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ARTICLES 1536 TO 1547

***1. (Carbonell v. Court of Appeals, G.R. No. L-29972, January 26,


1976)
1. CONTRACTS; PURCHASE AND SALE OF REALTY; REGISTRATION; EFFECT
OF GOOD FAITH ON DOUBLE SALES. The buyer of realty must act in
good faith in registering his deed of sale to merit the protection of the
second paragraph of Article 1544 of the New Civil Code. Unlike the first
and third paragraphs of said Article which accords preference to the one
who first takes possession in good faith of personal or real property, the
second paragraph directs that ownership of immovable property should be
recognized in favor of one "who in good faith recorded" his right. Under
the first and third paragraphs, good faith must characterize prior
possession. Under the second paragraph, good faith must characterize the
act of anterior registration. If there is no inscription, what is decisive is
prior possession in good faith. If there is inscription, prior registration in
good faith is a pre-condition to support title.
2. ID.; ID.; DOUBLE SALE ; FIRST BUYER IN GOOD FAITH WITH SUPERIOR
RIGHT OVER PROPERTY. Where the first buyer was not aware - and
could not have been aware - of any sale to another person as there was
no such sale, the buyer's prior purchase of the land was made in good
faith. Her good faith subsisted and continued to exist when she recorded
her adverse claim four days prior to the registration of the second buyer's
deed of sale. The first buyer's good faith did not cease after the seller told
her of his second sale of the same lot to the second buyer. By reason
thereof, she has superior right to the land in question.
3. ID.; ID.; VALIDITY OF PRIVATE DOCUMENT EXECUTED THEREFOR. A
private document is a valid contract of sale between the parties, since
sale is a consensual contract and is perfected by mere consent. Even an
oral contract of realty is valid between the parties and accords to the
vendee the right to compel the vendor to execute the proper public
document. A private document can be fully and partially performed to
remove it from the operation of the statute of frauds. Being a valid

consensual contract, a private document can effectively transfer the


possession of the lot to the vendee by constitutum possessorium (Art.
1500, New Civil Code); because thereunder the vendor continues to retain
physical possession of the lot as tenant of the vendee and no longer as
owner thereof.
***2. (Dagupan Trading Co. v. Macam, G.R. No. L-18497, May 31,
1965)
1. SALES; CONFLICTING SALES; ONE SALE BEFORE REGISTRATION OF
LAND AND THE OTHER AN EXECUTION SALE AFTER REGISTRATION OF
LAND; LAW GOVERNING. Where one of two conflicting sales of a piece
of land was executed before the land was registered, while the other was
an execution sale in favor of the judgment creditor of the owner made
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 the execution and delivery of the
final certificate of sale in favor of the purchaser of land sold in an
execution sale, such purchaser "shall be substituted to and acquire all the
rights, title, interest and claim of the judgment debtor to the property as
of the time of the levy".
2. ID.; ID.; ID.; UNREGISTERED SALE CANNOT BE DEFEATED BY
SUBSEQUENT EXECUTION SALE AND REGISTRATION OF LATTER. Where
for a considerable time prior to the levy on execution the interest of the
owner of the land levied upon had already been conveyed to another who
took possession thereof and introduced improvements therein, the
aforesaid levy is void. The prior sale, albeit unregistered, cannot be
deemed automatically cancelled upon the subsequent issuance of the
Torrens title over the land.
3. ID.; ID.; ID.; RIGHT OF OWNERSHIP ALREADY FIXED UNDER CIVIL LAW
AND/OR MORTGAGE LAW CANNOT BE OVERTHROWN BY NEW LAW. As
between a right of ownership already fixed and established under the Civil
Law and/or the Spanish Mortgage Law, and a new law or system which

