Facts:
Juan andres was the owner of the lot
situated in liboton, naga city. The sale was
evidenced by a deed of sale. Upon the death of
juan andres, ramon san andres was appointed
as administrator of the estate, and hired
geodetic engineer. Jose panero prepared a
consolidated plan of the estate and also
prepared a sketch plan of the lot sold to
respondent.
It
was
found
out
that
rzdfsdfespondent had enlarged the area which
he purchased from juan. The administrator sent
a letter to the respoindent to vacate the said
portion in which the latter refused to do.
Respondent alleged that apart from the original
lot, which had been sold to him, the latter
likewise sold to him the following day the
remaining portion of the lot. He alleged that the
payment for such would be affected in 5 years
from the eecution of the formal deed of sale after
a survey is conducted. He also alleged that
under the consent of juan, he took possession of
the same and introduced improvements thereon.
Respondent deposited in court the balance of
the purchase price amounting to P7,035.00 for
the aforesaid 509-square meter lot.
On September 20, 1994, the trial court rendered
judgment in favor of petitioner. It ruled that there
was no contract of sale to speak of for lack of a
valid object because there was no sufficient
indication to identify the property subject of the
sale, hence, the need to execute a new contract.
Respondent appealed to the Court of Appeals,
which on April 21, 1998 rendered a decision
reversing the decision of the trial court. The
appellate court held that the object of the
contract was determinable, and that there was a
conditional sale with the balance of the purchase
price payable within five years from the
execution of the deed of sale.
Issue: whether or not there was a valid sale.
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Held:
Civil Code provides that By the contract of sale
one of the contracting parties obligates himself
to transfer the ownership of and to deliver a
determinate thing, and the other to pay therefor
a price certain in money or its equivalent.
A contract
conditional.
of
sale
may
be
absolute
or
12
Page 2
Facts:
Severino sold his property to henry. Henry
applied for a loan with philam life. As It was
already approved pending the submission of
certain documents such as the owners duplicate
of transfer certificate of title which is in
possession of severino.
Henry already took possession of the property in
question after ejectment of the lessees. He also
paid an ernest money of 300,000 under the
premise that it shall be forfeited in favor of
severino in case of nonpayment.
Severino now claims ownership over the
property claiming that henry did not pay for the
property, therefore there was no sale to speak
of.
Issue: whether or not there is a contract of sale
perfected in this case.
Held: there was a perfected contract of sale due
to the second deed of sale.
The basic characteristic of an absolutely
simulated or fictitious contract is that the
apparent contract is not really desired or
intended to produce legal effects or alter the
juridical situation of the parties in any way.30
However, in this case, the parties already
undertook certain acts which were directed
towards fulfillment of their respective covenants
under the second deed, indicating that they
intended to give effect to their agreement.
Further, the fact that Severino executed the two
deeds in question, primarily so that petitioner
could eject the tenant and enter into a
loan/mortgage contract with Philam Life, is to
our mind, a strong indication that he intended to
transfer ownership of the property to petitioner.
For why else would he authorize the latter to sue
the tenant for ejectment under a claim of
ownership, if he truly did not intend to sell the
property to petitioner in the first place? Needless
to state, it does not make sense for Severino to
allow petitioner to pursue the ejectment case, in
petitioner's own name, with petitioner arguing
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 4
Issue:
Facts:
Decision:
Ratio Decidendi:
Supreme Court held that the
elements of a contract of sale were present.
Beth is presumed to have given her consent
by not inquiring as to the meaning of S
when the officer posed to buy Php 500
worth of S. Therefore, there was a meeting
of minds upon a definite object and upon the
price.
Though she was not in possession of
the object of sale, Article 1459 merely
requires that the vendor must have the right
to transfer ownership of the object sold at
the time of delivery. In the case at bar,
though Beth is not the owner, she had the
right to dispose of the prohibited drug.
Ownership was thereafter acquired upon her
delivery to the men in the alley after her
payment of the price.
Supreme Court also held that failure to
conduct prior surveillance and absence of
marked money does not affect the evidence of
the prosecution. It is sufficient that the members
of the operation were accompanied by the
informant to the scene; the sale was adequately
proven and; the drug subject was presented
before the court.
As regards the penalty imposed, since
the shabu only weighs 0.1954 grams, penalty
Page 5
Page 6
HEIRS OF AMPARO
AURORA SANTOS
G.R. No. L-46892
DEL
ROSARIO
v.
GUERRERO, J.:
Facts:
Amparo Del Rosario entered into a
contract with Attorney Andres Santos and his
wife Aurora Santos whereby the latter sold to the
former a 20,000 sq. m. of land which is to be
segregated from Lot 1. Said lot forms part of the
several lots belonging to a certain Teofilo
Custodio, of which lots, Attorney Santos, by
agreement with the latter, as his attorneys fees,
owns interest thereof.
Parties agreed that spouses Andres
shall thereafter execute a Deed of Confirmation
of Sale in favor of Del Rosario as soon as the
title has been released and the subdivision plan
of said Lot 1 has been approved by the Land
Registration Commissioner.
Due to the failure of spouses Andres to
execute the deed after the fulfillment of the
condition, Del Rosario claims malicious breach
of a Deed of Sale.
Defendant thereafter filed a motion to
dismiss setting up the defenses of lack of
jurisdiction of the court over the subject of the
action and lack of cause of action as well as the
defense of prescription.
They further alleged that the deed of
sale was only an accommodation graciously
extended, out of close friendship between the
defendants and the plaintiff, hence, tantamount
to
waiver,
abandonment
or
otherwise
extinguishment of the demand set forth in the
complaint.
Finally, defendants alleged that the
claim on which the action or suit is founded is
unenforceable under the statute of frauds and
that the cause or object of the contract did
not exist at the time of the transaction.
hope
or
Page 7
RULING:
Decision Modified.
Page 8
GR No. 90707
RULING:
Petition Dismissed. The trading contract signed
by the parties, is a contract for the sale of
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 9
GR No. 126376
Page 10
Page 11
pr vs. Santiago
December 4, 2001
Second Division
Ponente: Quisumbing, J.
GR No. 132305
Page 12
Page 13
Issues:
Whether the Court erred in holding that there is
a valid contract of sale?
Whether the Court erred in holding that the
consignation is valid?
Whether the
untenable?
amount
of
consignation
is
Page 14
LAGRIMAS
A.
BOY,
petitioner,
vs.
COURT OF APPEALS, ISAGANI P. RAMOS
and
ERLINDA
GASINGAN
RAMOS,
respondents.
Ruling:
Facts:
Page 15
Page 16
Ruling:
The March 15, 1985 letter sent by the
COS through their lawyer to the CUSTODIO
reveals that the parties entered into a perfected
contract of sale and not an option contract.
A contract of sale is a consensual
contract and is perfected at the moment there is
a meeting of the minds upon the thing which is
the object of the contract and upon the price.
From that moment the parties may reciprocally
demand performance subject to the provisions
of the law governing the form of contracts.
The elements of a valid contract of sale
under Article 1458 of the Civil Code are (1)
consent or meeting of the minds; (2) determinate
subject matter; and (3) price certain in money or
its equivalent. As evidenced by the March 15,
1985 letter, all three elements of a contract of
sale are present in the transaction between the
petitioners and respondent. Custodio's offer to
purchase the Beata property, subject of the sale
at a price of $100,000.00 was accepted by the
COS. Even the manner of payment of the price
was set forth in the letter. Earnest money in the
amounts of US$1,000.00 and P40,000.00 was
already received by the COS. Under Article 1482
of the Civil Code, earnest money given in a sale
transaction is considered part of the purchase
price and proof of the perfection of the sale.
.
The COS were of the mistaken belief
that CUSTODIO had lost her "option" over the
Beata property when she failed to pay the
remaining balance of $70,000.00 pursuant to
their August 8, 1986 letter. Accordingly,
CUSTODIO acted well within her rights when
she attempted to pay the remaining balance of
$70,000.00 to complete the sum owed of
$100,000.00 as the contract was still subsisting
at that time. When the COS refused to accept
said payment and to deliver the Beata property,
CUSTODIO immediately sued for the rescission
of the contract of sale and prayed for the return
of the $30,000.00 she had initially paid.
Under Article 138518 of the Civil Code,
rescission creates the obligation to return the
things which were the object of the contract but
such rescission can only be carried out when the
Page 17
return
Page 18
Ruling:
The contract of sale was not perfected. In
holding that there is perfected contract of sale,
the CA relied on the following findings: (1)
earnest money was allegedly given by
respondents and accepted by SMPPI through its
vice-president and operations manager, Isidro
Sobrecarey; and (2) the documentary evidence
in the records show that there was perfected
contract of sale.
With regard to the alleged payment and
acceptance of the earnest money, the SC holds
Page 19
was just an
privilege was
there was a
payment. No
enforced by
Page 20
the
First Division
Garcia, J
Facts:
-On December 4, 1996, petitioner PCI
LEASING and respondent GIRAFFE entered
into a Lease Agreement, whereby the former
leased out to the latter one (1) set of Silicon
High Impact Graphics and accessories worth
P3,900,00.00 and one (1) unit of Oxberry
Cinescan 6400-10 worth P6,500,000.00.
