Celestino v.

Collector of internal Revenue Facts: Oriental Sash Factory in the previous years ,paid the higher sales tax on the gross receipts of its sash, door, and window factory as a manufacturer-seller. The company now argues that being a factory engaged in the sale of services, it should only taxable under 191 of the Tax Code of 185. It argues that it is a contractor and not a manufacturer-seller because it only makes sash, windows, and doors for limited and special customers only upon their special orders. Issue: Is the company a manufacturer or a contractor for piece of work? Held: The company is a manufacturer. The company habitually made sash, windows, and doors , as it had presented itself in its advertisement to the public. It ordinarily and habitually manufactures its products to fulfill orders. Any customer with sufficient money may order from them and that it is mechanically equipped to mass produce its products. CIR VS. ENGINEERING EQUIPMENT & SUPPLY Co Facts: Engineering Equipment & Supply imports air-conditioning units and accessories and installs them in its clients establishments. The CIR assessed Engineering Equipment & Supply Co as a manufacturer, and therefore, liable for a 30% tax as importation and advanced sales tax. Engineering Equipment says it is only a contractor, and therefore, only liable for a 3% tax on its imports. Issue: Is Engineering Equipment a manufacturer or a contractor? Held: It is a contractor, and therefore, only liable for 3% tax. The true test in determining whether a business is a manufacturer or contractor is: It is a contractor if the thing to be delivered would not have existed if not for the order. It is a manufacturer if the thing which would have existed and has been a subject of the sale to some other persons even if the order has not been given. If the articles ordered by the purchaser is exactly such as the business keeps and sells to everyone, then the business is a manufacturer. If the articles ordered are specially done for those who order it, and that modifications can be done thereon upon the buyers request, then it is a contractor. Engineering & Machinery Corp vs. Almeda Facts: Engineering & Machinery Corp installed an air-conditioning system in the building owned by Almeda. Almeda later on sued EMC for damages because of defects of the Air Conditioning System. EMC argued that the contract it entered with Almeda is of sale, and therefore, the action against it has prescribed, because the 6 month prescriptive period had already lapsed. Almeda argued that the contract is for piece of work, and therefore the action is still well within the prescriptive period of 10 years. Also, since this is a contract for piece of work, and a suit for breach of contract and not an enforcement of warranty, the action is still well within the prescriptive period of 10 years. (it has only been 4 years). Issues : 1 .Is this a sales contract or contract for piece of work? 2. Is the action for the enforcement of the warranty or breach of contract? Held. 1. Piece of work. The air-condition system was installed in accordance with Almedas

preferred specifications. 2. This is suit for breach of contract. It was alleged that in the installation of the air conditioning system, did not comply with the specifications provided Quiroga vs. Parsons Hardware Co. Facts: Quiroga and Parsons entered into a contract wherein Parsons will sell the Quiroga Beds in the Visayan Islands. The contract had a clause that Parsons will pay for the beds received within a period of 60 days. Later on, Quiroga sued Parsons for the alleged violations of contractual obligation. However, among all those allegations, only the obligation to order the beds by the dozen and in no other manner is expressed in the contract, and thus, gives a cause of action to the suit. Quiroga argues that the contract with Parsons, being a contract of agency to sell, the obligations which were allegedly violated were implied. Issue: Is this a contract of agency to sell or contract of sale? Held: Contract of Sale. The Court looked at the essential clauses of the contract to determine whether this is a contract of agency to sell or contract of sale. This is a contract of agency to sell because Parsons will pay for the beds received, unlike in an agency where the agent merely delivers the price paid by a 3rd person Puyat vs. Arco Amusement Company Facts: Arco Amusement contracted Puyat to purchase for it some sound equipment from Starr Piano Company. The contract provided that Arco will pay Puyat the quoted price of the sound equipment, plus 10% commission. Arco discovered that Puyat was overpricing them because Puyat was actually buying the equipment at a 25% discount from Starr. It accused Puyat of concealing the actual price tantamount to fraud. Puyat argued that this is not a contract of agency to buy, but of sale. Issue: Is the contract of agency or of sale? Held: Of sale. A reading of the contract would mean that Puyat will have to buy equipment from the US and whatever unforeseen circumstances may arise, Arco can still hold Puyat to their agreement to the fixed prices they agreed upon. In a contract of agency to buy, the agent is exempted from all liabilities in the discharge of his commission, provided he acts within his authority. Also, Puyat is already an agent of Starr, it would be peculiar to say that Puyat is both the agent of the vendor and vendee. As to the 10% commission, it is actually an additional price to be paid by Arco in buying the equipment from Puyat. Ker vs Lingad Facts: Ker challenged the assessment of the Internal Revenue Commissioner making it liable for brokers tax. The assessment was made on transactions made by Ker, as distributor, of the products of US Rubber International. The contract had a disclaimer that Ker is not a distributor or legal representative of the US Rubber International. Issue: Was this a contract of sale or contract of agency to sell? Held: Contract of agency to sell. Reasons:

Even if possession was delivered to Ker as distributor, the US company still owned the products. The US company retained control over the price and terms of the products to be sold, and not Ker.

