Particular Kinds: Generic Things

Yu Tek & Co. vs. Gonzales, 29 Phil 384 (1915)

Facts:
Basilio Gonzales and Messrs. Yu Tek and Co., entered into a written contract wherein defendant in consideration of
3,000 pesos will deliver to the plaintiff 600 piculs of sugar of the first and second grade, according to the result of the
polarization, within the period of three months, beginning on the 1st day of January, 1912, and ending on the 31st day
of March of the same year, 1912. The said 600 piculs of sugar will be delivered at any place within the said municipality
of Santa Rosa which the said Messrs. Yu Tek and Co., or a representative of the same may designate. In case of failure to
deliver the 600 piculs of sugar within 3 months, the contract will be rescinded and the 3,000 pesos plus 1,200 by way of
indemnity for loss will be paid to plaintiff. Plaintiff proved that no sugar had been delivered to it under this contract nor
had it been able to recover the P3, 000. Judgment was rendered in favor of plaintiff. Hence, this case.
Gonzales Contentions:
He alleges that the court erred in refusing to permit parol evidence showing that the parties intended that the sugar was
to be secured from the crop which the defendant raised on his plantation, and that he was unable to fulfill the contract
by reason of the almost total failure of his crop.
He assumes that the contract was limited to the sugar he might raise upon his own plantation; that the contract
represented a perfected sale; and that by failure of his crop he was relieved from complying with his undertaking by loss
of the thing due.
Issue: W/N there was a perfected contract of sale.
Ruling:
Article 1450 defines a perfected sale as follows: The sale shall be perfected between vendor and vendee and shall be
binding on both of them, if they have agreed upon the thing which is the object of the contract and upon the price, even
when neither has been delivered. Article 1452 reads: "The injury to or the profit of the thing sold shall, after the contract
has been perfected, be governed by the provisions of articles 1096 and 1182." This court has consistently held that there
is a perfected sale with regard to the "thing" whenever the article of sale has been physically segregated from all other
articles.
In the case at bar the undertaking of the defendant was to sell to the plaintiff 600 piculs of sugar of the first and second
classes. Was this an agreement upon the "thing" which was the object of the contract within the meaning of article
1450, supra? Sugar is one of the staple commodities of this country. For the purpose of sale its bulk is weighed, the
customary unit of weight being denominated a "picul." There was no delivery under the contract. Now, if called upon to
designate the article sold, it is clear that the defendant could only say that it was "sugar." He could only use this generic
name for the thing sold. There was no "appropriation" of any particular lot of sugar. Neither party could point to any
specific quantity of sugar and say: "This is the article which was the subject of our contract."
We conclude that the contract in the case at bar was merely an executory agreement; a promise of sale and not a sale.
At there was no perfected sale, it is clear that articles 1452, 1096, and 1182 are not applicable. The defendant having
defaulted in his engagement, the plaintiff is entitled to recover the P3,000 which it advanced to the defendant, and this
portion of the judgment appealed from must therefore be affirmed.
With regards to the first contention of the defendant, the court held that this case appears to be one to which the rule
which excludes parol evidence to add to or vary the terms of a written contract is decidedly applicable. There is not the
slightest intimation in the contract that the sugar was to be raised by the defendant. Parties are presumed to have
reduced to writing all the essential conditions of their contract. While parol evidence is admissible in a variety of ways to
explain the meaning of written contracts, it cannot serve the purpose of incorporating into the contract additional

contemporaneous conditions which are not mentioned at all in the writing, unless there has been fraud or mistake. In
the case at bar, it is sought to show that the sugar was to be obtained exclusively from the crop raised by the defendant.
There is no clause in the written contract which even remotely suggests such a condition. The defendant undertook to
deliver a specified quantity of sugar within a specified time. The contract placed no restriction upon the defendant in the
matter of obtaining the sugar. He was equally at liberty to purchase it on the market or raise it himself. It may be true
that defendant owned a plantation and expected to raise the sugar himself, but he did not limit his obligation to his own
crop of sugar. Our conclusion is that the condition which the defendant seeks to add to the contract by parol evidence
cannot be considered. The rights of the parties must be determined by the writing itself.
Undivided Interest/Share
Yturalde v CA and Isabelo Rebollos, 43 SCRA 313 (1972)
Facts:
Spouses Francisco Yturralde and Margarita de los Reyes, owned a parcel of agricultural land in Tungawan, Zamboanga
del Sur. In 1944, Yturralde died intestate, survived by his wife, Margarita de los Reyes, and their children who are the
petitioners herein. In 1950, Margarita contracted a second marriage with her brother-in-law Damaso Yturralde . On May
30, 1952, Damaso and Margarita Reyes executed a deed of sale with right of repurchase in favor of Isabelo Rebollos,
covering the above-mentioned property in consideration of the sum of P1,715.00. The vendors a retro failed to exercise
the right to repurchase the property within the three-year period agreed upon, which expired on May 30, 1955. On May
3, 1965, Isabelo Rebollos, filed a petition for consolidation of ownership with the Court of First Instance of Zamboanga
del Sur. Summons were served against the petitioners except for three others whose addresses were changed.
Petitioners were then declared defaulted and the CFI rendered a decision consolidating the ownership of the subject
property in favor of Rebollos, and ordering the cancellation Original Certificate of Title No. 2356 and to issue a transfer
certificate of title in the name of Rebollos. An order for surrender of property was then issued, but petitioner Montano
Yturralde failed to comply with the order and on the motion filed by Rebollos, the Court, then presided by the
respondent Judge ordered the arrest of said Montano Yturralde, but the order of arrest was subsequently lifted on
motion filed by Montano Yturralde. Also, on petition filed by Rebollos, the respondent Judge, ordered the demolition of
all buildings not belonging to said Rebollos found on the premises in question .The petitioners then filed a motion for
reconsideration of the order of demolition, which was denied by the respondent Judge, who, however, on motion of
said petitioners, directed the respondent Sheriff to defer the implementation of the writ of execution and the order of
demolition until after June 23, 1969. Thereafter, the petitioners instituted the present proceedings. The petition was
given due course by this Court, and on June 19, 1969, a writ of preliminary injunction was issued, restraining the
respondents from enforcing the decision and the orders complained of in Civil Case No. 436, until further orders. In his
answer to the petition filed by the respondent, Isabelo Rebollos, he averred that on January 3, 1968, he sold the
property in question to Pilar M. vda. de Reyes under a deed of absolute sale and, accordingly, a Transfer Certificate of
Title was issued in favor of said vendee covering the subject property by the Register of Deeds. Hence, petitioners filed a
petition in CA for prohibition.
The Court of Appeals held that the action for prohibition before it seeking to restrain the enforcement of the decision in
Civil Case No. 436 and the implementing orders issued subsequent thereto will not prosper; because prohibition is a
preventive remedy to restrain the exercise of a power or the performance of an act and not a remedy against acts
already accomplished, which cannot be undone through a writ of prohibition, and in the instant case, the judgment of
the lower trial court consolidates the ownership of the entire property involved in Civil Case No. 436 in favor of
respondent Isabelo Rebollos, orders the cancellation of the original certificate of title covering the same, and directs the
issuance of a new certificate of title in the name of respondent Rebollos. By virtue of an absolute deed of sale executed
on January 3, 1968 by respondent Isabelo Rebollos, a new certificate of title was issued in the name of the vendee, Pilar
M. Vda. de Reyes. The respondent Court of Appeals then concluded that "As the thing sought to be restrained had
already been done, and since a certificate of title is conclusive evidence of the ownership of the land referred to therein,
and the same cannot be collaterally attacked, but can only be challenged in a direct proceeding prohibition in this case is
not the proper remedy."

