ALESNA, JUSTIN ROSS C.

SALES (SATURDAY 4:00 - 6:00)

DIZON VS COURT OF APPEALS

GR # 122544

FACTS:

Overland Express Lines, Inc entered into a contract of lease with option to buy with
Regina Dizon over a contended land with the term set to a year
during the period mentioned, Overland Express lines was granted an option to pur-
chase and thereafter, a lease shall be on per month basis with montly rental.
consequently, Overland Express Lines failed to pay for the increased rental and the
petitioners filed an ejectment case against them.
it was also contented that a perfect contract of sale was executed between the par-
ties on the leased premises and pursuant to the option to buy agreement
responded then acquired the rights of a vendee in a contract of sale

ISSUE:

was there a perfected contract of sale between the parties

HELD:

The Court has ruled that the contract of sale is perfected at the moment that there be a
meeting of the minds between the two contracting parties as regard to the object of the con-
tract and upon the price. From the moment of the conception of the contract, the parties have
entered into an agreement wherein the parties reciprocally demand performance. In conclu-
sion, sale is a consensual contract that proves its existence through competent proof.

In the given case, respodent gave 300,000 to petitioners on the erroneous presumption that
the said amount perfected a contract of sale pursuant to the Contract Of Lease With Option To
Buy. There was no valid consent by the petitioners on the supposed sale entered by Dizon, as
petitioner’s agent. As provided in New civil Code, there was no showing that petitioners have
consented to the act of Dizon nor have they authorized her to act on their behalf. What re-
spondent should have done was ascertain the extent of authority of Dizon. Respondent cannot
seek relief on the supposed agency.

PRINCIPLE:
A Contract of Sale is perfected at the moment that there be a meeting of the minds be-
tween the two contracting parties as regard to the object of the contract and upon the price.
From the moment of the conception of the contract, the parties have entered into an agree-
ment wherein the parties reciprocally demand performance. In conclusion, sale is a consensual
contract that proves its existence through competent proof.

GAITE VS FONACIER
GR # L-11827

FACTS:
Respondent Fonacier owned 11 iron lode mineral claims which he constituted a
Date of Assignment over and made Gaite his true and lawful attorney-in-fact to enter into a
contract for its exploration and debelopment on a royalty basis
Afterwads, Gaite executed a general assignment to the Larap Iron Mines solely
owned by him but then Fonacier decided to revoke the authority he granted
Subsequently, a balance has to be paid and to secure it, Fonacier delivered to
Gaite a surety bond. When it expired, no payment has been made by the respondent on his
allegation that his right to make use of the land has allegedly expired

ISSUES:
WON the lower court erred in holding that the obligation of Fonacier to pay
Gaite is one with a period or term and that the term has already expired.
WON the lower court erred in not holding that there were lesser tons of iron ore in
the stockpiles sold to Fonacier
HELD:
In the first issue, the court ruled that if the suspensive condition does not take place, the
parties would stand as if the condtional obligation had never existed. The parties did not intend
such state. The words of the contract expressed that obligation to pay and intended Gaite to be
paid. The sale of the ore to Fonacier was a sale on credit, not an aleatory contract. For their fail-
ure to renew the bond, the appellant have forfeited the right to compel Gaite to wait for the
sale of the ore before receiving payment of the balance. Under paragraphs 2 and 3 of Article
1198 of the Civil Code of the Philippines, the debtor shall lose every right to make use of the pe-
riod:
When he does not furnish to the creditor the guaranties or securities which he has
promised. When by his own acts he has impaired said guaranties or securities after their
establishment, and when through fortuitous event they disappear, unless he immediately
gives new ones equally satisfactory. Gaite's acceptance of the surety company's bond with full
knowledge it would automatically
expire within a year was not a waiver of its renewal after the expiration date. The balance
became due and payable thereafter.

On the second issue, the Court ruled in the negative. This is a case of a sale of a specific mass of
fungible goods for a single price or a lump sum. The quantity of "24,000 tons of iron ore, more
or less," stated in the contract is a mere estimate by the parties. A reasonable percentage of er-
ror should be allowed because neither of the parties had actually measured of weighed the
mass. In addition, no provision was made in their contract for the measuring or weighing of the
ore sold in order to complete or perfect the sale, nor was the price agreed upon by the parties
based upon any such measurement. When Gaite complied with his promise to deliver, the ap-
pellants, in turn, are bound to pay the lump price.

ACAP VS COURT OF APPEALS

GR NO. 118114

FACTS:
Felixberto inherited from his parents, spouses Vasques and Oruma, a lot in which he
executed a duly notarized document of Deed of Absolute Sale in favor of Cosme Pido
Acap was continously residing on the land, even though the ownership was trans-
ferred, and religiously paid his leasehold rentals
Pido consequently died intestate and his surving heirs executed a notarized declara-
tion of heirship and waiver of the rights of the lot to De Los Reyes
in turn, De Los Reyes informed Acap that the lease rentals should be paid to him
when petitioner failed and refues to pay lease after repeated demands, he filed a
complaint for recovery of possession and damages

ISSUES:
Whether or not the subject Declaration of heirship and waiver of rights is recognized
mode of acquiring ownership? Can it be considered a deed of sale?

