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ABOSULTE AND CONDITIONAL SALE DIGNOS VS.

CA Facts: The Dignos spouses owned a parcel of land, which was sold to plaintiff-appellant Jabil for the sum of P28,000 payable in two installments. Meanwhile, the Dignos spouses sold the same land to Cabigas spouses. As the Dignos spouses refused to accept the second payment and upon discovery of the second sale, Jabil brought this suit Petitioners contend that the Deed of Sale is a mere contract to sell and not an absolute sale; that the same is subject to two positive conditions. It is further contended that in said contract, title or ownership over the property was expressly reserved in the vendor until the suspensive condition of full and punctual payment of the balance of the purchase price shall have been met. Thus, there is no actual sale until full payment is made. Issue: WON the contract is a Deed of Absolute Sale or a Contract to Sell. Ruling: The contract is a Deed of Absolute Sale. 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. OBJECT OF A CONTRACT OF SALE Artates Pojas vs. Urbi, Et. Al. Facts: Spouses Artates and Pojas sought the annulment of the execution of a homestead issued and duly registered in their names. A public sale was made to satisfy a judgment against Artates, which amount was awarded to Urbi for physical injuries. Plaintiff spouses alleged that said sale violated the provision of the Public Land Law exempting said property from execution from any debt contracted within the five-year period from the date of the issuance of the patent. Issue: WON the execution sale is valid. Ruling: The execution sale is null and void. As thus prescribed by law, for a period of five 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 in favour of the government itself or any of its institutions or of duly constituted banking corporations, but also, they shall not be liable to

the satisfaction of any debt contracted within the said period, whether or not the indebtedness shall mature during or after the prohibited time. This provision is mandatory and a sale made in violation thereof is null and void and produces no effect. Though it may be a limitation on the right of ownership of the grantee, the salutary purpose of the provision is 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 the society.

CONTRACT OF SALE VS. AGENCY TO SELL Quiroga vs. Parsons Hardware Co. Facts: A contract was entered into by and between Quiroga and Parsons for the exclusive sale of Quiroga beds in the Visayan Islands. The tenor of said contract provides that Quiroga shall furnish beds of his manufacture to Parsons for the latters establishment in Iloilo, and shall invoice them at the same price he fixed for sales in Manila, and in the invoices, shall make an allowance of a discount as commission on the sales; and Parsons shall order the beds by the dozen, whether of the same or different styles. Parsons further binds himself to pay Quiroga for the beds received within 60 days from the date of their shipment, and binds himself not to sell any other kind except Quiroga beds. Quiroga contends that Parsons violated the following obligations: not to sell beds at higher prices than those of the invoices, to have an open establishment in Iloilo; to conduct the agency, to keep the beds on public exhibition, and to pay for the advertisement expenses for the same, and to order the beds by the dozen and in no other manner. He further alleged that Parsons was his agent for the sale in Iloilo, and said obligations are implied in a contract of commercial agency. Issue: WON Parsons, by reason of the contract, was a purchaser or an agent of Quiroga. Ruling: The contract entered into by the parties is one of a purchase and sale. In the contract in question, what was essential, as constituting the cause and subject matter, is that Quiroga was to furnish Parsons with beds which the latter might order, at the price stipulated, and that Parsons was to pay the price in the manner stipulated. These features exclude the legal conception of an Agency or Order to Sell, whereby the mandatory or agent received the thing to sell it, and does not pay its price, but delivers to the principal the price he obtains from the sale of the thing to a third person, and if he does not succeed in selling it, he returns it. COTRACT OF SALE VS. CONTRACT FOR A PIECE OF WORK Concrete Aggregates vs. CTA Facts: Concrete Aggregates Inc. is a domestic corporation which processes rock aggregates mined by it from private lands and produce ready-mixed concrete and plant-mixed hot asphalt. Upon the investigation conducted by the CTA, the peitioner is liable to pay taxes which the latter disputes. Petitioner contends that it is a contractor subject only to the 3% contractor's tax

Heirs of Enrique Zambales vs. CA Facts: The Zambales spouses were the homestead patentees of a parcel of land. Claiming that the Nin Bay Mining Corp. had removed silica sand from their land and destroyed the plants and other improvements therein, they instituted a case claiming for damages. The Zambales spouses entered into a Compromise Agreement with the Corporation; by virtue of which, the disputed property was sold to one Preysley. Ten years after the Trial Courts decision based on the Compromise Agreement and nine years after the sale, the Zambales spouses filed a civil case for annulment of the Deed of Sale with recovery of possession and ownership with damages, contending that it was their lawyer who prevailed upon them to sign the Compromise Agreement; that they wer unschooled and did not understand the contents thereof. Issue: WON the Compromise Agreement violates the alienation and encumbrance of a homestead lot within five years from the issuance of the patent. Ruling: The sale is void. The law does not distinguish between executor and consummated sales. The bilateral promise to buy and sell the homestead lot at a price certain, which was reciprocally demandable, was entered into within the five-year prohibitory period and is therefore, illegal and void. To all interests and purposes, therefore, there was an actual executory sale perfected during the period of prohibition except that it was reciprocally demandable thereafter and the agency to sell to any third person was deferred until after the expiration of the prohibitory period, and the agency to sell made effective only after the lapse of the said period, was merely a devise to circumvent the prohibition. The bilateral promise to buy and sell and the agency to sell entered into within five years from the date of the homestead patent was in violation of the Public Land Law, although the executed sale was deferred until after the expiration of the five-year prohibitory period.

