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SALES RULING:

Roberto D. Tuazon v Lourdes Q. Del This case involves an option


Rosario-Suarez, et al. G.R. No. 168325 contract and not a contract of a right of
December 8, 2010 FIRST DIVISION first refusal. An option as a contract, an
agreement in writing to give a person the
Contract of a right of first refusal v. ‘option’ to purchase lands within a given
option contract time at a named price is neither a sale
FACTS: nor an agreement to sell. It is simply a
contract by which the owner of property
Respondent Lourdes Q. Del agrees with another person that he shall
Rosario-Suarez (Lourdes) was the owner have the right to buy his property at a
of a parcel of land. Petitioner Roberto D. fixed price within a certain time. While in
Tuazon (Roberto) and Lourdes executed a a right of first refusal, while the object
Contract of Lease over the might be made determinate, the exercise
abovementioned parcel of land for a of the right, however, would be dependent
period of three years. During the not only on the grantor's eventual
effectivity of the lease, Lourdes sent a intention to enter into a binding juridical
letter to Roberto where she offered to sell relation with another but also on terms,
to the latter subject parcel of land. On including the price, that obviously are yet
June 19, 1997, or more than four months to be later firmed up.
after the expiration of the Contract of
Lease, Lourdes sold subject parcel of land Under Article 1324 it states that
to her only child, Catalina Suarez-De there is a great difference between the
Leon, her son-in-law Wilfredo De Leon, effects of an option which is without a
and her two grandsons, Miguel Luis S. De consideration from one which is founded
Leon and Rommel S. De Leon (the De upon a consideration. If the option is
Leons). The new owners, notified Roberto without any consideration, the offeror
to vacate the premises. Roberto refused may withdraw his offer by communicating
hence, the De Leons filed a complaint for such withdrawal to the offeree at any time
Unlawful Detainer against him. before acceptance; if it is founded upon a
consideration, the offeror cannot
MeTC rendered a withdraw his offer before the lapse of the
Decision9 ordering Roberto to vacate the period agreed upon. While under Article
property for non-payment of rentals and 1479 of the new Civil Code is "an option
expiration of the contract. The trial court to sell," or "a promise to buy or to sell,",
declared that the Deed of Absolute Sale In other words, "an accepted unilateral
made by Lourdes in favor of the De Leons promise can only have a binding effect if
as valid and binding. The offer made by supported by a consideration, which
Lourdes to Roberto did not ripen into a means that the option can still be
contract to sell because the price offered withdrawn, even if accepted, if the same
by the former was not acceptable to the is not supported by any consideration.
latter. The offer made by Lourdes is no Hence, it is not disputed that the option
longer binding and effective at the time is without consideration. A unilateral
she decided to sell the subject lot to the promise to buy or sell is a mere offer,
De Leons because the same was not which is not converted into a contract
accepted by Roberto. the CA affirmed the except at the moment it is
Decision of the RTC. accepted. Acceptance is the act that gives
life to a juridical obligation, because,
before the promise is accepted, the obligation, the BANK, instead of foreclosing
promissor may withdraw it at any time. the REM, agreed to a dation in payment or
a dacion en pago. It stated that DELTA
Hence, In this case, it is assigns, transfers, and conveys and sets over
undisputed that Roberto did not accept [to] the assignee that real estate with the
the terms stated in the letter of Lourdes building and improvements existing thereon,
as he negotiated for a much lower price. “in payment of the total obligation owing
Roberto’s act of negotiating for a much to [the Bank]”. Enriquez filed a complaint
lower price was a counter-offer and is against DELTA and the BANK alleging that
therefore not an acceptance of the offer of DELTA violated the terms of its License to
Lourdes. The counter-offer of Roberto for Sell.
a much lower price was not accepted by
Lourdes. There is therefore no contract HLURB upheld the validity of the
that was perfected between them with contract to sell between DELTA and the
regard to the sale of subject property. BANK. The Board of commissioners upheld
Roberto, thus, does not have any right to the validity of the contract to sell between
demand that the property be sold to him DELTA and Enriquez despite the alleged
at the price for which it was sold to the violation of the price ceilings. The Office of
De Leons neither does he have the right the President upheld HLURB Decision.
to demand that said sale to the De Leons However, the CA ruled against the validity of
be annulled. the dacion en pago executed in favor of the
BANK on the ground that DELTA had
earlier relinquished its ownership over its Lot
in favor of Enriquez via the Contract to Sell.
Since the dacion en pago is invalid it held
Luzon Development Bank v Angeles that DELTA remained indebted to the BANK.