Rubias vs. Batiller Facts:Atty. Rubias seeks to wrest the possession of a land from defendant Batiller. His predecessor, Militante, in a previous case, filed for the registration of the land in the registration court. Atty. Rubias was his counsel-of-record in that case. The application for registration was denied and during the pendency of the appeal, Militante sold the land to Atty. Rubias (who was, his counsel). One of the defenses raised by Batiller in this ejectment case against him is that Atty. Rubias has no cause of action against him, because the sale conveyed by Militante is void, being a sale between a client and an attorney of a land under litigation. Issue: Was the sale void? Held: The sale is void. Contracts expressly prohibited by law are void. Art. 1491 says that lawyers cannot purchase properties which are the object of litigation in which they take part by virtue of their profession. Such contracts are void from the beginning and cannot be ratified The first 3 enumerations of Art 1491 which are executors or administrators, agents, and guardians can be ratified by a new contract when the cause of nullity ceases. (There is only private wrong). But the ratification or 2nd contract will only be valid upon its execution and not retroact to the date of the first contract. The 2nd part of the enumeration which covers public officers, officers whose function are connected to the administration of justice, lawyers cannot be ratified because public policy and interest requires that they be prohibited permanently. (Note: The lawyer knew the defect from the beginning, thus he is in bad faith) Phil Trust Co. vs. Roldan Facts: The Minor Bernardo inherited properties from his father. His stepmother, Roldan assumed guardianship over him. She applied for authority to sell 17 parcels of land to her brother-in-law, Ramos. The sale pushed through on Aug 5, 1947 and the court confirmed this sale. 1 week later (Aug 13, 1947) Ramos sold the property to Roldan. Then 4 of the 17 parcels were sold by Roldan to Cruz, reserving to herself the right to repucrchase. Philippine Trust assumed guardianship of the minor and sought to undo the sale transactions for being violations of ART 1459 which prohibits the purchase of a guardian, by herself or through the mediation of another, property of her ward. Roldan argues that sale was beneficial to the minor since this resulted to higher rental earnings and the minor will be able to purchase the land from her in the future. Issue: Are the sale transactions void? Held: Yes. Even in the absence of proof showing collusion between Dr. Ramos and Roldan, the stubborn fact remains that the guardian acquired the properties of her ward. Her plan to acquire them is very apparent because after the court-approved sale to Ramos, she purchased them in just a week.

-She was not entirely truthful because she sold the lands for P14,700 even if she knew they were worth P17,000. - Annulling the sale will be most beneficial to the minor because the minor will get a better deal: receive all fruits of the lands from year 1947, and will return P14,700 not P15,000. Unlike if the lower courts are upheld: The contracts are valid but the minor can repurchase the lands for P15,000 within 1 year. Fabillo vs. IAC, Murillo Facts: Florencio Fabillo sought the services of ATTY. Murillo in recovering the ownership of a property that was bequeathed to him by his sister. Fabillo and Murillo entered into an agreement wherein it was stipulated that in case of a successful litigation, Murillo will get 40% of the benefits Fabillo will be entitled. The litigation over the property was resolved in favor of Fabillo and Atty. Murillo sought to enforce their agreement by asserting his right as owner of 40% of the property. The Fabillos claimed their consent was vitiated by old age, and that the contingent fee of 40% of the property is excessive. The Fabillo children eventually substituted their parents in this case and they raised the argument that the contingent fee was a violation of Art 1491 which prohibits a lawyer from purchasing a property which is the object of litigation in which he has taken part by virtue of his profession. Issue: Was the contingent fee agreement a violation of art 1491? Held: No. Contingent fees agreements do not violate art 1491 because the property is acquired by the lawyer when judgment was already rendered and the litigation is already over. The prohibition only applies during the pendency of the litigation. Also, the Canons of Prof Responsibility allows a lawyer to exercise lien over the properties of his client held by him to satisfy his unpaid legal fees. In this case, though the contingent fee agreement is valid, it was vague in its terms regarding ownership of the property when it is neither sold or mortgaged. The vagueness will be resolved against the one who drafted the contract (Murillo), therefore he is only entitled to P3,000 attorneys fees. Lee, FLAG vs RTC, Enderes Facts: Dr. Ortanez died, leaving behind a wife, 3 legitimate children, and 5 illegitimate children. Upon his death, 2 of his legitimate children, Rafael and Jose Ortanez were appointed as special administrators of the Estate. The inventory of the estate included 2,029 shares of stock in Philinterlife Corporation. Juliana Ortanez, the decedents wife, sold half of the Philinterlife shares in the inventory to petitioner FLAG, claiming that it is her share in the conjugal property. Jose Ortanez, acting in his personal capacity, sold the remaining 1,011 shares to FLAG as his share of the inheritance in the Estate. Prior to these sale transactions, Juliana Ortanez and her children entered into a memorandum of agreement extrajudically settling the estate among themselves. Ma Divina-Ortanez, an illegitimate child, moved for the nullification of the sales of the shares of stock, and the extrajudicial settlement. Issue: What is the status of the sales of shares of stock made by the special administrator without the approval of the court? Held: Void. The shares of stock were submitted in the inventory of the estate. Therefore, when