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

under Section 191 of the 1968 National Internal Revenue Code and not a manufacturer subject to the 7% sales tax under Section 186 of the same Code. Issue: WON the petitioner is a contractor or a manufacturer. Ruling: Concrete Aggregates Inc. is a manufacturer. Petitioner's raw materials are processed under a prescribed formula and thereby changed by means of machinery into a finished product, altering their quality, transforming them into marketable state or preparing them for any of the specific uses of industry. A contract to make is a contract of sale if the article is already substantially in existence at the time of the order and merely requires some alteration, modification or adaptation to the buyer's wishes or purposes. A contract for the sale of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not is a contract for the sale of goods. CONTRACTOR: one who undertakes to do a specific job or piece of work for other persons, using his own means and methods TRUE TEST: renders service in the form of independent occupation, representing the will of his employer only as to the result of his work PERFECTION OF CONTRACT OF SALE

show that they were still interested in its purchase although the area was reduced and to obviate ally doubt on the matter. They did not do so. The PHHC board of directors acted within its rights in withdrawing the tentative award. We cannot say there was a meeting of minds on the purchase of Lot 4. Toyota Shaw, Inc. vs. CA Facts: Sosa wanted to purchase a Toyota Lite Ace. upon contacting Toyota Shaw, Inc., he was told that there was an available unit. Sosa and his son, Gilbert, went to the Toyota and met Bernardo, a sales representative of Toyota. The parties agreed that the car shall be delivered on June 17, 1989 and that the balance of the purchase price would be paid by credit financing through B.A. Finance. They accomplished a printed Vehicle Sales Proposal (VSP) which shows that the customer's name, home address , the model series of the vehicle, the installment mode of payment with the initial cash outlay down. On the date of the delivery, the vehicle was not delivered. Toyota alleged that no sale was entered into between it and Sosa. Issue: WON the stnadard VSP woulfd represent a contract of sale between the parties. Ruling: Neither logic nor recourse to one's imagination can lead to the conclusion that VSP is a perfected contract of sale. It is not a contract of sale, thus no obligation on the part of Toyota to transfer ownership of a determinate thing to Sosa and no correlative obligation on the part of the latter to pay therefor a price certain appears therein. 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. This is so because the agreement as to the manner of payment goes into the price such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. Definiteness as to the price is an essential element of a binding agreement to sell personal property. The VSP was a mere proposal which was aborted in lieu of subsequent events. It follows that the VSP created no demandable right in favor of Sosa for the delivery of the vehicle to him, and its non-delivery did not cause any legally indemnifiable injury. Limketkai Sons Milling, Inc. vs. CA Facts: Philippine Remnants Co., Inc. constituted BPI as its trustee to manage, administer, and sell its real estate property. BPI gave Revilla the formal authority, to sell the lot for P1,000.00 per square meter. Revilla contacted Limketkai Sons Milling who agreed to buy the land.

Peoples Homesite and Housing Corp. vs. CTA Facts: The PHHC board of directors passed Resolution No. 513 awarding to Spouses Mendoza the Consolidation Subdivision Plan on Lot 4 subject to the approval of the Quezon City Council. The city council disapproved the said proposed plan. However approval was made by the said council upon submission of a revised plan reducing the land area. Later on, PHHC board of directors passed another resolution withdrawing the tentative award to the Mendoza -spouses who never paid the price of the lot nor made the 20% initial deposit. The spouses contend that there was a perfected sale of Lot 4 thus they can enforce against the PHHC an action for specific performance. Issue: WON there was a perfected contract of sale. Ruling: There was no perfected contract of 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. When the plan with the area of Lot 4 reduced to 2,608.7 square meters was approved, the Mendozas should have manifested in writing their acceptance of the award for the purchase of Lot 4 just to

There were negotiatons on the price and the term of payment between BPI and the Limketkai until agreement has been reached. BPI later on refused the payment tendered by the petitioner and sold the property to NBS instead. Issue: WON there was a meeting of mind between Limketkai and BPI. Ruling: There was a perfected contract of sale between Limketkai and BPI. The negotiation or preparation stage started with the authority given by Philippine Remnants to BPI to sell the lot, followed by (a) the authority given by BPI and confirmed by Philippine Remnants to broker Revilla to sell the property, (b) the offer to sell to Limketkai, (c) the inspection of the property and finally (d) 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 petitioner Limketkai, agreed to buy the disputed lot at P1,000.00 per square meter. Aside from this there was the earlier agreement between petitioner and the authorized broker. There was a concurrence of offer and acceptance, on the object, and on the cause thereof. Consent is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. The offer must be certain and the acceptance absolute. So long as it is clear that the meaning of the acceptance is positively and unequivocally to accept the offer, whether such request is granted or not, a contract is formed. PROMISE TO BUY AND SELL VS. ACCEPTED UNILATERAL PROMISE TO BUY OR TO SELL ARTS 1479 & 1324

Southwestern Sugar & Molasses Co. vs. Atlantic Gulf & Pacific Company Facts: On March 24, 1953, Atlantic granted Southwestern an option period to buy the formers barge. On May 11 of the same year, Southwestern Company communicated its acceptance of the option to Atlantic. The latter replied that their understanding was that the "offer of option" is to be a cash transaction and to be effected "at the time the lighter is available." On June 25, Atlantic advised the Southwestern Company that the barge could not be turned over to the latter company. On June 27, 1953, the Southwestern Company filed this action to compel Atlantic to sell the barge in line with the option, depositing with the court a check covering the amount, but said check was later withdrawn with the approval of the court. On June 29, the Atlantic withdrew

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

its "offer of option" with due notices to Southwestern Company. The Atlantic contended that the option to sell it made to Southwestern Company is null and void because said option to sell is not supported by any consideration. Issue: Whether or not the option to sell made to Southwestern Company is null and void because said option to sell is not supported by any consideration. Ruling: The Supreme Court reversed the trial courts decision applying Article 1479 of the new Civil Code. The Court reiterated that "an accepted unilateral promise" can only have a binding effect if supported by a consideration, which means that the option can still be withdrawn, even if accepted, if said option is not supported by any consideration. The option that Atlantic had provided was without consideration, hence, can be withdrawn notwithstanding Southwestern Companys acceptance of said option.

