money, not as earnest money. On appeal, the appellate court
affirmed in toto the prior decision.

ISSUE:
Whether or not there is a perfected contract of sale when the letter-offer clearly states option money

HELD:
Contracts are not defined by the parties thereto but by principles of law. In determining the nature of a
contract, the courts are not bound by the name or title given to it by the contracting parties. In the case at
bar, the sum of P30,000.00, although denominated as "option money," is actually in the nature of earnest
money or down payment when considered with the other terms of the offer. After the payment of the 10%
option money, the Offer to Purchase provides for the payment only of the balance of the purchase price,
implying that the "option money" forms part of the purchase price. This is precisely the result of paying

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! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 60

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earnest money under Art. 1482 of the Civil Code. It is clear then that the parties in this case actually entered
into a contract of sale, partially consummated as to the payment of the price.
However, considering the ruling on the civil case, it impossible for CDB to perform its obligation as seller
to deliver and transfer ownership of the property. A 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, not requiring that
the seller be the owner of the thing sold at that point in time. But at the time of delivery or consummation
stage of the sale, it is required that the seller be the owner of the thing sold. Otherwise, he will not be able
to comply with his obligation to transfer ownership to the buyer. It is at the consummation stage where the
principle of nemo dat quod non habet applies. In the present case, it is clear that the sellers no longer had

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 61

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any title to the parcels of land at the time of sale. Nemo dat quod non habet or one cannot give what one
does not have.
CDB cannot invoke the defense that it is a mortgagee in good faith because it only applies to private
individuals and not to banking institutions with an extraordinary diligence requirement. Considering CDB’s
negligence it is therefore liable for damages.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 62

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CONCHITA NOOL VS. COURT OF APPEALS!
G.R. NO. 116635! JULY 24, 1997! !!
FACTS:
Plaintiff bought two parcels of land from Conchita’s brothers. They obtained a loan from the Iligan Branch
of the Development Bank of the Philippines secured by a real estate mortgage on said parcels of land.
Manuel S. Mallorca, authorized officer of DBP, certified that the one-year redemption period was from
March 16, 1982 up to March 15, 1983 and that the mortgagors' right of redemption was not exercised within
this period. Notwithstanding, plaintiffs contacted defendant Anacleto Nool for the latter to redeem the
foreclosed properties of DBP. Defendant Agreed to buy from plaintiff the land subject to an agreement
whereby defendants agreed to return to plaintiffs the lands in question, at anytime the latter have the
necessary amount.
Plaintiffs asked the defendants to return the same but despite the intervention of the Barangay Captain of
their place, defendants refused to return the said parcels of land to plaintiffs; thereby impelling them
(plaintiffs) to come to court for relief.
Defendant theorized that they acquired the lands in question from the Development Bank of the Philippines,
through negotiated sale, and were misled by plaintiffs when defendant Anacleto Nool signed the private
writing, agreeing to return subject lands when plaintiffs have the money to redeem the same; defendant

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 63

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Anacleto having been made to believe, then, that his sister, Conchita, still had the right to redeem the said
properties.

ISSUES:
1. Whether or not the contract of sale between the plaintiff and defendant is valid;
2. Whether or not the auxiliary contract of repurchase between the plaintiff and defendant is valid.

HELD:
1. No. In the present case, it is clear that the sellers can no longer deliver the object of the sale to the
buyers, as the buyers themselves have already acquired title and delivery thereof from the rightful owner,
the DBP. Thus, such contract may be deemed to be inoperative and may thus fall, by analogy, under item
no. 5 of Article 1409 of the Civil Code: "Those which contemplate an impossible service." Article 1459 of
the Civil Code provides that "the vendor must have a right to transfer the ownership thereof [object of the
sale] at the time it is delivered." Here, delivery of ownership is no longer possible. It has become impossible.
2. No. Article 1505 of the Civil Code provides that "where goods are sold by a person who is not the
owner thereof, and who does not sell them under authority or with consent of the owner, the buyer acquires
no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded
from denying the seller's authority to sell." Here, there is no allegation at all that petitioners were authorized
by DBP to sell the property to the private respondents. Jurisprudence, on the other hand, teaches us that "a
person can sell only what he owns or is authorized to sell; the buyer can as a consequence acquire no more
than what the seller can legally transfer." No one can give what he does not have — nono dat quod non
habet. On the other hand, the sale in this case presupposes that petitioners could repurchase the property
that they "sold" to private respondents. As petitioners "sold" nothing, it follows that they can also
"repurchase" nothing. Nothing sold, nothing to repurchase. In this light, the contract of repurchase is also
inoperative — and by the same analogy, void.

!
HEIRS OF SEVERINA SAN MIGUEL VS. THE HONORABLE COURT OF
APPEALS! G.R. NO. 136054!

! SEPTEMBER 5, 2001!

FACTS:
This case involves a parcel of land originally claimed by Severina San Miguel (petitioners predecessor-
ininterest, hereafter, Severina). The land is situated in Panapan, Bacoor, Cavite with an area of six hundred
thirty two square meters (632 sq. m.), more or less.Without Severinas knowledge, Dominador managed to
cause the subdivision of the land into three (3) lots.
On September 25, 1974, Dominador, et al. filed a petition with the Court of First Instance, Cavite, as a land
registration court, to issue title over Lots 1 and 2 of LRC Psu-1313, in their names. Land Registration
Commission (hereafter LRC) rendered a decision directing the issuance of Original Certificate of Title No.
0-1816 in the names of Dominador, et al.
On or about August 22, 1978, Severina filed with the Court of First Instance of Cavite a petition for review
of the decision alleging that the land registration proceedings were fraudulently concealed by Dominador
from her. The court resolved to set aside the decision of July 19, 1977, and declared Original Certificate of

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! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 64

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Title No. 0-1816 as null and void. Later, the Register of Deeds of Cavite issued Transfer Certificate of Title
No. T-223511 in the names of Severina and her heirs. On February 15, 1990, the trial court issued an order
in favor of Severinas heirs, However, such order remained unsatisfied despite repeated demands.
On August 6, 1993, Severinas heirs, decided not to pursue the writs of possession and demolition and
entered into a compromise with Dominador, et al. According to the compromise, Severinas heirs were to
sell the subject lots to Dominador, et al. for one and a half million pesos (P1.5 M) with the delivery of
Transfer Certificate of Title No. T-223511 (hereafter, the certificate of title) conditioned upon the purchase
of another lot which was not yet titled at an additional sum of three hundred thousand pesos (P300,000.00).
On the same day, pursuant to the kasunduan, Severinas heirs and Dominador, et al. executed a deed of sale
designated as kasulatan sa bilihan ng lupa.Therafter, Dominador, et al. filed with the trial court a motion
praying that Severinas heirs deliver the owners copy of the certificate of title to them.
In time, Severinas heirs opposed the motion stressing that under the kasunduan, the certificate of title would
only be surrendered upon Dominador, et al. payment of the amount of three hundred thousand pesos within
two months from August 6, 1993, which was not complied with.
Dominador, et al. admitted non-payment of three hundred thousand pesos for the reason that Severinas
heirs have not presented any proof of ownership over the untitled parcel of land covered by LRC- Psu-1312.
Apparently, the parcel of land is declared in the name of a third party, a certain Emiliano Eugenio.
Severinas heirs countered that the arguments of Dominador, et al. were untenable in light of the provision
in the kasunduan where Dominador, et al. admitted their ownership over the parcel of land, hence dispensing
with the requirement that they produce actual proof of title over it. Specifically, they called the trial courts
attention to the following statement in the kasunduan.

ISSUE:
Whether or not Severinas heirs submit that the Court of Appeals erred and committed grave abuse of
discretion: First, when it held that the kasunduan had no effect on the kasulatan sa bilihan ng lupa. Second,
when it ordered them to surrender the certificate of title to Dominador, et al., despite non-compliance with

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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their prior obligations stipulated under the kasunduan. Third, when it did not find that the kasunduan was
null and void for having been entered into by Dominador, et al. fraudulently and in bad faith.

HELD:
The petition is without merit.
Severinas heirs anchor their claim on the kasunduan, stressing on their freedom to stipulate and the binding
effect of contracts. This argument is misplaced. The Civil Code provides:
Article 1306. The contracting parties may establish such stipulations, clauses, terms and conditions as they
may deem convenient provided they are not contrary to law, morals, good customs, public order or public
policy.
It is basic that the law is deemed written into every contract. Although a contract is the law between the
parties, the provisions of positive law which regulate contracts are deemed written therein and shall limit
and govern the relations between the parties. The Civil Code provisions on sales state:
Article 1458. By the contract of sale one of the contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and the other to pay a price certain in money or its
equivalent.
Article 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at
the time it is delivered.
Article 1495. The vendor is bound to transfer the ownership of and deliver, as well as warrant the thing
which is the object of sale.
True, in contracts of sale, the vendor need not possess title to the thing sold at the perfection of the contract.
However, the vendor must possess title and must be able to transfer title at the time of delivery. In a contract
of sale, title only passes to the vendee upon full payment of the stipulated consideration, or upon delivery
of the thing sold.
Under the facts of the case, Severinas heirs are not in a position to transfer title. Without passing on the
question of who actually owned the land covered by LRC Psu -1312, we note that there is no proof of
ownership in favor of Severinas heirs. In fact, it is a certain Emiliano Eugenio, who holds a tax declaration
over the said land in his name. Though tax declarations do not prove ownership of the property of the
declarant, tax declarations and receipts can be strong evidence of ownership of land when accompanied by
possession for a period sufficient for prescription. Severinas heirs have nothing to counter this document.
Therefore, to insist that Dominador, et al. pay the price under such circumstances would result in Severinas
heirs unjust enrichment. Basic is the principle in law, Niguno non deue enriquecerse tortizamente condano
de otro. The essence of a sale is the transfer of title or an agreement to transfer it for a price actually paid or
promised. In Nool v. Court of Appeals, we held that if the sellers cannot deliver the object of the sale to
the buyers, such contract may be deemed to be inoperative. By analogy, such a contract may fall under
Article 1405, No. 5 of the Civil Code, to wit:Article 1405. The following contracts are inexistent and void
from the beginning: xxx (5) Those which contemplate an impossible service.
Severinas heirs insist that delivery of the certificate of title is predicated on a condition - payment of three
hundred thousand pesos to cover the sale of Lot 3 of LRO Psu 1312. We find this argument not meritorious.
The condition cannot be honored for reasons afore-discussed. Article 1183 of the Civil Code provides that:
Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 66

!
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annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not
affected by the impossible or unlawful condition shall be valid. Xxx

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Hence, the non-payment of the three hundred thousand pesos (P300,000.00) is not a valid justification for
refusal to deliver the certificate of title.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 67

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FACTS:

CLEMENO ET. AL. VS.


LOBREGAT!
GR NO 137845 !
SEPTEMBER 9, 2004!
June 1987 - The respondent and petitioner Angel Clemeno, Jr., relatives by consanguinity, entered into a
verbal contract of sale over a property covered by TCT No. 277244 in the amount of Ph270, 000.00.
Respondent made a down payment of P25,000.00 for which petitioner Clemeno, Jr. issued a receipt. He
then made a partial payment of P5,000.00 to petitioner Clemeno, Jr. on July 8, 1987, and another partial
payment of P50,000.00 on February 9, 1988. The respondent paid the realty taxes due on the property for
1987 and 1988.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 68

!
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In 1992, Respondent demanded that petitioner Clemeno, Jr. executed a deed of absolute sale over the
property and deliver the title thereto in his name. Petitioners aver that they never sold the property to the
respondent; that they merely tolerated the respondent’s possession of the property for one year or until 1987,
after which the latter offered to buy the property, which offer was rejected; and that they instead consented
to lease the property to the respondent. The petitioners also declared that even if the respondent wanted to
buy the property, the same was unenforceable as there was no document executed by them to evince the
sale. They posited that the contract between the parties was unenforceable under Article 1403(2) of the New
Civil Code.

ISSUES:
Whether or not the contract is unenforceable; and whether or not the contract is a contract to sell.

HELD:
1. The contract of sale of the parties is enforceable notwithstanding the fact that it was an oral
agreement and not reduced in writing as required by Article 1403(2) of the New Civil Code. This is so
because the provision applies only to executory, and not to completed, executed or partially executed
contracts. In this case, the contract of sale had been partially executed by the parties, with the transfer of
the possession of the property to the respondent and the partial payments made by the latter of the purchase
price thereof.
2. The contract entered into by the parties was not a contract to sell because there was no agreement
for the petitioners to retain ownership over the property until after the respondent shall have paid the
purchase price in full, nor an agreement reserving to the petitioners the right to unilaterally resolve the
contract upon the buyer’s failure to pay within a fixed period. Unlike in a contract of sale, the payment of
the price is a positive suspensive condition in a contract to sell, failure of which is not a breach but an event
that prevents the obligation of the vendor to convey the title from becoming effective.
The evidence shows that upon the payment made by the respondent of the amount of P27,000.00 on June
4, 1987, the petitioners vacated their house and delivered possession thereof to the respondent. Conformably
to Article 1477 of the New Civil Code, the ownership of the property was transferred to the respondent
upon such delivery. The petitioners cannot re-acquire ownership and recover possession thereof unless the
contract is rescinded in accordance with law.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 69

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ATKINS KRILL & CO. VS CUA HIAN TEK!
102 PHIL 984!
JANUARY 1958!

!
FACTS:
Atkins Kroll & Co. (Atkins) sent a letter on September 13, 1951 to respondent B. Cu Hian Tek (Hian Tek)
offering 400 cartons of Luneta brand Sardines in Tomato Sauce 48 / 15-oz. Ovals at $8.25 per carton, 300
cartons of Luneta brand Sardines Natural 48/15 oz. talls at $6.25 per carton, and 300 cartons of Luneta
brand Sardines in Tomato Sauce 100/5-oz. talls at $7.48 per carton, with all of the offers subject to reply by
September 23, 1951. Hian Tek unconditionally accepted the said offer through a letter delivered on
September 21, 1951, but Atkins failed to deliver the commodities due to the shortage of catch of sardines
by the packers in California.
An action for damages was filed by Hian Tek in the CFI of Manila which granted the same in his favor.
Upon Atkins’ appeal, the Court of Appeals affirmed said decision but reduced the damages to P3,240.15
representing unrealized profits. Atkins herein contends that there was no such contract of sale but only an
option to buy, which was not enforceable for lack of consideration because it is provided under the 2nd
paragraph of Article 1479 of the New Civil Code that "an accepted unilatateral promise to buy or to sell a
determinate thing for a price certain is binding upon the promisor if the promise is supported by a
consideration distinct from the price.” Atkins also insisted that the offer was a mere offer of option, because
the "firm offer" was a continuing offer to sell until September 23.

ISSUE:
Whether or not there was a contract of sale between the parties or only a unilateral promise to buy

HELD:
Yes. The Court held that there was a contract of sale between the parties because a bilateral contract to sell
and to buy was created upon respondent’s acceptance.
If Hian Tek backed out after accepting, by refusing to get the sardines or to pay for their price, he could also
be sued. But his letter-reply to Atkins indicated that he accepted "the firm offer for the sale" and that "the
undersigned buyer has immediately filed an application for import license.” After accepting the promise
and before he exercises his option, the holder of the option is not bound to buy.
In this case at bar, however, upon respondent’s acceptance of herein petitioner's offer, a bilateral promise
to sell and to buy ensued, and the respondent had immediately assumed the obligations of a purchaser.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 70

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DEVELOPMENT BANK OF THE PHILIPPINES V. COURT OF APPEALS!
G.R. NO. 125838!

! JUNE 10, 2003!

FACTS:
Private respondent Emerald Resort Hotel Corporation (ERHC) obtained a loan from petitioner Development
Bank of the Philippines (BDP). To secure the loan, ERHC mortgaged its personal and real properties to
DBP.
On 5 June 1986, alleging that ERHC failed to pay its loan, DBP filed with the Office of the Sheriff,
Regional Trial Court of Iriga City, an Application for Extra-judicial Foreclosure of Real Estate and
Chattel Mortgages.
Sheriffs issued the required notices of public auction sale of the personal and real properties. However, they
failed to execute the corresponding certificates of posting the notices.
The office of the Sheriff scheduled on 12 August 1986 the public auction sale of the real properties. The
first scheduled public auction was published. However, the Office of the Sheriff postponed the auction sale
on 12 August 1986 to 11 September 1986 at the request of ERHC. DBP did not republish the notice of the
rescheduled auction sale because DBP and ERHC signed an agreement to postpone the 12 August 1986
auction sale.

ISSUE:
Whether or not the extra-judicial foreclosure of chattel and real mortgage are valid.

HELD:
Valid as to the chattel mortgage. Void as to the real estate mortgage.
There is no question that DBP published the notice of auction sale scheduled on 12 August 1986. However,
no auction sale took place on 12 August 1986 because DBP, at the instance of ERC, agreed to postpone the
same to 11 September 1986.
Publication, therefore, is required to give the foreclosure sale a reasonably wide publicity such that those
interested might attend the public sale. To allow the parties to waive this jurisdictional requirement, would
result in converting into a private sale what ought to be a public auction.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 71

DBP, however, complied with the mandatory posting of the notices of the auction sale of the personal
properties. Under the Chattel Mortgage Law, the only requirement is posting of the notice of auction sale.
There was no postponement of the auction sale of the personal properties and the foreclosure took place as
scheduled. Thus, the extrajudicial foreclosure of the chattel mortgage in the instant case suffers from no
procedural infirmity.

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PROVINCE OF CEBU VS HEIRS OF RUFINA MORALES!
GR NO. 170115!

FEBRUARY 19, 2008! !


FACTS:

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On September 27, 1961, petitioner Province of Cebu leased in favor of Rufina Morales a 210-square meter
lot which formed part of Lot No. 646-A of the Banilad Estate. Petitioner donated several parcels of land to
the City of Cebu. Among those donated was Lot No. 646-A which the City of Cebu divided into sub-lots.
The area occupied by Morales was thereafter denominated as Lot No. 646-A-3, for which Transfer

Certificate of Title (TCT) No. 30883 was issued in favor of the City of Cebu. !
On July 19, 1965, the city sold Lot No. 646-A-3 as well as the other donated lots at public auction. The
highest bidder for Lot No. 646-A-3 was Hever Bascon but Morales was allowed to match the highest bid
since she had a preferential right to the lot as actual occupant thereof. Morales thus paid the required deposit

and partial payment for the lot. !


Petitioner filed an action for reversion of donation against the City of Cebu. On May 7, 1974, petitioner and
the City of Cebu entered into a compromise agreement which the court approved on July 17, 1974.The
agreement provided for the return of the donated lots to petitioner except those that have already been
utilized by the City of Cebu. Pursuant thereto, Lot No. 646-A-3 was returned to petitioner and registered in
its name under TCT No. 104310. Morales died on February 20, 1969 during the pendency of Civil Case
No. 238-BC.Apart from the deposit and down payment, she was not able to make any other payments on

the balance of the purchase price for the lot. !

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 72

respondents filed an action for specific performance and reconveyance of property against petitioner, They
also consigned with the court the amount of P13,450.00 representing the balance of the purchase price

which petitioner allegedly refused to accept. !


Respondents averred that the award at public auction of the lot to Morales was a valid and binding contract
entered into by the City of Cebu and that the lot was inadvertently returned to petitioner under the
compromise judgment. The trail court rendered a decision that the Court is convinced that there was already
a consummated sale between the City of Cebu and Rufina Morales. There was the offer to sell in that public
auction sale. It was accepted by Rufina Morales with her bid and was granted the award for which she paid

the agreed downpayment. !


!
I SSUE:

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Whether or not the sale of the lot in public action valid !
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H ELD:
Yes, The appellate court correctly ruled that petitioner, as successor-in- interest of the City of Cebu, is bound
to respect the contract of sale entered into by the latter pertaining to Lot No. 646-A-3. The City of Cebu
was the owner of the lot when it awarded the same to respondents predecessor-in- interest, Morales, who
later became its owner before the same was erroneously returned to petitioner under the compromise
judgment. The award is tantamount to a perfected contract of sale between Morales and the City of Cebu,
while partial payment of the purchase price and actual occupation of the property by Morales and
respondents effectively transferred ownership of the lot to the latter. This is true notwithstanding the failure

of Morales and respondents to pay the balance of the purchase price. !


Petitioner can no longer assail the award of the lot to Morales on the ground that she had no right to match
the highest bid during the public auction. Whether Morales, as actual occupant and/or lessee of the lot,

!!!was qualified and had the right to match the highest bid is a foregone matter that could have been
questioned when the award was made. When the City of Cebu awarded the lot to Morales, it is assumed
that she met all qualifications to match the highest bid. The subject lot was auctioned in 1965 or more than
four decades ago and was never questioned. Thus, it is safe to assume, as the appellate court did, that all

!requirements for a valid public auction sale were complied with.A sale by public auction is perfected
when the auctioneer announces its perfection by the fall of the ham -
mer or in other customary manner. It does not matter that Morales merely matched the bid of the highest
bidder at the said auction sale. The contract of sale was nevertheless perfected as to Morales, since she

!merely stepped into the shoes of the highest bidder.


!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 73

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 75

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HARTFORD BEAUMONT VS. MAURO PRIETO, BENITO LEGARDA, JR., AND
BENITO VALDES AS ADMINISTRATOR OF THE ESTATE OF BENITO LEGARDA,
DECEASED, AND BENITO VALDES,! G.R. NO. L-8988!

! MARCH 30, 1916!

FACTS: !
Negotiations between Borck and Valdes relative to the purchase at first of a part of the Nagtajan Hacienda
situated in the district of Sampaloc of city of Manila belonging to Benito Legarda. Benito Valdes gave Borck
a letter of an option for three months to buy the property. Subsequent to the said date W. Borck addressed
to Benito Valdes several letters relative to the purchase and sale of the hacienda and as he did not obtain
what he expected or believe he was entitled to obtain from Valdes, he filed the complaint that originated
these proceedings. The defendant Benito Valdez gave to the plaintiff the document written and signed by
him stating that on January 19, 1912, while the offer or option mentioned in said document still stood, the
plaintiff in writing accepted the terms of said offer and requested Valdes to be allowed to inspect the
property, titles and other documents pertaining to the property and offered to pay to the defendant
immediately and in cash as soon as a reasonable examination could be made of said property titles and other
documents. It was also alleged that in spite of the frequent demands made by the plaintiff, the defendants
had persistently refused to deliver to him the property titles and other documents relative to said property
and to execute any instrument of conveyance thereof in his favor and that the plaintiff, on account of said
refusal on the part of the defendant Valdes, based on instructions from the defendant Legarda had suffered

!
damages. !

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I SSUE:

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 76

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Whether the agreement between the parties constitutes a mere offer to sell or an actual contract of option !

HELD: !
The plaintiff Borck accepted the offer of sale made to him, or the option of purchase given him in document
Exhibit E by the defendant Valdes, of the Nagtajan Hacienda, for the assessed valuation of the same, but his
acceptance was not in accordance with the condition with regard to the payment of the price of the property.
The plaintiff Borck made the offer to pay the said price, in the first of them, within the period of five months
from December 14, 1911; in the second, within the period of three months from the same date, and, finally,
in the other two documents, within an indefinite period which could as well be ten days as twenty or thirty
or more, counting from the date when the muniments of title relative to the said hacienda should have been
placed at his disposal to be inspected and he should have found them satisfactory and, in consequence

thereof, the deed of conveyance should have been executed in his favor by the defendant Valdes. !
There was no concurrence of the offer and the acceptance as to one of the conditions related to the cause of
the contract, to wit, the form in which the payment should be made. The expression of Borck's will was not
in accordance with all the terms of Valdes' proposal, or, what amounts to the same thing, the latter's promise
was not accepted by the former.
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FLORENCIA CRONICO VS. J. M. TUASON & CO., INC., AND CLAUDIO R.
RAMIREZ! G.R. NO. L-35272! AUGUST 26, 1977!