the administrators sold them, they did not have the authority. Aproperty under administration needs the approval of the probate court before it can be sold. It has been held that a property of the deceased, which is sold by an administrator without court authority is void. Heirs of San Andres vs. Rodriguez Facts: Juan San Andres sold to Vicente Rodriguez a portion of his land consisting of 345 sqm. San Andres died and the administrator of his estate contracted an engineer to survey the land. The engineer found out that the land being occupied by Rodrihuez was actually 509 sqaure meters more than what he purchased. The heirs of San Andres sought to recover the excess portion, saying that the contract of sale between San Andres and Rodriguez did not sufficiently describe the land sold. Rodriguez claimed that it was really the intention of San Andres to sell the land occupied by him as evidenced by the receipt of payment they signed. Issue: Did the contract of sale have a determinable object? Held: Yes. The object is determinable because there is no need for a new contract between the parties to ascertain their intention. The receipt shows that San Andres received P500 from Rodriguez as advance payment for the residential lot adjoining his previously paid lot on 3 sides, excepting the frontage. The full amount of purchase price was to be based on a survey and would be due and payable in 5 years from the execution of the deed of sale. The object can be determined with the above description. -That the object of the contract needed the services of a surveyor to be ascertained does not make invalid because the parties do not need to execute a new contract between them to determine the object. Pio Sian Melizza vs. City of Ilo-Ilo Facts: Melizza conveyed portions of her land 1214 to the City of Ilo-Ilo and in the public instrument evidencing it, specific lot numbers were expressly mentioned, along with a clause that the conveyance includes the lots needed for the construction of the City Hall pursuant to the Arellano Plan. (The City of Ilo-ilo donated the land to UP.) Melizza sold her remaining interest in lot 1214 to Villanueva, who then sold it to petitioner Pio San Melizza. Pio Sian Melizza contends that the sale of the land to the City of Ilo Ilo did not include lot 1214-B because it did not specifically designate it like the other lots. Pio avers that an interpretation that the contract included the lot 1214-B, which was not specifically designated therein will violate the requisite that an object must be determinable. Issue: Is lot 1214-B included in the sale to the Municipality of Ilo-Ilo? Held: Yes. Despite not being mentioned, the true intention of the parties can be gleaned from the contract of sale. The paramount intention for the donation was to provide the City of Ilo-Ilo a land for its City Hall pursuant to the Arellano Plan. The donation of the land before was revoked for not having met the required area. This contract of sale was executed to make the area donated sufficient to meet the plan. Also, after the contract specifically designated the lots to be conveyed, the contract went on further to say that the lots object of the sale are those needed to meet the Arellano Plan. Also, when the city already took ownership of the land, the vendor Melizza did not object.