Atkins Kroll & Co. vs. Cu Hian Tek Facts: On September 13, 1951, Atkins Kroll & Co. (Atkins) sent a letter to Cu Hian Tek (Hian Tek) offering to sell sardines with corresponding quantity. Hian Tek unconditionally accepted the said offer through a letter, but Atkins failed to deliver the commodities due to the shortage of catch of sardines by the packers in California. Hian Tek, filed an action for damages in the CFI of Manila which granted the same in his favor. Upon Atkins appeal, the Court of Appeals affirmed said decision. Issue: WON there was a contract of sale between the parties or only a unilateral promise to buy Ruling: The Supreme Court held that there was a contract of sale between the parties. Petitioners argument assumed that only a unilateral promise arose when the respondent accepted the offer, which is incorrect because a bilateral contract to sell and to buy was created upon respondents acceptance. 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 respondents 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. Sanchez vs. Rigos Facts: In an instrument entitled "Option to Purchase," executed on April 3, 1961, Severina Rigos "agreed, promised and committed ... to sell" to plaintiff-appellee Nicolas Sanchez for the sum of P1,510.00 within two (2) years from said date, a parcel of land situated in Nueva

Ecija. It was agreed 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. On March 12, 1963, Sanchez deposited the sum of P1,510.00 with the CFI of Nueva Ecija and filed an action for specific performance and damages against Rigos for the latters refusal to accept several tenders of payment that Sanchez made to purchase the subject land. Issue: WON there was a contract to buy and sell between the parties or only a unilateral promise to sell Ruling: The Supreme Court affirmed the lower courts decision. The instrument executed in 1961 is not a "contract to buy and sell," but merely granted plaintiff an "option" to buy, as indicated by its own title "Option to Purchase." The lower court relied upon Article 1354 of the Civil Code when it presumed the existence of said consideration, but the said Article only applies to contracts in general. However, it is not Article 1354 but the Article 1479 of the same Code which is controlling in the case at bar because the latters 2nd paragraph refers to "sales" in particular, and, more specifically, to "an accepted unilateral promise to buy or to sell." 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.

buy the property at any time they have the money, the Bank was not bound by the promise not only because it was not approved or ratified by the Board of Directors but also because, and more decisively, it was a promise unsupported by a consideration distinct from the repurchase price. The second paragraph of Article 1479 of the Civil Code expressly provides: An accepted unilateral promise to buy or to sell a determinate thing for a price certain is binding upon the promissory if the promise is supported by a consideration distinct from the price.

Spouses Natino vs. IAC Facts: On 12 October 1970, petitioners executed a real estate mortgage in favor of respondent bank. Petitioners failed to pay the loan on due date. The bank applied for the extrajudicial foreclosure of the mortgage. At the foreclosure sale, the respondent bank was the highest and winning bidder. A certificate of sale was executed in its favor by the sheriff and the same was registered with the Office of the Register of Deeds. The certificate of sale expressly provided that the redemption period shall be two years from the registration thereof No redemption was made by petitioners within the twoyear period and the sheriff issued a Final Deed of Sale. Issue: WON the petitioners were given an extension of the period of redemption. Ruling: We find the petition to be devoid of merit. 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. Even if the President and Manager of the bank is to be understood to have promised to allow the petitioners to

Serra vs .CA Facts: Petitioner is the owner of a 374 square meter parcel of land located at Quezon St., Masbate, Masbate. Sometime in 1975, respondent bank, in its desire to put up a branch in Masbate, Masbate, negotiated with petitioner for the purchase of the then unregistered property. A contract of LEASE WITH OPTION TO BUY was instead forged by the parties. The foregoing agreement was subscribed before Notary Public Romeo F. Natividad. Pursuant to said contract, a building and other improvements were constructed on the land which housed the branch office of RCBC in Masbate, Masbate. Within three years from the signing of the contract, petitioner complied with his part of the agreement by having the property registered and placed under the TORRENS SYSTEM, for which Original Certificate of Title No. 0-232 was issued by the Register of Deeds of the Province of Masbate. Petitioner alleges that as soon as he had the property registered, he kept on pursuing the manager of the branch to effect the sale of the lot as per their agreement. It was not until September 4, 1984, however, when the respondent bank decided to exercise its option and informed petitioner, through a letter, of its intention to buy the property at the agreed price of not greater than P210.00 per square meter or a total of P78,430.00. But much to the surprise of the respondent, petitioner replied that he is no longer selling the property. Issue: WON the contract lease with option to buy is valid. Ruling: YES. The contract lease with option to buy is valid , effective and enforceable, the price being certain and that there was consideration distinct from the price to support the option given to lessee. Article 1324 of the Civil Code provides that when an offeror has allowed the offeree a certain period to accept, the offer maybe withdrawn at anytime before acceptance by communicating such withdrawal, except when the option is founded upon consideration, as something paid or promised. On the other hand, Article

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

1479 of the Code provides that an accepted unilateral promise to buy and 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. In a unilateral promise to sell, where the debtor fails to withdraw the promise before the acceptance by the creditor, the transaction becomes a bilateral contract to sell and to buy, because upon acceptance by the creditor of the offer to sell by the debtor, there is already a meeting of the minds of the parties as to the thing which is determinate and the price which is certain. In which case, the parties may then reciprocally demand performance. Jurisprudence has taught us that an optional contract is a privilege existing only in one party the buyer. For a separate consideration paid, he is given the right to decide to purchase or not, a certain merchandise or property, at any time within the agreed period, at a fixed price. This being his prerogative, he may not be compelled to exercise the option to buy before the time expires. In the present case, the consideration is even more onerous on the part of the lessee since it entails transferring of the building and/or improvements on the property to petitioner, should respondent bank fail to exercise its option within the period stipulated. The bugging question then is whether the price "not greater than TWO HUNDRED PESOS" is certain or definite. A price is considered certain if it is so with reference to another thing certain or when the determination thereof is left to the judgment of a specified person or persons. And generally, gross inadequacy of price does not affect a contract of sale. Contracts are to be construed according to the sense and meaning of the terms which the parties themselves have used. In the present dispute, there is evidence to show that the intention of the parties is to peg the price at P210 per square meter. Moreover, by his subsequent acts of having the land titled under the Torrens System, and in pursuing the bank manager to effect the sale immediately, means that he understood perfectly the terms of the contract. He even had the same property mortgaged to the respondent bank sometime in 1979, without the slightest hint of wanting to abandon his offer to sell the property at the agreed price of P210 per square meter.