- A year into the life of the Lease Agreement,
GIRAFFE defaulted in its monthly rentalpayment obligations. And following a threemonth default, PCI LEASING addressed a
formal pay-or-surrender-equipment type of
demand letter dated February 24, 1998 to
GIRAFFE.
- The demand went unheeded.
- PCI Leasing instituted a case against
GIRAFFE. PCI prayed for the issuance of a writ
of replevin for the recovery of the leased
property
- Upon PCI LEASINGs posting of a replevin
bond, the trial court issued a writ of replevin,
paving the way for PCI LEASING to secure the
seizure and delivery of the equipment covered
by the basic lease agreement.
- Instead of an answer, GIRAFFE filed a Motion
to Dismiss,arguing that the seizure of the two (2)
leased equipment stripped PCI LEASING of its
cause of action.
-GIRAFFE argues that, pursuant to Article 1484
of the Civil Code on installment sales of
personal property, PCI LEASING is barred from
further pursuing any claim arising from the lease
agreement and the companion contract
documents, adding that the agreement between
the parties is in reality a lease of movables with
option to buy.
-GIRAFFE asserts in its Motion to Dismiss that
the civil complaint filed by PCI LEASING is
proscribed by the application to the case of
Articles 1484 and 1485, supra, of the Civil Code.
- PCI Leasing on the other hand maintains that
its contract with GIRAFFE is a straight lease
without an option to buy.
- petitioner contends that the financial leasing
arrangement it concluded with the respondent
represents a straight lease covered by R.A. No.
5980, the Financing Company Act, as last
amended by R.A. No. 8556, otherwise known as
Financing Company Act of 1998, and is outside
the application and coverage of the Recto Law.
To the petitioner, R.A. No. 5980 defines and
authorizes its existence and business.
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
xxx
xxx
(3)
Foreclose the chattel mortgage on the
thing sold, if one has been constituted, should
the vendee's failure to pay cover two or more
installments. In this case, he shall have no
further action against the purchaser to recover
any unpaid balance of the price. Any agreement
to the contrary shall be void.
Second Division
Mendoza J.
Facts:
-Private respondent Rolando Lantan was
employed at the Elisco Tool Manufacturing
Corporation as head of its cash department. On
January 9, 1980, he entered into an agreement
with the company which provided as follows:
- that, Elisco Tool Manufacturing Corp is the
owner of a car which for and in consideration of
a monthly rental of P 1010.65 will be leased to
Rolando Lantan for 5 years
- That, Rolando Lantan shall pay the lease thru
salary deduction from his monthly remuneration
in the amount as above specified for a period of
FIVE (5) years;
- That, he shall for the duration of the lease
contract, shoulder all expenses and costs of
registration, insurance, repair and maintenance,
gasoline, oil, part replacement inclusive of all
expenses necessary to maintain the vehicle in
top condition
-That, at the end of FIVE (5) year period or upon
payment of the 60th monthly rental, Lantan may
exercise the option to purchase the motor
vehicle from Elisco and all monthly rentals shall
be applied to the payment of the full purchase
price of the car and further, should Lantan desire
to exercise this option before the 5-year period
lapse, he may do so upon payment of the
remaining balance on the five year rental unto
Elisco, it being understood however that the
option is limited to the EMPLOYEE;
-That, in case of default in payment THREE (3)
accumulated monthly rentals, Elisco shall have
the full right to lease the vehicle to another
EMPLOYEE;
-That, in the event of resignation and or
dismissal from the service, Lantan shall return
the subject motor vehicle to the EMPLOYER in
good working and body condition.
-On the same day, January 9, 1980, private
respondent executed a promissory note which
states his promise to pay P 1,010.65 without the
necessity of notice or demand in accordance
with the schedule of payment
- After taking possession of the car, Lantan
installed accessories worth P15,000.00
-In 1981, Elisco Tool ceased operations, as a
result of which private respondent Rolando
Lantan was laid off. Nonetheless, as of
December 4, 1984, private respondent was able
to make payments for the car in the total amount
of P61,070.94.
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 25
Issue:
Whether or not there was a perfected
and enforceable contract of sale on October 11,
1983 which modified the earlier contracts to sell
which had not been validly rescinded.
Ruling:
The contracts to sell of 1961 were
cancelled to which the parties voluntarily bound
themselves. When petitioner failed to abide by
its obligation to pay the installments provision
No. 9 of the contract automatically took effect
which states that should the purchaser fail to
make the payment of any of the monthly
installments as agreed herein, this contract
shall, by the mere fact of nonpayment, expire by
itself and become null and void.
The 1961 agreements are contracts to
sell and not contracts of sale. The distinction
between these contracts is depicted in Adelfa
Properties, Inc. v. Court of Appeals which states
that the distinction between the two is important
for in a contract of sale, the title passes to the
vendee upon the delivery of the thing sold;
whereas in a contract to sell, by agreement the
ownership is reserved in the vendor and is not to
pass until the full payment of the price. In a
contract of sale, the vendor has lost and cannot
Page 26
Facts:
This refers to the complaint for
malpractice filed by Regalado Daroy against
Esteban Abecia, a member of the Bar.
Respondent Abecia was counsel of
complainant Daroy in a case for forcible entry
before the Municipal Trial Court of Opol,
Misamis Oriental. Judgment was rendered in
favor of complainant. To satisfy the judgment,
the sheriff sold at public auction a parcel of land
belonging to one of the defendants to
complainant Daroy as highest bidder. Upon
failure of the defendants to redeem the land, its
ownership was consolidated in complainant
Daroy.
Complainant
Daroy
claimed
that
respondent Abecia forged his signature in a
deed of absolute sale transferring the parcel of
land to Jose Gangay and that in a fictitious deed
of absolute sale it was made to appear that
Gangay in turn conveyed the land to Nena
Abecia, wife of respondent Abecia. Daroy
alleged that he entrusted the title to the land to
Abecia as his counsel and allowed him to take
possession of the land upon the latters request.
By means of the forged deed of sale, Abecia
was able to obtain new transfer certificates of
title, first in the name of Gangay and then in that
of Mrs. Abecia, from the Registry of Deeds of
Misamis Oriental. Daroy claimed he discovered
the fraud only in 1984.
On
July
15,
1993,
Commissioner Plaridel Jose ruled that
respondent Abecia is guilty of malpractice and
recommended his disbarment. The Integrated
Bar of the Philippines approved the report but
reduced the penalty to indefinite suspension.
Respondent Abecia filed a Motion for
Reconsideration and/or Appeal.
Issues:
Whether or not the Commission on Bar
Discipline erred when it held that complainant
had no knowledge of the execution of the Deed
of Absolute Sale.
Whether or not respondent Atty. Esteban
Abecia is prohibited from acquiring the parcel of
land.
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Ruling:
Respondents motion is well taken.
As already stated, the land in question
was purchased by complainant at the sheriffs
sale. Deputy Sheriff stated that when he finally
transferred the land to the buyer, he placed in
possession of the land not only the buyer,
Regalado Daroy, but also the latters assignee,
Nena Abecia, in whose name the title to the land
had in fact been transferred. It would appear,
therefore, that Daroy already knew that title to
the land had already been transferred in the
name
of
the
respondents
wife.
Indeed, what appears to have happened
in this case is that the parties thought that
because the land had been acquired by
complainant at a public sale held in order to
satisfy a judgment in his favor in a case in which
respondent was complainants counsel, the latter
could not acquire the land. The parties
apparently had in mind Art. 1491 of the Civil
Code which provides:
ART. 1491. The following persons
cannot acquire by purchase, even at a
public or judicial auction, either in
person or through the mediation of
another:
5)
Justices,
judges,
prosecuting
attorneys, clerks of superior and inferior
courts,
and
other
officers
and
employees
connected
with
the
administration of justice, the property
and rights in litigation or levied upon an
execution before the court within whose
jurisdiction or territory they exercise their
respective functions; this prohibition
includes the act of acquiring by
assignment and shall apply to lawyers,
with respect to the property and rights
which may be the object of any litigation
in which they may take part by virtue of
their profession.
In Guevara v. Calalang, we held that the
prohibition in Art. 1491 does not apply to the
sale of a parcel of land, acquired by a client to
satisfy a judgment in his favor, to his attorney as
long as the property was not the subject of the
litigation. While judges, prosecuting attorneys,
and others connected with the administration of
justice are prohibited from acquiring property or
rights in litigation or levied upon in execution, the
prohibition with respect to attorneys in the case
extends only to property and rights which may
Page 28
Page 29
Page 30
FACTS:
Encarnacion Valdes-Choy advertised for
sale her paraphernal house and lot in Makati
City which Chua responded to. They both
agreed on a purchased price of P100,000.00
payable in cash.
March 3, 1993
Issue:
DAVIDE, JR.
Facts:
Ramon J. Hibionada and Visayan Sawmill
Company (VISAYAN SAWMILL) entered into a
sale involving scrap iron subject to the condition
that plaintiff-appellee will open a letter of credit in
the amount of P250,000.00 in favor of
defendant-appellant corporation on or before
May 15, 1983.