would make possible the overthrowing of such ownership on admittedly


artificial and technical grounds, the former must be upheld
***3. (David v. Bandin, G.R. No. L-48322, L-49712, L-49716, L49687, April 08, 1987)
5. ID.; SALES; UNREGISTERED LAND; DEFENSE OF BUYER IN GOOD FAITH
CANNOT BE AVAILED IN PURCHASES OF UNREGISTERED LAND; CASE AT
BAR. As the record shows, petitioners bought the property when it was
still unregistered land. The defense of having purchased the property in
good faith may be availed of only where registered land is involved and
the buyer had relied in good faith on the clear title of the registered
owner. One who purchases an unregistered land does so at his peril. His
claim of having bought the land in good faith, i.e. without notice that
some other person has a right to, or interest in, the property, would not
protect him if it turns out that the seller does not actually own the
property. This is what happened in the case at bar.
6. ID.; ID.; ID.; ID.; CONVERSELY, PROTECTION ACCORDED TO PURCHASES
IN GOOD FAITH WHERE SUBJECT OF SALE IS REGISTERED LAND; NOT THE
SITUATION AT BAR. The appellate court held that Jose Ramirez and his
father Sotero Ramirez were not purchasers in good faith, not having made
diligent investigation of the true ownership of the properties they bought,
but relied merely on the tax declaration shown to them by the seller,
Rufino Miranda. We have no reason to disturb the foregoing findings of the
respondent appellate court. Besides, as mentioned earlier, the issue of
good faith or bad faith of the buyer is relevant only where the subject of
the sale is registered land and the purchaser is buying the same from the
registered owner, whose title to the land is clean. In such case, the
purchaser who relies on the clean title of the registered owner is protected
if he is a purchaser in good faith for value. However, this is not the
situation before us in the instant case. What petitioners bought were
unregistered lands.
7. ID.; ID.; REGISTERED LAND; PURCHASER IN GOOD FAITH FOR VALUE
PROTECTED BY THE LAW; ABSENT ANY SHOWING OF ACTUAL NOTICE OF

DEFECT IN TITLE, SALE AND TITLE CANNOT BE CANCELLED; CASE AT BAR.


The case of Magno de la Cruz stands on different footing from the other
petitions. The property purchased by him from Victoria Martin and
Maximina Martin were registered lands, covered by Torrens title. Being a
purchaser in good faith for value, Magno de la Cruz is protected by the
law. In the absence of a showing that he had actual notice of the defect in
the title of the vendors or that he is a buyer in bad faith, the deed of sale
in his favor and the corresponding certificate of title issued in his name
can not be nullified and cancelled. Hence, it was error for the respondent
court to invalidate the sale made by Victoria and Maximina Martin in favor
of Magno de la Cruz to the extent that it prejudiced the two-third (2/3) proindiviso share of respondents in the property and to order petitioner to
reconvey said share to respondents. The petition of Magno de la Cruz is
meritorious, and the decision appealed from should be modified
accordingly.

***4. (Olivares v. Gonzales, G.R. No. L-34500, March 18, 1988)


1. REMEDIAL LAW; CIVIL PROCEDURE; BAR BY PRIOR JUDGMENT; NOT
APPLIED IN THE INTEREST OF SUBSTANTIAL JUSTICE. It would be more in
keeping with substantial justice if the controversy between the parties be
resolved on the merits rather than on a procedural technicality in the light
of the express mandate of the Rules that they be "liberally construed in
order to promote their object and to assist the parties in obtaining just,
speedy and inexpensive determination of every action and proceeding."
2. ID.; SPECIAL CIVIL ACTION; CERTIORARI; FAILURE OF COURT TO ACT
JUDICIOUSLY AND WITH PRUDENCE IN DISMISSING A CASE CONSTITUTES
GRAVE ABUSE OF DISCRETION. The dismissal of actions is based on
sound judicial discretion and such discretion "must be exercised wisely
and prudently, never capriciously, with a view to substantial justice." For
having failed to meet that standard it will have to be held that respondent