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

WHO BEARS THE RISK OF LOSS ARTS 1480 & 1504 Roman vs. Grimalt

Norkis Distributors, In.c vs. CA Facts: Petitioner Norkis Distributors, Inc. (Norkis for brevity), is the distributor of Yamaha motorcycles in Negros Occidental with office in Bacolod City with Avelino Labajo as its Branch Manager. On September 20, 1979, private respondent Alberto Nepales bought from the Norkis-Bacolod branch a brand new Yamaha Wonderbike motorcycle Model YL2DX with Engine No. L2-329401K Frame No. NL2-0329401, Color Maroon, then displayed in the Norkis showroom. The price of P7,500.00 was payable by means of a Letter of Guaranty from the Development Bank of the Philippines

(DBP), Kabankalan Branch, which Norkis' Branch Manager Labajo agreed to accept. Hence, credit was extended to Nepales for the price of the motorcycle payable by DBP upon release of his motorcycle loan. As security for the loan, Nepales would execute a chattel mortgage on the motorcycle in favor of DBP. Branch Manager Labajo issued Norkis Sales Invoice No. 0120 (Exh.1) showing that the contract of sale of the motorcycle had been perfected. Nepales signed the sales invoice to signify his conformity with the terms of the sale. In the meantime, however, the motorcycle remained in Norkis' possession.On November 6, 1979, the motorcycle was registered in the Land Transportation Commission in the name of Alberto Nepales. Issue: Who should bear the loss of the motorcycle? Ruling: NORKIS, the seller. The issuance of a sales invoice does not prove transfer of ownership of the thing sold to the buyer. An invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold and has been considered not a bill of sale. In all forms of delivery, it is necessary that the act of delivery whether constructive or actual, be coupled with the intention of delivering the thing. The act, without the intention, is insufficient. When the motorcycle was registered by Norkis in the name of private respondent, Norkis did not intend yet to transfer the title or ownership to Nepales, but only to facilitate the execution of a chattel mortgage in favor of the DBP for the release of the buyer's motorcycle loan. The Letter of Guarantee issued by the DBP, reveals that the execution in its favor of a chattel mortgage over the purchased vehicle is a pre-requisite for the approval of the buyer's loan. If Norkis would not accede to that arrangement, DBP would not approve private respondent's loan application and, consequently, there would be no sale. In other words, the critical factor in the different modes of effecting delivery, which gives legal effect to the act, is the actual intention of the vendor to deliver, and its acceptance by the vendee. Without that intention, there is no tradition. Article 1496 of the Civil Code which provides that "in the absence of an express assumption of risk by the buyer, the things sold remain at seller's risk until the ownership thereof is transferred to the buyer," is applicable to this case, for there was neither an actual nor constructive delivery of the thing sold, hence, the risk of loss should be borne by the seller, Norkis, which was still the owner and possessor of the motorcycle when it was wrecked. This is in accordance with the well-known doctrine of res perit domino.

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

RECTO LAW ARTS 1484 & 1485

Southern Motors vs. Moscoso Facts: On June 6, 1957, plaintiff-appellee Southern Motors, Inc. sold to defendant-appellant Angel Moscoso one Chevrolet truck, on installment basis, for P6,445.00. Upon making a down payment, the defendant executed a promissory note for the sum of P4,915.00, representing the unpaid balance of the purchase price), to secure the payment of which, a chattel mortgage was constituted on the truck in favor of the plaintif. Of said account of P4,915.00, the defendant had paid a total of P550.00, of which P110.00 was applied to the interest up to August 15, 1957, and P400.00 to the principal, thus leaving an unpaid balance of P4,475.00. The defendant failed to pay 3 installments on the balance of the purchase price. On November 4, 1957, the plaintiff filed a complaint against the defendant, to recover the unpaid balance of the promissory note. Upon plaintiff's petition, embodied in the complaint, a writ of attachment was issued by the lower court on the properties Of the defendant. Pursuant thereto, the said Chevrolet truck, and a house and lot belonging to defendant, were attached by the Sheriff of San Jose, Antique, where defendant was residing on November 25, 1957, and said truck was brought to the plaintiff's compound in Iloilo City, for safe keeping. Issue: WON the remedy chosen by appellee is the foreclosure of the truck or a specific performance of the defendants obligation. Ruling: Manifestly, the appellee had chosen the first remedy (specific performance). The complaint is an ordinary civil action for recovery of the remaining unpaid balance due on the promissory note. The plaintiff had not adopted the procedure or methods outlined by Sec. 14 of the Chattel Mortgage Law but those prescribed for ordinary civil actions, under the Rules of Court. Had appellee elected the foreclosure, it would not have instituted this case in court; it would not have caused the chattel to be attached under Rule 59, and had it sold at public auction, in the manner prescribed by Rule 39. That the herein appellee did not intend to foreclose the mortgage truck, is further evinced by the fact that it had also attached the house and lot of the appellant at San Jose, Antique. As the plaintiff has chosen to exact the fulfillment of the defendant's obligation, the former may enforce execution of the judgment rendered in its favor on the personal and

real property of the latter not exempt from execution sufficient to satisfy the judgment. That part of the judgment against the properties of the defendant except the mortgaged truck and discharging the writ of attachment on his other properties is erroneous. We perceive nothing unlawful or irregular in appellee's act of attaching the mortgaged truck itself. Since herein appellee has chosen to exact the fulfillment of the appellant's obligation, it may enforce execution of the judgment that may be favorably rendered hereon, on all personal and real properties of the latter not exempt from execution sufficient to satisfy such judgment. It should be noted that a house and lot at San Jose, Antique were also attached. No one can successfully contest that the attachment was merely an incident to an ordinary civil action. (Sections 1 & 11, Rule 59; Sec. 16, Rule 39). The mortgage creditor may recover judgment on the mortgage debt and cause an execution on the mortgaged property and may cause an attachment to be issued and levied on such property, upon beginning his civil action.