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 77

! !
FACTS:

!
Appellant J. M. Tuason & Co. Inc. was the registered owner of Lot No. 22, Block 461, Sta. Mesa Heights
Subdivision. Plaintiff Florencia Cronico offered to buy the lot from the appellant company with the help of
Mary E. Venturanza. In the first week of March 1962, defendant-appellant Claudio Ramirez also learned
that the lot in question was being sold by the appellant company. On March 20, 1962, the appellant company
sent separate reply letters to prospective buyers including plaintiff Cronies and defendantappellant Ramirez.

!
It so happened that plaintiff Cronico went to the appellant company's office on March 21, 1962, and she was
informed that the reply letter of the appellant company to prospective buyers of the same lot had been mailed.
With this information, plaintiff Cronies and Mary E. Venturanza went to the post office in Manila and she
was able to get the letter at about 3:30 in the afternoon of the same date. After she got the letter, plaintiff
Cronies and Mary E. Venturanza went directly to the office of Gregorio Araneta Inc., Escolta, Manila, and
presented the letter to Benjamin Bautista, Head of the Real Estate Department of said company. He advised
plaintiff Cronies that it is Gregorio Araneta II who would decide whose offer to buy may be accepts after
the appellant company receives the registry return cards attached to the registered letters sent to the offerors.

!
On March 22, 1962, between 10:00 and 11:00 a.m., appellant Ramirez received from the post office at San
Francisco del Monte, Quezon City, the reply letter of the appellant company. On April 2, 1962, the J. M.
Tuason & Co. Inc., and Claudio R. Ramirez executed a contract to sell whereby the appellant company
agreed to sell to appellant Ramirez the lot in question for a total price of P167,896.00 subject to the terms
and conditions therein set forth. On April 28,1962, plaintiff Florencia Cronico lodged in the Court of First
Instance of Rizal (Quezon City Branch) a complaint against the defendants-appellants J. M. Tuason & Co.,
Inc. and Claudio Ramirez. The main purpose of the said suit is to annul and set aside the contract to sell

executed by and between appellant company and appellant Ramirez. !


!
I SSUE:

Whether or not petitioner has better right to purchase the subject property than appellant Ramirez !
HELD: !
No, the act of the petitioner in taking delivery of her letter at the entry section of the Manila post office
without waiting for said letter to be delivered to her in due course of mail is a violation of the "first come
first served" condition imposed by the respondent J. M. Tuason & Co. Inc., acting through Gregorio Araneta
Inc. In order that a unilateral promise may be binding upon the promisor, Article 1479, Civil Code of the
Philippines, requires the concurrence of the condition that the promise be "supported by a consideration
distinct from the price. The petitioner, Florencia Cronies, has not established the existence of a consideration
distinct from the price of the lot in question. The petitioner cannot claim that she had accepted the promise
before it was withdrawn because, as stated above, she had violated the condition of

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 78

"first come, first served”


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SPOUSES TRINIDAD AND EPIFANIO NATINO 

VS.

THE INTERMEDIATE APPELLATE COURT, THE RURAL BANK OF AGUILAR, INC.
AND THE PROVINCIAL SHERIFF EX-OFFICIO OF PANGASINAN!
G.R. NO. 73573!

! MAY 23, 1991! FACTS: !


On 12 October 1970 petitioners executed a real estate mortgage in favor of respondent bank as security for
a loan of P2,000.00. Petitioners failed to pay the loan on due date. The bank applied for the extrajudicial
foreclosure of the mortgage. At the foreclosure sale on 11 December 1974 the respondent bank was the
highest and winning bidder with a bid of P2,945.11. Since no redemption was made by petitioners within
the two-year period, which expired on 29 January 1977, the sheriff issued a Final Deed of Sale on 15
February 1977. Petitioners, however, claimed that they were granted by respondent bank an extension of the
redemption period; but the latter denied it. In their complaint petitioners alleged that the final deed of sale
was prematurely issued since they were granted an extension of time to redeem the property.

!
ISSUE:

! Whether or not the final deed of sale was prematurely


issued.

!
HELD: !
It seems clear from testimony elicited on cross-examination of the president and manager of the bank that
the latter offered to re-sell the property for P30,000.00 but after the petition for a writ of possession had
already been filed, and well after expiry of the period to redeem. Appellants failed to accept the offer; they
deposited only P4,000.00. There was therefore no meeting of the minds, and accordingly, appellants may

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 79

no longer be heard. the attempts to redeem the property were done after the expiration of the redemption

period and that no extension of that period was granted to petitioners. !!


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!
ATKINS, KROLL AND CO., INC.

VS.

B. CUA HIAN TEK !
G.R. NO. L-9871!

!
! JANUARY 31, 1958! FACTS: !

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 80

For its failure to deliver one thousand cartons of sardines, which it had sold to B. Cua Hian Tek, petitioner
was sued, and after trial was ordered by the Manila court of first instance to Pay damages, which on appeal
was reduced by the Court of Appeals to P3,240.15 representing unrealized profits. It was shown that B. Cua
Hian Tek accepted the offer unconditionally and delivered his letter of acceptance Exh. B on September 21,
1951. However, due to shortage of catch of sardines by the packers in California, Atkins Kroll & Co., failed
to deliver the commodities it had offered for sale.

!
ISSUE:

! Whether or not there was a contract of


sale

!
HELD: !
After accepting the promise and before he exercises his option, the holder of the option is not bound to buy.
He is free either to buy or not to later. In this case, however, upon accepting herein petitioners offer a bilateral
promise to sell and to buy ensued, and the respondent ipso facto assumed the obligations of a purchaser. He
did not just get the right subsequently to buy or not to buy. It was not a mere option then; it was bilateral
contract of sale. We must therefore hold, as the lower courts have held that there was a contract of sale
between the parties.


!!
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!
!
!
!

!
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!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 81

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SOUTHWESTERN SUGAR AND MOLASSES COMPANY 

VS.

ATLANTIC GULF & PACIFIC
COMPANY! G.R. NO. L-7382! JUNE
29, 1955!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 82

!
FACTS:

!
Defendant Atlantic Gulf & Pacific Co. granted an option to plaintiff Southwestern Sugar & Molasses Co. to
buy its barge for P30,000.00 to be exercised within ninety days. On May 11, 1953, Atlantic Gulf wrote
Southwestern Sugar that it was exercising its option and that it be notified as soon as the barge was available.
Atlantic Gulf replied that their understanding was that the "offer of option" is to be cash transaction and to
be effected at the time the barge was available. On June 25, 1953, Atlantic Gulf informed Southwestern
Sugar that the damage action could not be turned over to the latter. On June 27, 1953, Southwestern Sugar
instituted an action for specific performance in line with the accepted option, depositing with the Court the
purchase price of 30,000.00. Atlantic Gulf, relying upon Article 1479 of the New Civil Code, contended that
the option was not valid because it was not supported by any consideration apart from the price.
Southwestern Sugar contended that the option became binding on Atlantic Gulf when plaintiff gave notice
of its acceptance during the option period citing as its authority Article 1324 of the New Civil Code which
provides that 'when the offer or has allowed the offeree a certain period to accept, the offer may be withdrawn
at any time before acceptance by communicating such withdrawal except "when the option is founded upon
a consideration, as something paid or promised.”

!
ISSUE:

! Whether or not the promise to sell was


valid

!
HELD: !
No, the promise to sell was not valid because it was not supported by a consideration distinct from the price.
There is no question that under Article 1479 of the New Civil Code "an option to sell" or a "promise to buy
or to sell", as used in said article, to be valid must be "supported by a consideration distinct from the price".
This is clearly inferred from the context of said article that a unilateral promise to buy or to sell, even if
accepted, is only binding if supported by a consideration. In other words, "an accepted unilateral promise"
can only have a binding effect if supported by a consideration. Here, it is not disputed that the option is
without consideration. It can, therefore, be withdrawn notwithstanding the acceptance made of it by appellee.

!!
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!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 83

!
!
!
!
!
!
!
!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 84

!
!
R. F. NAVARRO VS. SUGAR PRODUCERS COOPERATIVE MARKETING
ASSOCIATION INC.!
G.R. NO. L-12888!
APRIL 29, 1961!

FACTS: !
On September 19th, 1956, defendant formally offered to plaintiff the sale of molasses at P50.00 per metric
ton. The plaintiff was given up to noon of September 24th, 1956 within which to accept the offer with the
admonition that upon its failure to hear from him by then, the defendant shall feel free to negotiate the sale
with other possible buyers. Promptly at five minutes before noon of September 24th, 1956, plaintiff formally
accepted the offer of sale tendered by the defendant by informing the latter in writing that he binds himself
to purchase from the preferred 20,000 metric tons of molasses in question for P50.00 per metric ton, and
the day after September 21st, 1956, plaintiff upon the request of defendant, made clarifications of his
agreement to purchase the said molasses. On the same day plaintiff made the foregoing clarifications of his

acceptance of the sale. !


The defendant hurried advised plaintiff that it committed a typographical error indicating the specific gravity
of the molasses at 185-degrees which should be only 85-degrees, the latter being the high for molasses at
60% sugar by invert, and requesting plain that the "specific gravity" be amended accordingly, which
correction and amendment plaintiff readily agreed to and accepted. There was no single word, effort or hint
that the defendant's offer, accepted by the plaintiff, was qualified in any way whatsoever.

On September 24th, 1956, relying upon the consummation and perfection of the purchase and sale of 20,000
metric tons of molasses in question as indicated above, plaintiff through his business associate here in
Manila, continued negotiations for the resale of said molasses to foreign buyers. On September 28th, 1956,
three days after an agreement had been consummated on the price, quantity and quality of said molasses
and the manner of payment thereof, the defendant, belatedly and abruptly advised plaintiff of its desire add
certain additional conditions to be incorporated in the formal contract of purchase and sale then under
preparation by it for signature, which were never even mentioned nor hinted at in its original offer or
proposal, on the untenable pretext that they were 'standard conditions' on all contracts for the sale said
commodity peremptorily giving plaintiff up to noon again of October 26th, 1956, within which to decide
upon his acceptance of said additional conditions with the warning that if he failed to do so, it would feel

free to advise its planters concerned that they could negotiate their molasses with other parties. !
!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 85

!
On the very same day defendant simply and rudely turned down the foregoing friendly gesture of the
plaintiff caused by the additional conditions demanded by the defendant in its letter of September 28, 1956
and bluntly informed plaintiff that in view of his non-acceptance of said conditions it would not continue
with the sale of the molasses in question to plaintiff and that it felt free to offer the same to any other
interested buyer. Claiming breach of contract, plaintiff prayed that judgment be rendered ordering defendant
to comply with and perform its contractual obligations, pursuant to its agreement with plaintiff of September
19 and 24, 1956 and in case of failure to do so, to pay plaintiff any and all damages he may suffer by reason
of such non compliance, plus moral damages and to pay plaintiff reasonable attorney's fees and actual costs
of the litigation. In view of Article 1479 of the New Civil Code, the trial court dismissed the action. His

motion for reconsideration having been denied, plain plaintiff interposed this appeal. !
!
I SSUE:

Whether or not there was a unilateral promise to buy and sell !


!
H ELD:

!!!!
No, this contention is not borne out by the facts alleged in the complaint. In the first place, as noted by the
trial court in its order denying plaintiff's motion for reconsideration, plaintiff himself, in paragraph 6 of his
complaint, referred to the transaction as an "option" which he exercised on September 24, 1956. Then again,
in his memorandum in lieu of oral argument, he expressly agreed that the offer made by defendant and
described in paragraph 2 of plaintiff's complaint is, In option, a unilateral promise to sell. And, undoubtedly,
this is the offer, the option, the unilateral promise to sell that was accepted by plaintiff five minutes before
the deadline — noon of September 24, 1956 This acceptance, without consideration, did not create an
enforceable obligation on the part of the defendant. The offer as well as the acceptance did not contemplate
nor produce an immediately binding and enforceable contract of sale. Both lack a most essential element
— the manner of payment of the purchase price.

!
In fact, it was only after the exercise of the option or acceptance of the unilateral promise to sell that the
terms of payment were first discussed. This was in connection with the clarification of plaintiff's acceptance
which was transmitted to defendant on September 25, 1956Plaintiff's offer of a domestic letter of credit was
not accepted by defendant who insisted on a cash payment of 50% of the purchase value, upon signing of a
contract. Plaintiff, on the other hand, agreed to accede to this provided the price is reduced from P50.00 per
metric ton to 7132.00 Defendant rejected defendant's alternative counter-offer. In the circumstance, there
was no complete meeting of the minds of the parties necessary for the perfection of a contract of sale.
Consequently, appellee was justified in withdrawing its offer to sell the molasses in question.

!!
!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 86

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 87

!
!
!
NICOLAS SANCHEZ VS. SEVERINA
RIGOS
 G.R. NO. L-25494!

! JUNE 14, 1972!

FACTS:

!
Plaintiff Nicolas Sanchez and defendant Severina Rigos executed an instrument entitled "Option to
Purchase," whereby Mrs. Rigos agreed, promised and committed to sell to Sanchez the a parcel of land
situated in the barrios of Abar and Sibot, municipality of San Jose, province of Nueva Ecija within two (2)
years from said date with the understanding that said option shall be deemed "terminated and elapsed," if
"Sanchez shall fail to exercise his right to buy the property" within the stipulated period. Inasmuch as several
tenders of payment of the sum of Pl,510.00, made by Sanchez within said period, were rejected by Mrs.
Rigos, on March 12, 1963, the former deposited said amount with the Court of First Instance of Nueva Ecija
and commenced against the latter the present action, for specific performance and damages. Alleging, as
special defense, that the contract between the parties "is a unilateral promise to sell, and the same being

unsupported by any valuable consideration, by force of the New Civil Code, is null and void" !
On February 11, 1964, both parties, assisted by their respective counsel, jointly moved for a judgment on
the pleadings. Accordingly, on February 28, 1964, the lower court rendered judgment for Sanchez, ordering
Mrs. Rigos to accept the sum judicially consigned by him and to execute, in his favor, the requisite deed of
conveyance. Mrs. Rigos was, likewise, sentenced to pay P200.00, as attorney's fees, and other costs. Hence,

this appeal by Mrs. Rigos. !


!
I SSUE:

Whether or not there was a unilateral promise to buy and sell !


!
H ELD:
This case admittedly hinges on the proper application of Article 1479 of our Civil Code, which provides:
ART. 1479. A promise to buy and sell a determinate thing for a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the

promissor if the promise is supported by a consideration distinct from the price. !


! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 88

In his complaint, plaintiff alleges that, by virtue of the option under consideration, "defendant agreed and
committed to sell" and "the plaintiff agreed and committed to buy" the land described in the option, copy
of which was annexed to said pleading as Annex A thereof and is quoted on the margin. Hence, plaintiff
maintains that the promise contained in the contract is "reciprocally demandable," pursuant to the first
paragraph of said Article 1479. Although defendant had really "agreed, promised and committed" herself
to sell the land to the plaintiff, it is not true that the latter had, in turn, "agreed and committed himself" to

buy said property. !


The option did not impose upon plaintiff the obligation to purchase defendant's property. Annex A is not a
"contract to buy and sell." It merely granted plaintiff an "option" to buy. And both parties so understood it,
as indicated by the caption, "Option to Purchase," given by them to said instrument. Under the provisions
thereof, the defendant "agreed, promised and committed" herself to sell the land therein described to the
plaintiff for P1,510.00, but there is nothing in the contract to indicate that her aforementioned agreement,
promise and undertaking is supported by a consideration "distinct from the price" stipulated for the sale of

the land. !
Furthermore, an option is unilateral: a promise to sell at the price fixed whenever the offeree should decide
to exercise his option within the specified time. After accepting the promise and before he exercises his
option, the holder of the option is not bound to buy. He is free either to buy or not to buy later. In this case,

however, upon accepting herein petitioner's offer a bilateral promise to sell and to buy ensued, and !

!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 89

!
!

!!!the respondent ipso facto assumed the obligation of a purchaser. He did not just get the right
subsequently

!If the option is given without a consideration, it is a mere offer of a contract of sale, which is not binding
to buy or not to buy. It was not a mere option then; it was a bilateral contract of sale. until accepted. If,
however, acceptance is made before a withdrawal, it constitutes a binding contract of sale, even though the
option was not supported by a sufficient consideration. In other words, since there may be no valid contract
without a cause or consideration, the promisor is not bound by his promise and may, accordingly, withdraw

!
it. Pending notice of its withdrawal, his accepted promise partakes, however, of the nature of an offer to

sell which, if accepted, results in a perfected contract of sale.

!
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!
!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 90

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 91

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RURAL BANK OF PARARAQUE, INC. VS. ISIDRA REMOLADO AND COURT OF
APPEALS!
G.R. NO. L-62051!

! MARCH 18, 1985!

FACTS:

!
Isidra Remolado, 64, a widow, and resident of Makati, Rizal, owned a lot with an area of 308 square meters,
with a bungalow thereon, which was leased to Beatriz Cabagnot. In 1966 she mortgaged it to the Rural Bank
of Parañaque, Inc. as security for a loan of P15,000. She paid the loan. On April 17, 1971 she mortgaged it
again to the bank. She eventually secured loans totaling P18,000. The loans become overdue. The bank
foreclosed the mortgage on July 21, 1972 and bought the property at the foreclosure sale for P22,192.70.
The one-year period of redemption was to expire on August 21, 1973. The bank advised Remolado that she
had until August 23 to redeem the property. The bank gave her a statement showing that she should pay

P25,491.96 for the redemption of the property on August 23. No redemption was made on that date. !
The bank consolidated its ownership over the property. Remolado’s title was cancelled. A new title, TCT
No. 418737, was issued to the bank. On September 24, 1973, the bank gave Remolado up to ten o'clock in
the morning of October 31, 1973, or 37 days, within which to repurchase (not redeem since the period of
redemption had expired) the property. The bank did not specify the price. On October 26, 1973 Remolado
and her daughter, Patrocinio Gomez, promised to pay the bank P33,000 on October 31 for the repurchase
of the property. Exhibits 1-1 and X do not evidence any perfected repurchase agreemi6nt. Even if it is
assumed that the bank's commitment to resell the property was accepted by Remolado, that option was not

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 92

supported by a consideration distinct from the price. Lacking such consideration, the option is void.
Contrary to her promise, Remolado did not repurchase the property on October 31. Five days later, or on
November 5, Remolado and her daughter delivered P33,000 rash to the bank's assistant manager as re-
purchase price. The amount was returned to them the next day. At that time, the bank was no longer willing

to allow the repurchase. !


On that day, November 6, Remolado filed an action to compel the bank to reconvey the property to her for
P25,491.96 plus interest and other charges and to pay P35,000 as damages. The repurchase price was not
consigned. A notice of lis pendens was registered. The bank sold the property to Pilar Aysip for P50,000.

A new title was issued to Aysip with an annotation of lis pendens. !


The trial court ordered the bank to return the property to Remolado upon payment of the redemption price
of P25,491.96 plus interest and other bank charges and to pay her P15,000 as damages. The Appellate Court
affirmed the judgment. The bank appealed to this Court. It contends that Remolado had no more right of

redemption and, therefore, no cause of action against the bank. !


ISSUE:

!
Whether or not Remolado still had the right of redemption or repurchase over the property ! 


!
H ELD:
No, we hold that the trial court and the Appellate Court erred in ordering the reconveyance of the property.
There was no binding agreement for its repurchase. Even on the assumption that the bank should be bound
by its commitment to allow repurchase on or before October 31, 1973, still Remolado had no cause of action

!
because she did not repurchase the property on that date. !

!!!!There may be a moral obligation, often regarded as an equitable consideration (meaning compassion),
but if there is no enforceable legal duty, the action must fail although the disadvantaged party deserves
commiseration or sympathy. In the instant case, the bank acted within its legal rights when it refused to give

Remolado any extension to repurchase after October 31, 1973. It had given her about two years to liqui date !
her obligation. She failed to do so.

!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 93

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 94

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AQUILINO NIETES

VS.


! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 95

!
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HON. COURT OF APPEALS & DR. PABLO C. GARCIA!
G.R. NO. L-32873!

! AUGUST 18, 1972!

FACTS:

!
Petitioner Aquilino Nietes and respondent Dr.Pablo Garcia entered a “Contract of Lease and Option to Buy”
where the latter agreed to lease his Angeles Educational Institute to the former. The rent is set to P5000 per
year up to 5 years and that the LESSOR agrees to give the LESSEE an option to buy the land and the school

building, for P100,000 within the period of the Contract of Lease. !


Nietes paid P3000 September 4, 1961 as per advance pay for the school and he also paid Garcia P2200 on
Dec.16, 1962 for partial payment on the purchase of the property, both were acknowledged by Garcia
through the issuance of receipts. Garcia decided to rescind the contract on the grounds that Nietes: (1) had
not maintained the building in good condition, (2) had not been using the original name of the schoolthereby
extinguishing its existence in the eyes of the public and injuring its prestige, (3) no inventory has been made
of all properties of the school, (4) had not collected or much less helped in the collection of back accounts
of former students. Garcia’s lawyers reminded Nietes that the foregoing obligations had been one, if not,
the principal moving factors which had induced the lessor in agreeing with the terms embodied in the
contract of lease, without which fulfillment, said contract could not have come into existence. Nietes also

deposited 84K to a bank corresponding to the balance for the purchase of the property. !
!
I SSUE:

Whether or not Nietes can avail of his option to buy the property !
HELD: !
Nietes can avail of the option to buy because he already expressed his intention to buy the property before
the termination of the contract. The contention of the respondent that the full price of the property should

first be paid before the option could be exercised is of no merit. !


The contract doesn’t provide such stipulation and as such, the provision of reciprocal obligations in
obligations and contracts should prevail. Notice of the creditor's decision to exercise his option to buy
need not be coupled with actual payment of the price, so long as this is delivered to the owner of the

property upon performance of his part of the agreement. !

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 96

Nietes had validly and effectively exercised his option to buy the property of Dr. Garcia, at least, on
December 13, 1962, when he acknowledged receipt from Mrs. Nietes of the sum of P2,200 then delivered
by her "in partial payment on the purchase of the property" described in the "Contract of Lease with Option

to Buy" !
!
!
!
!
!
!
!
!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 97

!
!

!
MAS VS LANUZA!
G.R. NO. 2058!

! DECEMBER 22, 1905!

F!ACT
S:
Judgment was rendered in favor of Jose Mas for the possession of a certain lot of land described in Tondo,
Manila, and declared said lot to be the property of the estate of which the plaintiff is administrator. Mas
submitted in evidence an agreement signed by the Lanuzas and Hilario that one Francisca Hilario gave the
Lanuzas permission to enter upon the land in question, and to occupy it for such time as Hilario’s heirs
should permit, the appellants, on their part, expressly acknowledging the right and title of Hilario, deceased,
to the possession and ownership of said property, and, among other stipulations, binding themselves to close
the opening in the wall which divided the said lot from their own, should any question ever arise over the

title thereto. !
Plaintiff also introduced in evidence that the lot in question was the property of the said Francisco Hilario,
and that Timoteo Lanuza had been treating with her for the purchase thereof.