Judge acted with grave abuse of discretion (see Tandoc vs. Tensuan, L50835, October 30, 1979, 93 SCRA 880).
The governing principle is prius tempore, potior jure (first in time, stronger
in right). Knowledge by the first buyer of the second sale cannot defeat
the first buyers rights except when the second buyer first registers in
good faith the second sale (Olivares vs.Gonzales, 159 SCRA 33)
***5. Caram v Laureta
FACTS:
On June 10, 1945, Marcos Mata conveyed a large tract of agricultural land
covered by OCT No. 3019 in favor of Claro Laureta, plaintiff, the
respondent herein. The deed of absolute sale in favor of the plaintiff was
not registered because it was not acknowledged before a notary public or
any other authorized officer. Since June 10,1945, the plaintiff Laureta had
been and is in continuous, adverse and notorious occupation of said land,
without being molested, disturbed or stopped by any of the defendants or
their representatives. In fact, Laureta had been paying realty taxes due
thereon and had introduced improvements worth not less than P20,000.00
at the time of the filing of the complaint. On May 5, 1947, the same land
covered by OCT No.3019 was sold by Marcos Mata to defendant Fermin Z.
Caram, Jr., petitioner herein. The deed of sale in favor of Caram was
acknowledged before Atty. Abelardo Aportadera. On December 9,1947,
the second sale between Marcos Mata and Fermin Caram, Jr. was
registered with the Register of Deeds. On the same date, Transfer
Certificate of Title No. 140 was issued in favor of Fermin Caram Jr. The
defendant Fermin Caram Jr. claimed that he has no knowledge or
information about the previous encumbrances, transactions, and
alienations in favor of plaintiff until the filing of the complaints.
ISSUE:

Whether or not the knowledge petitioner of a prior unregistered sale of a


titled property attributable to petitioner and equivalent in law of
registration of sale.
HELD:
Yes. There is no doubt then that Irespe and Aportadera, acting as agents
of Caram, purchased the property of Mata in bad faith. Applying the
principle of agency, Caram as principal, should also be deemed to have
acted in bad faith. Since Caram was a registrant in bad faith, the situation
is as if there was no registration at all. A possessor in good faith is one
who is not aware that there exists in his title or mode of acquisition any
flaw which invalidates it. Laureta was first in possession of the property.
He is also a possessor in good faith. It is true that Mata had alleged that
the deed of sale in favor of Laureta was procured by force. Such defect,
however, was cured when, after the lapse of four years from the time the
intimidation ceased, Marcos Mata lost both his rights to file an action for
annulment or to set up nullity of the contract as a defense in an action to
enforce the same.
***6. (Cruz v. Cabana, G.R. No. 56232, June 22, 1984)
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; SALES; DOUBLE SALE OF
REAL PROPERTY; OWNERSHIP OF PROPERTY ACQUIRED BY VENDEE WHO
FIRST REGISTERS SALE IN GOOD FAITH. As the Court held in Carbonell
vs. Court of Appeals, 69 SCRA 99 (1976), "it is essential that the buyer of
realty must act in good faith in registering his deed of sale to merit the
protection of the second paragraph of Article 1544 of the Civil Code." As
the writer stressed in his concurring opinion therein, "The governing
principle here is prius tempore, potior jure (first in time, stronger in right).
Knowledge gained by the first buyer of the second sale cannot defeat the
first buyer's right except only as provided by the Civil Code and that is
where the second buyer first registers in good faith the second sale ahead
of the first. Such knowledge of the first buyer does not bar her from
availing of her rights under the law, among them to register first her
purchase as against the second buyer. But in converso knowledge gained