Issues: Court of Appeals erred (1) in sustaining the actuation of the trial court in allowing service of summons upon
appellants Josefina, Zosima and Ramon Yturralde by registered mail pursuant to Section 6, Rule 13, of the Rules of Court;
(2) in sustaining the ruling of the trial court that it properly acquired jurisdiction over the aforesaid three appellants by
virtue of such mode of service of summons; and (3) in not declaring as null and void the decision of the trial court along
with its implementing orders, at least insofar as the aforenamed three appellants are concerned on the ground that they
were not given their day in court.
Ruling:
1. The Court of Appeals erred in holding that the petition for prohibition before it will not prosper as the act sought to
be prevented had already been performed; because the order for the issuance of the writ of execution, the
corresponding writ of execution and the order for demolition respectively dated January 6, 1969, January 20, 1969 and
May 15, 1969 in Special Civil Case No. 436 were not enforced by the respondent trial judge, who in his order dated May
26, 1969 directed the provincial sheriff to defer the implementation thereof. The petitioners herein reiterated that they
are still in possession of the property in question, which possession was recognized and protected by the respondent
Court of Appeals itself when it issued the writ of preliminary injunction dated June 19, 1969 against private respondent
Isabelo Rebollos pursuant to its resolution dated June 17,1969.
2. Unlike the old Civil Code, Article 1607 of the new Civil Code of 1950 provides that consolidation of ownership in the
vendee a retro of real property by virtue of the failure of the vendor a retro "to comply with the provisions of Article
1616 shall not be recorded in the Registry of Property without a judicial order, after the vendor has been duly heard." In
the case of Teodoro vs. Arcenas, this Court, through Mr. Justice Jose B. L. Reyes, ruled that under the aforesaid Article
1607 of the new Civil Code, such consolidation shall be effected through an ordinary civil action, not by a mere motion,
and that the vendor a retro should be made a party defendant, who should be served with summons in accordance with
Rule 14 of the Revised Rules of Court; and that the failure on the part of the court to cause the service of summons as
prescribed in Rule 14, is sufficient cause for attacking the validity of the judgment and subsequent orders on
jurisdictional grounds.
The Court in said case stressed that the reason behind the requirement of a judicial order for consolidation as directed
by Article 1067 of the new Civil Code is because "experience has demonstrated too often that many sales with right of
re-purchase have been devised to circumvent or ignore our usury laws and for this reason, the law looks upon them with
disfavor. When, therefore, Article 1607 speaks of a judicial order after the vendor shall have been duly heard, it
contemplates none other than a regular court proceeding under the governing Rules of Court, wherein the parties are
given full opportunity to lay bare before the court the real covenant. Furthermore, the obvious intent of our Civil Code,
in requiring a judicial confirmation of the consolidation in the vendee a retro of the ownership over the property sold, is
not only to have all doubts over the true nature of the transaction speedily ascertained, and decided, but also to prevent
the interposition of buyers in good faith while such determination is being made. Under the former method of
consolidation by a mere extrajudicial affidavit of the buyer a retro, the latter could easily cut off any claims of the seller
by disposing of the property, after such consolidation, to strangers in good faith and without notice. The chances of the
seller a retro to recover his property would thus be nullified, even if the transaction were really proved to be a mortgage
and not a sale."
The jurisdiction over the persons of herein petitioners Josefina, Zosima and Ramon all surnamed Yturralde, was not
properly acquired by the court because they were not properly served with summons in the manner directed by Rule 14
of the Revised Rules of Court. The said three petitioners cannot therefore be legally declared in default. If the residence
of the defendant is unknown or cannot be ascertained by diligent inquiry or if the defendant is residing abroad, service
may be made by publication in a newspaper of general circulation in accordance with Sections 16 & 17, Rule 14. 5 There
is no showing that such a diligent inquiry was made to justify a substituted service of summons by publication. The
return dated June 18, 1965, of the acting chief of police of Tungawan, Zamboanga del Sur, to the clerk of court and exofficio provincial sheriff "that Josefina, Zosima and Ramon are no longer residing in this municipality", does not suffice to
indicate that a careful investigation of their whereabouts was made. And even if it did, substituted service of summon by
publication should have been required. Aside from the fact that the said return of service is a nullity as it is not under
oath, there is no showing even that the acting chief of police was especially authorized by the court to serve the