Yu Tek and Co vs. Gonzales Facts: Gonzales received from Yu Tek Co the sum of P3,000 for which he bound himself to deliver 600 piculs of sugar. Yu-Tek Co later on sued Gonzales for non-compliance and demanded its P3,000 back plus P1,200 in damages a expressed in their agreement. Gonzales said that what he promised to deliver are crops from his sugar plantation, and that since the crops were destroyed, he is already relieved of his obligation. (Both are aggrieved by the lower court when it ruled that there was no contract of sale since the object cannot be ascertained) Issue: Was there a perfected contract of sale? Held: None, only a promise to sell. (Article 1450) The sale shall be perfected between the vendor and vendee and shall be binding upon both of them if they agreed upon the thing which is the object of the contract and upon the price, even when neither is delivered. There is a perfected sale with regard to the thing whenever the article of sale has been physically segregated from all other articles. In this case, the undertaking of the defendant to sell 600 piculs of sugar of the first and second classes did designate the article to be sold. There was no appropriation of the sugar to be sold. NGA/NFA vs. IAC, Soriano Facts: Soriano offered to sell his palay to NFA. NFA gave him a quote of 2,640 cavans of palay. The quota was noted in Sorianos Farmer Info Sheet and represented the maximum amount of palay he can deliver. Soriano delivered 630 cavans of palay to the NGA warehouse. The cavans delivered were not rebagged. The Provincial Manager, Cabal wrote Soriano to withdraw his palay because of NFA findings that he is not a bonafide farmer who sells palay not from his own plantation. Soriano sues NFA for collection of money due to him from the delivery of the 630 palay. He argues that there was already a contract of sale between him and NFA when the latter accepted his offer. NFA argues that there was no contract of sale because when Soriano delivered his palay to the warehouse, it was only an offer to sell. Since the company did not rebag it, the offer of the palay was rejected. Issue: Was there a perfected contract of sale between the parties? Held: Yes. There was an acceptance of the offer when NFA gave Soriano a quote which was indicated on his Farmers Info Sheet. The fact that the exact quantity of the cavans of palay to be delivered does not affect the perfection of the contract. (Article 1349: The fact that quantity is not determinate does not prevent the perfection of the contract, provided it is possible to determine the same without a new contract between the parties). In this case, there was no need for Soriano and NGA to enter in a new contract as Soriano can deliver cavans of Palay as long as they do not exceed the 2,640 quota. Magpalo vs. Magpalo Facts: The simple illiterate farmers spouses Miguel and Candido Magpalo wanted to donate

half of their land to Miguels brother, Maximo. They were made to sign a purported deed of donation which was actually a deed of sale. The deed of sale purports that the entire land is sold to Maximo for a consideration of P500. Maximo was able to have thel and registered to his name, then sold it to the Narcisos Miguel Magpalo now seeks the nullification of the deed of sale, saying it was procured through fraud, and that there was no actual consideration. Issue: Is the deed of sale void? Held: Yes. Consideration is an element of contract. When it is a false consideration, then it is merely voidable However, when there is no consideration, the contract is void.

Ong vs. Ong. Facts: Imelda Ong executed a Quitclaim deed over a undivided portion of a parcel of land in favor of Maruzoo for the consideration of P1. Later on, she revoked this Quitclaim Deed. Maruzzo, through her guardian, filed for the recovery of the land. Ong argues that the deed of sale is void because the consideration, which is P1 is not enough to be a valid consideration. Issue: Is the consideration of the contract valid? Held: Yes. It has been found by the CA that the consideration is not just for P1 but also for some other valuable considerations. Bad faith and inadequacy of monetary consideration do not render a conveyance void ab initio. The assignors liberality, being enough cause for the contract. (It is a practice among Anglo-Saxons to state a consideration which is less than that actually paid)

Bagnas vs. CA Facts: Mateum died without ascendants or descendants and was survived only by collateral

relatives. He left 29 parcels of land. The respondents, who were collateral relatives of the deceased have 2 deeds of sale allegedly executed by the deceased in their favor covering 10 parcels of land for a consideration of P1. The petitioners now assail the validity of the deeds of sale, being founded on a P1 consideration as compared to their assessed value of about P10K. The respondents say that aside from the P1 price, they also rendered service to the vendor. Issue: For having a consideration which is grossly disproportionate to the assessed value, are the deeds of sale void? Held: Yes. There is an absence of cause. The respondents cannot claim that the mere liberality of the donor is the cause. There was also no value assigned to the service the respondents rendered to the vendor.

Mate vs. Ca, Tan Facts: Mate was convinced by her cousin Josephine , to execute a deed of sale with right to repurchase for a consideration of P1.4 M with 5% interest per month in favor of Tan. This was for the purpose of saving Josephine from an imminent criminal prosecution by Tan arising from bouncing checks she issued. Josephine also undertook to provide for the repurchase price, and pay the interest, and issued to Mate checks amounting to the purchase price plus interest. When Mate deposited the checks so that he can repurchase his properties, the checks bounced. Mate now wants to nullify the deeds of sale he executed in favor of Tan for want of consideration, saying no money actually exchanged hands. Issue: Was there a valid consideration in the contract? Held: Yes. The consideration was the price Josephine undertook to pay Tan. It was just sad that Mate was swindled byJosephine. Appellant was impelled to enter into the contract by the P420,000 profit he will gain.