by the second buyer of the first sale defeats his rights even if he is first to
register the second sale, since such knowledge taints his prior registration
with bad faith. This is the price exacted by Article 1544 of the Civil Code of
the second buyer being able to displace the first buyer; that before the
second buyer can obtain priority over the first, he must show that he
acted in good faith throughout (i.e. in ignorance of the first sale and of the
first buyer's rights) from the time of acquisition until the title is
transferred to him by registration or failing registration, by delivery of
possession. The second buyer must show continuing good faith and
innocence or lack of knowledge of the first sale until his contract ripens
into full ownership through prior registration as provided by law."
2. ID.; ID.; ID.; ID.; ID.; KNOWLEDGE OF PRIOR SALE TAINTS SECOND
PURCHASER'S PRIOR REGISTRATION WITH BAD FAITH; CASE AT BAR.
When petitioner Cruz succeeded in registering the later sale in his favor,
he knew and was informed of the prior sale in favor of respondentsspouses. Respondents appellate court correctly held that such "knowledge
of a prior transfer of a registered property by a subsequent purchasers
makes him a purchaser in bad faith and his knowledge of such transfer
vitiates his title acquired by virtue of the latter instruments of conveyance
with creates no right as against the first purchaser."
***7. (Spouses Valdez v. Court of Appeals, G.R. No. 85082,
February 25, 1991)
"Art. 1544. If the same thing should have been sold to different vendees,
the ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.
Should it be immovable property, the ownership shall belong to the person
acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to the person
who in good faith was first in the possession; and, in the absence thereof,
to the person who presents the oldest title, provided there is good faith."

there can be no question that the sale of the subject lot to petitioners was
made long before the execution of the Deed of Assignment of said lot to
respondent Viernes and that petitioners annotated their adverse claim as
vendees of the property as early as September 6, 1982 with the Register
of Deeds of Quezon City. On the other hand the deed of Assignment in
favor of Viernes of the said lot was registered with the Register of Deeds
of Quezon City only on November 11, 1982 whereby a new title was
issued in the name of Viernes as above stated.
The rule is clear that a prior right is accorded to the vendee who first
recorded his right in good faith over an immovable property. In this case,
the petitioners acquired subject lot in good faith and for valuable
consideration from the Antes and as such owners petitioners fenced the
property taking possession thereof. Thus, when petitioners annotated their
adverse claim in the Register of Deeds of Quezon City they thereby
established a superior right to the property in question as against
respondent Viernes.
Petition is granted. declaring the petitioners to have the superior right to
the property in question and to be the true and lawful owners of the same.
***8. (Spouses Nuguid v. Court of Appeals, G.R. No. 77423, March
13, 1989)
4. CIVIL LAW; SALE; RECONVEYANCE; NOT POSSIBLE WHERE PROPERTY
WAS TRANSFERRED TO AN INNOCENT PURCHASER FOR VALUE. An
innocent purchaser for value is protected such that when land has already
passed into the hands of an innocent purchaser for value, reconveyance of
the same can no longer be made.
5. ID.; ID.; SALE OF IMMOVABLE PROPERTY TO DIFFERENT VENDEES;
OWNERSHIP BELONGS TO VENDEE WHO FIRST RECORDED THE SALE. It
is an established fact that the first sale to Juliana Salazar was not
registered while the sale to the petitioners was registered. The disputed
property being immovable property, the ownership should belong to the

vendee who in good faith first recorded it in the Registry of Property,


pursuant to the same article.
6. LAND TITLES AND DEEDS; TORRENS SYSTEM OF LAND REGISTRATION;
PURCHASER HAS A RIGHT TO RELY ON THE CERTIFICATE OF TITLE. 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.
***9. (Radiowealth Finance Co. v. Palileo, G.R. No. 83432, May 20,
1991)
1. CIVIL LAW; DOUBLE SALE OF IMMOVABLE PROPERTY; REGISTRATION IS
THE OPERATIVE ACT TO CONVEY OR AFFECT REGISTERED LANDS AS FAR
AS THIRD PERSONS ARE CONCERNED. Article 1544 of the Civil Code
provides that in case of double sale of an immovable property, ownership
shall be transferred: (1) to the person acquiring it who in good faith first
recorded it in the Registry of Property; (2) in default thereof, to the person
who in good faith was first in possession; and (3) in default thereof, to the
person who presents the oldest title, provided there is good faith. There is
no ambiguity regarding the application of the law with respect to lands
registered under the Torrens System. Section 51 of Presidential Decree No.
1529 (amending Section 50 of Act No. 496 clearly provides that the act of
registration is the operative act to convey or affect registered lands
insofar as third persons are concerned. Thus, a person dealing with
registered land is not required to go behind the register to determine the
condition of the property. He is only charged with notice of the burdens on
the property which are noted on the face of the register or certificate of
title. Following this principle, this Court has time and again held that a
purchaser in good faith of registered land (covered by a Torrens Title)
acquires a good title as against all the transferees thereof whose right is
not recorded in the registry of deeds at the time of the sale.
***10. (Tanedo v. CA, G.R. No. 104482, January 22, 1996)