summons. The action for consolidation should be brought against all the indispensable parties, without whom no final
determination can be had of the action; and such indispensable parties who are joined as party defendants must be
properly summoned pursuant to Rule 14 of the Revised Rules of Court. If anyone of the party defendants, who are all
indispensable parties is not properly summoned, the court acquires no jurisdiction over the entire case and its decision
and orders therein are null and void.
3. The pacto de retro sale executed by Margarita "casada en segundas nuptias con Damaso Yturralde," expressly
stipulates that she only sold all her rights, interests and participation in the lot covered by O.C.T. No. 2356 . Margarita
therefore, could not, for she had no right to, sell the entire lot, which is registered under O.C.T. No. 2356 "in the name of
Francisco Yturralde married to Margarita de los Reyes." Said lot is acknowledge by herein petitioners as the conjugal
property of Francisco and. What she validly disposed of under the aforesaid pacto de retro sale of 1952 was only her
conjugal share in the lot plus her successional right as heir in the conjugal share of her deceased husband Francisco.
Consequently, the vendee a retro, Isabelo Rebollos, cannot legally petition for the consolidation of his ownership over
the entire lot. While summons were served properly on all the other defendants in said Civil Case No. 436, herein
petitioners Josefina, Zosima and Ramon were not so served. Because of such failure to comply with Rule 14 of the
Revised Rules of Court on service of summons on indispensable parties, as heretofore stated, the trialcourt did not
validly acquire jurisdiction over the case; because no complete and final determination of the action can be had without
the aforesaid three petitioners Josefina, Zosima and Ramon. That the three children, herein petitioners Josefina, Zosima
and Ramon, are essential parties, without whom no valid judgment may be rendered, is further underscored by the fact
that the agricultural land in question was owned by them in common and pro indiviso with their mother and their
brothers and sisters and was not then as now physically partitioned among them.
For attempting to acquire the entire parcel by foisting upon the court the misrepresentation that the whole lot was sold
to him, private respondent Isabelo Rebollos must suffer the consequences of his deceit by the nullification of the entire
decision in his favor granting the consolidation of his title over the entire land in question. This Court condemns such
deception and declares null and void the ruling of lower court and set aside the ruling of the CA.

Gaite v. Fonacier, 2 SCRA 831 (1961)

Facts:
Defendant-appellant Fonacier was the owner/holder of 11 iron lode mineral claims, known as the Dawahan Group,
situated in Camrines Norte.
By Deed of Assignment, Respondent constituted and appointed plaintiff-appellee Gaite as attorney-in-fact to enter into
contract for the exploration and development of the said mining claims on. On March 1954, petitioner executed a
general assignment conveying the claims into the Larap Iron Mines, which owned solely and belonging to him.
Thereafter, he underwent development and the exploitation for the mining claims which he estimates to be
approximately 24 metric tons of iron ore.
However, Fonacier decide to revoke the authority given to Gaite, whereas respondent assented subject to certain
conditions. Consequently a revocation of Power of Attorney and Contract was executed transferring P20k plus royalties
from the mining claims, all rights and interest on the road and other developments done, as well as , the right to use of
the business name, goodwill, records, documents related to the mines. Furthermore, included in the transfer was the
rights and interest over the 24K+ tons of iron ore that had been extracted. Lastly the balance of P65K was to be paid for
covering the first shipment of iron ores.
To secure the payment of P65k, respondent executed a surety bond with himself as principal, the Larap Mines and
Smelting Co. and its stockholder as sureties. Yet, this was refused by petitioner. Appelle further required another bond