The defendants admit the execution of the agreement, and that they took possession of the lot but they allege
that they entered into it under the mistaken belief that Francisca Hilario was in fact the owner of the property
and that they discovered later that she held the property merely as administrator for the true owner. On
December 7, 1982 they loaned the true owner, Lao- Jico, 200 pesos, and took from him an agreement in
writing whereby he promised to sell them the said property for 500 pesos, an agreement which was never
consummated however, because he died a short time thereafter.

The defendants offered in evidence and certain other documents, which tended to show that the title to said

property was in Lao-Jico. !


!
I SSUE:

Whether or not the defendant is liable !


!
H ELD:
Trial Court refused to admit these documents in evidence because of the defendant’s own showing that the
agreement to sell did not pass title or dominion over the property, and only gave the defendants a right to
demand the fulfillment of the terms thereof, should it appear that the title was in fact in Lao-Jico. No weight

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 98

!
!
can be given to the defendants’ claim to title by prescription, for even if it were admitted that they had been
in possession for the full prescriptive period, they took possession by virtue of the express permission of
the deceased Francisca Hilario, and continued in possession by virtue of said permission until January 15,
1900, as appears from the above-mentioned certified copy of the statement under oath of one of the
defendants Timoteo Lanuza. Neither the plaintiff nor defendants have proven title to the property in
question, but that the plaintiff administrator is entitled to possession thereof; thus modified the judgment

should be affirmed. !
!
!
!
!
!
!
!
!
ANTONIO M. BARRETTO VS. JOSE SANTA MARINA!
G.R. NO. L-8169!

!
! DECEMBER 29, 1913!

FACTS:

!
The La Insular cigar and cigarette factory is a joint account association with a nominal capital of P865,000,
the plaintiff's share is P20,000, or 4/173 of the whole. The plaintiff's attorneys wrote the defendant's local
representative a letter offering to sell plaintiff's share in the factory. The result of the correspondence
between the parties and their representatives was that Exhibit G was duly executed on May 3, 1910. In
accordance with the terms of this exhibit a committee of appraisers was appointed to ascertain and fix the
actual value of La Insular. The committee rendered its report on November 14, 1910, fixing the net value
at P4,428,194.44. Subsequently to the execution of Exhibit J, demand was made by the plaintiff upon the

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 99

!
!
defendant for his share of the profits from June 30, 1909, to November 22, 1910. This demand was refused
and thereupon this action was instituted to recover said profits. The plaintiff argued that if the agreement of
May 3, 1910, was a perfected sale he cannot recover any profits after that date; while on the other hand the
defendant concedes that if said agreement was only a promise to sell in the future it, standing alone, would

not prevent recovery in this action. !


!
I SSUE:

Whether the agreement made by the parties on May 3, 1910 was a perfected contract of sale !
HELD:

Yes, it was a perfected contract of sale. The contract of May 3, 1910, provides that: "Whereas the respective
contracting parties have agreed, the one to sell and the other to buy the whole of the right, title and interest
of the said Antonio Maria Barretto in and to the said joint account association, including not only the
individual participation of the said party of the second part standing on the books of the association in the
name of Antonio M. Barretto, but also one-half of the share in the business which stands on the books in
the name of Barretto & Company constituting a total nominal share of P54,700 Philippine currency in the
total nominal capital of P865,000 Philippine currency” Under article 1450, supra there are two indispensable
requisites in a perfected sale: (1) There must be an agreement upon the things which is the object of the
contract; and (2) the contracting parties must agree upon the price. The object of the contract in the case at
bar was the whole of the plaintiff's right, title, and interest in La Insular. This whole was 4/173 of the entire
net value of the business. The parties agreed that the price should be 4/173 of the total net value. The fixing
of such net value was unreservedly left to the judgment of the appraisers. As to the thing and the price the
minds of the contracting parties met, and all questions relating thereto were settled. Nothing was left
unfinished in so far as the contracting parties were concerned. Neither party could withdraw from the
contract without the consent of the other. The result is that the two essential requisites necessary to constitute

a perfected sale were present. !


!
!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 100

!
!

!
!
!
UNIVERSITY OF THE PHILIPPINES VS PHILAB INDUSTRIES, INC.
! G.R. NO. 152411! SEPTEMBER 29, 2004!

!
F ACT
S:
In the year 1979, UP decided to construct an integrated system of research organization known as the
Research Complex. As part of the project, laboratory equipment and furniture were purchased for the
National Institute of Biotechnology and Applied Microbiology (BIOTECH) at the UP Los Banos. The
Ferdinand E. Marcos Foundation (FEMF) came forward and agreed to fund the acquisition of the laboratory

furniture, including the fabrication thereof. !


Lirio, the Executive Assistant of the FEMF, gave the go signal to BIOTECH to contact a corporation to
accomplish the project. On July 23, 1982, Dr. Padolina, the Executive Deputy Director of BIOTECH,
arranged for Philippine Laboratory Industries, Inc. (PHILAB), to fabricate the laboratory furniture and
deliver the same to BIOTECH for the BIOTECH Building Project, for the account of the FEMF. Lirio
directed Padolina to give the go signal to PHILAB to proceed with the fabrication of the laboratory furniture,

and requested Padolina to forward the contract of the project to FEMF for its approval. !
In 1982, Padolina wrote Lirio and requested for the issuance of the purchase order and downpayment for
the office and laboratory furniture for the project. Padolina also requested for copies of the shop drawings
and a sample contract for the project, but PHILAB failed to forward any sample contract. PHILAB made
partial deliveries of office and laboratory furniture to BIOTECH after having been duly inspected by their
representatives and FEMF Executive Assistant Lirio. On August 24, 1982, FEMF remitted P600,000 to
PHILAB as down payment for the laboratory furniture for the BIOTECH project and FEMF made another
partial payment of P800,000 to PHILAB.

UP, through Chancellor Javier and Gapud from FEMP executed a Memorandum of Agreement (MOA) in
which FEMF agreed to grant financial support and donate sums of money to UP for the construction of
buildings, installation of laboratory and other capitalization for the project, not to exceed P29,000,000.00.
The MOA, additionally states that: (1)the foundation shall acquire and donate to the UNIVERSITY the site
for the RESEARCH COMPLEX, (2) donate or cause to be donated to the UNIVERSITY the sum of

P29,000,000.00, and (3) shall continue to support the activities of the RESEARCH COMPLEX. !
Navasero promised to submit the contract for the installation of laboratory furniture to BIOTECH but failed
to do so. BIOTECH reminded Navasero but instead PHILAB submitted to BIOTECH an accomplishment
report on the project and requested payment thereon. By May 1983, PHILAB had completed 78% of the

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 101

!
!
project, amounting to P2,288,573.74 out of the total cost of P2,934,068.90. The FEMF had already paid
forty percent (40%) of the total cost of the project. Padolina wrote Lirio and furnished him the progress
billing from PHILAB. FEMF made another partial payment, in check, of P836,119.52 representing the
already delivered laboratory and office furniture after the requisite inspection and verification thereof by
representatives from the BIOTECH, FEMF, and PHILAB. FEMF failed to pay the bill and PHILAB
reiterated its request for payment through a letter however, there was no response from the FEMF. Philab
appealed for the payment of its bill even on installment basis. Navasero wrote BIOTECH requesting for its
much-needed assistance for the payment of the balance already due plus interest of P295,234.55 for its
fabrication and supply of laboratory furniture. PHILAB asked Cory Aquino for help to secure the payment
of the amount due from the FEMF. It was referred to then Budget Minister Romulo and referred the same
to UP President Edgardo Angara on June 9, 1986. Raul P. de Guzman, the Chancellor of UP Los Baos,
wrote then Chairman of the (PCGG) Jovito Salonga, submitting PHILABs claim to be officially entered as
accounts payable as soon as the assets of FEMF were liquidated by the PCGG. Chancellor De Guzman
wrote Navasero requesting for a copy of the contract executed between PHILAB and FEMF. Exasperated,
PHILAB filed a complaint for sum of money and damages against UP and the latter denied liability and
alleged that PHILAB had no cause of action against it because it was merely the donee/beneficiary of the
laboratory furniture in the BIOTECH; and that the FEMF, which funded the

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 102

!!!!
project, was liable to the PHILAB for the purchase price of the laboratory furniture. UP specifically denied
obliging itself to pay for the laboratory furniture supplied by PHILAB. Case was dismissed by lack of merit.

!
ISSUE:

Whether or not the defendant is liable !


HELD:

Petitioner argues that the CA overlooked the evidentiary effect and substance of the corresponding letters
and communications which support the statements of the witnesses showing affirmatively that an implied
contract of sale existed between PHILAB and the FEMF. The petitioner furthermore asserts that no contract
existed between it and the respondent as it could not have entered into any agreement without the requisite
public bidding and a formal written contract.

The respondent, on the other hand, submits that the CA did not err in not applying the law on contracts
between the respondent and the FEMF. It, likewise, attests that it was never privy to the MOA entered into
between the petitioner and the FEMF. The respondent adds that what the FEMF donated was a sum of
money equivalent to P29,000,000, and not the laboratory equipment supplied by it to the petitioner. The
respondent submits that the petitioner, being the recipient of the laboratory furniture, should not enrich itself
at the expense of the respondent.

It bears stressing that the respondents cause of action is one for sum of money predicated on the alleged
promise of the petitioner to pay for the purchase price of the furniture, which, despite demands, the petitioner
failed to do. However, the respondent failed to prove that the petitioner ever obliged itself to pay for the
laboratory furniture supplied by it. Hence, the respondent is not entitled to its claim against the petitioner.

There is no dispute that the respondent is not privy to the MOA executed by the petitioner and FEMF; hence,
it is not bound by the said agreement. Contracts take effect only between the parties and their assigns. A
contract cannot be binding upon and cannot be enforced against one who is not a party to it, even if he is
aware of such contract and has acted with knowledge thereof. Likewise admitted by the parties, is the fact
that there was no written contract executed by the petitioner, the respondent and FEMF relating to the
fabrication and delivery of office and laboratory furniture to the BIOTECH. Based on the records, an
implied-in-fact contract of sale was entered into between the respondent and FEMF. A contract implied in
fact is one implied from facts and circumstances showing a mutual intention to contract. It arises where the
intention of the parties is not expressed, but an agreement in fact creating an obligation. It is a contract, the
existence and terms of which are manifested by conduct and not by direct or explicit words between parties
but is to be deduced from conduct of the parties, language used, or things done by them, or other pertinent
circumstances attending the transaction. To create contracts implied in fact, circumstances must warrant
inference that one expected compensation and the other to pay. An implied-in-fact contract requires the
parties intent to enter into a contract; it is a true contract. The conduct of the parties is to be viewed as a
reasonable man would view it, to determine the existence or not of an implied-in-fact contract. The totality
of the acts/conducts of the parties must be considered to determine their intention. An implied-in-fact
contract will not arise unless the meeting of minds is indicated by some intelligent conduct, act or sign.

!!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 103

!
!
!
!
VILLONCO REALTY VS. BORMAHECO!
GR NO. L-26872!

! JULY 25, 1975! FACTS:

!
Francisco Cervantes of Bormaheco Inc. agrees to sell to Villonco Realty a parcel of land and its
improvements located in Buendia, Makati. Bormaheco made the terms and condition for the sale and
Villonco returned it with some modifications.The sale is for P400 per square meter but it is only to be
consummated after respondent shall have also consummated purchase of a property in Sta. Ana, Manila.
Bormaheco won the bidding for the Sta.Ana land and subsequently bought the property. Villonco issued a
check to Bormaheco amounting to P100,000 as earnest money. 26 days after signing the contract of sale,
Bormaheco returned the P100,000 to Villonco with 10% interest for the reason that they are not sure yet if
they will acquire the Sta.Ana property. Villonco rejected the return of the check and demanded for specific
performance.

!
ISSUE:

! Whether or not Bormaheco is bound to perform the contract with


Villonco

!
HELD:

!
The contract is already consummated when Bormaheco accepted the offer by Villonco. The acceptance can
be proven when Bormaheco accepted the check from Villonco and then returned it with 10% interest as
stipulated in the terms made by Villonco.

!
On the other hand, the fact that Villonco did not object when Bormaheco encashed the check is a proof that
it accepted the offer of Bormaheco. Whenever earnest money is given in a contract of sale, it shall be
considered as part of the price and as proof of the perfection of the contract" (Art. 1482, Civil Code).

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 104

!!!
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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 105

VELASCO VS. CA!


G.R. NO. L-31018!
JUNE 29, 1973!

!
FACTS: !
This is a suit for specific performance filed by Lorenzo Velasco against the Magdalena Estate, Inc. on the
allegation that on November 29,1962 the plaintiff and the defendant had entered into a contract of sale by
virtue of which the defendant offered to sell the plaintiff and the plaintiff in turn agreed to buy a parcel of

land with an area of 2,059 square meters in New Manila for the total purchase price of P100,000.00. !
It is alleged by the plaintiff that the agreement was that the plaintiff was to give a down payment of
P10,000.00 to be followed by P20,000.00 and the balance of P70,000.00 would be paid in installments, the
equal monthly amortization of which was to be determined as soon as the P30,000.00 down payment had
been completed. It is further alleged that the plaintiff paid down payment of P10,000.00 on November
29,1962 and that, when on January 8,1964 he tendered to the defendant the payment of the additional
P20,000.00 to complete the P30,000.00, the defendant refused to accept and execute a formal deed of sale

obviously agreed upon. !


The defendant denies that it has had any direct dealings, much less, contractual relations with the plaintiff
regarding the property in question, and contends that the alleged contract described in the document attached
to the complaint is entirely unenforceable under the Statute of Frauds. The defendant alleges that a portion
of the property in question was being leased by a certain Socorro Velasco who, on November 29, 1962,
went to the office of the defendant indicated her desire to purchase the lot. That the defendant indicated its
willingness to sell the property to her at the price of P100,000.00 under the condition that a down payment
of P30,000.00 be made, P20,000.00 of which was to be paid on November 31, 1962, and that the balance
of P70,000.00 including interest a 9% per annum was to be paid on installments for a period of ten years at
the rate of P5,381.32 on June 30 and December of every year until the same shall have been fully paid. On
November 29,1962 Socorro Velasco offered to pay P10,000.00 as initial payment instead of the agreed
P20,000.00 but because the amount was short of the alleged P20,000.00 the same was accepted merely as
deposited and upon request of Socorro Velasco the receipt was made in the name of her brotherin-law the
plaintiff herein. Socorro Velasco failed to complete the down payment of P30,000.00 and neither has she
paid any installments on the balance of P70,000.00 up to the present time. It was only on January 8,1964
that Socorro Velasco tendered payment of P20,000.00, which offer the defendant refused to accept because
it had considered the offer to sell rescinded on account of her failure to complete the down payment on or

before December 31, 1962. !


The lone witness for the plaintiff is Lorenzo Velasco, who exhibits the receipt issued in his favor by the
Magdalena Estate, Inc., in the sum of P10,000.00 dated November 29, 1962. He also identifies a letter of
the Magdalena Estate, Inc. addressed to him and his reply thereto. He testifies that Socorro Velasco is his
sister-in-law and that he had requested her to make the necessary contacts with defendant referring to the
purchase of the property in question. Because he does not understand English well, he had authorized her
to negotiate with the defendant in her whenever she went to the office of the defendant, and as a matter of
fact, the receipt for the P10,000.00 down payment was issued in his favor. The plaintiff also depends on the
receipt (Exhibit A) to prove that there was a perfected contract to sell, as follows: "Earnest money for the
purchase of Lot 15, Block 7, Psd-6129, Area 2,059 square meters including improvements thereon —
P10,000.00." At the bottom of Exhibit A, the following appears: "Agreed price: P100,000.00, P30,000.00
down payment, bal. in 10 years. To prove that the Magdalena Estate, Inc. had been dealing all along with
him and not with his sister-in-law and that the Magdalena Estate, Inc. knew very well that he was the person

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 106

interested in the lot in question and not his sister-in-law, the plaintiff offers in evidence five checks all

!
drawn by him in favor of Magdalena Estate, Inc. for payment of the lease of the property. !
!!!!!

ISSUE:

! Whether or not there was a perfected contract of


sale.

!
HELD:

!
The court a quo agreed with the respondent's (defendant therein) contention that no contract of sale was
perfected because the minds of the parties did not meet "in regard to the manner of payment." The court a
quo appraisal of this aspect of the action below is correct. The material averments contained in the
petitioners' complaint themselves disclose a lack of complete "agreement in regard to the manner of
payment" of the lot in question. The petitioners themselves admit that they and the respondent still had to
meet and agree on how and when the down-payment and the installment payments were to be paid. Such
being the situation, it cannot, therefore, be said that a definite and firm sales agreement between the parties
had been perfected over the lot in question. Indeed, this Court has already ruled before that a definite
agreement on the manner of payment of the purchase price is an essential element in the formation of a
binding and unenforceable contract of sale. 3 The fact, therefore, that the petitioners delivered to the
respondent the sum of P10,000 as part of the down-payment that they had to pay cannot be considered as
sufficient proof of the perfection of any purchase and sale agreement between the parties herein under article
1482 of the new Civil Code, as the petitioners themselves admit that some essential matter — the terms of
payment — still had to be mutually covenanted.

!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 107

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 108

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!
SPOUSES. DOROMAL V. CA!
66 SCRA 575!
SEPTEMBER 5, 1975!

!
FACTS:

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Lot 3504 was owned by Justice Antonio Horilleno. When he died, he executed a will stating that Luis,
Soledad, Fe, Rosita, Carlos and Esperana are co-owners of the property. Since Esperanza was already dead,
she was succeeded by herein respondent Filomen Javellana for 1/7 of the undivided ownership.

!
The co-owners, without Javellana, wanted to sell the whole property. They hired someone to look for buyers
and found herein petitioners Sps. Doromal. Carlos received as part of ‘earnest money’ the sum of Php5,000
and so the 6/7 of the entire property was sold to the Doromals. Carlos registered the deed of sale and the
Doromals paid the remaining Php97,000 by check On 10 June 1968, Atty. Villanueva went to the residence
of the Doromals bearing a letter from Javellana offering to repurchase the property for Php30,000. The
Doromals refused hence Javellana filed this instant case. Javellana contends that as co-owner she had the
right to re-purchase the property. The Doromals contend that if she did have the right to repurchase, it would
be for the whole value of the property and not only for Php30,000. Doromals also contend that Carlos had
already received the 5000 php as earnest money hence there was a consummated sale amongst them.

!
ISSUE:

! Whether the Php5000 given to carlos can be considered as earnest


money

!
HELD:

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No. Earnest money under the Civil Code is a guarantee that the buyer would not back out of the definite
agreement as to the price. In the case at bar, while 5.000 may have already been paid to Carlos, there is
nothing to show that the same was in the concept of earnest money contemplated under Art. 1482. The
parties belatedly agreed to the price of 5.00 per sq. m hence there was no ‘price definite’ agreed upon yet.

!
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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 109

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 110

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P.J. SALAS RODRIGUEZ VS. MARIANO P. LEUTERIO!
G.R. NO. 23550!
SEPTEMBER 16, 1925!

!
FACTS:

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Defendant agreed to sell a 7,000 sq.m. parcel of land to plaintiff for the consideration of 5,600 PHP, which
was duly paid by the plaintiff. At the time of this sale the particular lots contemplated as the subject of the
sale had not been segregated, but the seller agreed to establish the lots with a special frontage on a principal
thoroughfare as soon as the streets should be laid out in a projected new subdivision of the city. As time
passed the seller was unable to comply with this part of the agreement and was therefore unable to place
the purchaser in possession. An action was instituted by plaintiff for the resolution of the contract and a
return of double the amount delivered to the defendant as the purchase price of the land. Judgment was
rendered in favor of plaintiff.

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Article 1454 of the Civil Code (Old Civil Code) is relied upon by plaintiff-appellant as authority for claiming
double the amount paid out by him. In this article it is declared that when earnest money or pledge is given
to bind a contract of purchase and sale, the contract may be rescinded if the vendee should be willing to
forfeit the earnest money or pledge or the vendor to return double the amount.

!
ISSUE:

! Whether or not the price paid by plaintiff was earnest


money

!
HELD:

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The money paid was not earnest money. The aforementioned provision is clearly not pertinent to the case,
for the reason that where the purchase price is paid in whole or in part, the payment cannot be considered
to be either earnest money or pledge. In this connection the commentator Manresa observes that the delivery
of part of the purchase should not be understood as constituting earnest money unless it be shown that such
was the intention of the parties.

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In the case at bar, there is nothing to indicate that the parties intended that the cash price paid by the
purchaser should be treated merely as earnest money; and such could not possibly have been their intention.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 111

The evident purpose was that said payment should be taken as a fulfillment of the contract on the part of
the purchaser.

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DOMINGO MERCADO and JOSEFA MERCADO vs. JOSE ESPIRITU!
G.R. No. L-11872!

! December 1, 1917! FACTS: !


April 9,1913 counsel for Domingo and Josefa Mercado brought suit in the Court of FirstInstance of Bulacan
against Luis Espiritu, who died afterwards. Since Luis Espiritu died, the complaint was amended and was

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 112

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filed against Jose Espiritu. The plaintiffs alleged that they and their sisters Concepcion and Paz Mercado
were the children and sole heirs of Margarita Espiritu, who is the sister of the deceased Luis Espiritu.

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Margarita Espiritu died in 1897, leaving a tract of land of 48 hectares in area as her paraphernal property,
which is located in the barrio of Panducot, municipality of Calumpit, Bulacan. Luis Espiritu was accused
to have induced and fraudulently succeeded in getting the plaintiffs to sell their land for a sum of P400 as
opposed to its assessed value of P3,795. The annulment of a deed of sale was sought by the plaintiffs. They
asserted that two of the four parties were minors (Domingo and Josefa Mercado); Who presented themselves
to be of legal age upon signing the deed of sale and before the notary public.

!
ISSUE:

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Whether or not the deed of sale is a valid contract when the minors presented themselves that they were of
legal age

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HELD:

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Yes. The courts have laid down the rule that the sale of a real estate, made by minors who presented
themselves to be of legal age, when in fact they are not, is a valid contract. Moreover,they will not be
permitted to excuse themselves from the fulfilment of the obligations contracted by them, or to seek for
annulment.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 113

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SIA SUAN AND GAW CHIAO VS.RAMON ALCANTARA!
GR NO. L-1720!
MARCH 4, 1950!

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FACTS: !
On August 3, 1931, a deed of sale was executed by Rufino Alcantara and his sons Damaso Alcantara and
Ramon Alcantara conveying to Sia Suan five parcels of land. Ramon Alcantara was then 17 years, 10
months and 22 days old. On August 27, 1931, Gaw Chiao (husband of Sia Suan) received a letter from
Francisco Alfonso, attorney of Ramon Alcantara, informing Gaw Chiao that Ramon Alcantara was a minor
and accordingly disavowing the contract. After being contacted by Gaw Chiao, however, Ramon Alcantara
executed an affidavit in the office of Jose Gomez, attorney of Gaw Chiao, wherein Ramon Alcantara ratified

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 114

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the deed of sale. Sia Suan sold one of the lots to Nicolas Azores from whom Antonio Azores inherited the

same. !
On August 8, 1940, an action was instituted by Ramon Alcantara in the Court of First Instance of Laguna
for the annulment of the deed of sale as regards his undivided share in the two parcels of land. Said action
was against Sia Suan and her husband Gaw Chiao, Antonio, Azores, Damaso Alcantara and Rufino
Alcantara. the latter two being, respectively, the brother and father of Ramon Alcantara appealed to the
Court of Appealed which reversed the decision of the trial court, on the ground that the deed of sale is not
binding against Ramon Alcantara in view of his minority on the date of its execution. From this judgment

Sia Suan and Gaw Chiao have come to us on appeal by certiorari. !