1. CIVIL LAW; SPECIAL CONTRACTS; SALE; MAY NOT BE ENTERED INTO


UPON FUTURE INHERITANCE; EXCEPT IN CASES EXPRESSLY AUTHORIZED
BY LAW. Pursuant to Article 1347 of the Civil Code, "(n)o contract may
be entered into upon a future inheritance except in cases expressly
authorized by law." Consequently, said contract made in 1962 conveying
one hectare of his future inheritance is not valid and cannot be the source
of any right nor the creator of any obligation between the parties. Hence,
the "affidavit of conformity" dated February 28, 1980, insofar as it sought
to validate or ratify the 1962 sale, is also useless and, in the words of the
respondent Court, "suffers from the same infirmity." Even private
respondents in their memorandum concede this.
2. ID.; ID.; ID.; RULE ON PREFERENTIAL RIGHT OF VENDEES IN CASE OF
DOUBLE SALE. Petitioners contend that they were in possession of the
property and that private respondents never took possession thereof. As
between two purchasers, the one who registered the sale in his favor has
a preferred right over the other who has not registered his title, even if the
latter is in actual possession of the immovable property.
***11. Spouses Tomas and Silvina Occena vs. Esponilla
Civil Law; Property; Double Sale; To whom ownership shall belong in case
of sale of an immovable property to different vendees.Article 1544 of
the New Civil Code provides that in case an immovable property is sold to
different vendees, the ownership shall belong: (1) to the person acquiring
it who in good faith first recorded it in the Registry of Property; (2) should
there be no inscription, the ownership shall pertain to the person who in
good faith was first in possession; and, (3) in the absence thereof, to the
person who presents the oldest title, provided there is good faith.
Warranty in case of Eviction
Warranty against hidden defects
Art 1548(?)- 1570
***1. (Moles v. Intermediate Appellate Court, G.R. No. 73913,
January 31, 1989)

2. CIVIL LAW; SPECIAL CONTRACTS; SALES; IMPLIED WARRANTY; DOES


NOT APPLY TO SECONDHAND ARTICLES SUBJECT TO INSPECTION AT THE
TIME OF THE SALE. It is generally held that in the sale of a designated
and specific article sold as secondhand, there is no implied warranty as to
its quality or fitness for the purpose intended, at least where it is subject
to inspection at the time of the sale. On the other hand, there is also
authority to the effect that in a sale of a secondhand articles there may
be, under some circumstances, an implied warranty of fitness for the
ordinary purpose of the article sold or for the particular purpose of the
buyer. In a line of decisions rendered by the United States Supreme Court,
it had theretofore been held that there is no implied warranty as to the
condition, adaptation, fitness, or suitability for the purpose for which
made, or the quality, of an article sold as and for a secondhand article.
Thus, in finding for private respondent, the respondent court cited the
ruling in Sison vs. Ago, et al. to the effect that unless goods are sold as to
raise an implied warranty, as a general rule there is no implied warranty in
the sale of secondhand articles.
3. ID.; ID.; ID.; ID.; ID.; EXCEPTIONS. The general rule, however, is not
without exceptions. Article 1562 of our Civil Code, which was taken from
the Uniform Sales Act, provides: "Art. 1562. In a sale of goods, there is an
implied warranty or condition as to the quality or fitness of the goods, as
follows: (1) Where the buyer, expressly or by implication, makes known to
the seller the particular purpose for which the goods are acquired, and it
appears that the buyer relies on the seller's skill or judgment (whether he
be the grower or manufacturer or not), there is an implied warranty that
the goods shall be reasonably fit for such purpose;" Furthermore, and of a
more determinative role in this case, a perusal of past American decisions
likewise reveals a uniform pattern of rulings to the effect that an express
warranty can be made by and also be binding on the seller even in the
sale of a secondhand article.
4. ID.; ID.; ID.; ID.; WHAT DOES NOT APPEAR ON FACE OF WRITTEN
INSTRUMENT SHOULD BE REGARDED AS DEALER'S OR TRADER'S TALK.
Ordinarily, what does not appear on the face of the written instrument