underwritten by a bonding company to secure the payment of the balance. Hence a second bond was produced with Far
Eastern Surety as an additional surety, provided the liability of Far Eastern would only prosper when there had been an
actual sale of the iron ores of not less than the agreed amount of P65k, moreover, its liability was to automatically expire
on December 1955.
On December 1955, the second bond had expired and no sale amounting to the stipulation as prior agreed nor had the
balance been paid to petitioner by respondent. Thus such failure, prompted petitioner to file a complaint in the CFI of
Manila for the payment of the balance and other damages.
The Trial Court ruled in favor of plaintiff ordering defendant to pay the balance of P65k with interest. Afterwards an
appeal was affected by the respondent where several motions were presented for resolution: a motion for contempt;
two motions to dismiss the appeal for becoming moot and academic; motion for a new trial, filed by appellee Gaite. The
motion for contempt was held unmeritorious, while the rest of the motions were held unnecessary to resolve.
Issues:
(1) that the lower court erred in holding that the obligation of appellant Fonacier to pay appellee Gaite the P65,000.00
(balance of the price of the iron ore in question)is one with a period or term and not one with a suspensive condition,
and that the term expired on December 8, 1955; and (2) that the lower court erred in not holding that there were only
10,954.5 tons in the stockpiles of iron ore sold by appellee Gaite to appellant Fonacier.
Ruling:
No error was found, affirming the decision of the lower court. Gaite acted within his rights in demanding payment and
instituting this action one year from and after the contract was executed, either because the appellant debtors had
impaired the securities originally given and thereby forfeited any further time within which to pay; or because the term
of payment was originally of no more than one year, and the balance of P65k, became due and payable thereafter. The
Lower Court was legally correct in holding the shipment or sale of the iron ore is not a condition or suspensive to the
payment of the balance of P65k, but was only a suspensive period or term. What characterizes a conditional obligation is
the fact that its efficacy or obligatory force as distinguished from its demandability, 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 sale of the ore to Fonacier was a sale on credit, and not an aleatory
contract where the transferor, Gaite, would assume the risk of not being paid at all; and that the previous sale or
shipment of the ore was not a suspensive condition for the payment of the balance of the agreed price, but was
intended merely to fix the future date of the payment. While as to the right of Fonacier to insist that Gaite should wait
for the sale or shipment of the ore before receiving payment; or, in other words, whether or not they are entitled to
take full advantage of the period granted them for making the payment. The appellant had indeed have forfeited the
right to compel Gaite to wait for the sale of the ore before receiving payment of the balance of P65,000.00, because of
their failure to renew the bond of the Far Eastern Surety Company or else replace it with an equivalent guarantee. The
expiration of the bonding company's undertaking on December 8, 1955 substantially reduced the security of the
vendor's rights as creditor for the unpaid P65,000.00, a security that Gaite considered essential and upon which he had
insisted when he executed the deed of sale of the ore to Fonacier (first bond). Under paragraphs 2 and 3 of Article 1198
of the Civil Code of the Philippines: ART. 1198. The debtor shall lose every right to make use of the period: (2) When he
does not furnish to the creditor the guaranties or securities which he has promised. (3) When by his own acts he has
impaired said guaranties or securities after their establishment, and when through fortuitous event they disappear,
unless he immediately gives new ones equally satisfactory. Appellants' failure to renew or extend the surety company's
bond upon its expiration plainly impaired the securities given to the creditor (appellee Gaite), unless immediately
renewed or replaced.
Nevertheless, there is no merit in appellants' argument that Gaite's acceptance of the surety company's bond with full
knowledge that on its face it would automatically expire within one year was a waiver of its renewal after the expiration
date. No such waiver could have been intended, for Gaite stood to lose and had nothing to gain barely; and if there was
any, it could be rationally explained only if the appellants had agreed to sell the ore and pay Gaite before the surety

company's bond expired on December 8, 1955. But in the latter case the defendants-appellants' obligation to pay
became absolute after one year from the transfer of the ore to Fonacier by virtue of the deed, first bond.
Coming now to the second issue in this appeal, which is whether there were really 24,000 tons of iron ore in the
stockpiles sold by appellee Gaite to appellant Fonacier, and whether, if there had been a short-delivery as claimed by
appellants, they are entitled to the payment of damages, we must, at the outset, stress two things: first, that this is a
case of a sale of a specific mass of fungible goods for a single price or a lump sum, the quantity of "24,000 tons of iron
ore, more or less," stated in the contract Exhibit "A," being a mere estimate by the parties of the total tonnage weight of
the mass; and second, that the evidence shows that neither of the parties had actually measured of weighed the mass,
so that they both tried to arrive at the total quantity by making an estimate of the volume thereof in cubic meters and
then multiplying it by the estimated weight per ton of each cubic meter.
The sale between the parties is a sale of a specific mass or iron ore because no provision was made in their contract for
the measuring or weighing of the ore sold in order to complete or perfect the sale, nor was the price of P75,000,00
agreed upon by the parties based upon any such measurement.(see Art. 1480, second par., New Civil Code). The subject
matter of the sale is, therefore, a determinate object, the mass, and not the actual number of units or tons contained
therein, so that all that was required of the seller Gaite was to deliver in good faith to his buyer all of the ore found in
the mass, notwithstanding that the quantity delivered is less than the amount estimated by. There is no charge in this
case that Gaite did not deliver to appellants all the ore found in the stockpiles in the mining claims in questions; Gaite
had, therefore, complied with his promise to deliver, and appellants in turn are bound to pay the lump price.
But assuming that plaintiff Gaite undertook to sell and appellants undertook to buy, not a definite mass, but
approximately 24,000 tons of ore, so that any substantial difference in this quantity delivered would entitle the buyers
to recover damages for the short-delivery, was there really a short-delivery in this case?
We think not. As already stated, neither of the parties had actually measured or weighed the whole mass of ore cubic
meter by cubic meter, or ton by ton. Both parties predicate their respective claims only upon an estimated number of
cubic meters of ore multiplied by the average tonnage factor per cubic meter. There was, consequently, no shortdelivery in this case as would entitle appellants to the payment of damages, nor could Gaite have been guilty of any
fraud in making any misrepresentation to appellants as to the total quantity of ore in the stockpiles of the mining claims
in question, as charged by appellants, since Gaite's estimate appears to be substantially correct.
WHEREFORE, finding no error in the decision appealed from, we hereby affirm the same, with costs against appellants.
Things in Litigation
Atkins Kroll and Co. v. Domingo, 46 Phil 360 (1924)
Facts: Buenaventura Domingo owned the three lots nos. 36, 38 and 55. When he died intestate, his son Santiago
Domingo became the administrator of his estate. Another son named Leon Domingo died and Santiago Domingo also
became the administrator of his estate. Later, Santiago submitted a project of partition to the court, in which lots nos.
36, 38 and 55 are mentioned as properties pertaining to the decedent. In this project no mention was made of
improvements on any of said lots with the exception of a small house of strong materials on lot No. 38, the title to which
is not in question and may be dismissed from consideration. On August 8, 1918, the court duly approved the project of
partition. No objection to this action appears to have been made by any person interested in the estate. The share of
Santiago Domingo in his father's estate, so far as affects lots Nos. 36 and 55, has remained undisturbed and said interest
is still vested in him. However, in 1922 Santiago Domingo sold his entire interest in lot No. 38, "with all the
improvements existing thereon," by contract of sale with pacto de retro to one Ong Kong. The interest thus sold was
subject to repurchase within the period of one year, but redemption was never effected; and on February 17, 1923, the
property was duly consolidated in Ong Kong. On February 19, 1923, Ong Kong sold his entire interest in the lot and
improvements thereon to the present plaintiff, Atkins, Kroll & Co. It appears that the plaintiff, Atkins, Kroll & Co. is the
owner of three-fourths of lot No. 36, with the improvements thereon; of the whole of lot No. 38, with the improvements
thereon; and of three-fourths of lot No. 55, excluding the improvements.