debtor vendee (Art. 2066, Civil Code); so that ultimately, it will be the vendee who will be made to bear the payment of the balance of the price, despite the earlier foreclosure of the chattel mortgage given by him. Thus, the protection given by Article 1484 would be indirectly subverted, and public policy overturned." Filinvest Credit vs. CA Facts: Spouses Tan sells gravel produced from crushed rocks used for construction purposes. Wanting to increase production, they asked Mr. Ruben Mercurio to look for a more efficient rock crusher and were referred to Rizal Consolidated Corporation which then had for sale one such machinery. After inspection of said machinery, couple decided to buy the same and applied for financial assistance from Filinvest Credit Corporation on the conditions that: that the machinery be purchased in the petitioner's name; that it be leased (with option to purchase upon the termination of the lease period) to the private respondents; and that the private respondents execute a real estate mortgage in favor of the petitioner as security for the amount advanced by the latter. A contract of lease of machinery (with option to purchase) was entered into by the parties stipulating that at the end of the two-year period, the machine would be owned by the spouses. The latter executed a real estate mortgage over two parcels of land issued in favor Filinvest and issues check for P150,550.00, as initial rental (or guaranty deposit), and twenty-four (24) postdated checks corresponding to the 24 monthly rentals. Three months after the delivery of the machinery, the couple claiming that they had only tested the machine that month, sent a letter-complaint to the Filinvest, alleging that contrary to the 20 to 40 tons per hour capacity of the machine as stated in the lease contract, the machine could only process 5 tons of rocks and stones per hour and refused to pay. As a consequence of the non-payment of the rentals on the rock crusher as they fell due despite the repeated written demands, Filinvest extrajudicially foreclosed the real estate mortgage. To thwart the impending auction of their properties, Spouses Jose Sy Bang and Iluminada Tan filed before the RTC (QC) a complaint against Filinvest, asked for the rescission of the contract of lease, annullment of the real estate mortgage. A judgment was rendered in their favor. On appeal, the petitioner (Filinvest) reasserts that the cause of action should be directed against Rizal Consolidated Corporation, the original owner-seller of

Pascual & Leonila Torres vs. Universal Motors Facts: Spouses Torres executed a real estate mortgage on two parcel of land to secure the payment of the indebtedness of PDP Transit, Inc. for the purchase of five (5) Mercedes Benz trucks from Universal Motors Corp. Separate deeds of chattel mortgages on the Mercedez Benz units were also executed by PDP Transit in favor of UMC PDP Transit Inc. was able to pay a sum of P92,964.91, leaving balance of P68,641.69 including interest due as of February 8, 1965. On March 19, 1965, Universal Motors Corporation filed a complaint against PDP Transit, and it was able to repossess all the units sold, including the five (5) units guaranteed by the subject real estate mortgage, and to foreclose all the chattel mortgages constituted thereon, resulting in the sale of the trucks at public auction. Spouses Lorenzo Pascual and Leonila Torres filed an action in the CFI Quezon City for the cancellation of the mortgage. A judgment was rendered in their favor. UMC contends (on appeal) that what Article 1484 withholds from the vendor is the right to recover any deficiency from the purchaser after the foreclosure of the chattel mortgage and not a recourse to the additional security put up by a third party to guarantee the purchaser's performance of his obligation Issue: WON UMC correct in its contentions? Ruling: NO. if the guarantor should be compelled to pay the balance of the purchase price, the guarantor will in turn be entitled to recover what she has paid from the

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

the subject rock crusher, or Gemini Motors Sales which served as a conduit facilitator of the purchase of the said machine. The petitioner argues that it is a financing institution engaged in quasi-banking activities, primarily the lending of money to entrepreneurs such as the private respondents and the general public, but certainly not the leasing or selling of heavy machineries like the subject rock crusher. The petitioner denies being the seller of the rock crusher and only admits having financed its acquisition by the private respondents. Further, the petitioner absolves itself of any liability arising out of the lease contract it signed with the private respondents due to the waiver of warranty made by the latter. Issue: WON Filinvest is immuned from liability arising from the defect of the machinery? Ruling: YES. The spouses has independently inspected and verified the leased property and has selected and received the same from the Dealer of his own choosing in good order and excellent running and operating condition and on the basis of such verification, etc. the LESSEE has agreed to enter into this Contract. One of the stipulations in the contract they entered into with the petitioner is an express waiver of warranties in favor of the latter. By so signing the agreement, the private respondents absolved the petitioner from any liability arising from any defect or deficiency of the machinery they bought.

DELIVERY AS A MODE OF TRANSFERRING OWNERSHIP Addison vs. Felix Facts: By a public instrument Addison sold to Marciana Felix, four parcels of land, described in the instrument. Felix paid, at the time of the execution of the deed, the sum of P3,000 on account of the purchase price, and bound herself to pay the remainder in installments. It was further stipulated that the purchaser was to deliver to the vendor 25 per centum of the value of the products that she might obtain from the four parcels "from the moment she takes possession of them until the Torrens certificate of title be issued in her favor." It was also covenanted that "within one year from the date of the certificate of title in favor of Marciana Felix, Addison may rescind the present contract of purchase and sale. Later on, Addison filed suit in Court of First Instance of Manila to compel Marciana Felix to make payment of the first installment and of the interest in arrears. The defendant answered the complaint and alleged by way of special defense that the plaintiff had absolutely failed to deliver to the defendant the lands that were the

subject matter of the sale, notwithstanding the demands made upon him for this purpose. The evidence adduced shows that after execution of the deed of the sale Addison, at the request of Felix, went to Lucena, accompanied by a representative of the latter, for the purpose of designating and delivering the lands sold. He was able to designate only two of the four parcels, and more than two-thirds of these two were found to be in the possession of one Juan Villafuerte, who claimed to be the owner of the parts so occupied by him. Issue: WON there was delivery of the land sold. Ruling: NO. The record shows that the plaintiff did not deliver the thing sold. With respect to two of the parcels of land, he was not even able to show them to the purchaser; and as regards the other two, more than twothirds of their area was in the hostile and adverse possession of a third person. The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed "in the hands and possession of the vendee." (Civ. Code, art. 1462.) It is true that the same article declares that the execution of a public instruments is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality the delivery has not been effected.