Ramon J. Hibionada through his man, started to
dig and gather and scrap iron at the VISAYAN
SAWMILL's premises, proceeding with such
endeavor until May 30 when VISAYAN
SAWMILL allegedly directed Hibionadas men to
desist from pursuing the work in view of an
alleged case filed against Hibionada by a certain
Alberto Pursuelo. This, however, is denied by
VISAYAN SAWMILL who allege that on May 23,
1983, they sent a telegram to Hibionada
cancelling the contract of sale because of failure
of the latter to comply with the conditions
thereof.
On May 26, 1983, VISAYAN SAWMILL received
a letter advice from the Dumaguete City Branch
of the Bank of the Philippine Islands dated May
26, 1983.
Hibionada sent a series of telegrams stating that
the case filed against him by Pursuelo had been
dismissed and demanding that VISAYAN
SAWMILL comply with the deed of sale,
otherwise a case will be filed against them.
In reply, VISAYAN SAWMILL is unwilling to
continue with the sale due to Hibionada's failure
to comply with essential preconditions of the
contract.
Hibionada filed the complaint below with a
petition for preliminary attachment and prayed
for judgment ordering the VISAYAN SAWMILL to
comply with the contract by delivering to him the
scrap iron subject thereof
In their Answer with Counterclaim, VISAYAN
SAWMILL insisted that the cancellation of the
contract was justified because of Hibionadas
non-compliance with essential preconditions,
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
PARAS, J.:
Facts:
Norma Leuenberger inherited the whole of Lot
No. 140 from her grandmother, Simeona J. Vda.
de Ditching. In 1952, she donated a portion of
Lot No. 140, about 3 ha., to the municipality for
the ground of a certain high school and had 4
ha. converted into a subdivision. In 1963, she
had the remaining 21 ha. or 208.157 sq. m.
relocated by a surveyor upon request of lessee
Ramon Jover who complained of being
prohibited by municipal officials from cultivating
the land. It was then that she discovered that the
parcel of land, more or less 4 ha. or 33,747
sq.m. used by Petitioner Municipality of
Victorias, as a cemetery from 1934, is within her
property.
Norma Leuenberger wrote the Mayor of Victorias
regarding her discovery, demanding payment of
past rentals and requesting delivery of the area
allegedly illegally occupied by Municipality of
Victorias. When the Mayor replied that Petitioner
bought the land she asked to be shown the
papers concerning the sale but was referred by
the Mayor to the municipal treasurer who
refused to show the same.
Norma Leuenberger filed a complaint for
recovery of possession of the parcel of land
occupied by the municipal cemetery. In its
answer, petitioner Municipality, by way of special
defense, alleged ownership of the lot, subject of
the complaint, having bought it from Simeona
Jingco Vda. de Ditching sometime in 1934. The
lower court decided in favor of the Municipality.
On appeal Respondent appellate Court set
aside the decision of the lower court hence, this
petition for review on certiorari.
Held:
It is expressly provided by law that the thing sold
shall be understood as delivered, when it is
placed in the control and possession of the
vendee. Where there is no express provision
that title shall not pass until payment of the
price, and the thing gold has been delivered, title
passes from the moment the thing sold is placed
in the possession and control of the buyer.
Delivery produces its natural effects in law, the
principal and most important of which being the
conveyance of ownership, without prejudice to
the right of the vendor to payment of the price.
When the sale is made through a public
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
September 4, 2001.
YNARES-SANTIAGO, J.:
Facts:
The object of the controversy is a
portion of a vast tract of land located at Tindig na
Manga, Almanza, Las Pinas City. The spouses
Gerardo and Emma Ledonio, assigned to the
spouses Camilo and Ma. Marlene Sabio (herein
petitioners) all their rights, interests, title and
participation over a contiguous portion of the
subject property measuring 119,429 square
meters. Similarly, while the subject property was
still the object of several pending cases, the
International Corporate Bank, Inc. (or Interbank)
acquired from the Trans-Resource Management
and Development Corporation all of the latters
rights to the subject property by virtue of a deed
of assignment executed between them.
Held:
Under Article 1498 of the Civil Code,
when the sale is made through a public
instrument, the execution thereof shall be
equivalent to the delivery of the object of the
contract , if from the deed the contrary does not
appear or cannot be inferred. Possession is
also transferred, along with ownership thereof,
to the petitioners by virtue of the deed of
conveyance.
Petitioners
contention
that
respondents never acquired ownership over the
subject property since the latter was never in
possession of the subject property nor was the
property ever delivered is totally without merit.
The mere execution of the deed of conveyance
in a public document is equivalent to the delivery
of the property. Since the execution of the deed
of conveyance is deemed equivalent to delivery,
prior physical delivery or possession is not
legally required. The deed operates as a formal
or symbolic delivery of the property sold and
authorizes the buyer or transferee to use the
document as proof of ownership. Nothing more
is required.
Page 35
YNARES-SANTIAGO, J.:
Facts:
The instant controversy stemmed from a
dispute over a lot located in Pasay City and
registered in the name of Mariano Torres y
Chavarria,
the
predecessor-in-interest
of
respondents. Petitioner claims that he is the
lawful owner of the disputed lot, having
purchased it from a certain Eusebio Leonardo
Roxas who in turn acquired the same lot by
purchase from Mariano Torres. Petitioner filed a
complaint for Delivery of Possession of
Property, Owners Duplicate Certificate of Title,
Rentals and Damages.
Respondents, in their answer, countered
that since 1938 up to the present, the lot in
question has been registered in the name of the
late Mariano Torres y Chavarria, their
predecessors-in-interest and that they have
been in material possession thereof in the
concept of owners. Respondents maintain that
they have been in open and peaceful
possession of the said property and that it was
only in 1993 when they came to know of the
alleged claim of petitioners over the same
property.
The trial court issued an order
dismissing petitioners complaint on the ground
of prescription and laches. The Court of Appeals
likewise ruled that since petitioners cause of
action is founded on the the deed of sale dated
September 29, 1972, being an action based on
written contracts, petitioners complaint falls
under Art. 1144 of the Civil Code which provides
that an action upon a written contract shall
prescribe in 10 years from the time the right of
action accrued. Since petitioner brought the
instant case only on September 6, 1993 or 21
years from the time his supposed right of action
accrued on September 29, 1972, i.e., the date of
execution of the contract conveying him the
questioned lot, his action was clearly barred by
statute of limitations. Petitioner, on the other
hand, contends that the applicable provision is
Art. 1141 and not Art.1144 of the Civil Code
because his action is one for recovery of
possession of real property which prescribes in
30 years.
Issue:
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 36
Page 37
Facts:
The respondent LPJ Enterprises, Inc. had a
contract to supply 300,000 bags of cement per
year to Atlas Consolidated Mining Development
Corporation. Cesar Campos, a Vice-President of
petitioner Industrial Textile Manufacturing
Company of the Philippines(or Itemcop), asked
Lauro Panganiban, Jr., president of respondent
corporation, if he would like to cooperate in an
experiment to develop a plastic cement bags.
The petitioner agreed to the offer. The
experiment,however, was unsuccessful. Cement
dust oozed out under pressure through the small
holes of the woven plastic bags and the loading
and the loading platform was filled with dust. The
second batch o plastic bags subjected to trial
was likewise a failure. Although the weaving of
the plastic bags was already tightened, cement
dust still spilled through the gaps.
Petitoner delivered the orders consecutively but
the respondent only remitted a part of the total
amount leaving a balance of P84, 123.80 Thus,
the legal department of the petitioner sent
demand letters to respondent corporation
Page 39
FACTS:
Petitioner
Aerospace
Industries
purchased five hundred (500) metric tons of
sulfuric acid from private respondent Philippine
Phosphate Fertilizer Corporation (Philphos).The
agreement provided that the buyer shall pay its
purchases in Philippine Currency five days
before the shipment date. Petitioner as buyer
committed to secure the means of transport to
pick-up the purchases from private respondents
load ports. Per agreement, 100 metric tons of
sulfuric acid should be taken from Basay Negros
Oriental storage tank, while the remaining 400
metric tons should be retrieve from Sangi, Cebu.
On August 6, 1986, private respondent Philphos
sent an advisory letter to petitioner to withdraw
the sulfuric acid purchased at Basay because
private respondent has been incurring
incremental expenses of 2,000 for each delay in
shipment.On October 3, 1986, petitioner paid
Php 553,280 for 500 metric tons of sulfuric acid.
Petitioner charted the M/T Sultan Kayumanggi to
carry out the agreed volumes of freight form
designated loading areas. The chartered vessel
only withdrew 70 metric tons of sulfuric acid from
Basay because said vessel heavily tilted on its
port side. Because of this, the vessel underwent
repairs.