Santiago Domingo is in possession of said property and has at all times been in possession since the plaintiff acquired its
interest therein, and he has during the same period exclusively enjoyed the use of all the lots, with the income derived
from the buildings thereon. This circumstance, coupled with this refusal to admit the plaintiff's claim as coowner,
resulted, as already stated, in the institution of the present action by the plaintiff, for the purpose of recovering
possession of lot No. 38 and to secure a partition of lots Nos. 36 and 55, with an accounting for the plaintiff's proper
proportion of the profits. The lower court entered a judgment recognizing the rights of the plaintiff as tenant in common
with the defendant in respect to the land in all of said lots to the full extent claimed by the plaintiff and made an
appropriate order for a division thereof, but the court at the same time held that the buildings on lots Nos. 36 and 38
are of the exclusive ownership of the defendant, Santiago Domingo, and that before the plaintiff can obtain possession
of said buildings the defendant is entitled to be reimbursed for their value, which the court fixed at P18,000, in
accordance with article 361 of the Civil Code. At the same time the court denied the right of the plaintiff to recover any
part of the rents received by the defendant for said houses, though it recognized the obligation of the defendant to
reimburse the plaintiff for the defendant's share of the taxes paid by the plaintiff on all of the properties.
Issue: W/N the petitioner is entitled to the improvements on lots Nos. 36 AND 38.
Ruling: In the case at bar, the defendant asserts that the buildings referred to were erected in the latter months of the
year 1912 and first half of 1913, and the defendant asserts that they were built by him with his own money and with the
consent of his father. Upon this circumstance in connection with article 361 and related provisions of the Civil Code, the
defendant bases his claim to the exclusive ownership of said buildings. But assuming, as we may, that the buildings in
question were in fact constructed by the defendant with his own money, and with the consent of his father as owner of
the land, it is clear that the defendant's right to the buildings in controversy has been lost, except in so far as he is owner
of an undivided one-fourth interest by inheritance; and the interests of the two parties to this litigation in the properties
in question must be taken to be exactly as they are stated in the existing certificates of title. This results from the fact
that the plaintiff is a purchaser for value who has acquired the interests shown on the existing Torrens certificates upon
the faith of the registered title, and the defendant is in no position to arrest the effect of these documents.
But is it insisted that the plaintiff has been affected with the notice of the defendant's right by the filing of a lis pendens.
Notice of said lis pendens was noted on the back of the corresponding certificates of title. The remaining interests
acquired by the plaintiff in the same properties appear to have been acquired by it after the notice of lis pendens was
filed. As will be seen, the filing of the lis pendens was intended to affect third persons with notice of the claim which the
defendant had asserted in his explanatory report in the proceedings over the state of Buenaventura Domingo. But it will
be remembered that the efforts of the defendant to get his claim recognized in those proceedings completely failed of
effect. For this reason the lis pendens must be considered to have lost its efficacy. The effect of notice by lis pendens is,
of course, to charge the stranger with notice of the particular litigation referred to in the notice, and, if the notice is
effective, the stranger who acquires the property affected by the lis pendens takes subject to the eventuality of the
litigation. But when the adverse right fails in such litigation, the lis pendens becomes innocuous.
It should be noted that the defendant, supposing his claim to have been made in good faith, might have protected it, at
any time before the property had passed into the hands of a third person, by a proceeding under section 112 of Act No.
496. Said section declares that any person may at any time apply by petition to the court, where "new interests have
arisen or been created which do not appear upon the certificate," and procure such interests to be noted. Such a
petition must be filed and entitled in the original case in which the decree of registration was entered. In the case before
us the buildings which are the subject of controversy were placed on the land after the decree of registration. This
circumstance made a proceeding under section 12 of Act No. 496 all the more necessary in order to protect the new
interest thus created. So far as registered land is concerned, the right recognized in article 361 and related provisions of
the Civil Code is subject to the contingency that it shall be noted in the registered title before the property passes into
the hand of a purchaser for value.
The considerations so far adduced apply alike to the improvements on lots Nos. 36 and 38, but there is another
circumstance which is fatal to the defendant's claim to any of the improvements on lot No. 38. This is found in the fact
that he sold his interest in said lot, including the improvements, to Ong Kong, the plaintiff's predecessor in interest. It is
evident that the defendant is estopped by his own deed from claiming any interest in the buildings on this lot, whatever