the existing windows. Jalwindor filed with the CFI of Rizal, Quezon City an action for collection of a sum of money with a petition for preliminary attachment against Capitol for its failure to pay its purchases. Later, Jalwindor and Capitol submitted to the trial court a Compromised Agreement wherein Capitol acknowledged its indebtedness and that all the materials that Capitol purchased will be considered as security for such undertaking. Meanwhile, Sampaguita filed a complaint for ejectment and for collection of a sum of money against Capitol for the latters failure to pay rentals and the City Court of Quezon City ordered Capitol to vacate the premises and to pay Sampaguita. On the other hand, Capitol likewise failed to comply with the terms of the Compromise Agreement, and a levy was made on the glass and wooden jalousies. Sampaguita filed a third-party claim alleging that it is the owner of said materials and not Capitol, but Jalwindor filed an idemnity bond in favor of the Sheriff and the items were sold at public auction, with Jalwindor as the highest bidder . Sampaguita filed with the CFI of Rizal, Quezon City an action to nullify the Sheriff's sale and for an injunction to prevent Jalwindor from detaching the glass and wooden jalousies. Issue: WON there was a delivery made and, therefore, a transfer of ownership of the thing sold? Ruling: YES. When the glass and wooden jealousies were delivered and installed in the lease premises, Capitol became the owner thereof. Ownership is not transferred by perfection of the contract but by delivery, either actual or constructive. Capitol entered into a lease contract with Sampaguita, and the latter became the owner of the items mentioned by virtue of the contract agreement. When levy was made on the items, Capitol ( the judgment debtor) was no longer the owner thereof.

Sampaguita Pictures vs. Jalwindor Facts: Sampaguita leased to Capitol 300 Inc. the roof deck of its building with the agreement that all permanent improvements Capitol will make on said property shall belong to Sampaguita without any part on the latter to reimburse Capitol for the expenses of said improvements. Shortly, Capitol purchased on credit from Jalwindor glass and wooden jalousies, which the latter itself delivered and installed in the leased premises, replacing

Fiestan vs. CA Facts: Spouses Fiestan mortgaged their land to DBP as security for a loan. Upon failure to pay, the land was foreclosed an. DBP acquired lot as highest bidder. One year redemption period having expired, DBP title over the land was consolidated. Issue: WON DBP is prohibited to acquire the property under Art. 1491(2)? Ruling: NO. The prohibition does not apply in the instant case where the sale in dispute was made pursuant to a special power inserted in or attached to the real estate under Act No. 3135 as amended. As special statute, Act 3135 prevails over provisions of Civil Code as general statute. Moreover, even in the absence of such provision, the mortgagee may still purchase the subject property to protect his interest.

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

ARTS. 1506 & 559 Dizon vs. Suntay Facts: Respondent Suntay delivered a diamond ring to certain Clarita Sison for the latter to sell it on commission. Time lapses and there was no return of the ring nor the purchase price. Demand was made and later Sison was found out to have pledged it to petitioner Dizon. Suntay thereafter filed for the recovery of the thing. Lower and appellate courts found in her favor under Art 559 as owner thereof. Hence this petition. Issue: May Suntay still recover possession of the thing pledged? Ruling: YES. Suntay may recover the diamond ring from the pawnshop with which another person has pledged it without authority to do so. Art 559 applies and the defense that the pawnshop acquired possession of the ring without notice of any defect in the title of the pledge is unavailing. Since the thing was pledged by a pledgor having no authority to do so, the real owner is not stopped from pursuing an action against the pawnshop for the recovery of the possession of the thing. Petitioner is engaged in the business where presumably ordinary prudence would manifest itself to ascertain whether or not the individual offering jewelry by way of pledge is entitled to do so. No such precaution was exercised by petitioner. He, therefore, has only himself to blame for the fix he is now. EDCA Publishing vs. Santos Facts: A person identifying himself as Joe Cruz placed an order by telephone with EDCA Publishing & Distributing Co. for 406 books payable on delivery. Books were delivered for which Cruz issued a personal check as payment. Cruz was later found out to be an impostor and the check issued was dishonored after its presentation for payment. EDCA, after knowing that the said books were subsequently sold to Leonor Santos, asked help of the police to seize the books without warrant claiming it was unlawfully deprived of the books. Issue: WON EDCA was unlawfully deprived of the books since the check issued was dishonored? Ruling: NO. Non-payment only creates a right to demand payment or to rescind the contract, or to criminal prosecution in case of bouncing checks. Unless otherwise stipulated, delivery of the thing sold will effectively transfer ownership to the buyer who can in turn transfer it to another. It would certainly be unfair now to make private respondent bear the prejudice sustained by EDCA as a result of its own negligence. The Court cannot see the justice in transferring EDCAs

loss to the Santoses who had acted in good faith, and with proper case, when they bought the books from Cruz. DOUBLE SALE ART. 1544

Carbonell vs. CA FACTS: Jose Poncio mortgaged his lot to Republic Savings Bank for P1,500. Meanwhile, Poncio sold his mortgaged lot to Rosario Carbonell in a Sale with Assumption of Mortgage- with the purchase price would come the money to be paid to the bank. both went to bank to pay the arrears on mortgage. Poncio was allowed to live on the lot provided it will pay rents. Thereafter, Poncio sold the lot to Emma Infante who immediately took possession of the lot and built improvements thereon. Informed that the sale to Infante was not registered, Carbonell registered her adverse claim on Feb 8, 1955. Four days after, a deed of sale in favor of Infante was registered. Issue: Who has a better right on the question lot? Ruling: CARBONELL. In case of double sale of immovable property, art 1544, 2nd par directs that ownership should be recognized in favor of one who in good faith first recorded his right. Absent such inscription, what is decisive is prior possession in good faith. When Carbonell bought the land, she was the only buyer thereof and the title was still in Poncios name solely encumbered by bank mortgage duly annotated thereon. Hence Carbonells prior purchase of the land was made in good faith. Such good faith did not cease after Poncio told her of the 2nd sale since Carbonell attempted to talk to Infate but the latter did not accommodate her. Carbonell then registered her adverse claim. The recording of the adverse claim should be deemed to have been done in good faith and should compromise Infantes bad faith when she registered her deed of sale four days later. Dagupan Trading vs. Macam Facts: In the year 1955, Sammy Maron and his seven brothers and sisters were pro-indiviso owners of a parcel of unregistered land located in Barrio Parayao, Municipality of Binmaley, Pangasinan. While their application for registration of said land under Act No. 496 was pending, they executed on June 19 and September 21, 1955, two deeds of sale conveying the property to appellee who thereafter took possession thereof and proceeded to introduce substantial improvements therein. One month later,