!
ISSUE: !
Whether or not the contract of sale between the parties valid !
!
HELD: !
The circumstance that, about one month after the date of the conveyance, the appellee informed the
appellants of his minority, is of no moment, because appellee's previous misrepresentation had already
estopped him from disavowing the contract. Said belated information merely leads to the inference that the
appellants in fact did not know that the appellee was a minor on the date of the contract, and somewhat
emphasizes appellee's had faith, when it is borne in mind that no sooner had he given said information than

he ratified his deed of sale upon receiving from the appellants the sum ! of P500.
Counsel for the appellees argues that the appellants could not have been misled as to the real age of the
appellee because they were free to make the necessary investigation. The suggestion, while perhaps
practicable, is conspicuously unbusinesslike and beside the point, because the findings of the Court of
Appeals do not show that the appellants knew or could suspected appellee's minority. The Court of Appeals
seems to be of the opinion that the letter written by the appellee informing the appellants of his minority
constituted an effective disaffirmance of the sale, and that although the choice to disaffirm will not by itself
avoid the contract until the courts adjudge the agreement to be invalid, said notice shielded the appellee
from laches and consequent estoppel. This position is untenable since the effect of estoppel in proper cases

is unaffected by the promptness with which a notice to disaffirm is made. !


!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 115

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!
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! PADILLA, J.,
concurring:

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I concur in the result not upon the grounds stated in the majority opinion but for the following reasons: The
deed of sale executed by Ramon Alcantara on 3 August 1931 conveying to Sia Suan five parcels of land is
null and void insofar as the interest, share, or participation of Ramon Alcantara in two parcels of land is
concerned, because on the date of sale he was 17 years, 10 months and 22 days old only. Consent being one
of the essential requisites for the execution of a valid contract, a minor, such as Ramon Alcantara was, could
not give his consent thereof. The only misrepresentation as to his age, if any, was the statement appearing
in the instrument that he was of age. On 27 August 1931, or 24 days after the deed was executed, Gaw
Chiao, the husband of the vendee Sia Suan, was advised by Atty. Francisco Alfonso of the fact that his
client Ramon Alcantara was a minor. The fact that the latter, for and in consideration of P500, executed an
affidavit, whereby he ratified the deed of sale, is of no moment. He was still minor.

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The majority opinion invokes the rule laid down in the case of Mercado et al. vs. Espiritu, 37 Phil 215. The
rule laid down by this Court in that case is based on three judgments rendered by the Supreme Court of
Spain on 27 April 1960, 11 July 1868, and 1 March 1875. In these decisions the Supreme Court of Spain
applied Law 6, Title 19, of the 6th Partida which expressly provides: The contract of sale involved in the
case of Mercado vs. Espiritu, supra, was executed by the minors on 17 May 1910. The Law in force on this
last-mentioned date was not Las Siete Partidas, 1 which was the in force at the time the cases decided by
the Supreme Court of Spain referred to, but the Civil Code which took effect in the Philippines on 8
December 1889. As already stated, the Civil Code requires the consent of both parties for the valid execution
of a contract (art. 1261, Civil Code). As a minor cannot give his consent, the contract made or executed by
him has no validity and legal effect. There is no provision in the Civil Code similar to that of Law 6, Title
19, of the 6th Partida which is equivalent to the common law principle of estoppel.

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If there be an express provision in the Civil Code similar law 6, Title 19, of the 6th Partida, I would agree
to the reasoning of the majority. The absence of such provision in the Civil Code is fatal to the validity of
the contract executed by a minor. It would be illogical to uphold the validity of a contract on the ground of
estoppel, because if the contract executed by a minor is null and void for lack of consent and produces no
legal effect, how could such a minor be bound by misrepresentation about his age? If he could not be bound
by a direct act, such as the execution of a deed of sale, how could he be bound by an indirect act, such as
misrepresentation as to his age? The rule laid down in Young vs. Tecson, 39 O. G. 953, in my opinion, is
the correct one. Nevertheless, as the action in this case was brought on 8 August 1940, the same was barred,
because it was not brought within four (4) years after the minor had become of age, pursuant to article 1301
of the Civil Code. Ramon Alcantara became of age sometime in September 1934.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 116

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FUENTES V. CONRADO ROCA!
G.R. 178902!

APRIL 2010 ! !

FACTS: !
On, Oct 11, 1982, Tarciano Roca bought a 358-square meter lot in Zambales from his mother. Six years
later in 1988, Tarciano offered to sell the lot to the petitioners Fuentes spouses through the help of Atty.
Plagata who would prepare the documents and requirements to complete the sale. In the agreement between
Tarciano and Fuentes spouses there will be a Php 60,000 down payment and Php 140,000 will be paid upon
the removal of Tarciano of certain structures on the land and after the consent of the estranged wife of
Tarciano, Rosario, would be attained. Atty. Plagata thus went about to complete such tasks and claimed that
he went to Manila to get the signature of Rosario but notarized the document at Zamboanga. The deed of
sale was executed January 11, 1989. As time passed, Tarciano and Rosario died while the Fuentes spouses
and possession and control over the lot. Eight years later in 1997, the children of Tarciano and Rosario filed
a case to annul the sale and reconvey the property on the ground that the sale was void since the consent of
Rosario was not attained and that Rosarios’ signature was a mere forgery. The Fuentes spouses claim that

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 117

the action has prescribed since an action to annul a sale on the ground of fraud is 4 years from discovery. !
The RTC ruled in favor of the Fuentes spouses ruling that there was no forgery, that the testimony of Atty.
Plagata who witnessed the signing of Rosario must be given weight, and that the action has already
prescribed. On the other hand, the CA reversed the ruling of stating that the action has not prescribed since
the applicable law is the 1950 Civil Code which provided that the sale of Conjugal Property without the
consent of the other spouse is voidable and the action must be brought within 10 years. Given that the
transaction was in 1989 and the action was brought in 1997 hence it was well within the prescriptive peri-

od. !
!
I SSUE
S:
1. Whether or not Rosario’s signature on the document of consent to her husband Tarciano’s sale of their

conjugal land to the Fuentes spouses was forged; !


2. Whether or not the Rocas’ action for the declaration of nullity of that sale to the spouses already

prescribed; and!
3. Whether or not only Rosario, the wife whose consent was not had, could bring the action to annul that

sale. !
!
H ELD:

1. The SC ruled that there was forgery due to the difference in the signatures of Rosario in the
document giving consent and another document executed at the same time period. The SC noted that the
CA was correct in ruling that the heavy handwriting in the document which stated consent was completely

different from the sample signature. !


2. Although Tarciano and Rosario was married during the 1950 civil code, the sale was done in 1989,
after the effectivity of the Family Code. The Family Code applies to Conjugal Partnerships already
established at the enactment of the Family Code. The sale of conjugal property done by Tarciano without
the consent of Rosario is completely void under Art 124 of the family code. With that, it is a given fact that

assailing a !
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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 118

!void contract never prescribes. On the argument that the action has already prescribed based on the
discovery of the fraud, that prescriptive period applied to the Fuentes spouses since it was them who should
have assailed such contract due to the fraud but they failed to do so. On the other hand, the action to assail

!a sale based on no consent given by the other spouse does not prescribe since it is a void contract.
3. It is argued by the Spouses Fuentes that it is only the spouse, Rosario, who can file such a case to
assail the validity of the sale but given that Rosario was already dead no one could bring the action anymore.
The SC ruled that such position is wrong since as stated above, that sale was void from the beginning.
Consequently, the land remained the property of Tarciano and Rosario despite that sale. When the two died,
they passed on the ownership of the property to their heirs, namely, the Rocas. As lawful owners, the Rocas
had the right, under Article 429 of the Civil Code, to exclude any person from its enjoyment and

!disposal.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 119

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 120

!!!!
TITAN CONSTRUCTION CORPORA TION v. MANUEL A. DAVID, SR. and MARTHA
S. DAVID !
G.R NO. 169548!
MARCH 15, 2010!

!
FACTS: !
Manuel A. David, Sr. (Manuel) and Martha S. David (Martha) were married on March 25, 1957. In 1970,
the spouses acquired a 602 square meter lot located at White Plains, Quezon City, which was registered in
the name of MARTHA S. DAVID, of legal age, Filipino, married to Manuel A. David and covered by
Transfer Certificate of Title (TCT) No. 156043 issued by the Register of Deeds of Quezon City. In 1976,
the spouses separated de facto, and no longer communicated with each other. In March 1995, Manuel
discovered that Martha had previously sold the property to Titan Construction Corporation (Titan) for
P1,500,000.00. Thus, on March 13, 1996, Manuel filed a Complaint for Annulment of Contract and
Recovenyance against Titan before the RTC of Quezon City. Manuel alleged that the sale executed by

Martha in favor of Titan was without his knowledge and consent, and therefore void. !
Titan claimed that it was a buyer in good faith and for value because it relied on a Special Power of Attorney
(SPA) dated January 4, 1995 signed by Manuel which authorized Martha to dispose of the property on
behalf of the spouses. Titan thus prayed for the dismissal of the complaint. On the other hand, Manuel
claimed that the SPA was spurious, and that the signature purporting to be his was a forgery; hence, Martha

was wholly without authority to sell the property. !


The RTC declared the Deed of Sale between Titan and Martha as void; ordered Titan to reconvey said
property to Martha and Manuel; ordered the Registry of Deeds of Quezon City to issue a new title in the
names of Manuel and Martha and that Titan to pay damages and attorney’s fees. The CA affirmed the

decision with modification on the amount as to the damages. !


ISSUE: !
Whether or not the sale between Titan and Martha is valid !
HELD: !
No. The Court finds that the sale between Titan and Martha is void. The property under question belongs to
the conjugal partnership of Manuel and Martha. Under the Civil Code, all property of the marriage is
presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband
or to the wife. Titan failed to overturn the presumption that said property was conjugal. Moreover, the
property was undoubtedly part of the conjugal partnership, the sale to Titan required the consent of both
spouses. The Civil Code expressly provides that the husband is the administrator of the conjugal partnership.
Likewise, the same Code ordains that the wife cannot bind the conjugal partnership without the husbands
consent, except in cases provided by law. The Court further held that SPA allegedly signed by Manuel is

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 121

void as it was forged, thus consent of Manuel was evidently lacking. Without Manuel’s consent, the sale
between Martha and Titan is void.

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SPOUSES REX AND CONCEPCION AGGABO VS. DIONISIO Z. PARULAN,!
JR. AND MA. ELENA PARULAN!
GR NO. 165803!

SEPTEMBER 1, 2010 !
FACTS: !
Involved in this action are two parcels of land and their improvements in Parañaque City and registered
under the name of Spouses Parulan, who have been estranged from one another. Real estate broker Atanacio
offered the property to Spouses Aggabao who upon Atanacio’s insistence prevailed upon them, so that they
and Atanacio met with Ma. Elena (Parulan’s wife) at the site of the property. During their meeting, Spouses
Aggabao paid Ma. Elena earnest money amounting to P20,000 which she acknowledged with a handwritten
receipt. Then and there, they agreed on the terms of how the buyers will pay the price of the property.
Spouses Aggabao complied with all the terms with regard to the payment of the properties, but when Ma.
Elena already needed to turn over the owner’s duplicate copies for both lands, she was able to turn over

only one (which was successfully transferred to the name of spouses Aggabao). !
For the other one, she said that it is with a relative in HongKong but she promised to deliver it to the spouses
in a week. Needless to say, she failed to do so and by doing their own verification, the spouses found out
that said copy of title was in the hands of Dionisio’s brother. The spouses met with Dionisio’s brother, Atty.
Parulan, who told them that he is the one with the power to sell the property. He demanded P800,000 for
said property and gave the spouses several days to decide. When Atty. Parulan did not hear back from the
spouses, he gave them a call, and was then informed that they have already paid the full amount to Ma.
Elena. Subsequently, Dionisio, through Atty. Parulan, commenced an action praying for the declaration of
the nullity of the deed of absolute sale executed by Ma. Elena, and the cancellation of the title issued to the

petitioners by virtue thereof. !


! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 122

ISSUE: !
Whether or not the sale of conjugal property made by Ma. Elena, by presenting a special power of attorney
to sell (SPA) purportedly executed by respondent husband in her favor was validly made to the

vendees. !
HELD: !
No, the Court ruled that the sale of conjugal property without the consent of the husband was not merely
voidable but void; hence, it could not be ratified. Spouses Aggabao also cannot use the defense that they are
buyers in good faith because they did not exercise the necessary prudence to inquire into the wife’s authority
to sell. The relevant part of Article 124 of the Family Code provides that: xxx In the event that one spouse
is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do not include disposition or encumbrance
without authority of the court or the written consent of the other spouse. In the absence of such authority or

consent, the disposition or encumbrance shall be ! void.


!
!
!
!
!
!
!
BRAVO-GUERRERO VS. BRAVO!
GR NO. 152658!

! JULY 29, 2005

F!ACTS
:
Spouses Mauricio and Simona Bravo owned two parcels of land in Makati City, Metro Manila. Simona
executed a General Power of Attorney appointing Mauricio as her attorney-in-fact. In the GPA, Simona
authorized Mauricio to “mortgage or otherwise hypothecate, sell, assign and dispose of any and all of my
property, real, personal or mixed, of any kind whatsoever and wheresoever situated, or any interest therein

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 123

xxx." Mauricio subsequently mortgaged the Properties to the Philippine National Bank (PNB) and

Development Bank of the Philippines (DBP) for ! P10,000 and P5,000, respectively.
Mauricio executed a Deed of Sale with Assumption of Real Estate Mortgage conveying the Properties to
"Roland A. Bravo, Ofelia A. Bravo and Elizabeth Bravo” ("vendees"). The sale was conditioned on the
payment of P1,000 and on the assumption by the vendees of the PNB and DBP mortgages over the
Properties. However, the Deed of Sale was not annotated on the certificates. Neither was it presented to
PNB and DBP. The mortage loans and the receipts for loan payments issued by PNB and DBP continued
to be in Mauricio’s name even after his death. Edward, represented by his wife, Fatima Bravo, filed an
action for the judicial partition of the Properties. Edward claimed that he and the other grandchildren of
Mauricio and Simona are co-owners of the Properties by succession. Despite this, petitioners refused to
share with him the possession and rental income of the Properties. Edward later amended his complaint to
include a prayer to annul the Deed of Sale, which he claimed was merely simulated to prejudice the other

heirs. !
ISSUE: !
Whether or not Maurico who was only given a GPA by his wife was authorized to sell the property !
HELD ! :
Yes. Simona authorized Mauricio to dispose of the Properties when she executed the GPA. True, Article
1878 requires a special power of attorney for an agent to execute a contract that transfers the ownership of
an immovable. However, the Court has clarified that Article 1878 refers to the nature of the authorization,
not to its form. Even if a document is titled as a general power of attorney, the requirement of a special
power of attorney is met if there is a clear mandate from the principal specifically authorizing the
performance of the act. In Veloso v. Court of Appeals, the Court explained that a general power of attorney
could contain a special power to sell that satisfies the requirement of Article 1878, thus: An examination of
the records showed that the assailed power of attorney was valid and regular on its face. It was notarized

and as such, it carries the evidentiary weight conferred upon it with respect to its due execution. !
While it is true that it was denominated as a general power of attorney, a perusal thereof revealed that it
stated an authority to sell, to wit: "2. To buy or sell, hire or lease, mortgage or otherwise hypothecate lands,
tenements and hereditaments or other forms of real property, more specifically TCT No. 49138, upon such
terms and conditions and under such covenants as my said attorney shall deem fit and proper." Thus, there
was no need to execute a separate and special power of attorney since the general power of attorney had
expressly authorized the agent or attorney in fact the power to sell the subject property. The special power
of attorney can be included in the general power when it is specified therein the act or transaction for which

the special power is required. !


In this case, Simona expressly authorized Mauricio in the GPA to " sell, assign and dispose of any and all
of my property, real, personal or mixed, of any kind whatsoever and wheresoever situated, or any interest
therein xxx" as well as to "act as my general representative and agent, with full authority to buy, sell,
negotiate and contract for me and in my behalf." Taken together, these provisions constitute a clear and

specific mandate to Mauricio to sell the Properties. Even if it is called a “general power of attorney," the !

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 124

!!!!specific provisions in the GPA are sufficient for the purposes of Article 1878. These provisions in the
GPA

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!likewise indicate that


Simona consented to the sale of the Properties.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 125

!
FRANCISCO A. VELOSO VS. COURT OF APPEAL!
GR NO. 102737!
AUGUST 21,

1996 ! FACTS: !
Petitioner Francisco Veloso was the owner of a parcel of land situated in the district of Tondo, Manila,
registered under his name, single. The said title was subsequently cancelled and a new one, Transfer
Certificate of Title was issued in the name of Aglaloma B. Escario, married to Gregorio L. Escario.
Petitioner filed an action for annulment of documents, reconveyance of property with damages. He alleged
that he was the absolute owner of the subject property, and he never authorized anybody, not even his wife,

to sell it. !
Upon verification at the registry of deeds, he transfer of property was supported by a General Power of
Attorney and Deed of Absolute Sale, executed by Irma Veloso, wife of the petitioner and appearing as his
attorney-in-fact, and defendant Aglaloma Escario. Petitioner denied having executed the power of attorney
and alleged that his signature was falsified. Defendant Aglaloma Escario in her answer alleged that she was
a buyer in good faith and denied any knowledge of the alleged irregularity. She allegedly relied on the
general power of attorney of Irma Veloso which was sufficient in form and substance and was duly

notarized. !
Trial court adjudged defendant Aglaloma as the lawful owner of the property as she was deemed an innocent
purchaser for value. The assailed general power of attorney was held to be valid and sufficient for the
purpose. The trial court ruled that there was no need for a special power of attorney when the special power
was already mentioned in the general one. The court also stressed that plaintiff was not entirely blameless
for although he admitted to be the only person who had access to the title and other important documents,
his wife was still able to possess the copy. Petitioner Veloso filed his appeal with the Court of Appeals. The

respondent court affirmed in toto the findings of the trial court. Hence, this petition !
ISSUE: !
Whether or not the Court of Appeals committed a grave error in not finding that the forgery of the power of

attorney had been adequately proven, despite the preponderant evidence !


HELD: !
We find petitioner's contentions not meritorious. An examination of the records showed that the assailed
power of attorney was valid and regular on its face. It was notarized and as such, it carries the evidentiary
weight conferred upon it with respect to its due execution. While it is true that it was denominated as a
general power of attorney, a perusal thereof revealed that it stated an authority to sell, to wit: To buy or
sell, hire or lease, mortgage or otherwise hypothecate lands, tenements and hereditaments or other forms of
real property, more specifically TCT No. 49138, upon such terms and conditions and under such covenants
as my said attorney shall deem fit and proper. Whether the instrument be denominated as "general power
of attorney" or "special power of attorney", what matters is the extent of the power or powers contemplated

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 126

!
upon the agent or attorney in fact. If the power is couched in general terms, then such power cannot go
beyond acts of administration. However, where the power to sell is specific, it not being merely implied,
much less couched in general terms, there cannot be any doubt that the attorney in fact may execute a valid

sale. !
An instrument may be captioned as "special power of attorney" but if the powers granted are couched in
general terms without mentioning any specific power to sell or mortgage or to do other specific acts of strict
dominion, then in that case only acts of administration may be deemed conferred. Further, the right of an
innocent purchaser for value must be respected and protected, even if the seller obtained his title through
fraud. The fact remains that the Certificate of Title, as well as other documents necessary for the transfer of
title were in the possession of plaintiff's wife, Irma L. Veloso, consequently leaving no doubt or any
suspicion on the part of the defendant as to her authority.

JOSEFINA VILLANUEVA-MIJARES VS. THE COURT OF APPEALS!


GR NO. 108921!
APRIL 12, 2000

! !
FACTS: !
Petitioners Josefina, Waldetrudes, Godofredo, Eduardo, Germelina, and Milagros are the legitimate children
of the late Leon Villanueva. Petitioner Concepcion is his widow. Leon was one of eight (8) children of
Felipe Villanueva, predecessor-in-interest of the parties in the present case. Private respondents They are
related by blood to the petitioners as descendants of Felipe. Leon held in trust for his co-heirs the property
left by their late father. During Leons lifetime, his co-heirs made several seasonable and lawful demands
upon him to subdivide and partition the property, but no subdivision took place. After the death of Leon,
private respondents discovered that the shares of four of the heirs of Felipe was purchased by Leon as
evidenced by a Deed of Sale executed on August 25, 1946 but registered only in 1971. Also, Leon had,
sometime in July 1970, executed a sale and partition of the property in favor of his own children, herein
petitioners. Private respondents then filed a case for partition with annulment of documents and/or
reconveyance and damages. The latter contended that the sale in favor of Leon was fraudulently obtained
through machinations and false pretenses. Thus, the subsequent sale of the lot by Leon to his children was

null and void despite the OCT in his favor. !


Petitioners, for their part, claimed that the sale by Simplicio, Fausta, Nicolasa, and Maria Baltazar was a
valid sale. Trial court rendered favorable decision to the herein petitioners. However, CA reversed the ruling
of lower court as far as the authority of Maria Baltazar to convey any portion of her late husbands estate.
Maria Baltazar had no authority to sell the portion of her late husbands share inherited by her then minor
children since she had not been appointed their guardian. Respondent court likewise declared that as far as
private respondents Procerfina, Prosperidad, Ramon and Rosa, were concerned, the Deed of Sale of August

!
25, 1946 was "unenforceable." Hence this petition. !
ISSUE: !
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 127

!
Whether or not the Deed of Sale unenforceable against the private respondents for being an unauthorized

!
contract !
HELD: !
We find no reversible error committed by the respondent appellate court in declaring the Deed of Sale
unenforceable on the children of Maria Baltazar. Under the law then prevailing at the time of the demise of
her spouse, her husbands share in the common inheritance pertained to her minor children who were her
late husbands heirs and successors-in-interest. The old Civil Code governs the distribution and disposition
of his intestate estate. Thereunder, the legitime of the children and descendants consisted of two-thirds (2/3)
of the hereditary estate of the father and of the mother (first paragraph, Article 808); and the widower or
widow, as the case may be, who, at the time of death of his or her spouse, was not divorced or if divorced,
due to the fault of the deceased spouse, was entitled to a portion in usufruct equal to that which pertains as
legitime to each of the legitimate children or descendants not bettered (Article 834, 1st paragraph.)” In
addition, under the jurisprudence prevailing at the time of Benitos death, the rule was that while parents
may be the guardians of their minor children, such guardianship did not extend to the property of their minor
children. Parents then had no power to dispose of the property of their minor children without court
authorization. Without authority from a court, no person could make a valid contract for or on behalf of a
minor or convey any interest of a minor in land. Admittedly, Maria Baltazar showed no authorization from
a court when she signed the Deed of Sale of August 26, 1948, allegedly conveying her childrens realty to

Leon. !
NAPOLEON D. NERI, ET AL. V. HEIRS OF HADJI YUSOP
UY! G.R NO. 194366! OCTOBER 10, 2012!