might have been the law governing his claim to the buildings on the other lot. Hence, the court reversed the decision of
the lower court.
Laroza v. Guia, GR NO. L-45252, January 31, 1985
Facts: Action to quiet title filed by appellants Timoteo Laroza and Conchita Uri in the then Court of First Instance of
Laguna and San Pablo City versus appellee Donaldo Guia over a parcel of land. Appellants, in their complaint, alleged
that they bought the above-described property in good faith and for valuable considerations from Francisco Guia on
June 30, 1973, after they had seen the documents of ownership of said Francisco Guia and that they were in continuous
possession of the said property from the time they acquired the same from Francisco Guia until appellee, "through the
commissioners appointed by this Honorable Court in Civil Case No. SP-488, namely: Aproniano Mls. Magsino, Clerk of
Court; Rogaciano Borja, Deputy Clerk of Court; Atty. Ricardo Fabros, then represented by Mr. Armadilla; and, Engr.
Danilo Dichoso, the surveyor, intruded upon the said peaceful possession by attempting to survey the above-described
property and to partition the same by virtue of a decision of this Honorable Court dated December 29, 1966 in Civil Case
No. SP-488; that the attempt of herein defendant to survey and partition the above-described property beclouds the
title of herein plaintiffs for which reason, they were constrained to institute the present action with the assistance of
counsel at the agreed amount of P5,000.00 and were compelled to incur litigation expenses of not less than P500.00."
Appellee, through counsel, filed a motion to dismiss the complaint alleging, among others, "that the land subject matter
of the complaint has already been the subject of a final and executory judgment in Civil Case No. SP-488, hence,
plaintiffs (appellants) have no cause of action, or if there be any, the same is barred by a prior judgment."
The lower court dismissed the complaint. It is beyond debate or question that the land over which plaintiffs seek herein
to quiet title has already been declared the property of defendant by the final and executory judgment of this Court in
SP-488, which was affirmed by the Court of Appeals and a further attempt to challenge the adjudication by certiorari
was thrown out perfunctorily by the Supreme Court. There is no room for doubt or for controversy that all the requisite
elements of res judicata or bar by prior judgment are present here. Plaintiffs are the supposed purchasers of the
property from Francisco Guia, defendant in SP-488. Needless to say, a judgment against a party binds his successors in
interest. A sale or similar transmission of right does not disturb the Identity of party for purposes of res judicata. In this
regard, for further enlightenment on the issues generated by this dismissal motion, the Court hereby refers to its order
of March 22, 1971 in SP-488.
Issues: Appellants went to the then Court of Appeals alleging that the lower court erred (1) in holding that the instant
case is already barred by a previous judgment; (2) in dismissing the complaint without a hearing which although
preliminary should be conducted as ordinary hearings; and, (3) in holding that the ground of res judicata raised by
appellee is indubitable and patent from paragraphs 4 and 5 of the complaint. The appellate court forwarded the records
of the case to Us because "no factual issue is involved" and "the issues raised in the instant case are purely legal
questions which are beyond the jurisdiction of the Court to determine."
Ruling: There is no merit in this appeal. Records show that long before appellants had acquired subject property, a
notice of lis pendens (Civil Case No. SP 488) had already been registered with the Office of the Register of Deeds of San
Pablo City affecting the property. Lis pendens is a notice of pending litigation; a warning to the whole world that one
who buys the property so annotated does so at his own risk. Notwithstanding, appellants bought the land from
Francisco Guia, defendant in Civil Case No. SP 488. Having purchased the property with notice of lis pendens, appellants
took the risk of losing it in case the decision in the said civil case, as what actually happened, is adverse to their
predecessor-in-interest, Francisco Guia. Time and again, We have decreed that the filing of a notice of lis pendens
charges all strangers with a notice of the particular litigation referred to therein and, therefore, any right they may
thereafter acquired on the property is subject to the eventuality of the suit. The doctrine of lis pendens is founded upon
reason of public policy and necessity, the purpose of which is to keep the subject matter of the litigation within the
power of the Court until the judgment or decree shall have been entered; otherwise, by successive alienation's pending
the litigation, its judgment or decree shall be rendered abortive and impossible of execution. On this score alone,
appellants case would necessarily fall.

In their first assigned error appellants argue that there is no res judicata because there is no Identity of causes of action
since the case at bar is an action to quiet title, whereas, Civil Case No. SP-488 is one of filiation and partition. In Civil Case
No. SP-488, appellee Donaldo Guia maintained that he is a co-owner of that parcel of land, including the land in
question, which was later adjudicated to him as his share in the inheritance from the late Cayetana Garcia; whereas,
Francisco Guia, appellants' predecessor-in interest, alleged that he is the sole owner of the property. Thus, both parties
claim ownership over the same property appellee Donaldo Guia, by virtue of a final judgment rendered in Civil Case No.
SP-488, and appellants Timoteo Laroza and Conchita Uri, by virtue of the sale executed by Francisco Guia, who lost in
said civil case. In both cases, the question boils down to ownership of the land. Thus, there is Identity of causes of action.
Anent the second assigned error, records reveal that a hearing on appellee's motion to dismiss appellants' complaint
was conducted on August 12, 1974. There is, therefore, no basis for appellants to say that a hearing was never held in
the case. Finally, appellants claim that the lower court erred in declaring that res judicata is indubitable and patent from
the face of the complaint itself, without the appellee pleading the same as an affirmative defense. From a cursory
reading of the pleadings, extant in the records of the case, We find that in his motion to dismiss, appellee had
thoroughly discussed the issue of res judicata and, coupled by the fact that it was the same court which heard and
decided Civil Case No. SP 488, the trial court can rightfully rule on said issue.
Adequacy of price
Bagnas vs CA,176 SCRA 159
Facts: Hilario Mateum of Kawit, Cavite, died on March 11, 1964, single, without ascendants or descendants, and survived
only by collateral relatives, of whom petitioners herein, his first cousins, were the nearest. 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 Encarnacion and Nambayan, themselves collateral relatives of
Mateum though more remote in degree than the petitioners, registered with the Registry of Deeds for the Province of
Cavite two deeds of sale purportedly executed by Mateum in their (respondents') favor covering ten parcels of land for a
consideration of 1 peso. One deed was dated February 6,1963 and covered five parcels of land, and the other was dated
March 4, 1963, covering five other parcels, both, therefore, antedating Mateum's death by more than a year. It is
asserted by the petitioners, but denied by the respondents, that said sales notwithstanding, Mateum continued in the
possession of the lands purportedly conveyed until his death, that he remained the declared owner thereof and that the
tax payments thereon continued to be paid in his name.
On May 22,1964 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.
Defendants asserted 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, ...
that defendants were collateral relatives of Hilario Mateum and had done many good things for him, nursing him in his
last illness, which services constituted the bulk of the consideration of the sales; and (by way of affirmative defense) that
the plaintiffs could not question or seek annulment of the sales because they were mere collateral relatives of the
deceased vendor and were not bound, principally or subsidiarily, thereby. 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, holding (a) on the authority of Armentia vs. Patriarca, that the plaintiffs,
as mere collateral relatives, not forced heirs, of Hilario Mateum, could not legally question the disposition made by said
deceased during his lifetime, regardless of whether, as a matter of objective reality, said dispositions were valid or not;
and (b) that the plaintiffs evidence of alleged fraud was insufficient, the fact that the deeds of sale each stated a