Private respondents asked petitioners to retrieve
the remaining sulphur in Basay tanks so that
said tanks are emptied before December 15,
1986.Private respondent said that if petitioner
will not comply petitioner will be charge storage
and consequential costs. Petitioner chartered
another vessel after several demand of the
private respondent. Hernandez, acting for the
petitioner, addressed a letter to private
respondent, commencing additional orders to
replace its sunken purchases. Petitioner
Counsel, Atty Santos, sent a demand letter to
private respondent for the delivery of the 272.49
MT of sulfuric acid or return the purchase price
of Php 307, 530.In reply, private respondent
instructed petitioner to lift remaining 30 MT of
sulfuric acid from Basay or pay maintenance
and storage expenses. Despite several
demands to deliver remaining sulfuric acids and
other counter demands also of private
respondents, petitioner filed a complaint for
specific performance and/or damages before the
RTC. Private respondent contends that it was
the petitioner who was remiss in the
performance of its obligation.
Page 40
First Division
Page 41
Bellosillo, J.
Panganiban ,J.
Facts:
Facts:
G.R. No.
Page 42
June 4, 2004
Second Division
PUNO, J.:
Facts:
Spouses Nicolas and Irene Tordesillas owned a
piece of land which their children Harod, Angela
and Rosario, and grandchildren Arnold and Lilia
de la Flor inherited. The heirs sold a part of the
land to Alberta Morales. Morales possessed the
lot as owner, constructed a house on it and
appointed a caretaker to oversee her property.
Arnold borrowed the Original Certificate of Title
(OCT) from Alberta covering the lot. Then, he
executed an Affidavit acknowledging receipt of
the OCT in trust and undertook to return said
title free from changes, modifications or
cancellations. However, Arnold used the OCT he
borrowed from the vendee Alberta Morales,
subdivided the entire lot into three sublots, and
registered them all under his name. Arnold did
not return the OCT belonging to Alberta despite
repeated requests. Arnold subsequently sold the
land to spouses Tomas and Sylvina Occea.
When the respondent heirs of Alberta learned of
the sale, they filed a case for annulment of sale
and cancellation of titles, with damages, against
the Occea spouses, alleging bad faith since the
Occeas conducted ocular inspection of the
area before the purchase and their caretaker
warned them that Arnold is no longer the owner
of the lot being sold. On the other hand, the
Occea spouses alleged that they were buyers
in good faith as the titles to the subject lots were
free from liens or encumbrances when they
purchased them, that they verified with the
Antique Registry of Deeds that Arnolds TCTs
were clean and unencumbered. Lower court
declared the Occea spouses as buyers in good
faith and ruled that the action of the heirs was
time-barred. Court of Appeals reversed the
decision of the trial court. Hence the petition.
Page 43
Page 44
G.R. No.132677
Page 46
Page 47
ISSUE:
WHETHER THERE WAS BAD FAITH
ON THE REGISTRATION OF THE LAND BY
THE RESPONDENTS
HELD:
Petition DENIED.
RATIO:
Article 1544 of the Civil Code is
relevant, thus:
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.
Page 49
Petition DENIED.
RATIO:
HELD:
Page 50
17 August 2007
Page 51
September 5,
1997
Issues:
1.) Was there novation of the first contract?
2.) Was there a double sale of the real
property involved?
Held:
On Novation
Novation is never presumed; it must be
sufficiently established that a valid new
agreement or obligation has extinguished or
changed an existing one. The registration of a
later sale must be done in good faith to entitle
the registrant to priority in ownership over the
vendee in an earlier sale.
Article 1600 of the Civil Code provides that
"(s)ales are extinguished by the same causes as
all other obligations, . . . ." Article 1231 of the
same Code states that novation is one of the
Page 52
Page 53
March
10,
1993
Third Division
MELO, J.:
Page 54
Page 55
ROBERTO Z.
MACHUCA
LAFORTEZA vs.
ALONZO
Issues:
W the Memorandum of Agreement is a mere
contract to sell, as indicated in its title.
Page 57
Page 58
Page 59
ISSUE:
359 SCRA 91
First Division
Puno, J.:
FACTS:
Petitioners spouses Dinoare engaged in the
business of manufacturing and selling shirts.1
Respondent Sio is part owner and general
manager of a manufacturing corporation doing
business under the trade name "Universal Toy
Master Manufacturing."
Petitioners and respondent Sio entered into a
contract whereby the latter would manufacture
for the petitioners 20,000 pieces of vinyl frogs
and 20,000 pieces of vinyl mooseheads at P7.00
per piece in accordance with the sample
approved by the petitioners. These frogs and
mooseheads were to be attached to the shirts
petitioners would manufacture and sell.
Respondent Sio delivered in several installments
the 40,000 pieces of frogs and mooseheads.
Petitioner fully paid the agreed price.
Subsequently, petitioners returned to respondent
29,772 pieces of frogs and mooseheads for
failing to comply with the approved sample.
Petitioners then demanded from the respondent
a refund of the purchase price of the returned
goods in the amount of P208,404.00. As
respondent Sio refused to pay. Petitioners filed
action for collection of a sum of money.
Page 60
FACTS:
WENCESLAO had a contract with the Public
Estates Authority (PEA) for the improvement of
the main expressway in the R-1 Toll Project
along the Coastal Road in Paraaque City. To
fulfill its obligations to the PEA, WENCESLAO
entered into a contract with READYCON.
READYCON agreed to sell to WENCESLAO
asphalt materials valued at P1,178,308.75.
Under the contract, WENCESLAO was bound to
pay respondent a twenty percent (20%)
downpayment, or P235,661.75, upon delivery of
the materials contracted for. The balance of the
contract price, amounting to P942,647, was to
be paid within fifteen (15) days thereof. It was
further stipulated by the parties that respondent
was to furnish, deliver, lay, roll the asphalt, and if
necessary, make the needed corrections on a
prepared base at the jobsite.
Fifteen (15) days after performance of said work,
READYCON demanded that WENCESLAO pay
the balance of the contract price. WENCESLAO,
however, ignored said demand.On May 30,
1991, the counsel for READYCON wrote a
demand letter to WENCESLAO asking that it
make good on the balance it owed. Again,
WENCESLAO failed to heed the demand. It did
not even bother to reply to the demand letter.
READYCON filed a complaint with the RTC of
Pasig City for collection of a sum of money and
damages, with prayer for writ of preliminary
attachment against D.M. Wenceslao and/or
Dominador Dayrit.
In the proceedings below, WENCESLAO
admitted
that
it
owed
READYCON
P1,014,110.45 indeed. However, it alleged that
their contract was not merely one of sale but
also of service, namely, that respondent shall lay
the asphalt in accordance with the specifications
and standards imposed by and acceptable to the
government. WENCESLAO also alleged that
since the contract did not indicate this condition
with respect to the period within which the
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
ISSUE:
Was the obligation of WENCESLAO to pay
READYCON already due and demandable as of
May 30, 1991.
RULING:
Petition Denied.
Under Article 1582 of the Civil Code, the buyer is
obliged to pay the price of the thing sold at the
time stipulated in the contract. Both the RTC and
the appellate court found that the parties
contract stated that the buyer shall pay the
manufacturer the amount of P1,178,308.75.
Following the rule on interpretation of contracts,
no other evidence shall be admissible other than
the original document itself,26 except when a
party puts in issue in his pleading the failure of
the written agreement to express the true intent
of the parties.
However, to rule on whether the written
agreement failed to express the true intent of the
parties would entail having this Court reexamine
the facts. The findings of the trial court as
affirmed by the appellate court on this issue,
however, bind us now. For in a petition for
certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, this Court may not review the
findings of fact all over again. Suffice it to say,
however, that the findings by the RTC, then
affirmed by the CA, that the extra condition
being insisted upon by the petitioners is not
found in the sales contract between the parties.
Hence it cannot be used to qualify the reckoning
of the period for payment. Besides, telling
Page 61
Page 62
.INTEGRATED
vs.
PACKAGING
COURT OF APPEALS
PAPER CO., INC.,
CORP.,
and FIL-ANCHOR
Page 63
Page 64
GREGORIO FULE,
vs
COURT OF APPEALS, NINEVETCH CRUZ
and JUAN BELARMINO
[G.R. No. 112212 March 2, 1998; Third
Division]
ROMERO, J.:
FACTS
Gregorio Fule (petitioner), a banker by
profession and a jeweler at the same time,
acquired a 10-hectare property in Tanay, Rizal
(Tanay property).
Petitioner, as corporate secretary of the bank,
asked Remelia Dichoso and Oliva Mendoza to
look for a buyer who might be interested in the
Tanay property. The two found Dr. Ninevetch
Cruz (private respondent).
ISSUE
Whether or not the deed of sale of the Tanay
property is null and void.
RULING
Page 65
Page 66
Page 67
Issues:
Issue 1: Whether respondents are entitled to the
remedy of rescission despite of their noncompliance to their obligations to Central Bank.
Issue 2: Whether Central Bank is justified in
withholding the payment of the purchase price.
Held:
Issue 1: Respondents should not be allowed to
rescind the contract where they themselves did
not perform their essential obligation thereunder
which is to fill up the parcels of land with
escombro. It should be emphasized that a
contract of sale involves reciprocity between the
parties. Since respondents were in bad faith,
they may not seek the rescission of the
agreement they themselves breached.
Issue 2: Aside from the instances mentioned
under Article 1590 of the civil code, the vendee
is likewise entitled to withhold payment of the
purchase price if the vendor fails to perform any
essential obligation of the contract. Such right is
premised not on the aforequoted article, but on
general principles of reciprocal obligations.