should be regarded as dealer's or trader's talk; conversely, what is


specifically represented as true in said document, as in the instant case,
cannot be considered as mere dealer's talk.
5. ID.; ID.; ID.; REDHIBITORY DEFECT; MUST BE AN IMPERFECTION OR
DEFECT OF SUCH NATURE AS TO ENGENDER A CERTAIN DEGREE OF
IMPORTANCE. On the question as to whether the hidden defects in the
machine is sufficient to warrant a rescission of the contract between the
parties, we have to consider the rule on redhibitory defects contemplated
in Article 1561 of the Civil Code. A redhibitory defect must be an
imperfection or defect of such nature as to engender a certain degree of
importance. An imperfection or defect of little consequence does not
come within the category of being redhibitory.
7. CIVIL LAW; SPECIAL CONTRACTS; SALES; EXPRESS WARRANTY;
PRESCRIPTIVE PERIOD; GENERAL RULE ON RESCISSION OF CONTRACT
APPLIES THEREIN. At a belated stage of this appeal, private respondent
came up for the first time with the contention that the action for rescission
is barred by prescription. While it is true that Article 1571 of the Civil Code
provides for a prescriptive period of six months for a redhibitory action, a
cursory reading of the ten preceding articles to which it refers will reveal
that said rule may be applied only in case of implied warranties. The
present case involves one with and express warranty. Consequently, the
general rule on rescission of contract, which is four years shall apply.
Considering that the original case for rescission was filed only one year
after the delivery of the subject machine, the same is well within the
prescriptive period.
***2. (Engineering & Machinery Corp. v. Court of Appeals, G.R. No.
52267, January 24, 1996)
2. CIVIL LAW; SPECIAL CONTRACTS; CONTRACT FOR A PIECE OF WORK;
DISTINGUISHED FROM CONTRACT OF SALE. Article 1713 of the Civil
Code defines a contract for a piece of work. A contract for a piece of work,
labor and materials may be distinguished from a contract of sale by the
inquiry as to whether the thing transferred is one not in existence and

which would never have existed but for the order of the person desiring it.
In such case, the contract is one for a piece of work, not a sale. On the
other hand, if the thing subject of the contract would have existed and
been the subject of a sale to some other person even if the order had not
been given, then the contract is one of sale. If the parties intended that at
some future date an object has to be delivered, without considering the
work or labor of the party bound to deliver, the contract is one of sale. But
if one of the parties accepts the undertaking on the basis of some plan,
taking into account the work he will employ personally or through another,
there is a contract for a piece of work.
3. ID.; ID.; ID.; REMEDY IN CASE OF VIOLATION OF THE WARRANTY
AGAINST HIDDEN DEFECTS. The obligations of a contractor for a piece
of work are set forth in Articles 1714 and 1715 of the Civil Code. The
provisions on warranty against hidden defects, referred to in Art. 1714 are
found in Articles 1561 and 1566. The remedy against violations of the
warranty against hidden defects is either to withdraw from the contract
(redhibitory action) or to demand a proportionate reduction of the price
(accion quanti minoris), with damages in either case.
4. ID.; ID.; ID.; PRESCRIPTIVE PERIOD IN FILING AN ACTION IN CASE OF
BREACH THEREOF. The original complaint is one for damages arising
from breach of a written contract and not a suit to enforce warranties
against hidden defects. The governing law is Article 1715 (supra).
However, inasmuch as this provision does not contain a specific
prescriptive period, the general law on prescription, which is Article 1144
of the Civil Code, will apply. Said provision states, inter alia, that actions
"upon a written contract" prescribe in ten (10) years. The mere fact that
the employer accepted the work does not, ipso facto, relieve the
petitioner from liability for deviations from and violations of the written
contract, as the law gives him ten (10) years within which to file an action
based on breach thereof.
***3. (Catungal v. Rodriguez, G.R. No. 146839, March 23, 2011)