HELD:
In a contract of sale, one of the contracting parties obligates himself to transfer the ownership
of and to deliver a determinate thing, and the other party to pay a price certain in money or its
equivalent. Upon the other hand, a declaration of heirship and waiver of rights operates as a
public instrument when filed with the Registry of Deeds whereby the intestate heirs adjudicate
and divide the estate left by the decedent among themselves as they see fit. It is in effect an ex-
trajudicial settlement between the heirs under Rule 74 of the Rules of Court.

There is a marked difference between a sale of hereditary rights and a waiver of hereditary
rights. The first presumes the existence of a contract or deed of sale between the parties. The
second is a mode of extinction of an ownership where there is an abdication or intentional relin-
quishment of a known right with knowledge of its existence in favor of other persons who are
co-heirs in the succession. De los Reyes, being then a stranger to the succession of Cosme Pido,
cannot conclusively claim ownership over the subject lot on the sole basis of the waiver of docu-
ment which neither recites the elements of either a sale or donation or any other derivative
modes of acquiring ownership.
 SONNY LO vs KJS ECO-FORMWORK SYSTEM PHIL CO.
GR NO. 149420

FACTS:
respondent KJS is a corporation engaged in the sale of steel scafoldings while Lo
does business as a business contractor under the name and style of San’s Enterprises
petitioner ordered scafolding equipment from respondent and paid a downpay-
ment thereof but then only paid for the first two months thereafter due to financial difficul-
ties
petitioner and respondent then executed a Deed of Assignment wherein re-
spondent was assigned his recievables from Jomero Realty Corporation but then the latter
refused to honor it as it claimed that petitioner was also indebted to it
in 1990, respondent sent a letter demanding payment of his obligation however
petitioner refused as he claimed that his obligation had been extinguished when they exe-
cuted the Deed Of Assignment

ISSUES:
Did the Deed of Assignment extinguish the obligation of the petitioner

HELD:
The Court ruled in the negative that the petitioner’s obligation was not extinguished
with the execution of the deed of assignment.

An assignment of credit is an agreement by virtue of which the owner of a credit, known as the
assignor, by a legal cause, such as sale, dacion en pago, exchange or donation, and without the
consent of the debtor, transfers his credit and accessory rights to another, known as the assign-
ee, who acquires the power to enforce it to the same extent as the assignor could enforce it
against the debtor.

In dacion en pago, as a special mode of payment, the debtor offers another thing to the cred-
itor who accepts it as equivalent of payment of an outstanding debt. In order that there be a
valid dation in payment, the following are the requisites: (1) There must be the performance of
the prestation in lieu of payment (animo solvendi) which may consist in the delivery of a corpo-
real thing or a real right or a credit against the third person; (2) There must be some difference
between the prestation due and that which is given in substitution (aliud pro alio); (3) There
must be an agreement between the creditor and debtor that the obligation is immediately ex-
tinguished by reason of the performance of a prestation different from that due. The undertak-
ing really partakes in one sense of the nature of sale, that is, the creditor is really buying the
thing or property of the debtor, payment for which is to be charged against the debtor’s
debt. As such, the vendor in good faith shall be responsible, for the existence and legality of the
credit at the time of the sale but not for the solvency of the debtor, in specified circumstances.

Hence, it may well be that the assignment of credit, which is in the nature of a sale of person-
al property, produced the effects of a dation in payment which may extinguish the obligation.
However, as in any other contract of sale, the vendor or assignor is bound by certain warran-
ties.

Petitioner, as vendor or assignor, is bound to warrant the existence and legality of the credit at
the time of the sale or assignment. When Jomero claimed that it was no longer indebted to pe-
titioner since the latter also had an unpaid obligation to it, it essentially meant that its obliga-
tion to petitioner has been extinguished by compensation. In other words, respondent alleged
the non-existence of the credit and asserted its claim to petitioner’s warranty under the assign-
ment. Therefore, it necessary for the petitioner to make good its warranty and pay the obliga-
tion. Furthermore, the petitioner breached his obligation under the Deed of Assignment, to ex-
ecute and do all such further acts and deeds as shall be reasonably necessary to effectually ena-
ble said ASSIGNEE to recover whatever collectibles said ASSIGNOR has in accordance with the
true intent and meaning of these presents.
 CELESTINO VS COLLECTOR OF INTERNAL REVENUE
GR NO. L-8506

FACTS:
Celestion, the petitioner, is the owner of Oriental Sash Factory
In 1952, they began to pay 3% tax. Petiitoner claims that they do not manufac-
ture ready made doors, sash and window for the public but only for special orders from cus-
tomers therefore it does not engage in manufacturing but only in sales services.
after they failed to convince BIR that they were indeed involved in sales, peti-
tioner went to the Court of Tax Appeals but they were also shot down
the CTA, in its decision, holds that the “petitioner has chosen for its tradename
and has offered itself to the public as a “Factory”, which means it is out to do business, in its
chosen lines on a big scale

ISSUE:
Is the petitioner company engaged in sales or manufacturing?