Catherine Enriquez G.R. No. 168646
January 12, 2011 FIRST DIVISION RULING:

Dacion en Pago Dacion en pago extinguished the loan


obligation. Like in all contracts, the intention
FACTS:
of the parties to the dation in payment is
Petitioner DELTA is a domestic paramount and controlling. The contractual
corporation engaged in the business of
intention determines whether the property
developing and selling real estate
properties, particularly Delta Homes I. subject of the dation will be considered as
DELTA is owned by Ricardo De Leon (De the full equivalent of the debt and will
Leon), who is the registered owner of a parcel therefore serve as full satisfaction for the
of land. De Leon and his spouse obtained debt. The dation in payment extinguishes the
a P4 million loan from the BANK for the
obligation to the extent of the value of the
express purpose of developing Delta Homes I.
To secure the loan, the spouses De Leon thing delivered, either as agreed upon by the
executed in favor of the BANK a real estate parties or as may be proved, unless the
mortgage (REM) on several of their parties by agreement, express or implied, or
properties. DELTA executed a Contract to
by their silence, consider the thing as
Sell with respondent Angeles Catherine
equivalent to the obligation, in which case
Enriquez (Enriquez) over the house and lot.
When DELTA defaulted on its loan the obligation is totally extinguished.
bill of lading was prepared without its
consent. MOF filed a case for sum of money
In the case at bar, the Dacion en
before the Metropolitan Trial Court
Pago executed by DELTA and the BANK (MeTC), alleging that Shin Yang, a regular
indicates a clear intention by the parties that client, caused the importation and shipment
the assigned properties would serve as full of the goods and assured it that ocean freight
and other charges would be paid upon
payment for DELTAs entire obligation.
arrival of the goods in Manila. Yet, after
Without any reservation or condition,
Hanjin's compliance, Shin Yang unjustly
the Dacion stated that the assigned breached its obligation to pay. MOF argued
properties served as full payment of DELTAs that Shin Yang, as the named consignee in
total obligation to the BANK. The BANK the bill of lading, entered itself as a party to
the contract and bound itself to the Freight
accepted said properties as equivalent of the
Collect arrangement.
loaned amount and as full satisfaction of
DELTAs debt. The MeTC ruled in favor of MOF. It
ruled that Shin Yang cannot disclaim being a
party to the contract of affreightment. The
RTC affirmed in Toto the MeTC’s decision.
The CA dismissed MOFs complaint and
MOF Conpmany, Inc. v Shin Yang Brokerage
refused to award any form of damages or
Corporation G.R. No. 172822 December 18,
attorneys fees. It opined that MOF failed to
2009 SECOND DIVISION
substantiate its claim that Shin Yang had a
Bill of Laiding hand in the importation of the articles to
the Philippines or that it gave its consent to
FACTS: be a consignee of the subject goods.
Halla Trading Co., a company based RULING:
in Korea, shipped to Manila secondhand
cars and other articles on board the vessel A consignee, although not a signatory
Hanjin Busan 0238W. The bill of lading to the contract of carriage between the
covering the shipment, hich was prepared by shipper and the carrier, becomes a party to
the carrier Hanjin Shipping Co., Ltd. the contract by reason of either a) the
(Hanjin), named respondent Shin Yang relationship of agency between the consignee
Brokerage Corp. (Shin Yang) as the and the shipper/ consignor; b) the
consignee and indicated that payment was unequivocal acceptance of the bill of lading
on a Freight Collect basis, the shipment delivered to the consignee, with full
arrived in Manila. Thereafter, petitioner knowledge of its contents or c) availment of
MOF Company, Inc. (MOF), Hanjins the stipulation pour autrui, i.e., when the
exclusive general agent in the Philippines, consignee, a third person, demands before
repeatedly demanded the payment of ocean the carrier the fulfillment of the stipulation
freight, documentation fee and terminal made by the consignor/shipper in the
handling charges from Shin Yang. The latter, consignees favor, specifically the delivery of
however, failed and refused to pay the goods/cargoes shipped.
contending that it did not cause the
In the instant case, Shin Yang
importation of the goods, that it is only the
consistently denied in all of its pleadings that
Consolidator of the said shipment, that the
it authorized Halla Trading, Co. to ship the
ultimate consignee did not endorse in its
goods on its behalf; or that it got hold of the
favor the original bill of lading and that the
bill of lading covering the shipment or that it lot fenced and had a nipa hut constructed
demanded the release of the cargo. Basic is thereon. The other portions of his land were,
the rule in evidence that the burden of proof likewise, sold by Lazaro to several buyers.