Alino vs. Heirs of Lorenzo

Facts: Lucia Carlos sold a land to her daughter Angelica for P10,000. Lucia remained in possession of the land, collected its fruits, and paid its taxes. Angelica died and her heirs partitioned her estate, including the land. Lucia demanded the heirs to return to her the land, but the heirs refused. She filed a case for recovery of the land, saying that there was really no sale between her and her daughter because they did it just to support Angelicas loan application. She said that the contract did not have a consideration. Issue: Is the contract void? Held: Yes. There are indications that the contract is absolutely simulated. There was really no consideration paid. Suffice it to say that the concept of non-payment of price is irreconcilable with simulation. If there exits an actual consideration, however small it may be, there is a valid sale. The absence of a consideration showed that the parties did not intend to be bound at all

Gonzalez vs. Trinidad Facts: Trinidad sold his land to Gonzales for P10,000. The sale was actually fictitious as the vendors did not really receive the purchase price. The purpose was to save the property from attachment by Dr. Papa, to whom Trinidad executed a promissory note. Trinidad says that the consideration was illegal and the CA erred in holding that articles 1305 anf 1306 are not applicable. Issue: Is the contract void? Held: Yes. The contract is void for having an absolutely simulated price. Also the Sc, made a distinction as to the motive and consideration. Consideration is the why of contracts, the essential reason why the parties enter into a contract.

Macasaet vs. R Transpot Facts: Under a deed of sale with assumption to mortgage, Respondent R Transport sold its 4 buses to petitioner Macasaet for P12M . Macasaet failed to pay the price, and R. Transport sued to recover the buses. Issue: Was the rescission of the contract in order? (The CA ruled that there was no consideration, because the price was never paid and therefore the sale is void.) Held: Yes. Failure to pay the consideration is different from lack of consideration. Failure to pay the consideration presupposes the existence of a valid contract, and therefore, the remdy is rescission. Lack of consideration prevents the existence of a contract. When a deed of sale purports that the price has been paid, but actually never been paid, the sale is void for the absence of consideration. In this case, the contract was perfected because there was a meeting of the minds. Macasaet failed to pay the price stipulated, and so, the sale can be rescinded.

RP vs. Philippine Resources Dev Corp Facts: Apostol owed the Bureau of Prisons money in the sum of P34K as the price of the materials he bought. The Bureau (Through RP), sued Apostol for collection of the balance. Apostol in his defense, said that he already paid to the Bureau the balance in the form of goods ( GI Sheets and GI Pipes), which the Bureau accepted. The Bureau argues that the delivery of these goods cannot constitute payment because they are not in money. Issue: Can the materials delivered by Apostol in payment of his debt be considered valid payments? Held: Yes. Payment may be in the sum of money or its equivalent. While it is true that the original agreed price was in the sum of money, the goods delivered by Apostol to the bureau were already assessed and their price equivalrnt in the sum of money have been determined. -The issue on whether these materials belonged to Phil Resources is still to be determined

Velasco vs. CA, Magdalena Estates Facts: Lorenzo Velasco, requested his sister-in-law, Socorro Velasco to negotiate with Madalena Estates the purchase of a land. Magdalena Estates said that it was willing to sell the land for P100,000. P30K will be the down payment and P70,000 will be the balance. As the P30,000 downpayment was too high for Lorenzo Velasco, he paid an earnest money of P10,000 with the payment of the remaining balance to be agreed upon The Velascos now sue Magdalena for specific performance to convey to them the land. Magdalena says that there was no perfected sale because the manner of payment was not agreed upon. Issue: Was there a perfected sale? Held: None. A definite agreement on he manner of payment of the purchase price is an essentiall element in the formation of a binding an enforceable contract of sale. The fact, therefore, that the Velascos delivered to the Magdalena the sum of P10,000 as part of the downpayment that they had to pay cannot be considered as sufficient proof of the perfection of any purchase and sale agreement between the parties. The terms of payment still had to be agreed.

San Miguel Properties vs. Huang Facts: SMP put up for sale a property. The Huangs, through their lawyer, expressed their intention to buy the property. They sent SMP a check worth P1M as earnest money subject to the condition that they be given an exclusive option to purchase the property within 30 days from the acceptance of the offer. During those 30 days, he parties will negotiate the terms and conditions of the purchase. This counter-offer of the Huangs was accepted by SMP and it gave them an exclusive option to buy the property within 30 days. SMP and the Huangs failed to agree on the terms and conditions of the payment, after a series of offers and counter-offers. The option period elapsed and SMP returned to the Huangs their check of P1M which they sent as earnest money. The Huangs argue that there was already a contract of sale perfected when SMP accepted its check. SMP for its part say that there was no sale contract perfected, because 1.) The parties did not agree on the payment terms. 2.) That the Huangs failed to exercise their option to buy within the period and that the option is unenforceable for not being founded on consideration. 3.) Issue: Was there a contract of sale? Held: None. There was no perfected contract because the parties did not agree on the terms of payment. What happened was a series of offers and counter-offers. The P1M was merely a deposit to be applied as downpayment in the event that the parties agree on a contract of sale. The option is unenforceable for not being founded on a consideration.