Since respondents failed to comply with their
obligation, Central Bank is justified in
withholding its payment of the purchase price.
Page 68
ALBERT
R.
PADILLA vs.
SPOUSES
FLORESCO
PAREDES
and
ADELINA
PAREDES, and THE HONORABLE COURT OF
APPEALS
G.R. No. 124874
Second Division
QUISUMBING, J.:
Facts: Albert R. Padilla and Floresco and
Adelina Paredes entered into a contract to sell
involving a parcel of land in San Juan, La Union.
At that time, the land was untitled although
private respondents were paying taxes thereon.
Under the contract, petitioner undertook to
secure title to the property in private
respondents' names. Of the P312,840.00
purchase price, petitioner was to pay a
downpayment of P50,000.00 upon signing of the
contract, and the balance was to be paid within
ten days from the issuance of a court order
directing issuance of a decree of registration for
the property. But petitioner made several
payments to private respondents, some even
before the court issued an order for the issuance
of a decree of registration.
After the court ordered the issuance of a decree
of land registration for the subject property,
respondents then demanded payment of the
balance of the purchase price. But the petitioner
was not able to pay the balance in full. In a
letter, private respondents, through counsel,
demanded payment of the remaining balance,
with interest and attorney's fees, within five days
from receipt of the letter. Otherwise, private
respondents stated they would consider the
contract rescinded. Petitioner did not accept
private respondents' proposal. Instead, he
offered to pay the balance in full for the entire
property, plus interest and attorney's fees.
Private respondents refused the offer.
Petitioner instituted an action for specific
performance against private respondents,
alleging that he had already substantially
complied with his obligation under the contract
to sell. He claimed that the several partial
payments he had earlier made, upon private
respondents' request, had impliedly modified the
contract. He also averred that he had already
spent P190,000.00 in obtaining title to the
property, subdividing it, and improving its rightof-way.
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 70
Facts:
Private respondent Palao sold to petitioner
Iringan an undivided portion of land to be paid in
installments.
Due to petitioners failure to pay the full amount
on the second installment, private respondent
considered the contract rescinded. The
petitioner on the other hand, on its reply, did not
oppose the revocation of the contract but only
asked for the reimbursement of the initial
payment made.
Issues:
1. Whether or not the contract of sale is
validly rescinded.
2. Whether or not the award of moral and
exemplary damages is proper.
Held:
1. Article 1592 requires the rescinding
party to serve judicial or notarial notice
of his intent to resolve the contract. The
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 71
Issue:
Whether or not the property was validly
sold to Iluminada and Agapito Pacetes.
Held:
Facts:
Concepcion Gil and sister Nieves Gil are
co-owners of a parcel of land. Nieves
and husband constructed a two storey
building on the said land. Concepcion
then filed a complaint against her sister.
The Court rendered judgment in favor of
Concepcion. Nieves appealed to the
Court of Appeals but the latter also
affirmed the assailed decision.
The Court issued a writ of execution but
Nieves refused to execute the required
deed.
The Sheriff was then ordered to execute
but instead, he divided the property into
4 lots and gave two to Concepcion. Lot
59 C1, one of the two lots given to
Concepcion was then sold by the latter
to Agapito and Iluminada Pacetes. This
contract was however subject to the
condition that a deposit shall be given at
the time of the execution of the contract
and the remaining amount shall be paid
upon the delivery of the certificate of title
to the vendee. The property was then
sold to one Constancio Maglana and
was again sold to the present possessor
Emilio Magtulac who is constructing a
building on said lot. Subsequently,
Concepcion died and now represented
by her successors as the petitioners in
this instant case.
Petitioners
are
contending
that
Concepcions sale of the disputed
property to Iluminada and Agapito
Pacetes is merely a contract to sell
because the full price was not paid by
the latter to the former. They also argue
that the consignation made by Iluminada
did not produce legal effect. Therefore,
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 72
ISSUE:
vs.
Court of Appeals, Tenth Division, Mariano B.
Nemenio and Felisa V. Nemenio, Constantino
M. Galeos and Eugenio V. Amores
February 9, 2000
Buena, J.:
RULING:
FACTS:
Issue 1
Issue 2
Page 73
Decision of CA is REVERSED.
Page 74
ISSUE:
Nachura, J.:
RULING:
FACTS:
Art. 1544 provides:
A property in the name of Go Kim Chuan was
originally owned by the Amodias and was
brought under the operation of the Torrens
System. However, the title was lost during the
Second World War.
Page 75
G.R. No.154017
Page 76
Division: En banc
Ponente: Justice Davide
In line with the foregoing, the nonfulfillment could not even be considered a
breach, but simply an event that prevented the
obligation of the petitioner corporation to convey
title from acquiring binding force.
On
the
other
hand,
petitionercorporation insisted that the cancellation of the
contract was justified because of private
respondents non-compliance with essential preconditions, among which was the opening of an
irrevocable and unconditional letter of credit not
later than May 15, 1983.
Page 77
RULING:
None.
Third Division
PANGANIBAN, J:
FACTS:
ISSUE:
Page 78
CHICO-NAZARIO, J.:
FACTS:
ISSUE:
1. No.
In executing the said Deed of
Sale, Dominador and Eulalia never
intended the transfer of ownership of the
subject property but to burden the same
with an encumbrance to secure the
indebtedness incurred by Dominador on
the occasion of his employment with
Eulalia. By Eulalias own admission it
was her customary business practice to
require her biyaheros to deliver to her
the titles to their real properties and to
execute in her favour the corresponding
deeds of sale over the said properties
as security for the money she provided.
Hence, said transaction is an equitable
mortgage, so that Eulalia has no right to
subsequently transfer ownership of the
subject property, in consonance that
nobody can dispose of what he does not
have. Their relationship is merely
mortgagor and mortgagee rather than
seller and buyer. The contention of
petitioner that Dominador ceded his
property to Eulalia as payment for his
obligation for it is contrary to human
experience because he would first look
for means to settle his obligation and the
selling of a property on which his house
that shelters them stand would be his
last resort.
2. No.
Jocelyn is a grandniece of
Eulalia which resides in the same
Page 79
Page 80
FIRST DIVISION
YNARES-SANTIAGO, J.:
Issue:
Facts:
Ruling:
Page 82
Page 83
Third Division
PANGANIBAN, J.:
FACTS: A fishpond located in Arellano-Bani
Dagupan City is co-owned by brothers Antonio,
Santiago, Demetria and Angel Fernandez,
together with their uncle Armando. Antonio and
Demetria sold their respective shares to
Spouses Tarun. These sales were registered
and annotated in the OCT. Later, the said coowners executed a Deed of Extrajudicial
Partition of two parcels of registered land with
exchange of shares. This involved the fishpond
(1st) that was co-owned and another fishpond
(2nd). It was also stipulated in the deed that the
parties recognize and respect the sale earlier
made. Angel B. Fernandez exchanged his share
in the 2nd fishpond to the shares of his co-owners
on the remaining portion of the 1st fishpond.
From that time on, they had been paying the
realty taxes thereon. However, it was Angel B.
Fernandez and later on his heirs, [petitioners],
who remained in possession of the entire
fishpond. The Spouses Tarun sought the
partition of the property but Angel Fernandez
refused. When he died, Spouses Tarun again
sought the partition of the property but Angel
Fernandezs heirs [petitioner] again refused.
Hence, this action for partition.
Page 84
Issues:
August 1, 2002
Second Division
Quisumbing, J:
Facts:
Sps. Pedro and Josefina De Guzman
were the registered owners of a parcel of land
covered by TCT No. 20248 T-105 of the Register
of Deeds of Quezon City (RD of QC). They
obtained a loan from the Rehabilitation Finance
Corporation (RFC), now Development Bank of
the Philippines (DBP), and executed a mortgage
security therefor.
They failed to pay the
obligation; hence, the mortgage was foreclosed.
Ruling:
1.) Petitioners argue that Art. 1602 of
the Civil Code applies only when there is no
express agreement or stipulation between the
parties. But in the instant case, there was an
express agreement, therefore inapplicable.
Page 85
Petition DENIED.
_______________________________________
Art. 1602. The contract shall be presumed to be
an equitable mortgage, in any of the following
cases:
(1) When the price of a sale with right to
repurchase is unusually inadequate;
(2) When the vendor remains in possession
as a lessee or otherwise;
(3) When upon or after the expiration of the
right to repurchase another instrument
extending the period of redemption or
granting a new period is executed;
(4) When the purchaser retains for himself a
part of the purchase price;
(5) When the vendor binds himself to pay
the taxes on the thing sold;
(6) In any other case where it may be fairly
inferred that the real intention of the
parties is that the transaction shall secure
the payment of a debt or the performance
of any other obligation.
In any of the foregoing cases, any money,
fruits, or other benefit to be received by the
vendee as rent or otherwise shall be
considered as interest which shall be subject
to the usury laws.
Art. 1604. The provisions of article 1602 shall
also apply to a contract purporting to be an
absolute sale.