!
FACTS: !
Anunciacion Neri had seven children. Two from her first marriage with Gonzalo; Eutropia and Victoria;
and five with Enrique: Napoleon, Alicia, Visminda, Douglas, and Rosa. Throughout the marriage of Enrique
and Anunciacion, they acquired several properties with a total area of 296,555 sq. m. Anunciacion thereafter
died intestate. Her husband Enrique, in his personal capacity and as natural guardian of his minor children
Rosa & Douglas, together with his three other children executed an Extra-Judicial Settlement of the estate
with Absolute Deed of Sale, adjudicating among themselves the said properties and conveying them to late

spouses Hadji Yusop UY and Julpha Ibrahim Uy for 80,000 Php. !


However, the children of Enrique filed a complaint for the annulment of sale against spouses Uy assailing
the validity of the sale for having been sold within the prohibited period. The complaint was later amended
to include Eutropia and Victoria (children from 1st marriage) as additional plaintiffs for having been
excluded and deprived of their legitimes. The heirs of Uy countered that the sale took place beyond the

5year prohibitory period from the issuance of the patents. !

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 128

!
The RTC ordered the annulment of the extra-judicial settlement of the estate with the absolute deed of sale
on the ground that Eutropia and Victoria were indeed deprived of their hereditary rights and that Enrique

had no judicial authority to sell the shares of the minors. The case was brought to the Court of Appeals. !
The Court of Appeals reversed the ruling and found it unconscionable to permit the annulment of sale
considering the properties were in the possession of the Uy’s for 17 year. CA ruled that Enrique had
authority, as they were co-owners. Moreover, although Rosa and Douglas were minors at the time of the

sale, they were deemed to have ratified the sale when they failed to question it. !
ISSUE: !
Whether or not there was a valid sale !
HELD: !
There was a partial valid sale with respect to the shares of Enrique, Napoleon, Alicia, Visminda, and Rosa
whereas the sale with respect to the shares of Eutropia, Victoria, and Douglas were null and void.Although
the Civil Code recognizes Enrique as the natural guardian of his minor children, he does not have the power
to dispose or encumber the property of the minors. Therefore, there is want of authority. Furthermore, the
disputed sale entered into by Enrique on behalf of his minor children without proper judicial authority is

unenforceable unless ratified, as provided by Art. 1403 in relation to Art. 1317 of the Civil Code. !
An unenforceable contract once ratified cleanses the defects of the contracts from the moment it was
constituted. Records show that Rosa had ratified the extrajudicial settlement of the estate with absolute sale.
However, the same is not the case with Douglas as there was a lack of evidence showing ratification. With
respect to Eutropia and Victoria, they were admittedly excluded from the extrajudicial settlement therefore

making it a total nullity.


!!!!!!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 129

!
DOMINGO D. RUBIAS VS. ISAIAS BATILLER!
G.R. NO. L-3570!

! MAY 29, 1973!

FACTS: !
Before the war with Japan, Francisco Militante filed an application for registration of the parcel of land in
question. After the war, the petition was heard and denied. Pending appeal, Militante sold the land to
petitioner, his son-in-law. Plaintiff filed an action for forcible entry against respondent. Defendant claims
the complaint of the plaintiff does not state a cause of action, the truth of the matter being that he and his
predecessors-in-interest have always been in actual, open and continuous possession since time immemorial

under claim of ownership of the portions of the lot in question. !


ISSUE: ! Whether or not the contract of sale between appellant and his father-in-law was void

because it was made when plaintiff was counsel of his father-in-law in a land registration case involving

the property in dispute ! HELD:!


The stipulated facts and exhibits of record indisputably established plaintiff's lack of cause of action and
justified the outright dismissal of the complaint. Plaintiff's claim of ownership to the land in question was
predicated on the sale thereof made by his father-in- law in his favor, at a time when Militante's application
for registration thereof had already been dismissed by the Iloilo land registration court and was pending
appeal in the Court of Appeals. Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code)
prohibits in its six paragraphs certain persons, by reason of the relation of trust or their peculiar control over
the property, from acquiring such property in their trust or control either directly or indirectly and "even at
a public or judicial auction," as follows: (1) guardians; (2) agents; (3) administrators; (4) public officers and
employees; judicial officers and employees, prosecuting attorneys, and lawyers; and (6) others especially
disqualified by law. Fundamental consideration of public policy render void and inexistent such expressly
prohibited purchase (e.g. by public officers and employees of government property entrusted to them and
by justices, judges, fiscals and lawyers of property and rights in litigation and submitted to or handled by
them, under Article 1491, paragraphs (4) and (5) of our Civil Code) has been adopted in a new article of
our Civil Code, viz, Article 1409 declaring such prohibited contracts as "inexistent and void from the
beginning." Indeed, the nullity of such prohibited contracts is definite and permanent and cannot be cured
by ratification. The public interest and public policy remain paramount and do not permit of compromise
or ratification. In his aspect, the permanent disqualification of public and judicial officers and lawyers
grounded on public policy differs from the first three cases of guardians, agents and administrators (Article
1491, Civil Code), as to whose transactions it had been opined that they may be "ratified" by means of and
in "the form of a new contact, in which cases its validity shall be determined only by the circumstances at
the time the execution of such new contract. The causes of nullity which have ceased to exist cannot impair
the validity of the new contract. Thus, the object which was illegal at the time of the first contract, may have
already become lawful at the time of the ratification or second contract; or the service which was impossible
may have become possible; or the intention which could not be ascertained may have been clarified by the

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 130

!
parties. The ratification or second contract would then be valid from its execution; however, it does not

!
retroact to the date of the first contract.” !

!
!
!
!
!
JACOBUS BERNHARD HULST VS. PR BUILDERS, INC.!
G.R. NO. 156364!

!
!! SEPTEMBER 3, 2007!

FACTS:

!
Jacobus Bernhard Hulst and his spouse, Dutch nationals, entered into a Contract to Sell with PR Builders,
Inc. for the purchase of a 210-sq m residential unit in respondent's townhouse project in Batangas. When
respondent failed to comply with its verbal promise to complete the project by June 1995, the spouses Hulst
filed before the Housing and Land Use Regulatory Board (HLURB) a complaint for rescission of contract
with interest, damages and attorney's fees. HLURB rendered a Decision in favor of the spouses. A writ of
execution was ordering the sheriff to execute the judgment and the levy the property was executed. But

!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 131

!
upon the motion of the respondent, the levy was set aside, leaving only the respondent's personal properties

to be levied first. The Sheriff set a public auction of the said levied properties. !
The respondent filed a motion to quash Writ of levy on the ground that the sheriff made an over levy since
the aggregate appraised value of the properties at P6,500 per sq m is P83,616,000. Instead of resolving the
objection of the respondent's regarding the auction, the Sheriff proceeded with the auction since there was
no restraining order from the HLURB. The 15 parcels of land was then awarded to Holly Properties Realty
at a bid of P5,450,653. On the same day, the Sheriff remitted the legal fees and submitted to contracts of
sale to HLURB, however, he then received orders to suspend proceedings on the auction for the reason that
the market value of the properties was not fair. There was disparity between the appraised value and the
value made by the petitioner and the Sheriff, which should've been looked into by the Sheriff before making
the sale. While an inadequacy in price is not a ground to annul such sale, the court is justified to such

intervention where the price shocks the conscience !


!
I SSUE:

Whether or not the sale may be annulled on the basis that it was inadequately priced !
!
H ELD:
Under Article 1414, one who repudiates the agreement and demands his money before the illegal act has
taken place is entitled to recover. Petitioner is therefore entitled to recover what he has paid, although the
basis of his claim for rescission, which was granted by the HLURB, was not the fact that he is not allowed
to acquire private land under the Philippine Constitution. But petitioner is entitled to the recovery only of
the amount of P3,187,500.00, representing the purchase price paid to respondent. No damages may be
recovered on the basis of a void contract; being nonexistent, the agreement produces no juridical tie between
the parties involved. Further, petitioner is not entitled to actual as well as interests thereon, moral and
exemplary damages and attorney's fees. The HLURB Decision resulted in the unjust enrichment of
petitioner at the expense of respondent. Petitioner received more than what he is entitled to recover under

!
the circumstances !!

!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 132

!
IN RE: PETITION FOR SEPARATION OF PROPERTY ELENA BUENAVENTURA
MULLER VS. HELMUT MULLER!
G.R. NO. 149615 !

! AUGUST 29, 2006! FACTS: !


Petitioner Elena Buenaventura Muller and respondent Helmut Muller were married in Hamburg, Germany.
The couple resided in Germany at a house owned by respondent’s parents but decided to move and reside
permanently in the Philippines. Respondent had inherited a house in Germany from his parents which he
sold and used the proceeds for the purchase of a parcel of land in Antipolo, Rizal at the cost of P528,000.00
and the construction of a house amounting to P2,300,000.00. The Antipolo property was registered in the
name of petitioner. The spouses eventually separated and the trial court rendered a decision which
terminated the regime of absolute community of property between the petitioner and respondent and decreed
the separation of properties between them and ordered the equal partition of personal properties located
within the country, excluding those acquired by gratuitous title during the marriage. With regard to the
Antipolo property, the court held that it was acquired using paraphernal funds of the respondent. However,
it ruled that respondent cannot recover his funds because the property was purchased in violation of Section
7, Article XII of the Constitution

! ISSUE: ! Whether or not Elena should reimburse Helmut for the amount used for the
acquisition of the land

!
HELD:

!
Aliens, whether individuals or corporations, are disqualified from acquiring lands of the public domain.
Hence, they are also disqualified from acquiring private lands. The primary purpose of the constitutional
provision is the conservation of the national patrimony. Respondent was aware of the constitutional
prohibition and expressly admitted his knowledge thereof to this Court. He declared that he had the Antipolo
property titled in the name of petitioner because of the said prohibition. The distinction made between
transfer of ownership as opposed to recovery of funds is a futile exercise on respondent’s part. To allow
reimbursement would in effect permit respondent to enjoy the fruits of a property which he is not allowed
to own.

!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 133

!!!!

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CELSO R. HALILI AND ARTHUR R. HALILI VS. COURT OF APPEALS,!
HELEN MEYERS GUZMAN, DAVID REY GUZMAN AND EMILIANO CATANIAG!
G.R. NO. 113539 !

!
! MARCH 12, 1998! FACTS: !

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 134

!
Simeon de Guzman, an American citizen, died sometime in 1968, leaving real properties in the Philippines.
His forced heirs were his widow, defendant appellee Helen Meyers Guzman, and his son, defendant appellee
David Rey Guzman, both of whom are also American citizens. On August 9, 1989, Helen executed a deed
of quitclaim, assigning, transferring and conveying to David Rey all her rights, titles and interests in and
over six parcels of land which the two of them inherited from Simeon. David Rey Guzman sold said parcel
of land to defendant-appellee Emiliano Cataniag. Petitioners, who are owners of the adjoining lot, filed a
complaint before the Regional Trial Court of Malolos, Bulacan, questioning the constitutionality and
validity of the two conveyances between Helen Guzman and David Rey Guzman, and between the latter
and Emiliano Cataniag and claiming ownership thereto based on their right of legal redemption.

!
ISSUE:

! Whether or not there is a valid sale between De Guzman and


Cataniag

!
HELD:

!
Article XII, Section 7 of the Constitution provides that “Save in cases of hereditary succession, no private
lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to
acquire or hold lands of the public domain” The capacity to acquire private land is made dependent upon
the capacity to acquire or hold lands of the public domain. Private land may be transferred or conveyed only
to individuals or entities qualified to acquire lands of the public domain. In fine, non-Filipinos cannot
acquire or hold title to private lands or to lands of the public domain, except only by way of legal succession.
In this case, there was a valid sale between the parties.

!!
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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 135

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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 136

!
CAMILO F. BORROMEO VS. ANTONIETTA O. DESCALLAR,!
G.R. NO. 159310 !

!
! FEBRUARY 24, 2009! FACTS: !

Wilhelm Jambrich, an Austrian, arrived in the Philippines in 1983. He met respondent Antonietta
OpallaDescallar, a separated mother of two boys who was working as a waitress at St. Moritz Hotel. The
two fell in love with each other and they were able to acquire some real properties in the Philippines
composed of several houses and lots which the' bought from Agro Macro Development Corporation. The
deed of sale of said real properties were placed in the name of both Jambrich and Descallar as buyers, but
were registered under the Torrens system in the name of Descallar alone as Jambrich is disqualified to own
real properties in the country. The relationship turned sour so they got separated. Jambrich met petitioner
Camilo F. Borromeo sometime in 1986. Petitioner was engaged in the real estate business and building and
repairing speedboats as a hobby. In 1989, Jambrich purchased an engine and some accessories for his boat
from petitioner, for which he became indebted to the latter for about P150,000.00. To pay for his debt, he
sold his rights and interests in the Agro-Macro properties to petitioner for P250,000, as evidenced by a
"Deed of Absolute Sale/Assignment."

!
ISSUE:

! Whether or not there is valid sale between Jambrich and


Borromeo

!
HELD:

!
Jambrich has all authority to transfer all his rights, interests and participation over the subject properties to
petitioner by virtue of the Deed of Assignment he executed on July 11, 1991. Respondent argued that aliens
are prohibited from acquiring private land. However in the instant case, the transfer of land from Agro-
Macro Development Corporation to Jambrich, who is an Austrian, would have been declared invalid if
challenged, had not Jambrich conveyed the properties to petitioner who is a Filipino citizen. It is a well
settled rule that if land is invalidly transferred to an alien who subsequently becomes a Filipino citizen or
transfers it to a Filipino, the flaw in the original transaction is considered cured and the title of the transferee
is rendered valid. Therefore the sale is valid

!!
!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 137

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!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 138

!
J.G. SUMMIT HOLDINGS, INC. VS. COURT OF APPEALS; COMMITTEE ON!
PRIVATIZATION, ITS CHAIRMAN AND MEMBERS; ASSET PRIVATIZATION!
TRUST; AND PHILYARDS HOLDINGS, INC.,!
G.R. NO. 124293 !

!
! JANUARY 31, 2005!

FACTS:

!
The National Investment and Development Corporation (NIDC), a government corporation, entered into a
Joint Venture Agreement (JVA) with Kawasaki Heavy Industries, Ltd. of Kobe, Japan (Kawasaki) for the
construction, operation, and management of the Subic National Shipyard, Inc. (SNS), which subsequently
became the Philippine Shipyard and Engineering Corporation (PHILSECO). Under the JVA, NIDC and
Kawasaki would maintain a shareholding proportion of 60% - 40%, respectively. One of the provisions of
the JVA accorded the parties the right of first refusal should either party sell, assign or transfer its interest
in the joint venture. On 25 November 1986, NIDC transferred all its rights, title and interest in PHILSECO
to the Philippine National Bank (PNB). More than two months later, by virtue of Administrative Order 14,
PNB's interest in PHILSECO was transferred to the National Government. Meanwhile, on 1986, President
Corazon C. Aquino issued Proclamation 50 establishing the Committee on Privatization (COP) and the
Asset Privatization Trust (APT) to take title to and possession of, conserve, manage and dispose of non-
performing assets of the National Government. On 27 February 1987, a trust agreement was entered into
between the National Government and the APT by virtue of which the latter was named the trustee of the
National Government's share in PHILSECO. In 1989, as a result of a quasi-reorganization of PHILSECO
to settle its huge obligations to PNB, the National Government's shareholdings in PHILSECO increased to
97.41% thereby reducing Kawasaki's shareholdings to 2.59%. Exercising their discretion, the COP and the

APT deemed it in the best interest of the national !


!
I SSUE:

!
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!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 139

Whether or not the purchase of share in a land holding is valid !


HELD:

!
An "invitation to bid, there is a condition imposed upon the bidders to the effect that the bidding shall be
subject to the right of the government to reject any and all bids subject to its discretion. No law disqualifies
a person from purchasing shares in a landholding corporation even if the latter will exceed the allowed
foreign equity, what the law disqualifies is the corporation from owning land. Section 7. Save in cases of
hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations,
or associations qualified to acquire or hold lands of the public domain. The petitioner further argues that
"an option to buy land is void in itself but in a case the court stated that: To be sure, a lease to an alien for
a reasonable period is valid. So is an option giving an alien the right to buy real property on condition that
he is granted Philippine citizenship. Aliens are not completely excluded by the Constitution from the use of
lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted
temporary rights such as a lease contract which is not forbidden by the Constitution. Should they desire to
remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to acquire.

!
!
CLARIN V. RULONA!
GR NO. L-30786!

! FEBRUARY 20, 1984!

FACTS:

!
Two exhibits were shown by the Petitioner. Exhibit A contains an authorization to survey the 10 hectares
to be awarded to the respondents which the couple (Rulonas) purchased from the Clarins for 2,500 pesos.
Exhibit B contains the acknowledgment of Clarin that Mr. Rulona paid 800 pesos as initial payment. The
conditions of the sale were that a downpayment of P1,000.00 was to be made and then the balance of
P1,500.00 was to be paid in monthly installment of P100.00. As shown by Exhibit B, the respondent

!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 140

!
delivered to the petitioner a downpayment of P800.00 and on the first week of June the amount of P200.00

was also delivered thereby completing the downpayment of P1,000.00. !


On the first week of August, another delivery was made by the respondent in the amount of P100.00 as
payment for the first installment. Respondent further alleged that despite repeated demands to let the sale
continue and for the petitioner to take back the six postal money orders, the latter refused to comply.
petitioner alleged that while it is true that he had a projected contract of sale of a portion of land with the
respondent, such was subject to the following conditions: (1) that the contract wouldbe realized only if his
co-heirs would give their consent to the sale of a specific portion of their common inheritance from the late
Aniceto Clarin before partition of the said common property and (2) that should his co-heirs refuse to give
their consent, the projected contract would be discontinued or would not be realized. The trial court and CA

ruled in favor of the respondent. Hence, this petition. !


ISSUE:

!
Whether or not there has been a perfected contract of sale between petitioner and respondent !
HELD:

!
YES. While it is true that Exhibits A and B are, in themselves, not contracts of sale, they are, however, clear
evidence that a contract of sale was perfected between the petitioner and the respondent and that such

contract had already been partially fulfilled and executed. !


A 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. Such contract is binding in whatever form it may have been entered into.
Construing Exhibits A and B together, it can be seen that the petitioner agreed to sell and the respondent
agreed to buy a definite object, that is, ten hectares of land which is part and parcel of Lot 20 PLD No. 4,
owned in common by the petitioner and his sisters although the boundaries of the ten hectares would be
delineated at a later date. The parties also agreed on a definite price which is P2,500.00. Exhibit B further
shows that the petitioner has received from the respondent as initial payment, the amount of P800.00. Hence,
it cannot be denied that there was a perfected contract of sale between the parties and that such contract was
already partially executed when the petitioner received the initial payment of P800.00. The latter's

!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 141

!
acceptance of the payment clearly showed his consent to the contract thereby precluding him from rejecting

its binding effect. !


!
!
!
CARABEO V. SPOUSES DINGCO!
GR NO. 190823!

! APRIL 4, 2011! FACTS: !


Domingo Carabeo (petitioner) entered into a contract denominated as "Kasunduan sa Bilihan ng Karapatan
sa Lupa" with Spouses Norberto and Susan Dingco (respondents) whereby petitioner agreed to sell his rights
over a 648 square meter parcel of unregistered land situated in Orani, Bataan to respondents for P38, 000.
Respondents tendered their initial payment of P10, 000 upon signing of the contract, the remaining balance
to be paid on September 1990. Respondents were later to claim that when they were about to hand in the
balance of the purchase price, petitioner requested them to keep it first as he was yet to settle an on-going
"squabble" over the land. Respondents learned that the alleged problem over the land had been settled and
that petitioner had caused its registration in his name. They thereupon offered to pay the balance but
petitioner declined. Respondent filed a complaint for specific performance before the Regional Trial Court
(RTC) of Balanga, Bataan.

!
ISSUE:

! Whether or not the contract of sale contains a determinate


object

!
!
!
!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 142

!
HELD:

!
YES. Even though the kasunduan did not specify the technical boundaries of the property, it did not render
the sale a nullity. The requirement that a sale must have for its object a determinate thing is satisfied as long
as, at the time the contract is entered into, the object of the sale is capable of being made determinate without
the necessity of a new or further agreement between the parties. As shown by the kasunduan, there is no
doubt that the object of the sale is determinate. Respondents are pursuing a property right arising from the
kasunduan, whereas petitioner is invoking nullity of the kasunduan to protect his proprietary interest.
Assuming arguendo, however, that the kasunduan is deemed void, there is a corollary obligation of
petitioner to return the money paid by respondents, and since the action involves property rights, it survives.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 143

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 144

!
TAÑEDO V. CA!
GR NO. 104482!

!
! JANUARY 22, 1996! FACTS: !

Lazardo Tañedo executed a notarized deed of absolute sale in favor of his eldest brother, Ricardo Tañedo,
and the latter's wife, Teresita Barera, private respondents herein, whereby he conveyed to the latter in
consideration of P1,500.00 a lot in Gerona, Tarlac stating that it is his future inheritance from his parents.
Upon the death of his father, Lazaro executed an "Affidavit of Conformity" re-affirm, respect, acknowledge
and validate the sale he made. Ricardo learned that Lazaro sold the same property to his children, petitioners
herein, through a deed of sale. Petitioners filed a complaint for rescission (plus damages) of the deeds of
sale executed by Lazaro in favor of private respondents covering the property inherited by Lazaro from his
father. Lazaro testified that he sold the property to Ricardo. Both the trial court and the CA ruled in favor
of the respondents.

!
ISSUE:

! Whether or not a sale of future inheritance


valid?

!
HELD:

!
NO. Pursuant to Article 1347 of the Civil Code, "(n)o contract may be entered into upon a future inheritance
except in cases expressly authorized by law." Consequently, said contract made in 1962 conveying one
hectare of his future inheritance is not valid and cannot be the source of any right nor the creator of any
obligation between the parties. Hence, the "affidavit of conformity" dated February 28, 1980, insofar as it
sought to validate or ratify the 1962 sale, is also useless and, in the words of the respondent Court, "suffers
from the same infirmity."

!
Even private respondents in their memorandum concede this. However, the documents which followed after
the death of Lazaro’s father in favor of private respondents are material. These two documents were
executed after the death of Matias (and his spouse) and after a deed of extra-judicial settlement of his
(Matias') estate was executed, thus vesting in Lazaro actual title over said property.

!!
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 145

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ATTY. PEDRO M. FERRER VS SPOUSES ALFREDO DIAZ AND IMELDA DIAZ,
REINA COMANDANTE AND SPOUSES BIENVENIDO PANGAN AND ELIZABETH
PANGA!
GR NO. 165300!

! APRIL 23, 2010!

FACTS:

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 146

!
!
Petitioner Atty. Ferrer claimed in his complaint that on May 7, 1999, the Diazes, as represented by their
daughter Comandante, through a Special Power of Attorney (SPA),obtained from him a loan of
P1,118,228.00. The loan was secured by a Real Estate Mortgage Contract by way of second mortgage over
Transfer Certificate of Title (TCT) No. RT6604 and a Promissory Note payable within six months or up to
November 7, 1999. Comandante also issued to petitioner postdated checks to secure payment of said loan.
Petitioner further claimed that prior to this or on May 29, 1998, Comandante, for a valuable consideration
of P600,000.00, which amount formed part of the abovementioned secured loan, executed in his favor an
instrument entitled Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided).In her
Reply, respondent alleged that sometime in 1998, she sought the help of petitioner with regard to the
mortgage with a bank of her parents lot located at No. 6, Rd. 20, Project 8, Quezon City and covered by
TCT No. RT6604. She also sought financial accommodations from the couple on several occasions which
totaled P500,000.00. Comandante, however, claimed that these loans were secured by chattel mortgages
over her taxi units in addition to several postdated checks she issued in favor of petitioner. As she could not
practically comply with her obligation, petitioner and his wife, presented to Comandante sometime in May
1998 a document denominated as Waiver of Hereditary Rights and Interests Over a Real Property (Still
Undivided) pertaining to a waiver of her hereditary share over her parents’ property. The Pangans, on the
other hand, asserted that the annotation of petitioners adverse claim on TCT No. RT6604 cannot impair
their rights as new owners of the subject property. They claimed that the Waiver of Hereditary Rights and
Interests O ver a Real Property (Still Undivided) upon which petitioners adverse claim is anchored cannot
be the source of any right or interest over the property considering that it is null and void under paragraph

2 of Article 1347 of the Civil Code. !