Co vs. CA, Ngo Facts: Benito Ngo and Antonio Ong were both claiming to have purchased the same parcels of land from Narciso Gonzales. To settle their dispute, the Fil-Chinese Chambers of Commerce suggested that they divide the 2 properties among themselves. Ngo and Ong later accepted the suggestion and the properties were divided: Ong got lot 7-A and Ngo got lot 7B Important facts starts here : Petitioner Co now claims that Ngo agreed to sell Lot 7-B to him for P49,500. Co presented evidence of purporting to be payments. Ngo denied having entered into a contract of sale with Co. Ngo said that those payments are for some other purpose. Issue: Was there a contract of sale? Held: None. A definitive agreement on the manner of payment of the price is an essentioal element in the formation of a binding an enforceable contract of sale. The evidence of petitioner Co did not establish a definitive agreement on in the manner of payment.

Heirs of Amado vs. Salvador Facts: The heirs of Judge Amado were seeking the recovery of a parcel of land from Salvador. Salvador claims that the land was sold to him by Amado for t P66K+. They did not agree with the date the payment due. Salvador claimed that he delivered to Amado the payment price partly in the form of money and construction materials. The heirs argue that there was no contract of sale, the truth being was that the payments Salvador delivered to Amado were part of a loan agreement they entered. Issue Was there a contract of sale? Held: None. Salvador failed to prove that the parties have an exact notion of the consideration to which they supposedly gave their consent. Salvador failed to allege the manner of payment of the purchase price on which the parties should have agreed. No period was set within which the payment must be made. Of the P66K purportedly agreed upon, the amount which should be paid in cash and the amount which should be paid in construction materials was not determined.

Navarra vs. Planters Bank Facts: Navarras land was foreclosed by Planters Bank as a result of his default in paying his loan. Planters bank became the new owner of the land after foreclosure proceedings. Later on Navarra offered to redeem the property from Planters, saying that the downpayment of P300k will be paid by his brother. He also expressed his understanding that the purchase price will be based on the redemption value plus the prevailing interests. The Bank agreed to accommodate the request, and replied that he should see the head of their acquired assets department for the details of the transaction. Navarra then asked the bank to apply the P300k overpayment due to the company of Carmelita Navarra (also petitioner, wife) be applied to the downpayment. Planters Bank said that Navarra must secure the board resolution of that company allowing the P300K to be applied. Navarra failed to submit the resolution and the bank informed him that it cannot resell the land to him. Navarra now argues that there was a contract of sale of the land to him. The bank argues that there was none because the parties failed to agree on the price, and payment of the price. Issue: Was there a contract of sale? Held: None. The letters between the bank and Navarra showed that there was no definitive agreement on how the succeeding balance will be paid. For a valid contract of sale to exist, the manner of payment of the purchase price must first b e established since failure to agree on such is tantamount to failure to agree on a price. Villonco vs. Bormaheco, Cervantes Facts: Bormaheco, through its President, Cervantes, offered to sell a land to Villonoco Realty. Villonco counter offered and Bormaheco accepted it. In accepting it, Cervantes made insertions in Viloncos counter offer. Bormaheco eventually backed out of the sale. When they were sued, one of Cervantess defense was that there was no perfected contract because his acceptance of the counter-offer was qualied. Issue: Was there a perfected contract? Held: Yes. The insertions made by Cervantes are not material changes, but mere clarications. An acceptance may still be binding even if it contained request for certain changes in the terms of the offer if it is a clear and unequivocal acceptance of the offer. It shall be deemed binding even if the request for changes is granted or not. Where the change does not essentially change the terms of the offer, it shall not constitute a counter-offer but still a binding acceptance.

Doromal vs. Javellana Facts: Respondent Javellana co-owned a property together with her relatives. These relatives sold 6/7 of the property (corresponding to their share) to the Dormals. Javellana retained 1/7 of the property. Javellana sought to repurchase the property from the Doromals but the Doromals refused. Javellana sued the Doromals to resell them the property. The Doromals argued that Javallena can no longer redeem the properties because the 30 days had already elapsed from the time Javellana got a notice of the sale. There were 2 letters of notice to Javellana: one dated January 1968 and the one dated November 5 1967. The one dated November 1967 was informing her that a P5,000 pesos earnest money had already been received. Issue: Was there a perfected sale in the rst place? Held: None. The letters sent to Javellana did not amount to a notice of a perfected sale because the price is indenite. The earnest money stated therein is not the earnest money being contemplated in the New Civil Code, which is part of the purchase price and an indication of a perfected sale. The earnest money stated therein was more of an earnest money being contemplated in the Old Civil Code which is a guarantee that the vendee will not back out from the transaction. This is so because there appears to be no clear agreement as to the price and that the petitioners were decided to buy 6/7 only of the property should Javellana refuse to sell her 1/7 shar