consideration of only Pl.00 not being in itself evidence of fraud or simulation. On appeal by the plaintiffs to the Court of
Appeals, that court affirmed, adverting with approval to the Trial Court's reliance on the Armentia ruling which, it would
appear, both courts saw as denying, without exception, to collaterals, of a decedent, not forced heirs, the right to
impugn the latter's dispositions inter vivos of his property.
Issue: W/N questioned deeds of sale each state a price of only one peso (P1.00) plus unspecified past, present and
future services to which no value is assigned, said deeds were void or inexistent from the beginning ("nulo") or merely
voidable, that is, valid until annulled.
Ruling: Without necessarily according all these assertions its full concurrence, but 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, recoverable by his intestate heirs, the petitioners herein, whose status as such is not
challenged.
The private respondents have only themselves to blame for the lack of proof that might have saved the questioned
transfers from the taint of invalidity as being fictitious and without ilicit cause; proof, to be brief, of the character and
value of the services, past, present, and future, constituting according to the very terms of said transfers the principal
consideration therefor. As the record clearly demonstrates, the respondents not only failed to offer any proof
whatsoever, opting to rely on a demurrer to the petitioner's evidence and upon the thesis, which they have maintained
all the way to this Court, that petitioners, being mere collateral relatives of the deceased transferor, were without right
to the conveyances in question. In effect, they gambled their right to adduce evidence on a dismissal in the Trial Court
and lost, it being the rule that when a dismissal thus obtained is reversed on appeal, the movant loses the right to
present evidence in his behalf. WHEREFORE, the appealed Decision of the Court of Appeals is reversed.
Vda. De Gordon vs. Ca And Duazo, 109 SCRA 88 (1981)
Facts: Two parcels of land owned by Restituto Vda. De Gordon were sold by City Treasurer of Quezon City in a public
auction to respondent Rosario Duazon because of unpaid taxes subject to redemption. The lands sold have assessed
value of P16,800 and were sold for only P10,500. Petitioner fails to redeem the property within the one year period. She
contends that the sale is void because of inadequacy of price.
Issue: (1) whether the price is so grossly inadequate as to justify the setting aside of the public sale and (2) whether the
oppositor [Gordon] is entitled to redeem the two parcels of land in question.
Ruling: The combined assessed value of the two parcels of land is P16,800.00. The price paid at the public sale is
P10,500.00. The residential house on the land is assessed at P45,580.00. But the assessment was made in 1961. The
present value of the residential house must be much less now considering the depreciation for over ten years. While the
price of P10,500.00 is less than the total assessed value of the land and the improvement thereon, said price cannot be
considered so grossly inadequate as to be shocking to the conscience of the court. In the case at bar, the price of
P10,500.00 is about one sixth of the total assessed value of the two parcels of land in question and the residential house
thereon. The finding of the lower court that the house and land in question have a fair market value of not less than

P200,000.00 has no factual basis. It cannot be said, therefore, that the price of P10,500.00 is so inadequate as to be
shocking to the conscience of the court. Mere inadequacy of the price alone is not sufficient ground to annul the public
sale.
Moreover, in Velasquez vs. Coronet, 5 SCRA 985, 988, the Supreme Court has held: It is true that respondent treasurer
now claims that the prices for which the lands were sold are unconscionable considering the wide divergence between
their assessed values and the amounts for which they had been actually sold. However, while in ordinary sales for
reasons of equity a transaction may be invalidated on the ground of inadequacy of price, or when such inadequacy
shocks one's conscience as to justify- the courts to interfere, such does not follow when the law gives to the owner the
right to redeem, as when a sale is made at public auction upon the theory that the lesser the price the easier it is for the
owner to effect the redemption. And so it was aptly said: When there is the right to redeem, inadequacy of price should
not be material because the judgment debtor may reacquire the property or also sell his right to redeeem and thus
recover the loss he claims to have suffered by reason of the price obtained at the auction sale.
The contention that the oppositor can still redeem the two parcels of land in question because the public sale has not
been judicially confirmed deserves scant consideration. The public sale in the instant case is governed by Section 40 of
Commonwealth Act No. 470 which gives the delinquent taxpayer a period of one year from the date of the sale within
which to repurchase the property sold. In case the delinquent taxpayer does not repurchase the property sold within the
period of one year from the date of the sale, it becomes a mandatory duty of the provincial treasurer to issue in favor of
the purchaser a final deed of sale. We find that the oppositor is not entitled to repurchase the two parcels of land in
question because she failed to do so within one year from the date of the sale thereof.
Petitioner's second assignment of error that the period for redemption should be the two-year period provided in
Republic Act No. 1275 likewise has no merit, since the specific law governing tax sales of properties in Quezon City is the
Quezon City Charter, Commonwealth Act No. 502 which provides in section 31 thereof for a one-year redemption
period. The special law covering Quezon City necessarily prevails over the general law. Furthermore, as respondent has
pointed out, as of the time of filing in 1974 of respondent's brief, petitioner had not then for a period of 10 years (and 17
years as of now) sought to exercise her alleged right of redemption or make an actual tender thereof. Furthermore, if
herein Petitioner really believes in good faith, that [she] had still that right of redemption, then she should have paid the
real estate taxes, but as the records wig show, since 1964, Private Respondent Duazo is the one paying the real estate
taxes of the lands in question
Petitioner's third and last assignment of error as to the alleged gross inadequacy of the purchase price must likewise fail.
As the Court has held in Velasquez vs. Coronet alleged gross inadequacy of price is not material "when the law gives the
owner the right to redeem as when a sale is made at public auction, upon the theory that the lesser the price the easier
it is for the owner to effect the redemption." As the Court further stressed in the recent case of Tajonera vs. Court of
Appeals, the law governing tax sales for delinquent taxes may be "harsh and drastic, but it is a necessary means of
insuring the prompt collection of taxes so essential to the life of the Government."
ACCORDINGLY, the appellate court's decision under review is hereby affirmed. Without costs.
False Consideration
Ong vs Ong, 139 SCRA 133 (1985)
Facts: Records show that on February 25, 1976 Imelda Ong, for and in consideration of One (P1.00) Peso and other
valuable considerations, executed in favor of private respondent Sandra Maruzzo, then a minor, a Quitclaim Deed
whereby she transferred, released, assigned and forever quit-claimed to Sandra Maruzzo, her heirs and assigns, all her
rights, title, interest and participation in the ONE-HALF () undivided portion of the parcel of land in Makati with an area
of 125 sq. meters. On November 19, 1980, Imelda Ong revoked the aforesaid Deed of Quitclaim and, thereafter, on
January 20, 1982 donated the whole property described above to her son, Rex Ong-Jimenez. On June 20, 1983, Sandra
Maruzzo, through her guardian (ad litem) Alfredo Ong, filed with the Regional Trial Court of Makati, Metro Manila an