Page 86
Second Division
Mendoza, J:
Facts:
Gorgonio Macainan was the owner of
several properties in Bacolod City. Upon his
death in 1966, his estate was divided among his
heirs, including Berbonia who had predeceased
him. In turn, her children Rafael, Lourdes and
Teresita, surnamed Medalla succeeded to her
inheritance. Rafael Medallas share consisted of
five hectares in Lot No. 1031 and 1,197 sq.m. in
the Lopez Jaena property.
Issues:
1.) Whether Art. 1602 of the Civil Code
is present in the instant case.
2.) Whether the contract of deed of
absolute sale executed is the law
between the parties.
Ruling:
1.) Under Art. 1602 in relation to Art.
1604 of the Civil Code, a contract purporting to
be an absolute sale is presumed to be an
equitable mortgage
Page 87
Petition DENIED.
Page 88
MELO, J.:
Private
respondents
Nicanor
de
Guzman, Jr. and Ester de Guzman were the
owners of three lots located in Greenhills
Subdivision, San Juan, Metro Manila. In 1971,
they constructed, at a cost of P3 million, a 1,200
square meter residential house on two of the
lots. In 1987, the market value of the lots already
ranged from P4,000 to P5,000 per square meter
while the house was worth about P10 million.
Sometime in 1987, Nicanor de Guzman,
Jr. decided to run for the position of
Representative of the Fourth District of Nueva
Ecija. Sometime in April 1987, however, de
Guzmans campaign fund began to run dry and
he was compelled to borrow P2.5 Million from
Mario Siochi. The de Guzman spouses were
required to sign, as a sort of collateral, a deed of
sale dated April 10, 1987 whereby they
purportedly sold 2 of the 3 lots along with the
improvements thereon, to Siochi. De Guzman
was able to obtain two more loans of
P500,000.00 each from Siochi. No additional
collateral was required, the "deed of sale" being
more than sufficient to cover the original P2.5
million loan and the additional P1 million loan.
Despite the "deed of sale," however, the de
Guzmans remained in possession of the
property. Aside from these loans, de Guzman
also owed Siochi several debts, to repay these
other loans, the de Guzmans agreed with Siochi
to have their 1,411 square meter vacant lot,
which had already been "sold" to Siochi under
the April 10, 1987 deed of sale, sold. The sale of
the same amounted to P4.8 Million, the
proceeds of which were all retained by Siochi. In
the meantime and without the knowledge of the
de Guzman spouses, Siochi had the spouses
TCT cancelled on the basis of the deed of sale
executed by the spouses on April 10, 1987, and
had new Torrens titles issued in his name.
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 89
Page 90
GONZAGA-REYES, J.:
Petitioners were the registered owners
of a 225-square meter parcel of land located in
Antipolo, Rizal covered by Transfer Certificate of
Title No. 165009. Sometime in August 1991,
petitioners mortgaged this property to Florencio
and Nestor Carlos in the amount of
P150,000.00.
About a year later, the mortgage
obligation had increased to P500,000.00 and
fearing foreclosure of the property, petitioners
asked their son-in-law, herein private respondent
Ricardo delos Reyes, for help in redeeming their
property. Private respondent delos Reyes
agreed to redeem the property but because he
allegedly had no money then for the purpose he
solicited the assistance of private respondent
Josefina Cruz, a family friend of the delos
Reyeses and an employee of the Land Bank of
the Philippines.
It was agreed that petitioners will sign a
deed of sale conveying the mortgaged property
in favor of private respondent Cruz and
thereafter, Cruz will apply for a housing loan with
Land Bank, using the subject property as
collateral. It was further agreed that out of the
proceeds of the loan, P500,000.00 will be paid
to the Carloses as mortgagees, and an such
balance will be applied by petitioners for capital
gains tax, expenses for the cancellation of the
mortgage to the Carloses, transfer of title to
Josefina Cruz, and registration of a mortgage in
favor of Land Bank. Moreover, the monthly
amortization on the housing loan which was
supposed to be deducted from the salary of
private respondent Cruz will be reimbursed by
private respondent delos Reyes.
On September 29, 1992, the Land Bank
issued a letter of guarantee in favor of the
Carloses, informing them that Cruzs loan had
been approved. On October 22, 1992, Transfer
Certificate of Title No. 165009 was cancelled
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 91
Page 92
OF
Page 94
Page 96
Facts:
Issue:
Whether or not the transaction between the
parties was not a sale but an equitable
mortgage?
Ruling:
Petition Denied
Coming
now to
the temporary
possession of the subject land by
petitioner, the court find credibility in
private respondents claim that the
spouses Tupas gave petitioner a ten
(10) year period to occupy the subject
land as part of their mortgage
agreement. That period of time may well
be deemed as the time allotted to the
spouses Tupas, as mortgagors, to pay
their indebtedness to petitioner. That
petitioner vacated the subject land after
having occupied the same only
underscores the fact that no sale took
place between the parties. Otherwise,
why would she, as rightful owner,
abandon the property she already was
in possession of, only to leave
possession of the same to her vendor?
Page 98
Page 99
shown by Tax Declaration No. 9407335-A, while Lot No. 4035 C-4 with an
area of 4,420 square meters has a
market value of P4,120.00 and an
assessed value of P1,460.00, per Tax
Declaration No. 94-07355-A; (2) their
(plaintiffs) continued payment of realty
taxes; (3) the land title and tax
declaration remained in the names of
Jacinto Nemeo and Dalmacia
Dayangco-Nemeo; (4) their
possession, particularly Justo
Nemeos, of the subject lots with the
petitioner spouses only given two-thirds
share of the harvest therefrom; and (5)
the pactum commissorium stipulation in
the subject contract.
Issue:
Whether or not the transaction between the
parties was not a sale but an equitable
mortgage?
Ruling:
Petition denied.
Page 100
Page 101
THIRD DIVISION
Page 102
Page 103
FIRST DIVISION
Ponente: SANDOVAL-GUTIERREZ
Page 104
Third Division
ISSUE:
FACTS:
Hamilton Salak and Shirley G. Unangst
were arrested on February 02, 1997 for estafa
and carnapping for the formers failure to return
a car he rented from Benjamin Bautista.
Bautista demanded from Salak the sum of Php
232, 372.00 as payment for car rental fees,
other fees and incidental expenses in the
retrieval of the car.
Salak and the respondent proposed to
sell to the petitioner a house & lot under the
Unangsts name to amicably settle the cases
filed against them and their accounts with the
same,
which
the
petitioner
welcomed.
Furthermore, petitioner agrees to pay the
mortgage loan over the subject property to a
certain Jojo Lee (as the property was then set to
be publicly auctioned).
They executed a deed of sale with right
to repurchase within 30 days, and that the
respondents shall pay the taxes and utility bills
related to the subject property.
Upon the failure of the respondent to
repurchase, petitioner filed a complaint for
specific performance or recovery of possession,
for sum of money, for consolidation of
ownership,
and
damages
against
the
respondent.
After the RTC deciding in favor of the
petitioner, respondent now argues before the CA
to annul the deed, arguing that respondent
Unangsts consent to the deed was procured
under duress and assuming arguendo that the
same was freely given the same partakes the
nature of an equitable mortgage and not of sale.
The CA ruled in favor of the respondent; hence
this petition for review on certiorari.
HELD:
The Deed of Sale with right to
repurchase is that of an equitable mortgage.
The petition is denied for lack of merit.
RATIO DECIDENDI:
The Deed of Sale with right to
repurchase qualifies as an equitable mortgage
under Article 1602, for respondent merely
secured the payment of the unpaid car rentals
and the amount advanced by petioner to Jojo
Lee.
Provided for are the cases to presume a
contract to be an equitable mortgage under
Article 1602 (NCC):
(1.)
(2.)
(3.)
(4.)
(5.)
(6.)
Page 105
Page 106
(1.)
Octavio
and
Lorbes
(petitioners)
mortgaged their parcel of land in Antipolo, Rizal
to Florencio and Nestor Carlos for Php 150,
000.00 that subsequently increased to Php 500,
000.00 in a year.
In fear of foreclosure,
petitioner asked their son-in-law, delos Reyes
(herein respondent), for help in redeeming the
subject property. Since the latter has no money
for that purpose, he solicited the help of his
friend Josefina Cruz, a Land Bank of the
Philippines (LBP) employee.
It was agreed upon by the parties that:
(1.)
(2.)
(3.)
(4.)
(5.)
(6.)
(2.)
ISSUES:
Whether the Deed of Absolute Sale
entered into by the parties was an equitable
mortgage?
HELD:
Page 107
RATIO DECIDENDI:
There is no conclusive test to determine
whether a deed of absolute sale on its face is
really a simple loan accommodation secured by
a mortgage, ergo; the decisive decisive factor in
evaluating such agreement is the intention of the
parties, as shown not necessarily by the
terminology used in the contract but by all the
surrounding circumstances, such as the relative
situation of the parties at that time, the attitude,
acts, conduct, declarations of the parties, the
negotiations between them leading to the deed,
and generally, all pertinent facts having a
tendency to fix and determine the real nature of
their design and understanding. As such,
documentary and parol evidence may be
submitted and admitted to prove the intention of
the parties.
Provided for are the cases to presume a
contract to be an equitable mortgage under
Article 1602 (NCC):
(1.)
(2.)