Art. 1545.Where the obligation of either party to a contract of sale is


subject to any condition which is not performed, such party may refuse to
proceed with the contract or he may waive performance of the condition
xxx
***4. (J.M. Tuason & Co., Inc. v. Court of Appeals, G.R. No. L41233, November 21, 1979)
Without being shown to be vendees in good faith, herein respondents are
not entitled to the warranty against eviction, nor are they entitled to
recover damages (Article 1555 of the Civil Code).

CASES ON LEASE?
***1. GUZMAN, BOCALING AND CO. VS. BONNEVIE, 206 SCRA 668
1. CIVIL LAW; SPECIAL CONTRACTS; LEASE; NECESSITY OF SECURING THE
APPROVAL OF PROBATE COURT; RULE; CASE AT BAR. The Court agrees
with the respondent court that it was not necessary to secure the approval
by the probate court of the Contract of Lease because it did not involve an
alienation of real property of the estate nor did the term of the lease
exceed one year so as to make it fall under Article 1878(8) of the Civil
Code. Only if Paragraph 20 of the Contract of Lease was activated and the
said property was intended to be sold would it be required of the
administratrix to secure the approval of the probate court pursuant to Rule
89 of the Rules of Court.||| (Guzman, Bocaling & Co. v. Bonnevie, G.R. No.
86150, March 02, 1992)
***2. YEK SENG CO VS. CA, 205 SCRA 305
1. CIVIL LAW; SPECIAL CONTRACTS; LEASE; EXTENSION OF THE LEASE
CONTRACT; MATTERS TO BE CONSIDERED IN ALLOWING THEREOF; DIVINO
v. MARCOS (4 SCRA 186) CITED. In extending the lease contract it was
considered important in the case of Divino v. Marcos (4 SCRA 186) that: 1)
the plaintiff had been occupying the leased premises for more than twenty
years; 2) he was assured by the defendants that he could remain in the
house as long as he continued paying the rentals; and 3) he made

improvements on the house costing P20,000.00 with the consent of the


defendants. ||| (Yek Seng Co. v. Court of Appeals, G.R. No. 87415, January
23, 1992)
***3. CLUTARIO VS. CA, 216 SCRA 341
1. CIVIL LAW; LEASE; EJECTMENT; ACCEPTANCE BY LESSOR OF BACK
RENTALS DOES NOT CONSTITUTE ABANDONMENT OF THEIR CAUSE OF
ACTION. Case law is to the effect that the acceptance by the lessor of
the payment by the lessee of the rentals in arrears does not constitute a
waiver of the default in the payment of rentals as a valid cause of action
for ejectment. The Court notes that when petitioners paid the back rentals
on May 15, 1981, private respondents had already filed the complaint for
ejectment earlier, to be specific, on March 4, 1981. The conduct of private
respondents subsequent to their acceptance of the back rentals belies any
intention to waive their right to eject petitioners as a result of the latter's
failure to pay the rent for more than three (3) months. They did not enter
into an amicable settlement with petitioners. Neither did they notify the
trial court of their intention to have the complaint dismissed. Instead, they
participated actively in the proceedings before the MTC during all the time
that the case dragged on for almost three years. In light of the
surrounding circumstances of the case, as well as the prevailing
jurisprudence, the Court rules that the acceptance by private respondents
of the petitioners-lessees' back rentals did not constitute a waiver or
abandonment of their cause of action for ejectment against the latter.|||
(Spouses Clutario v. Court of Appeals, G.R. No. 76656, December 11,
1992)
***4. YAP VS, CRUZ, 208 SCRA 692
1. CIVIL LAW; LEASE; TRANSFER OF LEASEHOLD RIGHTS IN CASE AT BAR IS
CONDITIONAL AND HAS NO FORCE AND EFFECT IF THE CONDITION IS NOT
COMPLIED. Dr. Vergel G. Cruz, the private respondent in this case was
the bonafide tenant of Amado Q. Bugayon, Jr. Sometime in the latter part
of July, 1985, he offered for sale the goodwill of the veterinary clinic and
some of its equipments to Dr. Wendelyn V. Yap, Evelia H. Badiagan,
Teresita A. Baladad and Florencia C. de Vera, the petitioners herein. During
the period of negotiations, private respondent Cruz introduced to the