action against petitioners, for the recovery of ownership/possession and nullification of the Deed of Donation over the
portion belonging to her and for Accounting.
Petitioners claimed that the Quitclaim Deed is null and void inasmuch as it is equivalent to a Deed of Donation,
acceptance of which by the donee is necessary to give it validity. Further, it is averred that the donee, Sandra Maruzzo,
being a minor, had no legal personality and therefore incapable of accepting the donation.
On December 12, 1983, the trial court rendered judgment in favor of respondent Maruzzo and held that the Quitclaim
Deed is equivalent to a Deed of Sale and, hence, there was a valid conveyance in favor of the latter. Petitioners appealed
to the respondent Intermediate Appellate Court. They reiterated their argument below and, in addition, contended that
the One (P1.00) Peso consideration is not a consideration at all to sustain the ruling that the Deed of Quitclaim is
equivalent to a sale. Appellate Court promulgated its Decision affirming the appealed judgment and held that the
Quitclaim Deed is a conveyance of property with a valid cause or consideration; that the consideration is the One (P1.00)
peso which is clearly stated in the deed itself; that the apparent inadequacy is of no moment since it is the usual practice
in deeds of conveyance to place a nominal amount although there is a more valuable consideration given.
Issue: W/N the quitclaim is equivalent to a Deed of Sale and if the 1 peso is a consideration.
Ruling: A careful perusal of the subject deed reveals that the conveyance of the one- half () undivided portion of the
above-described property was for and in consideration of the One (P 1.00) Peso and the other valuable
considerations (emphasis supplied) paid by private respondent Sandra Maruzzo through her representative, Alfredo
Ong, to petitioner Imelda Ong. Stated differently, the cause or consideration is not the One (P1.00) Peso alone but also
the other valuable considerations. As aptly stated by the Appellate Court... although the cause is not stated in the contract it is presumed that it is existing unless the debtor
proves the contrary (Article 1354 of the Civil Code). One of the disputable presumptions is that there is a
sufficient cause of the contract (Section 5, (r), Rule 131, Rules of Court). It is a legal presumption of
sufficient cause or consideration supporting a contract even if such cause is not stated therein (Article
1354, New Civil Code of the Philippines.) This presumption cannot be overcome by a simple assertion of
lack of consideration especially when the contract itself states that consideration was given, and the
same has been reduced into a public instrument with all due formalities and solemnities. To overcome
the presumption of consideration the alleged lack of consideration must be shown by preponderance of
evidence in a proper action.
The execution of a deed purporting to convey ownership of a realty is in itself prima facie evidence of the existence of a
valuable consideration, the party alleging lack of consideration has the burden of proving such allegation. Moreover,
even granting that the Quitclaim deed in question is a donation, Article 741 of the Civil Code provides that the
requirement of the acceptance of the donation in favor of minor by parents of legal representatives applies only to
onerous and conditional donations where the donation may have to assume certain charges or burdens (Article 726,
Civil Code). The acceptance by a legal guardian of a simple or pure donation does not seem to be necessary. The
donation to an incapacitated donee does not need the acceptance by the lawful representative if said donation does not
contain any condition. In simple and pure donation, the formal acceptance is not important for the donor requires no
right to be protected and the donee neither undertakes to do anything nor assumes any obligation. The Quitclaim now
in question does not impose any condition. Indeed, bad faith and inadequacy of the monetary consideration do not
render a conveyance inexistent, for the assignor's liberality may be sufficient cause for a valid contract (Article 1350,
Civil Code), whereas fraud or bad faith may render either rescissible or voidable, although valid until annulled, a contract
concerning an object certain entered into with a cause and with the consent of the contracting parties, as in the case at
bar." WHEREFORE, the appealed decision of the Intermediate Appellate Court should be, as it is hereby AFFIRMED, with
costs against herein petitioners.