(3.)
(4.)
(5.)
(6.)
Page 108
FRANCISCO, J.:
FACTS
THIRD DIVISION
Page 109
ISSUE
RULING
Page 111
SECOND DIVISION
QUISUMBING, J.:
FACTS
ISSUE
RULING
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
force as
repel or
unlawful
property.
Page 114
brought
the
ISSUE:
Whether or not the contract between the
parties was an absolute sale with pacto de retro.
HELD: NO.(it was
equitable mortgage)
held
as
mere
Page 116
FACTS:
On April 13, 1988, Diosdada Nueva, with marital
consent, sold under a pacto de retro, a parcel of
land (2,033 sq.m.) situated in Cagayan de Oro
City to Agan for P21k.The property is covered by
TCT No. 25370 and registered in the name of
Spouses Andres and Diosdada Nueva.
The agreement is evidenced by a public
instrument entitled Deed of Sale under a Pacto
de Retro executed and duly signed by the late
Diosdada and Philadelphia. The parties agreed
that the Nuevas are granted the right to
repurchase the property sold, within six (6)
months for the same consideration.
Petitioners failed to repurchase the property
within the stipulated period.
On July 5, 1991, upon the death of Diosdada
Nueva, the property was extrajudicially
partitioned where Andres sold his interest in the
land in question to his daughter Ann and son
Lou. Since the title to the property was allegedly
lost during the fire that razed the property on
March 19, 1990 where Diosdada died, title was
reconstituted and subsequently transferred and
registered in the name of Ann and Lou Nueva.
On June 19, 1992, Philadelphia filed a petition
for consolidation of ownership against Spouses
Nuevas with RTC of Cagayan de Oro City xxx In
their answer filed on the Nuevas alleged that the
pacto de retro sale was actually an equitable
mortgage, the consideration for the sale being
only P21k as against its Fair Market Value of
P81k pursuant to Tax Declaration.
On August 3, 2000, the judgment consolidating
ownership over the disputed property in favor of
Philadelphia was rendered by RTC. However,
the second paragraph of the dispositive portion
gave the vendors a period of 30 days from
receipt of the decision within which to redeem
the property. The dispositive portion of the
decision reads:
WHEREFORE, based on the evidence
presented, the ownership in the vendee is
hereby consolidated by virtue of the failure of the
vendors to redeem the property described in the
Deed of Sale under Pacto de Retro xxx
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
HELD: YES.
There is no ambiguity at all in the
decision that would warrant clarification. If at all,
the ambiguity is merely ostensible. At first blush,
the dispositive portion of the RTC Decision
declaring the consolidation of ownership of the
property in petitioner, on one hand, and granting
respondents thirty (30) days to repurchase the
property, on the other, appears inconsistent.
The dispositive portion, however, also makes
reference to the third paragraph of Article 1606
of the New Civil Code. Taken together, it
becomes obvious that the consolidation of the
property in petitioner is subject to the
suspensive condition of respondents failure to
repurchase within the thirty-day period.
At any rate, the grant of the right to repurchase
to respondents is in accordance with the third
paragraph of Article 1606, a provision not found
in the old Civil Code. The legislative intent
behind this Article, along with Articles 1602-1605
and 1607 of the same Code, is to accord the
vendor a retro the maximum safeguards for the
protection of his legal rights under the true
agreement of the parties.
Experience has
demonstrated too often that many sales with
right to repurchase have been devised only to
circumvent or ignore our usury laws and for this
reason, the law looks upon then with disfavor.
Article 1606 is intended to cover suits where the
seller claims that the real intention was a loan
with equitable mortgage but decides otherwise.
The seller, however, must entertain a good faith
belief that the contract is an equitable mortgage.
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 118
Page 119
August 9, 2004
Page 120
CORONA, J.:
Facts:
Respondent spouses Januario Antonio
Veloso and Natividad Veloso obtained a loan of
P1,300,000 from Family Bank and Trust
Company. The loan was secured by a deed of
mortgage over three parcels of lands owned by
the spouses.
Issue:
Ratio Decidendi:
Despite the opposition of petitioner, the
trial court ordered the release to the
respondents of P1,400,000 of the consigned
amount. The balance of P100,000 is to take the
place of the injunction bond to answer for
whatever damages petitioner might suffer
because of the issuance of the preliminary
injunction previously issued by a different branch
of RTC and then later lifted.
Page 121
Page 122
December 4, 1995
GR No. 104114
Bellosillo, J.:
FACTS:
A piece of land is disputed by Lee Chuy Corp.
and Marc Realty. Originally the property was coowned by Ruben Jacinto to the extent of onesixth and the Bascaras and Ernesto Jacinto who
collectively owned the remaining five-sixths.
On April 30, 1981, sale bet. Ruben Jacinto, of
his one-sixth pro-indiviso share, and Lee Chuy
was duly registered. The Bascaras and E.
Jacinto sold theirs to Marc Realty. The same
was registered on Oct. 16, 1989.
Lee Chuy claims it was never informed of the
other sale. Marc Realty claims it was verbally
informed and was given a copy of the deed of
sale.
On 13 November 1989 LEE CHUY REALTY filed
a complaint for legal redemption against MARC
REALTY and consigned in court a manager's
check for 614,400. In its Amended Answer with
Counterclaim with Motion to Dismiss, MARC
REALTY insisted that the complaint be
dismissed for failure to state a cause of action
there being no allegation of prior valid tender of
payment nor a prior valid notice of consignation.
The trial court ruled in favour of Lee Chuy and
decreed that neither a separate offer to redeem
nor a formal notice of consignation are
necessary for the reason that the filing of the
action itself, within the period of redemption, is
equivalent to a formal offer to redeem.
In respondents appeal to CA, CA reversed trial
courts judgment and decreed in contrary that a
prior tender or offer of redemption is a
prerequisite or precondition to the filing of an
action for legal redemption. Hence, the petition.
ISSUE: W/N THE FILING OF THE ACTION
ITSELF IS EQUIVALENT TO A FORMAL
OFFER TO REDEEM
RULING:
Petition Granted.
Primary Structures Corp. vs. Sps. Anthony
and Susan T. Valencia
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 123
GR No.150060
First Division
Ponente: Vitug, J.
Page 124
Page 125
Facts:
Sofia P. Martinez was the registered owner of
two (2) parcels of land in Tacloban City. On
1961, she leased the lots to Yu Siong, father of
petitioner for a period of ten (10) years. The
contract required the lessee to construct a
commercial building on the property which shall
become the property of Sofia upoon expiration
of the lease. On 1973, the contract was renewed
with explicit stipulation that the new owner of the
building is Sofia. Sofia then sold the lot and
building to her daughter, private respondent
Teodora P. Martinez. After the new lease
contract expired, it was no longer renewed by
the party. Petitioner continued posession and
regulary paid monthly rentals to Sofia until her
death. After her death the rentals were paid to
Teodora. On 1989, private respondent sent a
letter to petitioner informing him of her intention
to sell the premises to one Mrs. Petilla which the
petitioner only received a month after. The
petitioner sought to purchase the property.
Petitioner filed a verified complaint against
Teodora for the annulment of the Deed of Sale
by her mother in her favor stating that they have
preferential right over the land. However,
Teodora sold the property to respondent Tiu
Uyping. Petitioner prays for the nullity of the
second sale. Trial court rendered decision in
favor of the petitioner. Court of Appeals rendered
a decision reversing the trial court.
HTP.
Issues:
Whether the CA erred in declaring the sale
between Sofia and Teodora valid?
Whether Petitioner has the right of first refusal to
assert against the private respondent?
Rulings:
1. Teodora Martinez had the right, as
lawful owner of the leased premises, to
sell the same to private respondent Tiu
Uypin brothers. However, the sale
between her and her mother was void
for being fictitious. This was established
by several badges of simulation proving
that the sale was not intended to have
any legal effect between them. Some
evidence of simulation is the late
notarization and Teodoras signature not
as an owner but merely as an
instrumental witness. Also,
Sofia
continued to receive the rentals until her
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Facts:
- Rufino Cabales died on July 4, 1966 and left a
5, 714 square meter parcel of land to his wife
and children
- On July 26, 1971, brothers and co owners sold
the property to Dr. Corrompido for P 2,000 with
right to repurchase within eight years. The
siblings divided the proceeds of the sale among
them.
--The following month or on August 18, 1971,
Alberto secured a note (vale) from Dr.
Corrompido in the amount of P300.00.
In 1972, Alberto died leaving his wife and son,
petitioner Nelson.
On December 18, 1975, within the eight-year
redemption period, Bonifacio and Albino
tendered their payment of P666.66 each to Dr.
Corrompido. But Dr. Corrompido only released
the document of sale with pacto de retro after
Saturnina paid for the share of her deceased
son, Alberto, including his vale of P300.00.
On even date, Saturnina and her four (4)
children Bonifacio, Albino, Francisco and
Leonora sold the subject parcel of land to
respondents-spouses Jesus and Anunciacion
Feliano for P8,000.00. The Deed of Sale
provided in its last paragraph, thus:
It is hereby declared and
understood that the amount of
TWO
THOUSAND
TWO
HUNDRED EIGHTY SIX PESOS
(P2,286.00) corresponding and
belonging to the Heirs of Alberto
Cabales and to Rito Cabales who
are still minors upon the execution
of this instrument are held in trust
by the VENDEE and to be paid
and delivered only to them upon
reaching the age of 21.