that is, on October 14, 1955, Original Certificate of Title No. 6942 covering the land was issued in the name of the Marons, free from all liens and encumbrances. On August 4, 1956, by virtue of a final judgment rendered by the Municipal Court of Manila against Sammy Maron in favor of the Manila Trading and Supply Company, levy was made upon whatever interest he had in the aforementioned property, and thereafter said interest was sold at public auction to the judgment creditor. The corresponding notice of levy, certificate of sale and the Sheriffs certificate of final sale in favor of the Manila Trading and Supply Co. because nobody exercised the right of redemption - were duly registered. On March 1, 1958,latter sold all its rights and title to the property to appellant Appellant, filed an action against appellee Rustico Macam, praying that he be declared owner of the oneeighth portion of the land. Answering the complaint, appellee alleged, in the main, that Sammy Maron's share in the property described in the complaint, as well as that of all his coheirs, had been acquired by purchase by appellee since June 19 and September 21, 1955, before the issuance of the original certificate of title in their name; that at the time the levy in execution was made on Sammy Maron's share therein, the latter had no longer any right or interest in said property; that appellant and its predecessor in interest were cognizant of the facts already mentioned; that since the sales made in his favor, he had enjoyed uninterrupted possession of the property and introduced considerable improvements thereon. Appellee likewise sought to recover damages by way of counterclaim. After trial upon the issue thus joined, the court rendered judgment dismissing the complaint, which, on appeal, was affirmed by the Court of Appeals Issue: Whether or not appellant Dagupan Trading Company is the owner of the one-eight portion of the land. Held: No. The sale in favor of appellee was executed before the land subject matter thereof was registered, while the conflicting of appellant was executed after the same property had been registered. What should determine the issue are the provisions of the last paragraph of Section 35, Rule 39 of the Rules of Court, to the effect that upon execution and delivery of the final certificate of sale in favor of the purchaser of land sold in an execution sale, such purchase "shall be substituted to and acquire all the right, title, interest and claim of the judgment debtor to the property as of the time of the levy." We ask: What was the interest and claim of Sammy

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

Maron on the one-eighth portion of the property inherited by him and his co-heirs, at the time of the levy? The answer must necessarily be that he had none because for a considerable time prior to levy, his interest had already been conveyed to the appellee fully and retrievably.

transfer vitiates his title acquired, by virtue of the latter instrument of conveyance which creates no right as against the first purchaser. Nuiguid vs. CA Facts: The deceased spouses Victorino and Crisanta dela Rosa were the registered owners of a parcel of land situated in Bataan, and covered by OCT. Victorino dela Rosa (widowed by then) sold one half of the said property to Juliana Salazar for P 95.00. This sale was not registered. Immediately after the sale, Juliana Salazar constructed a house on the lot she purchased. Petitioner spouses caused the registration of a document entitled "Kasulatan ng Partihan at Bilihan." In this document, Marciana dela Rosa, Victoria Buenaventura, Ernesto Buenaventura, Virgilio Buenaventura, and Felicisimo Buenaventura-all heirs of Victorino and Crisanta dela Rosa- sold to the petitioners the entire area of the property for the sum of P300.00. Subsequently, the OCT was cancelled by the Register of Deeds, and TCT was issued in the names of the petitioners. The private respondents claim that the document is a forged deed. The petitioners assert that the land subject of this case was offered to them for sale by Nicolas dela Rosa who then claimed that he had already purchased the shares of the heirs over the subject property as evidenced by a private document entitled "Kasunduan". The RTC dismissed the complaint filed by the private respondents, but on appeal, this was reversed by the Court of Appeals. Hence, this petition Issue: Whether or not the subsequent sale is valid, the petitioner spouses being purchasers in good faith. Held: Yes. The Original Certificate of Title No. 3778 covering the entire property was clean and free from any annotation of an encumbrance, and there was nothing whatsoever to indicate on its face any vice or infirmity in the title of the registered owners-the spouses Victorino and Crisanta dela Rosa. Thus, the petitioners could not have known of the prior sale to Juliana Salazar as, precjsely, it was not registered. The general rule is that if the property sold is registered land, the purchaser in good faith has a right to rely on the certificate of title and is under no duty to go behind it to look for flaws. This notwithstanding, the petitioners did not rely solely upon the certificate of title. They personally inspected the subject property. Undeniably, they found the same to be occupied by two houses, one belonging to a certain Doray dela Rosa and the other to spouses Pedro Guevarra and Pascuala Tolentino, parents of the respondents Guevarras. Upon

Cruz vs. Cabana Facts: On June 1, 1965, defendant Leodegaria Cabana sold a parcel of land with right of repurchase to defendants-spouses Teofilo Legaspi and Iluminada Cabana. A document "Bilihang Muling Mabibili" stipulated that the land can be repurchased by the vendor within one year from December 31, 1966. Said land was not repurchased and in the meantime, however, said defendants-spouses took possession of the land. Upon request of Leodegaria Cabana, the title of the land was lent to her in order to mortgage the property to the Philippine National Bank. Said title was forthwith, deposited with the PN8. On October 21, 1968, defendant Leodegaria Cabana sold the land by way of absolute sale to the defendantsspouses. However, on November 29, 1968, defendant sold the same property to plaintiff Abelardo Cruz and the latter was able to register it in his name. While the title was registered in plaintiff-appellant Cruz's name on February 9, 1971, he knew of the sale of the land to defendants spouses Legaspi, as he was inforned in the Office of the Register of Deed of Quezon. Issue: Whether or not, the second buyer Cruz, being the first to register the land creates right as against the first buyer, notwithstanding his knowledge of the previous sale. Held: No. Said respondent spouses were like wise the first to register the sale with the right of repurchase in their favor on May 13, 1965 under Primary Entry No. 210113 of the Register of Deeds. They could not register the absolute deed of sale in their favor and obtain the corresponding transfer certificate of title because at that time the seller's duplicate certificate was still with the bank. But there is no question and the lower courts so found conclusively as a matter of fact, that when petitioner Cruz succeeded in registering the later sale in his favor, he knew and he was informed of the prior sale in favor of respondents spouses., Respondent appellate court correctly held that such knowledge of a prior transfer of a registered property by a subsequent purchaser makes him a purchaser in bad faith and his knowledge of such