ISSUE:

!
Is Comandantes waiver of hereditary rights valid? Is petitioners adverse claim based on such waiver likewise

valid and effective? !


HELD:

!
No. Pursuant to the second paragraph of Article 1347 of the Civil Code,no contract may be entered into
upon a future inheritance except in cases expressly authorized by law. For the inheritance to be considered
future, the succession must not have been opened at the time of the contract. A contract may be classified
as a contract upon future inheritance, prohibited under the second paragraph of Article 1347, where the
following requisites concur: 1)That the succession has not yet been opened. 2)That the object of the contract
forms part of the inheritance; and, 3) That the promissor has, with respect to the object, an expectancy of a
right which is purely hereditary in nature. In this case, there is no question that at the time of execution of
Comandantes Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided), succession
to either of her parents properties has not yet been opened since both of them are still living. With respect
to the other two requisites, both are likewise present considering that the property subject matter of
Comandantes waiver concededly forms part of the properties that she expect to inherit from her parents
upon their death and, such expectancy of a right, as shown by the facts, is undoubtedly purely hereditary in
nature. From the foregoing, it is clear that Comandante and petitioner entered into a contract involving the
formers future inheritance as embodied in the Waiver of Hereditary Rights and Interest Over a Real Property

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 147

(Still Undivided) executed by her inpetitioners favor. Hence, the Waiver of Hereditary Rights and Interest

Over a Real Property (Still Undivided) executed by Comandante in favor of petitioner !!!as not valid and
that same cannot be the source of any right or create an obligation between them for be!ing violative of the
second paragraph of Article 1347 of the Civil Code.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 148

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 149

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HEIRS OF JUAN SAN ANDRES (VICTOR S. ZIGA) AND SALVACION!
S. TRIA VS. VICENTE RODRIGUEZ!
G.R. NO. 135634!

!! MAY 31, 2000!

FACTS:

!
Juan San Andres was the registered owner of Lot No. 1914-B1335, as situated in Liboton, Naga City. On
September 28, 1964, he sold a portion thereof, consisting of 345 square meters, to respondent Vicente S.
Rodriguez for P2,415.00. The sale is evidenced by a Deed of Sale.Upon the death of Juan San Andres on
May 5, 1965, Ramon San Andres was appointed judicial administrator of the decedent's estate. Ramon San
Andres engaged the services of a geodetic engineer, Jose Peñero, to prepare a consolidated plan of the estate.
Engineer Peñero also prepared a sketch plan of the 345-square meter lot sold to respondent. From the result
of the survey, it was found that respondent had enlarged the area which he purchased from the late Juan San
Andres by 509 square meters. Accordingly, the judicial administrator sent a letter, dated July 27, 1987, to
respondent demanding that the latter vacate the portion allegedly encroached by him. However, respondent
refused to do so, claiming he had purchased the same from the late Juan San Andres. Thereafter, on
November 24, 1987, the judicial administrator brought an action, on behalf of the estate of Juan San Andres,
for recovery of possession of the 509 lot. Respondent alleged that the full payment of the 509square meter
lot would be effected within five (5) years from the execution of a formal deed of sale after a survey is
conducted over said property. He further alleged that with the consent of the former owner, Juan San Andres,

he took possession of the same and introduced improvements thereon as early as 1964 !.
Respondent Vicente Rodriguez died on August 15, 1989 and was substituted by his heirs. Bibiana B.
Rodriguez, widow of respondent Vicente Rodriguez, testified that they had been in possession of the 509
square –meter lot since 1964 when the late Juan San Andres signed the receipt. She testified that they did
not know at that time the exact area sold to them because they were told that the same would be known after
the survey of the subject lot. Petitioner contends,that the "property subject of the sale was not described

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 150

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with sufficient certainty such that there is a necessity of another agreement between the parties to finally

ascertain the identity; size and purchase price of the property which is the object of the alleged sale. !
ISSUES:

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(1)Whether or not the object of the contract is determinate?

(2) ! Is the contract of sale between the parties absolute?


HELD:

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(1) Yes. There is no dispute that respondent purchased a portion of Lot 1914-middle of Lot 1914-B-B-2
consisting of 345 square meters. This portion is located in the 2, which has a total area of 854 square meters,
and is clearly what was referred to in the receipt as the "previously paid lot." Since the lot subsequently sold
to respondent is said to adjoin the "previously paid lot" on three sides thereof, the subject lot is capable of
being determined without the need of any new contract. The fact that the exact area of these adjoining
residential lots is subject to the result of a survey does not detract from the fact that they are determinate or
determinableConcomitantly, the object of the sale is certain and determinate. Under Article 1460 of the
New Civil Code, a thing sold is determinate if at the time the contract is entered into, the thing is capable
of being determinate without necessity of a new or further agreement between the parties. Here, this
definition finds realization. Appellee's Exhibit "A" affirmingly shows that the original 345 sq. m. portion
earlier sold lies at the middle of Lot 1914-of the said Lot 19 14-B-B-2 surrounded by the remaining portion

2 on three (3) sides, in the east, in the west and in the north. The northern boundary is a 12 meter !
!!!
road. Conclusively, therefore, this is the only remaining 509 sq. m. portion of Lot 1914 Rod-B-2 sur-

!rounding the 345 sq. m. lot initially purchased by Rodriguez. It is quite definite, determinate and certain.(2)
Yes. A deed of sale is considered absolute in nature where there is neither a stipulation in the deed that
title to the property sold is reserved in the seller until full payment of the price, nor one giving the vendor
the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. In this
case, there is no reservation of ownership nor a stipulation providing for a unilateral rescission by either
party. In fact, the sale was consummated upon the delivery of the lot to respondent. Thus, Art. 1477 provides
that the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive

!delivery thereof.
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 151

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 152

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FILINVEST LAND, INC., EFREN C. GUTIERREZ AND LINA DE GUZMAN-FERRER
VS ABDUL BACKY ABEHERA ET AL.,!
GR NO. 193747!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 153

! JUNE 5, 2013!

FACTS:

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Respondents were grantees of agricultural public lands located in Tambler, General Santos City through
Homestead and Fee patents sometime in 1986 and 1991. Negotiations were made by petitioner, represented
by Lina de Guzman-Ferrer with the patriarch of the Ngilays, Hadji Gulam Ngilay sometime in 1995.
Eventually, a Deed of Conditional Sale of the said properties in favor of petitioner Filinvest Land, Inc. was
executed. Upon its execution, respondents were asked to deliver to petitioner the original owner's duplicate
copy of the certificates of title of their respective properties. Respondents received the downpayment for
the properties on October 28, 1995. A few days after the execution of the afore stated deeds and the delivery
of the corresponding documents to petitioner, respondents came to know that the sale of their properties
was null and void, because it was done within the period that they were not allowed to do so and that the
sale did not have the approval of the Secretary of the Department of Environment and Natural Resources
(DENR) prompting them to file a case for the declaration of nullity of the deeds of conditional and absolute
sale of the questioned properties. The RTC ruled in favor of Filinvest Land, Inc. and upheld the sale of all
the properties in litigation. It found that the sale of those properties whose original certificates of title were
issued by virtue of the 1986 Patents was valid. As to those patents awarded in 1991, the same court opined
that since those properties were the subject of a deed of conditional sale, compliance with those conditions
is necessary for there to be a perfected contract between the parties.. The CA, nullified the disposition of
those properties granted through patents in 1991 . CA ruled that the contract of sale between the parties was
a perfected contract, hence, the parties entered into a prohibited conveyance of a homestead within the

prohibitive period of five years from the issuance of the patent. !


ISSUE:

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Whether the conditional sale involving the 1991 patents violated the prohibition against alienation of

homesteads under the Public Land Act !


HELD:

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Yes. The five year prohibitory period following the issuance of the homestead year patent is provided under
Section 118 of Commonwealth Act No. 141, as amended by Commonwealth Act No. 456, otherwise known
as the Public Land Act. It bears stressing that the law was enacted to give the homesteader or patentee every
chance to preserve for himself and his family the land that the State had gratuitously given to him as a
reward for his labour in cleaning and cultivating it. Its basic objective, as the Court had occasion to stress,
is to promote public policy that is to provide home and decent living for destitute, aimed at providing a class
of independent small landholders which is the bulwark of peace and order. Hence, any act which would
have the effect of removing the property subject of the patent from the hands of a grantee will be struck
down for being violative of the law. In the present case, the negotiations for the purchase of the properties
covered by the patents issued in 1991 were made in 1995 and, eventually, an undated Deed of Conditional
Sale was executed. On October 28, 1995, respondents received the downpayment of P14,000.000.00 for the
properties covered by the patents issued in 1991. Applying the five year prohibition, the properties covered
by the patent issued on November 24, 1991 could only be alienated after November 24, 1996. Therefore,
the sale, having been consummated on October 28, 1995, or within the fiveyear prohibition, is as ruled by
the CA, void. The prohibition does not distinguish between consummated and executory sale. The
conditional sale entered into by the parties is still a conveyance of the homestead patent.And, even assuming

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 154

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that the disputed sale was not yet perfected or consummated, still, the transaction cannot be validated. The

prohibition of the law on the sale or encumbrance of the homestead within !!!!five years after the grant
is MANDATORY. To repeat, the conveyance of a homestead before the expiration of the five year
prohibitory period following the issuance of the homestead patent is null and void and cannot be enforced,

for it is not within the competence of any citizen to barter away what public policy by !law seeks to
preserve.

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 155

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 156

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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 157

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JOSELITO C. BORROMEO VS JUAN T. MINA!
GR NO, 193747!

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! JUNE 5, 2013! FACTS: !

Subject of this case is a 1.1057 hectare parcel of agriculture land, situated in Barangay Magsaysay,
Naguilian, Isabela, denominated as Lot No. 5378 and covered by Certificate of Title (TCT) No. EP-Transfer
43526,4 registered in the name of respondent (subject property). It appears from the foregoing TCT that
respondent’s title over the said property is based on Emancipation Patent No. 393178 issued by the
Department of Agrarian Reform (DAR) on May 2, 1990. Petitioner filed a Petition before the Provincial
Agrarian Reform Office (PARO) of Isabela, seeking that: (a) his landholding over the subject property
(subject landholding) be exempted from the coverage of the government’s OLT program under Presidential
Decree No. 27 dated October 21, 19727 (PD 27); and (b) respondent’s emancipation patent over the subject
property be consequently revoked and cancelled.To this end, petitioner alleged that he purchased the
aforesaid property from its previous owner, one Serafin M. Garcia (Garcia), as evidenced by a deed of sale
notarized on February 19, 1982 (1982 deed of sale). For various reasons, however, he was not able to effect
the transfer of title in his name. Subsequently, to his surprise, he learned that an emancipation patent was
issued in respondent’s favor without any notice to him.

!
ISSUE:

! Whether or not the sale of subject property to petitioner is


valid

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HELD:

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No.PD 27 prohibits the transfer of ownership over tenanted rice and/or corn lands after October 21, 1972
except only in favor of the actual tenant tillers thereon. Records reveal that the subject landholding fell
under the coverage of PD 27 on October 21, 1972 and as such, could have been subsequently sold only to
the tenant thereof, i.e., the respondent. Notably, the status of respondent as tenant is now beyond dispute
considering petitioner’s admission of such fact. Likewise, as earlier discussed, petitioner is tied down to his
initial theory that his claim of ownership over the subject property was based on the 1982 deed of sale.
Therefore, as Garcia sold the property in 1982 to the petitioner who is evidently not the tenant beneficiary
of the same, the said transaction is null and void for being contrary to law. In consequence, petitioner cannot
assert any right over the subject landholding, such as his present claim for landholding exemption, because
his title springs from a null and void source. A void contract is equivalent to nothing; it produces no civil
effect; and it does not create, modify or extinguish a juridical relation.Hence, notwithstanding the erroneous
identification of the subject landholding by the MARO as owned by Cipriano Borromeo, the fact remains
that petitioner had no right to file a petition for landholding exemption since the sale of the said property to
him by Garcia in 1982 is null and void.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 158

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REPUBLIC OF THE PHILIPPINES VS.PHILIPPINE RESOURCES DEVELOPMENT
CORPORATION AND THE COURT OF APPEALS!
GR NO. L-10141!

! JANUARY 31, 1958! FACTS: !


Macario Apostol, allegedly acting for the Philippine Resources Development Corp. (PRDC), contracted
with the Bureau of Prison for the purchase of 100 tons of designated logs, but only a small payment of the
purchase price was made. In lieu of the balance of the purchase price, he caused to be delivered goods of
the PRDC to the Bureau of Prison as payment for the outstanding price. The Government asserted that the
subject matter of its litigation with Apostol was a sum of money allegedly due to the Bureau of Prison from
Apostol and not the goods reportedly turned over by Apostol in payment of his private debt to the Bureau
of Prison and the recovery of which was sought by PRDC; and for this reason, PRDC had no legal interest
in the very subject matter in litigation as to entitle it to intervene. The Government argued that the goods
which belonged to PRDC were not connected with the sale because “Price ... is always paid in terms of
money and the supposed payment being in kind, it is no payment at all

!
ISSUE:

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Whether PRDC had the right to intervene in the sales transaction executed between Apostol and the Bureau
of Prisons and in the suit brought by the Government to enforce such sale

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 159

HELD:

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The Court held that the Government’s contentions were untenable, ruling that Article 1458 provides that
the purchaser may pay “a price certain in money or its equivalent,” which means payment of the price need
not be in money. Whether the goods claimed by PRDC belong to it and delivered to the Bureau of Prison
by Apostol in payment of his account is sufficient payment therefor, is for the court to pass upon and decide
after hearing all the parties in the case. PRDC therefore had a positive right to intervene in the case because
should the trial court credit Apostol with the value price of the materials delivered by him, certainly PRDC
would be affected adversely if its claim of ownership to such goods were upheld. Republic is not at all
authority to say that under Article 1458, as it defines a contract of sale, the term “equivalent” of price can
cover other than money or other media of exchange, since Republic covers not the perfection stage of a
contract of sale, but rather the consummation stage where the price agreed upon (which ideally should be
in money or its equivalent) can be paid under the mutual arrangements agreed upon by the parties to the
contract of sale, even by dation in payment, as was the case in Republic.

!!!!!

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ISAAC BAGNAS, ENCARNACION BAGNAS, SILVESTRE BAGNAS MAXIMINA
BAGNAS, SIXTO BAGNAS AND AGATONA ENCARNACION VS. COURT OF
APPEALS

G.R. NO. L-38498!
AUGUST 10 1989!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 160

FACTS: !
Hilario Mateum died on March 11, 1964, without ascendants or descendants, and survived only by collateral
relatives. Mateum left no will, no debts, and an estate consisting of twenty-nine parcels of land in Kawit
and Imus, Cavite, ten of which are involved in this appeal. On April 3, 1964, the private respondents,
themselves collateral relatives of Mateum registered with the Registry of Deeds for the Province of Cavite
two deeds of sale purportedly executed by Mateum in their favor covering ten parcels of land. The
consideration were the sum of P1 peso and “services rendered, being rendered and to be rendered for my
benefit”.


On the strength of the deeds of sale, the respondents were able to secure title in their favor over three of the
ten parcels of land conveyed thereby. The petitioners commenced suit against the respondents seeking
annulment of the deeds of sale as fictitious, fraudulent or falsified, or, alternatively, as donations void for
want of acceptance embodied in a public instrument. Claiming ownership pro indiviso of the lands subject
of the deeds by virtue of being intestate heirs of Hilario Mateum, the petitioners prayed for recovery of
ownership and possession of said lands, accounting of the fruits thereof and damages. Although the
complaint originally sought recovery of all the twenty-nine parcels of land left by Mateum, at the pre-trial
the parties agreed that the controversy be limited to the ten parcels subject of the questioned sales, and the
Trial Court ordered the exclusion of the nineteen other parcels from the action. Of the ten parcels which
remained in litigation, nine were assessed for purposes of taxation at values aggregating P10,500 00. The
defendants (respondents here) denied the alleged fictitious or fraudulent character of the sales in their favor,
asserting that said sales were made for good and valuable consideration; that while "... they may have the
effect of donations, yet the formalities and solemnities of donation are not required for their validity and
effectivity”


After the plaintiffs had presented their evidence, the defendants filed a motion for dismissal in effect, a
demurrer to the evidence reasserting the defense set up in their answer that the plaintiffs, as mere collateral
relatives of Hilario Mateum, had no light to impugn the latter's disposition of his properties by means of the
questioned conveyances and submitting, additionally, that no evidence of fraud maintaining said transfers
had been presented.


The Trial Court granted the motion to dismiss. The plaintiffs appealed to the CA. The Appellate Court
declared that the testimony of the plaintiff’s witness failed to establish fraud of any kind or that Mateum
had continued paying taxes on the lands in question even after executing the deeds conveying them to the
defendants stating that since in duly notarized and registered deeds of sale consideration is presumed, The
Court does not and it necessary to rule on the alternative allegations of the appellants that the said deed of

!
sale were in reality donations. !

ISSUE: !
Whether or not the sale is void for want of consideration



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! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 161

!HELD: YES. Upon the consideration alone that the apparent gross, not to say enormous, disproportion
between the stipulated price (in each deed) of P l.00 plus unspecified and unquantified services and the
undisputably valuable real estate allegedly sold worth at least P10,500.00 going only by assessments for tax
purposes which, it is well-known, are notoriously low indicators of actual value plainly and unquestionably
demonstrates that they state a false and fictitious consideration, and no other true and lawful cause having
been shown, the Court finds both said deeds, insofar as they purport to be sales, not merely voidable, but
void ab initio. Neither can the validity of said conveyances be defended on the theory that their true causa
is the liberality of the transferor and they may be considered in reality donations because the law also
prescribes that donations of immovable property, to be valid, must be made and accepted in a public
instrument, and it is not denied by the respondents that there has been no such acceptance which they claim
is not required. The transfers in question being void, it follows as a necessary consequence and conformably
to the concurring opinion in Armentia, with which the Court fully agrees, that the properties purportedly
conveyed remained part of the estate of Hilario Mateum, said transfers notwithstanding, re-

!!!!!!!!!!!!!!!!!!!!!!!coverable by his intestate heirs, the petitioners herein, whose status as


such is not challenged.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 162

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!
ANTONIO GOQUIOLAY V. WASHINGTON SYCIP!

! G.R. NO. L-11840!

FACTS: !
On May 29, 1940, the plaintiff partnership "Tan Sin An and Goquiolay" purchased the three (3) parcels of
land, known as Lots Nos. 526, 441 and 521 of the Cadastral Survey of Davao, subject-matter of the instant
litigation, assuming the payment of a mortgage obligation of P25,000.00, payable to "La Urbana Sociedad
Mutua de Construccion y Prestamos" for a period of ten (10) years, with 10% interest per annum. Another
46 parcels were purchased by Tan Sin An in his individual capacity, and he assumed payment of a mortgage
debt thereon for P35,000.00 with interest. The downpayment and the amortization were advanced by Yutivo
and Co., for the account of the purchasers.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 163

On September 25, 1940, the two separate obligations were consolidated in an instrument executed by the
partnership and Tan Sin An, whereby the entire 49 lots were mortgaged in favor of the "Banco Hipotecario
de Filipinas" (as successor to "La Urbana") and the covenantors bound themselves to pay, jointly and
severally, the remaining balance of their unpaid accounts amounting to P52,282.80 within eight 8 years,
with 8% annual interest, payable in 96 equal monthly installments.

On March 29, 1949, after the death of her husband and due to demands of the creditors of the former, Kong
Chai Pin, wife of the former, filed a petition with the probate court for authority to sell all the 49 parcels of
land to Washington Z, Sycip and Betty Y. Lee, for the purpose preliminary of settling the aforesaid debts
of Tan Sin An and the partnership. Pursuant to a court order of April 2, 1949, the administratrix executed
on April 4, 1949, a deed of sale1 of the 49 parcels of land to the defendants Washington Sycip and Betty
Lee in consideration of P37,000.00 and of vendees' assuming payments of the claims filed by Yutivo Sons
Hardware Co. and Sing Yee and Cuan Co., Inc.

!
I SSUE:
Whether or not the sale is invalid on account of the price being unreasonably low

!
H ELD:
No. Appellants assails the correctness of the amounts paid for the account of the partnership as found by
the trial court. This question, however, need not be resolved here, as in the deed of conveyance executed by
Kong Chai Pin, the purchasers Washington Sycip and Betty Lee assumed, as part consideration of the
purchase, the full claims of the two creditors, Sing Yee and Cuan Co., Inc. and Yutivo Sons Hardware Co.
There is complete failure of proof, moreover, that the price for which the properties were sold was
unreasonably low, or in any way unfair, since appellants presented no evidence of the market value of the
lots as of the time of their sale to appellees Sycip and Lee. The alleged value of P31,056.58 in May of 1955
is no proof of the market value in 1949, specially because in the interval, the new owners appear to have
converted the land into a subdivision, which they could not do without opening roads and otherwise
improving the property at their own expense. Upon the other hand, Kong Chai Pin hardly had any choice
but to execute the questioned sale, as it appears that the partnership had neither cash nor other properties
with which to pay its obligations. Anyway, we cannot consider seriously the inferences freely indulged in
by the appellants as allegedly indicating fraud in the questioned transactions, leading to the conveyance of

the lots in dispute to the appellee Insular Development Co., Inc. !


!
!
!
!
LADANGA V. COURT OF APPEALS!
GR NO. L-55999!
AUGUST 24, 1984!

! !
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 164

!
F ACT
S:
Clemencia A. Aseneta, a spinster who retired as division superintendent of public schools at 65 in 1961,
had a nephew named Bernardo S. Aseneta, the child of her sister Gloria, and a niece named Salvacion, the
daughter of her sister Flora. She legally adopted Bernardo in 1961. On a single date, 6 April 1974, she 9then
78 years old) signed 9 deeds of sale in favor of Salvacion, for various real properties. One deed of sale
concerned the said Paco property (166 sq. m. lot located at 1238 Sison Street Paco Manila and administered
by the Ladanga spouses, Agustin and Salvacion) which purportedly was sold to Salvacion for P26,000. The
total price involved in the 9 deeds of sale and in the 10th sale executed on 8 November 1974 was P92,200.

The deed of sale for the Paco property was signed in the office of the Quezon City registry of deeds. !
In May 1975, Bernardo, as guardian of Clemencia, filed an action for reconveyance of the Paco property,
accounting of the rentals and damages, with the CFI Manila. Clemencia was not mentally incompetent but
she was placed under guardianship because she was an easy prey for exploitation and deceit. Clemencia
testified and denied having “received even one centavo” of the price of P26,000), much less the P92,000.
This testimony was corroborated by Soledad L. Maninang, 69, a dentist with whom Clemencia had lived
for more than 30 years in Kamuning, Quezon City. The notary public stated that he did not see Salvacion
hand any money to Clemencia for the purported sale when the deed was signed in the registry of deeds. The

trial court declared void the sale of the Paco property. !