Serrano vs. Caguiat Facts: The spouses Serrano owned a property (439 sqm). Caguiat offered to buy the property at P1,500/sqm. Caguian gave the Serranos P100,000 as partial payment. The Serranos issued a receipt for the P100,000 to the effect that it was received as a partial payment for the property with the balance payable by March 23, 1990, and that upon the payment of the balance, a deed of sale will be excuted. On March 28,1990, the respondent expressed his willingness topay the balance. The Serrano said they are canceling the transaction and are returning the P100,000 downpayment. Caguiat sued the Serranos for specic performance. The Serranos averred that there was no contract of sale between them and Caguiat because there was no clear agreement between the parties as to the amount of consideration Issue: Is this a contract of sale or contract to sell?

Held: Contract to sell because the property remained with the Serranos pending the full payment of the price. In a contract to sell, full payment is a suspensive condition that will give rise to the obligation. In this case, since there was no full payment of the balance, the Serranos were entitled to rescind the contract. Since this is a contract to sell, the earnest money given can only form part of the consideration only if the sale is consummated upon full payment of the purchase price. Article 1482, which speaks of earnest money in a contract of sale does not apply.

Dailon vss. CA, Sebasaje Facts: Sebasaje sued Dailon for recovery of ownership of a parcel of land he allegedly bought as evidenced by a deed of sale. Sebasaje denied executing such deed of sale and further argued that granting such deed of sale is authentic, the same cannot be enforced for not being in a public document as required by Article 1358 of the Civil Code. Issue: Can the deed of sale be enforced despite not being in a public instrument? Held: Yes. A contract of sale is a consensual contract which is perfected upon the meeting of the minds. Article 1358 merely requires the sale of real property to be in a public document for convenience purposes. The fact that a deed of sale is not in a public document will not really render the deed invalid or unenforceable.

Secuya vs. Selma Facts: In this case, Secuya led an action for quieting of title against Selma. It is contended by the Secuyas that the subject property was sold to Damacio Secuya by Pacencia Sabellona by means of a private document. This private document, however, they cannot produce. They claim that through an Agreement of Partition, Pacencia Sabellona that property was ceded to Pacencia by a Maximo Caballero. Selma on the other hand claims that she bought the property from A Cesara Caballero as evidenced by a notarized deed of sale.

Issue: Is the deed of conrmation of sale in favor of the petitioners valid? Held: The purported deed of sale was not produced. While a sale of a piece of land appearing in rd a private deed of sale is binding between the parties, it cannot be considered binding to 3 persons if it is not embodied in a public instrument and recorded in the Registry of Deeds. Selma on the other hand, has all the necessary documents to prove her claim.

Yuvienco vs. Dacuycuy

Limketai Sons Milling vs. CA, et Al Facts: BPI put a property it was holding up for sale. Limketai sent a letter expressing its offer to buy the property and the price it was willing to pay. BPI rejected it. Limketai sent another letter of offer which BPI likewise rejected.

Limketai sent a letter expressing that there was already a perfected contract of sale between it and BPI. It presented as evidence the correspondence with BPI. Issue: Was there a valid sale? Held: No. It failed to hurdle the strict requirement of the Statute of Frauds which require that the not ot memorandum evidencing the sale must establish the perfection of the contract. Also: During the trial, the respondents counsel persistently objected when the trial court allowed the presentation of oral testimony to prove the existence of the contract. Despite the presentation of oral testimony and the respondents counsel cross-examination of the witness, this cannot be considered as a waiver of the parole evidence rule (nor a waiver of their right to object on the ground of Statute of Frauds.)

Ortega vs. Leonardo Facts: Oretega and Leonardo were claiming ownership over the same property. Ortega and Leonardo later on agreed that Ortega will desist from pressing her claim and that Leonardo will just sell to her a portion of the land, after he acquired title thereto, provided that Ortega will pay for the survey and subdivision of the land, and provided further that she could continue holding on the land as tenant by paying a monthly rental. Leonardo eventually acquired title over the land. Ortega had the land surveyed, built improvements thereon, and paid Leonardo the monthly rentals corresponding to his portion over the land. Ortega tendered the purchase price for the land but Leonardo refused without reason. Both parties admit that an oral agreement to sell a piece of land is unenforceable. However, Ortega argued that this sale is partially executed, and therefore, already enforceable. Issue: Is the sale partially executed? Held: Yes. The making of valuable improvements on the land with the knowdlege of the vendor is the strongest indication of partial performance in this case as it indicates delivery of possession. Also: the surveying of the land, and the tender of the purchase price pursuant to the agreement can also indicate partial performance.