being informed of the petitioners' desire to purchase the land, Doray dela Rosa apparently offered to sell her house, which offer was accepted by the petitioners. As regards the spouses Guevarra, we find no reason to disturb the trial court's finding that they themselves requested that they be allowed to refrain on the property until such time that the petitioners would need the entire premises; and in lieu of rentals to the petitioners, they offered to continue paying the real estate taxes for one-half of the property as this was their arrangement with the previous owners-to which request the petitioners acceded. Evidently, neither Doray dela Rosa nor the spouses Guevarra professed ownership over the portions of land they were occupying; on the contrary, by their actuations they expressly acknowledged that they were not the real owners of the said property. The spouses Guevarra, in particular, made no mention of the prior unregistered sale to their predecessor-in-interest, Juliana Salazar. Thus, when the petitioners registered the sale in their favor with the Register of Deeds, they did so without any knowledge about the prior sale in favor of Juliana Salazar. The petitioners, therefore, had acted in good faith.

Tanedo vs. CA Facts: Lazaro Tanedo executed a deed of absolute sale in favor of his eldest brother, Ricardo Tanedo and the latters wife where he conveyed his future inheritance from his parents. Later, Ricardo discovered that the land in litigation was sold to Lazaros children through another deed of sale which was recorded in the Register of Deeds; the heirs of Lazaro wanted to have the rescission of the deeds in favor of Ricardo. Issue: WON the second sale and the act of registration are valid. Ruling: Yes. In addition, applying 1544 of the NCC, the petitioners (heirs of Lazaro) also have a better right over the land, because under the said provision, ownership shall belong to the buyer who in good faith registers it first it in the Registry of Property.

Radiowealth Finance Company vs. Palileo Facts: Spouses Castro sold a parcel of unregistered land evidenced in a notarized deed of absolute sale to Palileo. Palielo through his mother performed acts of ownership; appellee on the other hand continuously paid the real estate taxes on said land. A judgment in a civil case against Castro resulted to a sale of the land at a public auction and Radiowealth bought it. The period of redemption expired and the sale was later registered.

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

Issue: WON the rule in 1544 of the NCC is applicable to the UNREGISTERED LAND. Held: No. Apply Sec. 35, Rule 39 of the Revised Rules of Court instead. The Court explained that the purchaser of an unregistered land in a sheriffs execution sale only steps in the shoes of the judgment debtor.

Spouses Gabriel vs. Mabanta Facts: Mabanta spouses were the registered owners of two lots. They mortgaged the said properties to DBP as collateral. Later, the spouses sold the land to Susana Soriano (Deed of sale of parcels of land with assumption of mortgage) with a right to repurchase; they failed to buy it back. Susana executed a document entitled "Cancellation of Contract" whereby she transferred to Alejandro all her rights over the two lots. Alejandro and his son Alfredo cultivated the lots. However, when they were ready to pay the entire loan, they found that Tans daughter already bought the land. Issue: WON the Tan-Reyes is in good faith when she bought and registered the land. Ruling: No. Good faith is something internal; hence, we must rely on the conduct and outward acts of TanReyes. Good faith must concur with registration. Consolidated Rural Bank va. CA acts: The Madrid brothers were the registered owners of a lot. It was subdivided. Rizal Madrid sold part of his share to Aleja Gamiao and Felisa Dayag by virtue of a Deed of Sale. The sale was not registered; however, Gamiao and Dayag declared the property for taxation purposes. A part of the land was sold to Hernandez and dela Cruz and the heirs of the latter continued possession. The Madrid brothers sold the same land to Marquez. The sale was registered. Marquez mortgaged the land; these were registered. The land was foreclosed and was sold to Calixto. The heirs of dela Cruz filed a case for reconveyance. Issue: WON 1544 would apply. Held: No, 1544 cannot be invoked where two persons made the sale. Apply the principle of prior tempore, potior jure. The Heirs have a superior right. ADDITIONAL CASES IN SALES CONTRACT OF SALE VS. CONTRACT TO SELL Ursal vs. CA Ursal and spouses Monesets entered into a Contract to Sell Lot & House. The amount agreed upon was P130,000.00. Ursal is to pay P50k as down payment and will continue to pay P3k monthly starting the next month

until the balance is paid off. After 6 months, Ursal stopped paying the Monesets for the latter failed to give her the transfer of certificate title. In November 1985, the Monesets executed an absolute deed of sale w/ one Dr. Canora. In September 1986, the Monesets mortgaged the same property to the Rural Bank of Larena for P100k. The Monesets failed to pay the P100k hence the bank filed for foreclosure. Trial ensued and the RTC ruled in favor of Ursal. The trial court ruled that there was fraud on the part of the Monesets for executing multiple sales contracts. That the bank is not liable for fraud but preference to redeem should be given to Ursal. The Monesets are ordered to reimburse Ursal plus to pay damages and fees. Ursal was not satisfied as she believed that the bank was also at fault. ISSUE: Whether or not the Contract to Sell vested ownership in Ursal. HELD: No. There should be no special preference granted to Ursal in redeeming the property. What she had with the Monesets was contract to sell in which case ownership was not transferred to her due the suspensive condition of full payment. Further, the property was sold to other properties already. A contract to sell is 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. In such contract, the prospective seller expressly reserves the transfer of title to the prospective buyer, until the happening of an event, which in this case is the full payment of the purchase price. What the seller agrees or obligates himself to do is to fulfill his promise to sell the subject property when the entire amount of the purchase price is delivered to him. Stated differently, 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. Since the contract in this case is a contract to sell, the ownership of the property remained with the Monesets even after petitioner has paid the down payment and took possession of the property. What is a conditional contract of sale? The fulfillment of the suspensive condition, which is the full payment of the purchase price, will not automatically transfer ownership to the buyer although the property may have been previously delivered to him. The prospective vendor still has to

convey title to the prospective buyer by entering into a contract of absolute sale. While in a conditional contract of sale, the fulfillment of the suspensive condition renders the sale absolute and affects the seller title thereto such that if there was previous delivery of the property, the sellers ownership or title to the property is automatically transferred to the buyer.

Nia Julian. Sororitas Reginae Juris Sales. Dean Sundiang

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