Clemencia died on 21 May 1977 at the age of 80. She allegedly bequeathed her properties in a holographic
will dated 23 November 1973 to Doctor Maninang. In that will she disinherited Bernardo. The will was
presented for probate. The testate case was consolidated with the intestate proceeding filed by Bernardo in
the sala of Judge Ricardo L. Pronove at Pasig, Rizal. He dismissed the testate case. He appointed Bernardo

as administrator in the intestate case. !


On appeal, the Court of Appeals affirmed the decision of the CFI, ordered the register of deeds to issue a
new title to Clemencia, and ordered the spouses to pay Clemencia’s estate P21,000 as moral and exemplary
damages and attorney’s fees and to render to Bernardo an accounting of the rentals of the property from 6

April 1974. !
ISSUE:

!
Whether or not the sale is void for lack of consideration !
!
H ELD:
The Ladanga spouses contend that the Appellate Court disregarded the rule on burden of proof. This
contention is devoid of merit because Clemencia herself testified that the price of P26,000 was not paid to
her. The burden of the evidence shifted to the Ladanga spouses. They were not able to prove the payment
of that amount. The sale was fictitious. A contract of sale is void and produces no effect whatsoever where
the price, which appears therein as paid, has in fact never been paid by the purchaser to the vendor.
Clemencia did not intend to donate the Paco property to the Ladangas. Her testimony and the notary’s
testimony destroyed any presumption that the sale was fair and regular and for a true consideration. The
Supreme Court affirmed the judgment of the Appellate Court with the modification that the adjudication
for moral and exemplary damages is discarded; Without costs.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 165

!
!
!!!

RUBY H. GARDNER AND FRANK GARDNER, JR., VS COURT OF APPEALS,
DEOGRACIAS R. NATIVIDAD AND JUANITA A. SANCHEZ! G.R. NO. L-59952!

AUGUST 31, 1984 !



 FACTS: !
Ruby Gardner, married to Frank Gardner, Jr. an American, was the registered owner of two adjoining parcels
of agricultural land situated at Calamba, Laguna, designated as Lot No. 1426-new and Lot No.
4748-new covered by TCT Nos. T-20571 and T-20573.

On November 27, 1961, The Gardners and the Santoses entered into an agreement for the subdivision of
the two parcels, with the Santoses binding themselves to advance to the Gardners the amount of P93,000.00
in installments. The Gardners remained in actual possession of the properties. On June 10, 1964, Unknown
to the Gardners, Santoses transferred Lot No. 1426-New to Jose Cuenca. On October 19, 1966, Cuenca
transferred the lots to Michael C. Verroya. On March 29, 1967, Verroya constituted a mort- gage on both
lots in favor of Anita Nolasco and Rosario Dalina, which encumbrance was registered on the existing titles.
On June 29, 1967, Verroya executed a deed of transfer of the properties to respondent Deogracias Natividad,
married to Juanita Sanchez. On September 30, 1967, the Natividads transferred the lots to Ignacio Bautista
and Encarnacion de los. No titles were issued to the Bautistas. On July 8, 1969, the Gardners filed suit for
"Declaration of Nullity, Rescission and Damages" against the Five Transfer- ees, including the mortgagees,
Anita Nolasco and Rosario Dalina before the CFI of Laguna, praying for the declaration of nullity of all the
Five Transfers and the cancellation of all titles issued pursuant thereto on the ground that they were all
simulated, fictitious, and without consideration.The Trial Court ruled in favor of the Gardners nullifying the
said transfers. Respondents appealed to the CA which reversed the decision of the Trial Court. Hence, this
petition is filed.

ISSUE:

!
Whether or not the transfers involved in the case is void and inexistent.

HELD:

!
Yes. Added proof of the fictitiousness of the chain of transfers is that fact that, notwithstanding the same,
the GARDNERS remained in actual possession, cultivation and occupation of the disputed lots throughout
the entire series of transactions. All Five Transfers starting from that of the SANTOSES down to the
NATIVIDADS, were absolutely simulated and fictitious and were, therefore, void ab initio and inexistent.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 166

Contracts of sale are void and produce no effect whatsoever where the price, which appears therein as paid,
has, in fact, never been paid by the purchaser to the vendor. Such sales are inexistent and cannot be

considered consummated.
!!!!!!!!!!!!
!!!
CORNELIA CLANOR VDA. DE PORTUGAL VS. INTERMEDIATE APPEL-
LATE COURT AND HUGO C. PORTUGAL
 G.R. NO. 73564!
MARCH 25, 1988!

FACTS

: !
Cornelia Clanor and her late husband Pascual Portugal, during the lifetime of the latter, were able to
accumulate several parcels of real property. Among these were a parcel of residential land situated in
Poblacion, Gen. Trias, Cavite covered by T.C.T. No. RT-9355 and an agricultural land located at Pasong
Kawayan, Gen. Trias, Cavite under T.C.T. No. RT-9356. Sometime in January, 1967, the private respondent
Hugo Portugal, a son of the spouses, borrowed from his mother, Cornelia, the certificates of title to the
above-mentioned parcels of land on the pretext that he had to use them in securing a loan that he was
negotiating. On November 17, 1974, Pascual Portugal died. For the purposes of executing an extra-judicial
partition of Pascual's estate, wished to have all the properties of the spouses collated, Cornelia asked the
private respondent for the return of the two titles she previously loaned, Hugo manifested that the said titles
no longer exist. Transfer Certificate of Title T.C.T. No. 23539 registered in his and his brother Emiliano
Portugal's names, and which new T.C.T. cancelled the two previous ones. This falsification was triggered
by a deed of sale by which the spouses Pascual Portugal and Cornelia Clanor purportedly sold for P8,000.00
the two parcels of land adverted to earlier to their two sons, Hugo and Emiliano. Emiliano caused the
reconveyance of Lot No. 2337 previously covered by TCT No. RT-9356 and which was conveyed to him
in the void deed of sale. Hugo, on the other hand, refused to make the necessary restitution thus compelling
the petitioners, his mother and his other brothers and sisters, to institute an action for the annulment of the
controversial deed of sale and the reconveyance of the title over Lot No. 3201.The Trial Court hereby
declares inoperative the Deed of Sale. The CA reversed the decision stating that the action had already
prescribed.

ISSU
E:

!
Whether or not the sale is valid

HEL

D: !
No. No consideration was ever paid at all by the Hugo Portugal. Applying the provisions of Articles 1350,
1352, and 1409 of the new Civil Code in relation to the indispensable requisite of a valid cause or
consideration in any contract, and what constitutes a void or inexistent contract, we rule that the disputed
deed of sale is void ab initio or inexistent, not merely voidable.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 167

!! !!!!!!!!!!!!!
!!
VALERIO VS.
REFRESCA! G.R NO.
163687 ! MARCH 28,
2006!

! ! FACTS: !
Narciso Valerio, married to Nieves Valerio, owned two adjacent agricultural lots with a total area of 6.5
hectares. One of these lots, Lot 428, was a four-hectare land. A portion thereof, consisting of 511 sq. m. and
known as Lot 428-A, is the subject of the petition in the case at bar. Spouses Alejandro and Vicenta Refresca
started cultivating the 6.5-hectare land as tenants. Narciso Valerio acquired ownership over the land. The
Valerios entered into a leasehold contract with tenant Alejandro Refresca whereby the latter was allowed to
continue tilling the 6.5-hectare land in exchange for fixed rentals. Narciso Valerio, with the consent of his
wife Nieves, executed a Deed of Sale whereby he sold his 6.5-hectare landholding to his heirs. The parties
to the Deed of Sale, as co-owners, subdivided the 6.5-hectare land and executed a Deed of Agreement of
Subdivision.3The same 511 sq. m. of land was granted to tenant Alejandro Refresca. Individual titles over
the apportioned areas were subsequently issued to the vendees. Nieves Valerio, entered into another
leasehold agreement with the Refrescas over the 6.5-hectare landholding for the period 19841985 in
exchange for the latter’s payment of rentals. Petitioners demanded that the respondents vacate the land.
They alleged that the 511 sq. m. lot was given to the respondents on the condition that they will surrender
their tenancy rights over the entire land but respondents failed to do so.

!
ISSUE:

! Whether or not the deed of sale was absolutely


simulated

!
HELD:

!
The Ruling of the Supreme Court is that the deed of sale was relatively simulated. Article 1345 of the New
Civil Code provides that the simulation of a contract may be absolute or relative. In absolute simulation,
there is a colorable contract but it has no substance as the parties have no intention to be bound by it. The
main characteristic of an absolute simulation is that the apparent contract is not really desired or intended
to produce legal effect or in any way alter the juridical situation of the parties. As a result, an absolutely
simulated or fictitious contract is void, and the parties may recover from each other what they may have
given under the contract. Thus, we rule that the 1975 Deed of Sale between the parties is a relatively
simulated contract as the clear intent was to transfer ownership over the land. Therefore, the contract binds
the parties to their true agreement.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 168

!!
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!
SPOUSES VILLACERAN AND FAR EAST BANK & TRUST COMPANY,
VS JOSEPHINE DE GUZMAN
 G.R. NO. 169055!
FEBRUARY 22, 2012!

FACTS:

!
De Guzman alleged that she is the registered owner of a parcel of land covered by Transfer Certificate of
Title (TCT) No. T-236168, located in Echague, Isabela, having an area of 971 square meters and described
as Lot 8412-B of the Subdivision Plan Psd-93948. On April 17, 1995, she mortgaged the lot to the Philip-
pine National Bank (PNB) of Santiago City to secure a loan of P600,000. In order to secure a bigger loan
to finance a business venture, De Guzman asked Milagros Villaceran to obtain an additional loan on her
behalf. She executed a Special Power of Attorney in favor of Milagros. Considering De Guzmans
unsatisfactory loan record with the PNB, Milagros suggested that the title of the property be transferred to
her and Jose Villaceran and they would obtain a bigger loan as they have a credit line of up toP5,000,000

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 169

with the bank. On June 19, 1996, De Guzman executed a simulated Deed of Absolute Sale in favor of the
spouses Villaceran. On the same day, they went to the PNB and paid the amount of P721,891.67 using the
money of the spouses Villaceran. The spouses Villaceran registered the Deed of Sale and secured TCT No.
T-257416 in their names. Thereafter, they mortgaged the property with FEBTC Santiago City to secure a
loan of P1,485,000. The loan was released and they failed to pay it so the property was foreclosed in favor
of the FEBTC. De Guzman filed an action for the annulment of the sale, but the RTC and CA ruled that the

Deed of sale was valid and binding. !


ISSUE:

!
Whether or not the Deed of Sale is relatively simulated !
HELD:

!
Yes. Article 1345 of the Civil Code provides that the simulation of a contract may either be absolute or
relative. In absolute simulation, there is a colorable contract but it has no substance as the parties have no
intention to be bound by it. The main characteristic of an absolute simulation is that the apparent contract
is not real- ly desired or intended to produce legal effect or in any way alter the juridical situation of the
parties. As a result, an absolutely simulated or fictitious contract is void, and the parties may recover from
each other what they may have given under the contract. However, if the parties state a false cause in the
contract to conceal their real agreement, the contract is only relatively simulated and the parties are still
bound by their real agreement. Hence, where the essential requisites of a contract are present and the
simulation refers only to the content or terms of the contract, the agreement is absolutely binding and

enforceable between the parties and their successors in interest. !


The primary consideration in determining the true nature of a contract is the intention of the parties. If the
words of a contract appear to contravene the evident intention of the parties, the latter shall prevail. Such
intention is determined not only from the express terms of their agreement, but also from the
contemporaneous and subsequent acts of the parties. In the case at bar, there is a relative simulation of
contract as the Deed of Absolute Sale dated June 19, 1996 executed by De Guzman in favor of petitioners
did not reflect the true intention of the parties. It is worthy to note that both the RTC and the CA found
that the evidence established that the aforesaid document of sale was executed only to enable petitioners to
use the property as collateral for a bigger loan, by way of accommodating De Guzman.

!
!!!
!!
YU BUN GUAN, PETITIONER, VS. ELVIRA ONG, RESPONDENT!
GR NO 144735 !
OCTOBER 18, 2001!

!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 170

FACTS: !
Respondent said that she and petitioner are husband and wife, having been married according to Chinese
rites on April 30, 1961. They lived together until she and her children were abandoned by petitioner because
of the latter's `incurable promiscuity, volcanic temper and other vicious vices'. She purchased a parcel of
land referred to as the Rizal Property from Aurora Seneris, supported by a Title and then subsequently
registered in her name.

Before their separation, the respondent executed a Deed of Sale of the Rizal property in petitioner’s favor
on the promise that he would construct a commercial building for the benefit of the children. The
consideration for the `simulated sale' was that, after its execution in which he would represent himself as
single, a Deed of Absolute Sale would be executed in favor of the three (3) children and that he would pay
the Allied Bank, Inc. the loan he obtained.

Petitioner did not pay the consideration. A new title was issued in petitioner’s name but the respondent did
not deliver the owner’s copy to him. Petitioner filed a Petition for Replacement of an owner’s duplicate title
in which he attached an Affidavit of Loss. It was granted by the court, following which a new owner’s copy
of the title was issued to petitioner.

Petitioner avers that he used the respondent as his dummy to purchase the Rizal property since at that time
he was not a Filipino citizen. Petitioner added that respondent could not have purchased the property
because she had no financial capability to do so. Petitioner averred that respondent was in pari delicto being
privy to the simulated sale.

The RTC ruled that the Rizal property was the paraphernal property of the Respondent. It likewise voided
the Deed of Absolute Sale of the Rizal property for having been simulated and executed during the marriage
of the parties. The CA upheld the trial court’s findings.

ISSUE: !
Whether there was a valid contract of sale

HELD: !
NO. A contract of purchase and sale is null and void and produces no effect whatsoever where the same is
without cause or consideration in that the purchase price which appears thereon as paid has in fact never
been paid by the purchaser to vendor.

In the present case, it is clear from the factual findings of both lower courts that the Deed of Sale was
completely simulated and, hence, void and without effect. No portion of the P200,000 consideration stated
in the Deed was ever paid. Also, from the facts of the case, it is clear that neither party had any intention
whatsoever to pay that amount.

Instead, the Deed of Sale was executed merely to facilitate the transfer of the property to petitioner pursuant
to an agreement between the parties to enable him to construct a commercial building and to sell the Juno
property to their children. Being merely a subterfuge, that agreement cannot be taken as the consideration

!
for the sale. !
!
! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 171

!
MOISES JOCSON VS. HON. COURT OF APPEALS, AGUSTINA
JOCSON- VASQUEZ, ERNESTO VASQUEZ
 G.R. NO. L-55322! FEBRUARY

16, 1989 ! !
FACTS:

!
Petitioner Moises Jocson and respondent Agustina Jocson-Vasquez are the only surviving offsprings of the
spouses Emilio Jocson and Alejandra Poblete, while respondent Ernesto Vasquez is the husband of
Agustina. Alejandra Poblete predeceased her husband without her intestate estate being settled.

Subsequently, Emilio Jocson also died intestate on April 1, 1972. ! 



The present controversy concerns the validity of three (3) documents executed by Emilio Jocson during his
lifetime. These documents purportedly conveyed, by sale, to Agustina Jocson-Vasquez what apparently
covers almost all of his properties, including his one-third (1/3) share in the estate of his wife. Petitioner
Moises Jocson assails these documents and prays that they be declared null and void and the properties

subject matter therein be partitioned between him and Agustina as the only heirs of their deceased parents. !
1) Emilio Jocson sold to Agustina Jocson-Vasquez six (6) parcels of land, all located at Naic, Cavite,
for the sum of ten thousand P10,000.00 pesos. On the same document Emilio Jocson acknowledged receipt

of the purchase price, !


2) Emilio Jocson purportedly sold to Agustina Jocson-Vasquez, for the sum of FIVE THOUSAND
(P5,000.00) PESOS, two rice mills and a camarin (camalig) located at Naic, Cavite. As in the first

document, Moises Jocson acknowledged receipt of the purchase price !


3) Whereby Emilio Jocson and Agustina Jocson-Vasquez, without the participation and intervention
of Moises Jocson, extrajudicially partitioned the unsettled estate of Alejandra Poblete, dividing the same
into three parts, one-third (1/3) each for the heirs of Alejandra Poblete, namely: Emilio Jocson, Agustina
Jocson-Vasquez and Moises Jocson. By the same instrument, Emilio sold his one-third (1/3) share to
Agustin for the sum of EIGHT THOUSAND (P8,000.00) PESOS. As in the preceding documents, Emilio

Jocson acknowledged receipt of the purchase price !


Petitioner avers:

With regard the first document, that the defendants, through fraud, deceit, undue pressure and influence and
other illegal machinations, were able to induce, led, and procured their father to sign the contract of sale,
for the simulated price of P10,000.00, which is a consideration that is shocking to the conscience of ordinary
man and despite the fact that said defendants have no work or livelihood of their own ...; that the sale is null

and void, also, because it is fictitious, simulated and fabricated contract !


With regards the second and third document, that they are null and void because the consent of the father,
Emilio Jocson, was obtained with fraud, deceit, undue pressure, misrepresentation and unlawful
machinations and trickeries committed by the defendant on him; and that the said contracts are simulated,
fabricated and fictitious, having been made deliberately to exclude the plaintiff from participating and with

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 172

the dishonest and selfish motive on the part of the defendants to defraud him of his legitimate share on said
properties [subject matter thereof]; and that without any other business or employment or any other source
of income, defendants who were just employed in the management and administration of the business of
their parents, would not have the sufficient and ample means to purchase the said properties except by

!
getting the earnings of the business or by simulated consideration . ! ISSUE: !

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 173

!!!
Wheteher or not there is a simulated sale as alleged by the petitioner and if it may cause the contract to be
void.

HELD:

As pointed out by petitioner, he further assailed the deeds of conveyance on the ground that they were
without consideration since the amounts appearing thereon as paid were in fact merely simulated.

“According to Article 1352 of the Civil Code, contracts without cause produce no effect whatsoever. A
contract of sale with a simulated price is void (Article 1471; also Article 1409 [3]]), and an action for the
declaration of its nullity does not prescribe (Article 1410, Civil Code).

Moises Jocson’s action, therefore, being for the judicial declaration of nullity of and 4 on the ground of
simulated price, is imprescriptible. Neither may the contract be declared void because of alleged inadequacy
of price. To begin with, there was no showing that the prices were grossly inadequate. In fact, the total
purchase price paid by Agustina Jocson-Vasquez is above the total assessed value of the properties alleged
by petitioner and any difference between the market value and the purchase price, which as admitted by
Emilio Jocson was only slight, may not be so shocking considering that the sales were effected by a father
to her daughter in which case filial love must be taken into consideration.

Furthermore, gross inadequacy of price alone does not affect a contract of sale, except that it may indicate
a defect in the consent, or that the parties really intended a donation or some other act or contract (Article
1470, Civil Code) and there is nothing in the records at all to indicate any defect in Emilio Jocson's consent.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 174

!!!

!!!!!!!!!!!!!!!!!!!!!!!!!!!
RAFAEL G. SUNTAY VS. THE HON. COURT OF APPEALS AND FEDERICO C. !
SUNTAY !
G.R. NO. 114950 !

! DECEMBER 19, 1995!

F!ACTS
:
Federico Suntay was the registered owner of a parcel of land. He applied as a miller-contractor of the then
National Rice and Corn Corporation (NARIC). His application, prepared by his nephew-lawyer, Rafael
Suntay, was disapproved because at that time he was tied up with several unpaid loans. Federico allowed
Rafael to make the application for him. Rafael prepared an absolute deed of sale whereby Federico, for and
in consideration of P20,000.00 conveyed to Rafael said parcel of land with all its existing structures. Said
deed was notarized. A counter sale was prepared and signed by Rafael who also caused its delivery to
Federico. Through this counter conveyance, the same parcel of land was sold by Rafael back to Federico
for P20,000.00 also. Although on its face, the second deed appears to have been notarized, an examination
thereof will show that, it is not the said deed of sale but a certain "real estate mortgage on a parcel of land
to secure a loan of P3,500.00 in favor of the Hagonoy Rural Bank.” Asian testimony, Atty. Flores (notary
public) admitted that he failed to submit to the Clerk of Court a copy of the second deed. Neither was he
able to enter the same in his notarial register. Federico requested that Rafael deliver his copy of title
certificate so that Federico could have the counter deed of sale in his favor registered in his name. The
request was turned down. In opposition thereto, Rafael chronicled the discrepancy in the notarization of the
second deed of sale upon which said petition was premised and ultimately concluded that said deed was a
counterfeit or "at least not a public document which is sufficient to transfer real rights according to law."
Rafael insisted that said property was "absolutely sold and conveyed for a consideration of P20,000.00 and
for other valuable consideration" as dacion en pago.

ISSUE:

!
Whether or not the sale constitutes as a sale of dacion en pago

HELD: !
No. The failure of the late Rafael to take exclusive possession of the property allegedly sold to him is a clear
badge of fraud. Federico remained in actual possession, cultivation and occupation of the disputed lot from
the time the deed of sale was executed until the present. It is a circumstance which is unmistakably added
proof of the fictitiousness of the said transfer, the same being contrary to the principle of ownership.
According to the late Rafael, he allowed Federico to remain in the premises and enjoy the fruits thereof
because of their understanding that Federico may subsequently repurchase the property. Contrary to what
Rafael thought, this in fact is added reason for simulation. If it were true that the first sale transaction was

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 175

!!!
actually a "dacion en pago" in satisfaction of Federico's alleged unpaid attorney's fees, it does strain the
logical mind that Rafael had agreed to allow the repurchase of the property three months thereafter. Federico
was financially liquid. Had he intended to pay attorney's fees, he would have paid Rafael in cash and not
part with valuable income-producing real property.

!!!!!!!!!
SWEDISH MATCH VS. COURT OF APPEALS, ALS MANAGEMENT &
DEVELOPMENT CORPORATION AND ANTONIO K. LITONJUA! G.R. NO.
128120!
OCTOBER 20, 2004!
FACTS:
Swedish Match, AB (SMAB) is a corporation organized under the laws of Sweden, however, had 3
subsidiary corporations in the Philippines organized under Philippine laws: Phimco, Provident Tree Farms,
Inc, and OTT/Louie (Phils,), Inc.
In 1988, STORA, its parent company, decided to sell SMAB and the latter’s worldwide match, lighter and
shaving products operation to Swedish Match NV (SMNV). Enriquez, VP of SMSA (management company
of SMAB), was held under special instructions that the sale of Phimco shares should be executed on or
before June 30, 1990. Respondent GM Antonio Litonjua of ALS Management and Development Corp. was
one of the interested parties to acquire Phimco shares, offering US$36 million. After an exchange of
information between CEO Rossi of SMAB and Litonjua, the latter informed that they may not be able to
submit their final bid on the given deadline considering that the acquisition audit of Phimco and the review
of the draft agreements have not been completed.
In a letter dated July 3, 1990, Rossi informed Litonjua that on July 2, SMAB signed a conditional contract
with a local group for the disposal of Phimco and that the latter’s bid would no longer be considered unless
the local group would fail to consummate the transaction on or before September 15, 1990. Irked by
SMAB’s decision to junk his bid, Litonjua asserted that the US$36 million bid was final, thus finalizing the
terms of the sale.
After 2 months from receipt of Litonjua’s letter, Enriquez informed the former that the proposed sale with
the local buyers did not materialize and invited to resume negotiations for the sale of Phimco shares based
on a new set of conditions, as to reducing the period of sale from 30-day to 15, to which Litonjua expressed
objections and emphasized that the new offer constituted an attempt to reopen the already perfected contract
of sale.
Respondents prayed that petitioners be enjoined from selling or transferring the Phimco shares, or otherwise
implementing the sale or transfer thereof, in favor of any person or entity other than respondents, and that
any such sale to third parties be annulled and set aside. Respondents also asked that petitioners be ordered

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 176

!!!
to execute all documents or instruments and perform all acts necessary to consummate the sales agreement
in their favor.
Traversing the complaint, petitioners alleged that respondents have no cause of action, contending that no
perfected contract, whether verbal or written, existed between them. Petitioners added that respondents
cause of action, if any, was barred by the Statute of Frauds since there was no written instrument or
document evidencing the alleged sale of the Phimco shares to respondents.