- On December 17, 1985, the Register of Deeds
of Southern Leyte issued Original Certificate of
Title No. 17035 over the purchased land in the
names of respondents-spouses.
-On December 30, 1985, Saturnina and her four
(4) children executed an affidavit to the effect
that petitioner Nelson would only receive the
amount of P176.34 from respondents-spouses
when he reaches the age of 21 considering that
Saturnina paid Dr. Corrompido P966.66 for the
obligation of petitioner Nelsons late father
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 127
Ratio:
-When Rufino Cabales died intestate, his wife
Saturnina and his six (6) children survived and
succeeded him. Article 996 of the New Civil
Code provides that [i]f a widow or widower and
legitimate children or descendants are left, the
surviving spouse has in the succession the
same share as that of each of the children.
-Verily, the seven (7) heirs inherited equally on
subject property. Petitioner Rito and Alberto,
petitioner Nelsons father, inherited in their own
rights and with equal shares as the others.
-But before partition of subject land was
effected, Alberto died. By operation of law, his
rights and obligations to one-seventh of subject
land were transferred to his legal heirs his wife
and his son petitioner Nelson.
-The first sale with pacto de retro to Dr.
Corrompido by the brothers and co-owners
Bonifacio, Albino and Alberto was valid but only
as to their pro-indiviso shares to the land. When
Alberto died prior to repurchasing his share, his
rights and obligations were transferred to and
assumed by his heirs, namely his wife and his
son, petitioner Nelson. But the records show
that it was Saturnina, Albertos mother, and not
his heirs, who repurchased for him. As correctly
ruled by the Court of Appeals, Saturnina was not
subrogated to Albertos or his heirs rights to the
property when she repurchased the share.
-Upon redemption from Dr. Corrompido, the
subject property was resold to respondentsspouses by the co-owners. Petitioners Rito and
Nelson were then minors and as indicated in the
Deed of Sale, their shares in the proceeds were
held in trust by respondents-spouses to be paid
and delivered to them upon reaching the age of
majority.
-the father, or, in his absence, the mother, is
considered legal administrator of the property
pertaining to the child under his or her parental
authority without need of giving a bond in case
the amount of the property of the child does not
exceed two thousand pesos. Corollary to this,
Rule 93, Section 7 of the Revised Rules of Court
of 1964, applicable to this case, automatically
designates the parent as legal guardian of the
child without need of any judicial appointment in
case the latters property does not exceed two
thousand pesos
Saturnina was clearly petitioner Ritos legal
guardian without necessity of court appointment
considering that the amount of his property or
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 128
Page 129
VALENCIA and
respondents.
SUSAN
T.
VALENCIA,
Facts:
Petitioner is a private corporation in
Cebu City and the registered owner of Lot
situated in Liloan, Cebu. Adjacent to the lot of
petitioner are 3 parcels of land. The 3 lots have
been sold by Hermogenes Mendoza to
respondent spouses.
Petitioner learned of the sale of the lots
then it sent a letter to respondents signifying its
intention to redeem the three lots. Petitioner sent
another letter to respondents tendering payment
of the price paid to Mendoza by respondents for
the lots. Respondents, in response, informed
petitioner that they had no intention of selling the
parcels.
Invoking the provisions of
Articles 1621 and 1623, petitioner filed an action
against respondents to compel the latter to allow
the legal redemption. Petitioner claimed that
neither Mendoza, the previous owner, nor
respondents gave formal or even just a verbal
notice of the sale of the lots as so required by
Article 1623 of the Civil Code.
Regional Trial Court of Cebu
dismissed
petitioners
complaint
and
respondents'
counterclaim.
Both
parties
appealed the decision of the trial court to the
Court of Appeals. The appellate court affirmed
the assailed decision.
Issue:
Whether or not petitioner Primary
Structures Corporation has the right of
redemption over the three parcels of land.
Ruling:
Article 1621 of the Civil Code expresses
that the right of redemption it grants to an
adjoining owner of the property conveyed may
be defeated if it can be shown that the buyer
does not own any other rural land. The appellate
court, sustaining the trial court, has said that
there has been no evidence to show that
respondents are not themselves owners of rural
lands for the exclusionary clause of the law to
apply.
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
July 4, 2007
Page 130
Facts:
Edgar Ledonio obtained from Patrocinio
S. Picache two loans with the amount of
P60,000.00, and covered by promissory notes
duly signed by him.
Later on, Picache transferred his due
from
Ledonio
to
Capitol
Development
Corporation .
However, Ledonio failed to pay any of
the loans covered by the promissory notes when
they became due. The corporation demanded
payment from him but refused to do so. He
denied that he made such promissory notes in
favor of Picache and he further alleged that he
only signed the promissory notes as a result of
intimidation and fraud. He alleged that when he
made the promissory notes, they were only used
by Picache by taking advantage of his signature.
Page 131
Issue:
whether or not Caltex Philippines has a better
right over the Certificate of time deposits?
Held:
Security Bank has a better right because the
assignment of the CTDs made by Angel de la
Cruz in favor of respondent bank was embodied
in a public instrument. Art. 1625. An assignment
of credit, right or action shall produce no effect
as against third persons, unless it appears in a
public instrument, or the instrument is recorded
Sales Case Digests
UST Faculty of Civil Law
2A SY 2009-2010
Page 132
October 8, 2003
First Division
Justice Ynares-Santiago
Facts:
Respondent KJS ECO_FORMWORK System
Phil., Inc. is a corporation engaged in the sale of
steel scaffoldings. Sonny Lo, on the other hand
is a building contractor.
The petitioner ordered scaffolding equipments
worth P540, 425.80 from respondent and paid a
downpayment of P150,000. The balance was
made payable in ten monthly installments.
The respondent delivered the equipments to
petitioner but Sonny Lo was only able to pay the
first two monthly installments because his
business encountered financial difficulties.
Despite the situation, the petitioner and
respondent executed a Deed of Assignment
whereby the petitioner assigned to respondent
his receivables in the amount of P335, 462.80
from Jomero Realty Corporation.
When the respondent tried to collect the said
credit from the corporation. Jomero Realty
Corporation refused to honor the Deed of
Assignment because it claimed that petitioner
was also indebted to it.
The respondent filed an action for recovery of a
sum of money before the RTC of Makati.The trial
court dismissed the complaint on the ground that
the assignment of credit extinguished the
obligation when they executed the Deed of
Assignment.
The respondent appealed the decision to the
Court of Appeals and the said court reverses the
appealed decision.
Issue:
Whether or not the Deed of Assignment that was
executed extinguished the obligation of the
petitioner.
Ruling:
The decision of the Court of Appeals ordering
petitioner to pay the respondent the sum of
P335,
462.14
is
AFFIRMED
with
MODIFICATION.
Page 133
ATOK
FINANCE
CORPORATION,
petitioner vs. COURT OF APPEALS, SANYU
CHEMICAL CORPORATION, DANILO E.
ARRIETA, NENITA B. ARRIETA, PABLITO
BERMUNDO
and
LEOPOLDO
HALILI,
respondents.
G.R. No. 80078 May 18, 1993
FELICIANO, J.:
FACTS: Private respondents Sanyu Chemical
corporation ("Sanyu Chemical") as principal and
Sanyu Trading Corporation ("Sanyu Trading")
along with individual private stockholders of
Sanyu Chemical, namely, private respondent
spouses Danilo E. Halili and Pablico Bermundo
as sureties, executed in the continuing
Suretyship Agreement in favor of Atok Finance
as creditor. Under this Agreement, Sanyu
Trading and the individual private respondents
who were officers and stockholders of Sanyu
Chemical
did
jointly
and
severally
unconditionally guarantee to ATOK FINANCE
CORPORATION the full, faithful and prompt
payment and discharge of any and all
indebtedness of private respondent to the
Creditor Atok. The word "indebtedness" is used
herein in its most comprehensive sense and
includes any and all advances, debts,
obligations and liabilities of Principal or any one
or more of them.
On 27 November 1981, Sanyu Chemical
assigned its trade receivables outstanding as of
27 November 1981 with a total face value of
P125, 871.00, to Atok Finance in consideration
of receipt from Atok Finance of the amount of
P105, 000.00. The assigned receivables carried
a standard term of thirty (30) days; it appeared,
however, that the standard commercial practice
was to grant an extension up to one hundred
twenty (120) days without penalties. Later,
additional trade receivables were assigned by
Sanyu Chemical to Atok Finance with a total
face value of P100, 378.45.
On 13 January 1984, Atok Finance commenced
action against Sanyu Chemical, the Arrieta
spouses, Pablito Bermundo and Leopoldo Halili
before the Regional Trial Court of Manila to
collect the sum of P120, 240.00 plus penalty
charges amounting to P0.03 for every peso due
and payable for each month starting from 1
September 1983. Atok Finance alleged that
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UST Faculty of Civil Law
2A SY 2009-2010
Page 135