lies upon him who asserts it, not upon him Later on, Lazaro executed a Partition
who denies, since, by the nature of things, he Agreement in favor of Magallanes and the
who denies a fact cannot produce any proof aforesaid buyers delineating the portions to
of it. Thus, MOF has the burden to be owned by each buyer. It appears that the
controvert all these denials, it being insistent Partition Agreement became the subject of
that Shin Yang asserted itself as the legal disputes because Lazaro refused to turn
consignee and the one that caused the over the mother title, to the aforesaid buyers,
shipment of the goods to the Philippines. thus, preventing them from titling in their
Here, MOF failed to meet the required names the subdivided portions
quantum of proof. Other than presenting the thereof. Lazaro sold those previously
bill of lading, which, at most, proves that the assigned to the buyers, to her niece, Lynn
carrier acknowledged receipt of the subject Lazaro, and the latters husband, Rogelio
cargo from the shipper and that the Natividad (Spouses Natividad), who the latter
consignee named is to shoulder the then subdivided Lots. Spouses Natividad sold
freightage, MOF has not adduced any other a portion of a Lot (subject lot) to petitioner
credible evidence to strengthen its cause of Ramy Pudadera (who later married petitioner
action. It did not even present any witness in Zenaida Pudadera on July 31, 1989) as
support of its allegation that it was Shin evidenced by a Deed of Sale. Sometime
Yang which furnished all the details thereafter Magallanes caused the
indicated in the bill of lading and that Shin construction of two houses of strong
Yang consented to shoulder the shipment materials on the subject lot, petitioners filed
costs. There is also nothing in the records an action for forcible entry against
which would indicate that Shin Yang was an Magallanes before the trial court, however, it
agent of Halla Trading Co. or that it exercised was later on dismissed the action. It held
any act that would bind it as a named that Magallanes was first in possession of the
consignee. Thus, the CA correctly dismissed subject lot by virtue of the Deed of Definite
the suit for failure of petitioner to establish Sale, they also found that when petitioner
its cause against respondent. Ramy Pudadera bought the subject lot from
Spouses Natividad, the former had notice
that someone else was already in possession
Spouses Ramy and Zenaida Pudadera v of the subject lot.
Ireneo Magallanes G.R. No. 170073 October
18, 2010 FIRST DIVISION The trial court ruled that respondents
are the rightful owners of the subject lot
Double Sale
which was sold by Lazaro to their
FACTS: predecessor-in-interest, Magallanes, When
Lazaro sold the subject lot for a second time
Belen Consing Lazaro (Lazaro) was
the absolute owner of a parcel of land, Lazaro to Spouses Natividad, no rights were
sold a portion of his lot to Daisy Teresa transmitted because, by then, Magallanes
Cortel Magallanes (Magallanes) under a was already the owner thereof. For the same
Contract of Sale upon full payment of the reason, when Spouses Natividad
monthly installments, Lazaro executed a
subsequently sold the subject lot to
Deed of Definite Sale in favor of
Magallanes. Thereafter, Magallanes had the petitioners nothing was transferred to the
latter. The trial court further held that contract ripens into full ownership through
petitioners cannot be considered buyers in prior registration as provided by law. One is
good faith and for value because after considered a purchaser in good faith if he
Magallanes bought the subject lot from buys the property without notice that some
Lazaro, Magallanes immediately took other person has a right to or interest in
possession of the lot, and constructed a such property and pays its fair price before
fence with barbed wire around the property. he has notice of the adverse claims and
The presence of these structures should, interest of another person in the same
thus, have alerted petitioners to the possible property. Well-settled is the rule that every
flaw in the title of the Spouses Natividad person dealing with registered land may
considering that petitioners visited the safely rely on the correctness of the certificate
subject lot several times before purchasing of title issued therefor and the law will in no
the same. The Court of Appeals affirmed the way oblige him to go beyond the certificate to
trial court. determine the condition of the property.
However, this rule shall not apply when the
RULING:
party has actual knowledge of facts and
The question before the Court is that, circumstances that would impel a
who between petitioners and respondents reasonably cautious man to make such
have a better right over the subject Lot. inquiry or when the purchaser has
Under Article 1544, in case of a double sale knowledge of a defect or the lack of title in
of immovables, ownership shall belong to (1) his vendor or of sufficient facts to induce a
the first registrant in good faith; (2) then, the reasonably prudent man to inquire into the
first possessor in good faith; and (3) finally, status of the title of the property in litigation.
the buyer who in good faith presents the is mere refusal to believe that such defect
oldest title. However, mere registration is not exists, or his wilful closing of his eyes to the
enough to confer ownership. The law possibility of the existence of a defect in his
requires that the second buyer must have vendors title will not make him an innocent
acquired and registered the immovable purchaser for value if it later develops that
property in good faith. In order for the second the title was in fact defective, and it appears
buyer to displace the first buyer, the that he had such notice of the defect had he
following must be shown: (1) the second acted with that measure of precaution which
buyer must show that he acted in good faith may reasonably be required of a prudent
(i.e., in ignorance of the first sale and of the man in a like situation.
first buyers rights) from the time of
In the case at bar, both the trial court
acquisition until title is transferred to him by
and CA found that petitioners were not
registration or failing registration, by delivery
buyers and registrants in good faith owing to
of possession; and (2) the second buyer must
the fact that Magallanes constructed a fence
show continuing good faith and innocence or
and small hut on the subject lot and has
lack of knowledge of the first sale until his
been in actual physical possession. Hence,
petitioners were aware or should have been
aware of Magallanes prior physical
possession and claim of ownership over the
subject lot when they visited the lot on
several occasions prior to the sale thereof.