landlord Dr. Wendelyn V. Yap as the person interested in taking over the
clinic. However, the negotiations did not materialize but the petitioners
managed to enter into a contract of lease for the said premises at a
monthly rental of P1,800.00 with the landlord. As a result, private
respondent Cruz brought an action for "Forcible Entry with Damages" with
the Metropolitan Trial Court which rendered its decision in favor of private
respondent. We rule in favor of private respondent. When the petitioners
and the landlord executed a new contract of lease, the lease of private
respondent was still valid and subsisting. There is no question that private
respondent has not effectively relinquished his leasehold rights over the
premises in question in view of the failure of negotiations for the sale of
the goodwill. Clearly, the transfer of the leasehold rights is conditional in
nature and has no force and effect if the condition is not complied with.|||
(Yap v. Cruz, G.R. No. 89307, May 08, 1992)
***5. UNITED REALTY CORP. VS. CA, 183 SCRA 725
1. CIVIL LAW; CONTRACTS; LEASE ON A MONTH TO MONTH BASIS;
CONSIDERED WITH A DEFINITE PERIOD. A reading of the two contracts
of lease entered into between petitioner and private respondent
hereinabove reproduced show that its period is from month to month and
that the lease may be terminated when either party gives a 5 days notice
in writing. No doubt such a stipulation between the parties demonstrates
that the agreement of lease is for a definite period and not for an
indefinite period as held by the appellate court.||| (United Realty Corp. v.
Court of Appeals, G.R. No. 62603, March 27, 1990)
***6. LEGAR MGNT AND REALTY CORP. VS. CA, G. R. NO. 117423,
JAN. 24, 1996
1. CIVIL LAW; SPECIAL CONTRACTS; LEASE; RESIDENTIAL PROPERTY
COVERED BY THE RENT CONTROL LAW AND WHERE RENTALS ARE PAID
MONTHLY, EJECTMENT IS PROPER UPON EXPIRATION ON THE LAST DAY OF
ANY GIVEN 30-DAY PERIOD UPON PROPER DEMAND AND NOTICE. The
issue is whether the lessee of a residential property covered by the Rent
Control Law can be ejected on the basis alone of the expiration of the
verbal lease contract under which rentals are paid monthly. We resolved
this issue in the affirmative in the case of Acab vs. Court of Appeals, G.R.

No. 112285, February 21, 1995. Section 6 of Batas Pambansa Blg. 877,
which is exactly the same as Section 6 of Batas Pambansa Blg. 25 does
not suspend the effects of Article 1687 of the New Civil Code. Thus, lease
agreements with no specified period, but in which rentals are paid
monthly, are considered to be on a month-to- month basis. . . . They are
for a definite period and expire after the last day of any given thirty-day

period, upon proper demand and notice by the lessor to vacate. . . . Where
the verbal lease agreement entered into has been validly terminated,
there is sufficient cause for ejectment under Section 5(f) of Batas
Pambansa Blg. 877. cdasia||| (Legar Management & Realty Corp. v. Court
of Appeals, G.R. No. 117423, January 24, 1996)