HELD:

The Cort ruled that the Oriental Sash Factory is engaged in manufacturing. The company
habitually makes sash, windows and doors as it has been represented to the public.The fact
that windows and doors are made by it only when customers place their orders, does not alter
the nature of the establishment, for it is obvious that it only accepted such orders as called for
the employment of such material-moulding, frames, panels-as it ordinarily manufactured or
was in a position habitually to manufacture. The Oriental Sash Factory does nothing more than
sell the goods that it mass-produces or habitually makes; sash, panels, mouldings, frames, cut-
ting them to such sizes and combining them in such forms as its customers may desire.
 COMMISSIONER OF INTERNAL REVENUE VS ENGINEERING EQUIPMENT AND SUPPLY CO.
GR NO. L-27044

FACTS:

Respondent EES, to abbreviate, is engaged in the business of designing and installing central
air conditioning systems
The CIR then assed their business with 30% advanced sales tax and other penalties pursuant
to an anonymous complaint filed with the Bureau of Internal Revenue
EES then objected to such claim and argued that they are contractors and not manufac-
turers and should only be liable for only 3% tax on sales of services or piece of work
The Commissioner demanded the payment of the assessed tax and suggested that EES pay a
sum of money to compromise for their penal liability and for violation of the Tax Code

ISSUES:
Is Engineering Equipment and Supply, Co. a contractor for a piece of work thus liable for
only 3% tax?

HELD:
The Supreme Court found that EES was not a manufacturer of air-conditioning units. While it
imported such items, itw as known they were not for sale to the general public and were used
as mere components for the design of the centralized air-conditioning system with the designs
and specifications different for every client they encounter. Various technical factors must be
considered and it can be argued that no two plants are the same; all are engineered separately
and distinctly. Each project requires careful planning and meticulous layout. Such central air-
conditioning systems and their designs would not have existed were it not for thespecial order
of the party desiring to acquire it. EES is therefore not liable for the sales tax.

As for their liability for violation of Tax Code, they should pay the whole amount not the one
suggestedby the commissioner.
 MYRNA RAMOS VS SUSANA SARAO AND JONAS RAMOS
GR NO. 149756

FACTS:
in this case involves spouses Ramos who executed a Contract of Sale over their
conjugal house in favor of respondent with the consideration of a sum of money
the contract, entitled Deed of Sale Under Pacto De Retro, granted the Ramos
spouses the option to repurchase the property
Petitioner tendered to Sarao the amount of P1,633,034.20 in the form of two
manager’s checks, which the latter refused to accept for being allegedly insufficient
Myrna then filed a complaint and deposited the checks with the RTC
Sarao filed against the Ramos spouses a consolidation of ownership

ISSUE:
Was the pacto de retro sale in reality an equitable mortgage?

HELD:
YES. In order to judge the intention of the contracting parties, their contemporaneous
and subsequent acts shall be principally considered (Art.1371, NCC). The contract shall be pre-
sumed 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
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 him-
self 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. (Art. 1602, NCC)
 CABALES VS. COURT OF APPEALS
GR NO. 162421

FACTS:
Cabales died and left his parcel ofn land to his surving wife and children
Bonifacio, Alberto, and Albino, co-owners and brothers, sold the property to Dr.
Corrompido with right to repurchase within eight years and divided the proceeds of the sale
amongst themselves
Alberto then died leaving his son petitioner Nelson
within the redemption period, Bonifacio and Albino tendered their payment to
Corrompido while Saturnina, their mother, paid for Alberto’s share and in turn Corrompido
released the document of sale with pacto de retro
family Cabales sold the contended parcel of land to the spouses Feliciano
However, Nelson revealed his intention to redeem the subject land
The Feliciano spouses contended that he was estopped from claiming any right
considering that Nelson himself failed to consign to the court the the total amountof re-
demption price necessary for legal redemption

ISSUES:
Is Nelson Cabales a co-owner of the subject land with the right of legal redemption

HELD:
The sale insofar as their shares are concerned is unenforceable because it was entered
into in the name of another person by one who had not given authority. (Art. 1403(1), NCC).
Nelson and his mother, therefore, retained ownership over their undivided share of subject
property. (Cabales, et al. v. CA, et al., G.R. No. 162421, August 31, 2007).

With respect to petitioner Nelson, the contract of sale was void. He was a minor at the
time of the sale. Saturnina or any and all the other co-owners were not his legal guardians;
rather it was his mother who if duly authorized by the courts, could validly sell his share in the
property. Consequently, petitioner Nelson retained ownership over their undivided share in the
said property. However, Nelson can no longer redeem the property since the thirty day redemp-
tion period has expired and thus he remains as co-owner of the property with the Spouses Felia-
no.