ISSUE:
(1) Whether the appellate court erred in reversing the trial courts decision dismissing the complaint for
being unenforceable under the Statute of Frauds; and
(2) Whether there was a perfected contract of sale between petitioners and respondents with respect to the
Phimco shares.

HELD:
YES. Evidently, the trial courts dismissal of the complaint on the ground of unenforceability under the
Statute of Frauds is warranted. The term Statute of Frauds is descriptive of statutes which require certain
classes of contracts to be in writing. The Statute does not deprive the parties of the right to contract with

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 177

!
!
respect to the matters therein involved, but merely regulates the formalities of the contract necessary to
render it enforceable. Consequently, the effect of non-compliance with the requirement of the Statute is
simply that no action can be enforced unless the requirement is complied with. Clearly, the form required
is for evidentiary purposes only. Hence, if the parties permit a contract to be proved, without any objection,
it is then just as binding as if the Statute has been complied with.
No, there was no perfected contract of sale since Litonjua’s letter of proposing acquisition of the Phimco
shares for US$36 million was merely an offer. Consent in a contract of sale should be manifested by the
meeting of the offer and acceptance upon the thing and the cause which are to constitute the contract. The
lack of a definite offer on the part of the respondents could not possibly serve as the basis of their claim that
the sale of the Phimco shares in their favour was perfected, for one essential element of a contract of sale
needed to be certain --- the price in money or its equivalent. Obviously, there can be no sale without a price.
Respondents’ attempt to prove the alleged verbal acceptance of their US$36 million bid becomes futile since
there was in the first place no meeting of the minds with respect to the price, and such was merely a
preliminary offer. Respondents’ failure to submit their final bid on the deadline set by the petitioners
prevented the perfection of the contract of sale.
Petition was GRANTED. The appealed Decision is hereby MODIFIED insofar as it declared the agreement
between the parties enforceable under the Statute of Frauds

!
!
!
!
!
!
!
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!

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 178

!
!
! !
!
!
UNIVERSITY OF THE PHILIPPINES VS PHILAB INDUSTRIES, INC.
! G.R. NO. 152411! SEPTEMBER 29, 2004!

!
F ACTS
:
In the year 1979, UP decided to construct an integrated system of research organization known as the
Research Complex. As part of the project, laboratory equipment and furniture were purchased for the
National Institute of Biotechnology and Applied Microbiology (BIOTECH) at the UP Los Banos. The
Ferdinand E. Marcos Foundation (FEMF) came forward and agreed to fund the acquisition of the laboratory

furniture, including the fabrication thereof. !


Lirio, the Executive Assistant of the FEMF, gave the go signal to BIOTECH to contact a corporation to
accomplish the project. On July 23, 1982, Dr. Padolina, the Executive Deputy Director of BIOTECH,
arranged for Philippine Laboratory Industries, Inc. (PHILAB), to fabricate the laboratory furniture and
deliver the same to BIOTECH for the BIOTECH Building Project, for the account of the FEMF. Lirio
directed Padolina to give the go signal to PHILAB to proceed with the fabrication of the laboratory furniture,

and requested Padolina to forward the contract of the project to FEMF for its approval. !
In 1982, Padolina wrote Lirio and requested for the issuance of the purchase order and downpayment for
the office and laboratory furniture for the project. Padolina also requested for copies of the shop drawings
and a sample contract for the project, but PHILAB failed to forward any sample contract. PHILAB made
partial deliveries of office and laboratory furniture to BIOTECH after having been duly inspected by their
representatives and FEMF Executive Assistant Lirio. On August 24, 1982, FEMF remitted P600,000 to
PHILAB as down payment for the laboratory furniture for the BIOTECH project and FEMF made another
partial payment of P800,000 to PHILAB.

UP, through Chancellor Javier and Gapud from FEMP executed a Memorandum of Agreement (MOA) in
which FEMF agreed to grant financial support and donate sums of money to UP for the construction of
buildings, installation of laboratory and other capitalization for the project, not to exceed P29,000,000.00.
The MOA, additionally states that: (1)the foundation shall acquire and donate to the UNIVERSITY the site
for the RESEARCH COMPLEX, (2) donate or cause to be donated to the UNIVERSITY the sum of

P29,000,000.00, and (3) shall continue to support the activities of the RESEARCH COMPLEX. !
Navasero promised to submit the contract for the installation of laboratory furniture to BIOTECH but failed
to do so. BIOTECH reminded Navasero but instead PHILAB submitted to BIOTECH an accomplishment
report on the project and requested payment thereon. By May 1983, PHILAB had completed 78% of the

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 179

project, amounting to P2,288,573.74 out of the total cost of P2,934,068.90. The FEMF had already paid
forty percent (40%) of the total cost of the project. Padolina wrote Lirio and furnished him the progress
billing from PHILAB. FEMF made another partial payment, in check, of P836,119.52 representing the
already delivered laboratory and office furniture after the requisite inspection and verification thereof by
representatives from the BIOTECH, FEMF, and PHILAB. FEMF failed to pay the bill and PHILAB
reiterated its request for payment through a letter however, there was no response from the FEMF. Philab
appealed for the payment of its bill even on installment basis. Navasero wrote BIOTECH requesting for its
much-needed assistance for the payment of the balance already due plus interest of P295,234.55 for its
fabrication and supply of laboratory furniture. PHILAB asked Cory Aquino for help to secure the payment
of the amount due from the FEMF. It was referred to then Budget Minister Romulo and referred the same
to UP President Edgardo Angara on June 9, 1986. Raul P. de Guzman, the Chancellor of UP Los Baos,
wrote then Chairman of the (PCGG) Jovito Salonga, submitting PHILABs claim to be officially entered as
accounts payable as soon as the assets of FEMF were liquidated by the PCGG. Chancellor De Guzman
wrote Navasero requesting for a copy of the contract executed between PHILAB and FEMF. Exasperated,
PHILAB filed a complaint for sum of money and damages against UP and the latter denied liability and
alleged that PHILAB had no cause of action against it because it was merely the donee/beneficiary of the
laboratory furniture in the BIOTECH; and that the FEMF, which funded the

!!!!
project, was liable to the PHILAB for the purchase price of the laboratory furniture. UP specifically denied
obliging itself to pay for the laboratory furniture supplied by PHILAB. Case was dismissed by lack of merit.

!
ISSUE:

Whether or not the defendant is liable !


HELD:

Petitioner argues that the CA overlooked the evidentiary effect and substance of the corresponding letters
and communications which support the statements of the witnesses showing affirmatively that an implied
contract of sale existed between PHILAB and the FEMF. The petitioner furthermore asserts that no contract
existed between it and the respondent as it could not have entered into any agreement without the requisite
public bidding and a formal written contract.

The respondent, on the other hand, submits that the CA did not err in not applying the law on contracts
between the respondent and the FEMF. It, likewise, attests that it was never privy to the MOA entered into
between the petitioner and the FEMF. The respondent adds that what the FEMF donated was a sum of
money equivalent to P29,000,000, and not the laboratory equipment supplied by it to the petitioner. The
respondent submits that the petitioner, being the recipient of the laboratory furniture, should not enrich itself
at the expense of the respondent.

It bears stressing that the respondents cause of action is one for sum of money predicated on the alleged
promise of the petitioner to pay for the purchase price of the furniture, which, despite demands, the petitioner
failed to do. However, the respondent failed to prove that the petitioner ever obliged itself to pay for the
laboratory furniture supplied by it. Hence, the respondent is not entitled to its claim against the petitioner.

There is no dispute that the respondent is not privy to the MOA executed by the petitioner and FEMF; hence,
it is not bound by the said agreement. Contracts take effect only between the parties and their assigns. A
contract cannot be binding upon and cannot be enforced against one who is not a party to it, even if he is

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 180

aware of such contract and has acted with knowledge thereof. Likewise admitted by the parties, is the fact
that there was no written contract executed by the petitioner, the respondent and FEMF relating to the
fabrication and delivery of office and laboratory furniture to the BIOTECH. Based on the records, an
implied-in-fact contract of sale was entered into between the respondent and FEMF. A contract implied in
fact is one implied from facts and circumstances showing a mutual intention to contract. It arises where the
intention of the parties is not expressed, but an agreement in fact creating an obligation. It is a contract, the
existence and terms of which are manifested by conduct and not by direct or explicit words between parties
but is to be deduced from conduct of the parties, language used, or things done by them, or other pertinent
circumstances attending the transaction. To create contracts implied in fact, circumstances must warrant
inference that one expected compensation and the other to pay. An implied-in-fact contract requires the
parties intent to enter into a contract; it is a true contract. The conduct of the parties is to be viewed as a
reasonable man would view it, to determine the existence or not of an implied-in-fact contract. The totality
of the acts/conducts of the parties must be considered to determine their intention. An implied-in-fact
contract will not arise unless the meeting of minds is indicated by some intelligent conduct, act or sign.

!!
!
!
!
!
MARCIANA CONLU, ET AL., VS. PABLO
ARANETA
 G.R. NO. L-4508! MARCH 4, 1910!

FACTS: !
Plaintiffs commenced an action against the defendants to recover, as owners, certain parcels of land located
in the pueblo of Molo, Province of Iloilo, together with damages, which parcels of land are described in par.
6 of the complaint. Defendants allege that they are the owners of the parcels of land in question. The question
thus presented by the complaint was “Who are the owners of said parcels of land?” The lower court found
that the plaintiffs were the owners and were entitled to the possession of all of the parcels of land described
in said paragraph 6 of the complaint, except that parcel, together with the house located thereon, described
in subsection (d) of said paragraph 6. This latter parcel of land the lower court held belonged to the estate
of Vito Tiongco.


It was established that the house in question, with the tile roof, was originally the property of Catalina
Tiongco, sister of Anselma, which was afterwards left to Anselma by virtue of the will made by Catalina
before her death. In 1887, her nephew, Vito Tiongco, was appointed gobernadorcillo of Molo, whose
appointment was contested on the ground that he was not the owner of any reality. Anselma, who then
possessed many properties, put him into possession of the said tile-roofed house as apparently his own
property. Vito lived in the house from that date up to the time of his death in 1904, and, as it appeared to
everybody, he considered it as if he was the real owner thereof. He made many repairs as well as alterations
in the house on his account further, after being put into possession of the house in the manner above
mentioned, Anselma agreed that he could have the house as his own if he would pay to her P3,000, which
sum is alleged to be the amount paid by her sister Catalina for the erection of said house; and that afterwards,

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 181

and before the death of Anselma, he had paid this sum to the satisfaction of Anselma, It was found that the
house with tile roof was, at the time of the death of Anselma, really the property of Vito Tiongco.


!

ISSUE: !
Whether or not the sale of real property made in 1887 be proved by oral testimony


!

HELD: !
YES. ”An oral contract for the sale of real estate, made prior to the enactment of the Code of Civil Procedure,
is binding between the parties thereto, although it may still be necessary for the parties seeking to enforce
such contract to take some action to secure the execution of proper documents, but this requirement will not
render the agreement invalid.”


Further, Sec. 335 of the Code of Procedure in Civil Actions, now in force, has established a rule relating to
the method of proving contracts of sale of real property, and an oral contract for the sale of real property
can not now be proven under said section 335 except "some note or memorandum thereof be in writing and
subscribed by the party charged or by his agent." However, said section makes no attempt to render oral
contracts invalid. It simply provides that the contract shall not be enforced by an action, unless the same is
evidenced by some note or memorandum. The contract exists and is valid, though it may not be clothed
with the necessary form and the effect of a noncompliance with the provisions of the statute is simply that
no action can be proved unless the requirement is complied with; but a failure to except to the evidence
because it does not conform with the statute is a waiver of the provisions of the law. If the parties to the
action, during the trial make no objection to the admissibility of oral evidence to support a contract of sale
of real property, and thus permit the contract to be proved, it will be just as binding upon the parties as if it
had been reduced to writing.


!!!In the present case the defendants called thirteen witnesses, who each testified concerning the sale of
the 
parcel of land and the house in question in or about the year 1887, and no objection was made by the
plaintiffs to the admissibility of this testimony. They permitted the defendants to prove the oral contract of
sale. The contract of sale, therefore, being fully proven, and under the provisions of the law an oral contract
for the sale of real property being binding and valid between the parties, we see no escape from the
conclusion that if the evidence was sufficient to show the sale, that the contract was binding, even though

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 182

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
!!!!!!!!!!!it had not been reduced to writing.

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! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 183

!
JULIO TAPEC V. COURT OF APPEALS!
G.R. NO. 111952!

! OCTOBER 26, 1994!

F!ACTS
:
On 4 December 1994, the petitioners, who are husband and wife, filed a complaint for recovery of ownership
with the Regional Trial Court at Batac, Ilocos Norte, against David Cabuyadao and herein private
respondent Loreto Raguirag. The petitioners alleged in their complaint that they are the owners of a parcel
of land with an area of 11,850 square meters, located at Barangay No. 26, Oaiag-Upay, Paoay, Ilocos Norte.

The petitioners' claim of ownership is based on two deeds of absolute sale, one executed on 2 January 1950
by Trinidad Gonzales in favor of petitioner Julio Tapec, and the other executed on 28 May 1949 by Rosario
Gonzales in favor of the petitioners, 5 both acknowledged before the same notary public and duly registered
with the Office of the Register of Deeds under Act No. 3344 on 8 March 1950 and 29 July 1949.

Respondent Loreto Raguirag, on the other hand, anchored his defense on a document, dated 15 May 1931
and handwritten in Ilocano, wherein the brothers Victoriano, Gregorio, Matias, and Alejandro, all surnamed
Gonzales, sold to the spouses Manuel Raguirag and Clara Tapec, grandparents of respondent Raguirag, for
a consideration of P150.00 a pasture situated in Dumalaoing, Paoay, Ilocos Norte, with an area of 3,450 sq.
meters.

!
I SSUE:
Whether or not the petitioner’s deed of sale should prevail over the alleged sale to the ancestors of
respondent Raguirag executed much earlier in a private instrument

!
H ELD:
No. The said private instrument is a deed of sale in which all the requisites of a valid contract are present
and which is binding upon the parties. Contracts shall be obligatory, in whatever form they may have been
entered into, provided all the essential requisites for their validity are present. The trial court erroneously
held that it is invalid because it is not in a public document as required by Article 1358 of the Civil Code
and pursuant to Manotok Realty, Inc. vs. Court of Appeals. 27 Article 1358 does not invalidate the acts or

contracts enumerated therein if they are not embodied in public documents. !


This Article enumerates certain contracts that must appear in public or private documents. This provision
does not require such form in order to validate the act or contract but to insure its efficacy. It is limited to
an enumeration of the acts and contracts which should be reduced to writing in a public or private instrument.
The reduction to writing in a public or private document, required in this article, is not an essential requisite

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 184

by which
for the existence of the contract, but is simply a coercive power granted to the contracting parties

they can reciprocally compel the observance of these formal requisites.


!!!!!!!!!!!!
ZAIDE V. COURT OF APPEALS!
GR NO. L-46715-16 !
JULY 29, 1988!

!
FACTS:

!
On January 11, 1965, Edita Zaide executed a public instrument denominated “Deed os Sale” by which, in
consideration of P5,000 paid to her, she sold the parcel of land covered by TCT No. 69088 to Leoncia Zaide.
The deed described both the vendor, Edita Zaide, and the vendee, Leoncia Zaide, as “married” but named
neither of their husbands. The document however did bear the signature of Edita’s husband, Roberto De

Leon, indicating his “marital consent.” !


The omission of the name of the vendee’s husband in the deed of sale gave rise to a problem. Precisely
because of it, the Register of Deeds refused to accept it for registration. A second deed of sale, couched in
the same terms as the first but this time with the names of the husbonds of both vendor and vendee, was
made and shortly thereafter was presented to, and was promptly accepted for registration, by the register of
deeds. The latter then issued new title, TCT No. 138606, in the name of “Leoncia Zaide, married to Primitivo

Zaide.” !
With this lot as collateral, the Zaide spouses thereafter obtained a loan from the GSIS a sum of P28,500.
This was sometime November 1964. The proceeds were used to construct a two-story apartment building

on the land. !
On June 1, 1969, the house of the De Leons burned down. They moved to one of the doors of the apartment
built by the Zaide spouses. They were asked to pay rentals, they refused and litigation ensued.
The De Leon spouses filed a complaint with the court of first instant of Rizal against the Zaide spouses
alleging that the second deed of sale was forged and therefore should be cancelled. The De Leon spouses
reasoned that they “could not possibly have sold their lot for the measly sum of P5,000 appearing in the

forged deed considering that the market price of the land … cannot be less than P20,000.” !
CFI rendered judgement in favor of the Zaide Spouses i.e the second deed of sale is VALID. The CA

reversed the decision. Hence, the instant case. !


ISSUE:

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 185

!
Whether or not the first Deed of Sale is valid even if defective of faulty in its form !

HELD: !
YES, the first deed of sale is VALID. Although the first deed of sale was genuine, it was so far defective as
to render it unregistrable in the Registry of Property. As already pointed out, it did not set forth the name of

the vendee’s husband and was for this reason refused registration by the Register of Deeds. !
The Defect was unsubstantial. It did not invalidate the deed. The legal Dispositions are clear. Though
defective in form, the sale was valid; and the parties could compel each other to do what was needful to

make the document of sale registrable. !


The law generally allows a contract of sale to be entered into any form, whether “in writing, or by word of
mouth, or partly in writing and partly by word or mouth, or (even) inferred from the conduct of the parties;”
but if the agreement concerns “the sale of land or of an interest therein,” the law requires not only that “the
same, or some note or memorandum thereof, be in writing, and subscribed by the party charged’ in order
that it may be enforceable by action, but also that the writing be in the form of a “public document.” The

!
law finally provides that “if the law requires a document or other special form, as in the acts !
!!!and contracts enumerated in Article 1358, the contracting parties may compel each other to observe
that form, once the contract has been perfected and such right may be exercises simultaneously with the
action

!upon the contract.”In the case at bar, the Zaides thus had the right to compel the De Leons to observe the

special form pre scribed by law; i.e., revised the public document by inserting the name of the

vendee’s husband. Indeed,

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 186

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!this was precisely what was done


in the second deed of sale.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 187

!!
LIMKETKAI SONS MILLING, INC VS. COURT OF APPEALS!
G.R. NO. 118509 !
DECEMBER 1, 1995!

FACTS: !
In 1976, Philippine Remnants Co., Inc. constituted the Bank of the Philippine Islands (BPI) as its trustee to
manage, administer, and sell its real estate property, one of which was the disputed lot in Pasig. In 1988,
Pedro Revilla, Jr., a licensed real estate broker, was given formal authority by BPI to sell the lot for
P1,000/sqm. Broker Revilla contacted Alfonso Lim of Limketkai Sons Milling (LSM) who agreed to buy
the land. LSM asked that the price of P1,000/sqm. be reduced to P900.00 while Albano stated the price is
to be P1,100.00. The parties finally agreed that the lot would be sold at P1,000/sqm. to be paid in cash.
Notwithstanding the final agreement to pay P1,000/sqm. on a cash basis, Alfonso Lim (LSM official) asked
if it was possible to pay on terms. The bank officials stated that there was no harm in trying to ask for
payment on terms because in previous transactions, the same had been allowed. It was the understanding,
however, that should the term payment be disapproved, then the price shall be paid in cash. It was Albano
who dictated the terms under which the installment payment may be approved, and acting thereon, Alfonso
Lim wrote BPI through Merlin Albano embodying the payment initially of 10% and the remaining 90%
within a period of 90 days. 2 or 3 days later, LSM learned that its offer to pay on terms had been frozen.
Alfonso Lim went to BPI and tendered the full payment of P33,056,000.00 to Albano. The payment was
refused because Albano stated that the authority to sell that particular piece of property in Pasig had been
withdrawn from his unit. The same check was tendered to BPI Vice-President Nelson Bona who also refused

to receive payment. !
LSM filed an action for specific performance with damages against BPI. In the course of the trial, BPI
informed the trial court that it had sold the property under litigation to National Book Store (NBS) in 1989.
The complaint was thus amended to include NBS. RTC ruled in favor of LSM, holding that there was a
perfected contract of sale between LSM and BPI. CA reversed, holding that no contract of sale was perfected
because there was no concurrence of the three requisites enumerated in Article 1318 of the Civil Code.

ISSUE: !
Whether or not there was a perfected contract between petitioner Limketkai Sons Milling, Inc. and
respondent Bank of the Philippine Islands (BPI)

HELD: !
Yes. There was a meeting of the minds between the buyer and the bank in respect to the price of P1,000/
sqm. The requirements in the payment of the purchase price on terms instead of cash were suggested by BPI
Vice-President Albano. Since the authority given to broker Revilla specified cash payment, the possibility
of paying on terms was referred to the Trust Committee but with the mutual agreement that “if the proposed
payment on terms will not be approved by our Trust Committee, Limketkai should pay in cash, the amount
was no longer subject to the approval or disapproval of the Committee, it is only on the terms.” The record
shows that if payment was in cash, either broker Revilla or Aromin had full authority. But because LSM
took advantage of the suggestion of Vice-President Albano, the matter was sent to higher officials.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO
! ! 188

Immediately upon learning that payment on terms was frozen and/or denied, Limketkai exercised his right

within the period given to him and tendered payment in full, thus complying with their agreement. !
The negotiation or preparation stage started with the authority given by Philippine Remnants to BPI to sell
the lot, followed by the authority given by BPI and confirmed by Philippine Remnants to broker Revilla to
sell the property, the offer to sell to Limketkai, the inspection of the property and the negotiations with

Aromin and Albano at the BPI offices. The perfection of the contract took place when Aromin and !
!!!
Albano, acting for BPI, agreed to sell and Alfonso Lim with Albino Limketkai, acting for LSM, agreed to
buy the disputed lot at P1,000/sqm. Aside from this there was the earlier agreement between LSM and the
authorized broker.

! SALES AND LEASE under ATTY. CASIÑO - CASE DIGESTS - CLASS 2K A.Y. 2016-2017!
! ABONG, ABRIO, ACOSTA, ALIH, ARGOSO, BELLO, BERNALES, BRINGAS, CHING, CULAJARA, DADAYAN, DELGADO, DIZON, ENDAYA,
FAJANILAN, GARCIA, GOLANGCO, HIPE, LIM, MACABATO, MINGUA, PABLO, SALONGA, SANGUYO, SANTOS, SILLA, TOLENTINO, VALERA,
VELASCO, VERCELES, VILLANUEVA, VITORILLO

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