Heirs of Claudel vs. CA, Siblings of Claudel Facts: The heirs of Claudel inherited a property from Claudel. They were able to secure title over the property to their names. Later on, the Siblings of Claudel led for cancellation of these titles claiming that they are the rightful owners of the property by virtue of a sale Claudel executed in favor of their parents. The sale they allege was verbal only. Issue: Can a contract of sale of land may be proven orally? Held: No. The Statute of Frauds was designed to protect the parties. The contract of sale cannot be enforced unless the required proof are met. -Also, action has already presctibed. Alleged sale 1930; the date the titles were issued to the heirs 1976

Spouses Alfredo vs. Spouses Borras Facts: The spouses Afredo sold a land to the spouses Borras. The Boras paid the purchase price (receipt) and took over the land. Later on however, the Borras spouses discovered that the spouses Alfredos resold it to other persons. The Borras spouses sued the Boras spouses for specic performance against the Alredos and the subsequent buyers. The spouses Alfredos and the subsequent buyers argued that the sale to the Borras spouses is unenforceable because it was not in a written instrument. Issue: Whether or not the sale to the spouses Borras is valid and enforceable? Held: Yes. The Statue of Frauds does not apply anymore because this contract has already been executed. The spouses Alfredos already turned over the property to the Borras and the Borras already paid the price, as evidenced by the receipt. Also, the receipt serves as a memorandum of sale.

Xentrex Automotive vs. CA, Samson Facts: Petitioner Xentrex sold a car to the respondents Samsons. The Samson spouses paid an intitial deposit. The remaining balance was to be paid thru bank nancing. The Spouses Samson then decided to pay the balance in full because there were delays in the bank nancing. The Samsons then discovered that Xentrex sold the car to someone else. The Samsons sued Xentrex for breach of damages. Xentrex argued that there was no perfected contract between it and the Samsons because the Samsons failed to comply with their obligation to pay the price in full. Issue: Was there a perfected contract? Held: Yes. There was a meeting of the minds on the car to be old and the price. Cebu Winland vs. Ong Siao Hua -2 topics Facts: Cebu Winland, a real estate developer sold to Ong Siao Hua condominium units. The possession of the properties were turned over to Ong on October 10, 1996. When Ong requested for the cono certicates, Cebu Winland sold to Ong documents denominated as Deeds of Absolute sale for the two condos. Ong was surprised to see that the stated oor area in the deed of sale is only is 127 sqm, contrary to what was indicated in the price list which is 155 sqm. He had the condo surveyed and found out that it was only 110 sqm. He later on sued Cebu Winland for refund of the amount proportional to the discrepancies of the oor areas. One of the arguments raised by Cebu Winland is that the action has prescribed because 6 months had already elapsed since it delivered the units. Ong however argued that the action has not yet prescribed because they have not yet executed a deed of sale. Issue: Was there a delivery of the properties? Held: None. Under the law on Sales, delivery happens when the ff concur: Transfer of possession Transfer of ownership In this case, even though there was a transfer of possession, there was no transfer of ownership yet because the there was no execution of deed of sale. Note: If vendee is placed in actual possession of the property, but by agreement of the parties ownership of the same is retained by the vendor until the vendee has fully paid the price, the mere transfer of possession of the property is not the delivery contemplated under the Law on Sales. Therefore, there was no delivery yet and the action has not yet prescribed.
ARTICLE 1542. In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a greater or lesser area or number than that stated in the contract.

The same rule shall be applied when two or more immovables are sold for a single price; but if, besides mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or number should be designated in the contract, the vendor shall be bound to deliver all that is included within said boundaries, even when it exceeds the area or number specified in the contract; and, should he not be able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the area or number, unless the contract is rescinded because the vendee does not accede to the failure to deliver what has been stipulated. (1471) [Emphasis supplied] ARTICLE 1543. The actions arising from Articles 1539 and 1542 shall prescribe in six months, counted from the day of delivery

Chua vs. CA, Valdes-Choi Facts: Valdez-Choi owned a real estate property. He put the property up for sale. He and Chua agreed on a purchase price of P10M+. Valdes Choi received from Chua P100,000 as earnest money, which can be forfeited should Chua fail to pay the balance by July 15, 1989. 2 days before the due date of the balance, Chua was able to secure a managers check for the payment but nevertheless refused to hand it over to Valdes-Choi until a TCT is issued to his name. This angered Valdes Choi who said that this was not part of their agreement. Valdes-Choi was unwilling to be cause the issuance of a transfer certicate of title until he is paid the full balance and Chua was unwilling to pay the balance until the TCT is issued to him. Chua led a case for specic performance against Valdes-Choi. Issues: 1. Whether the transaction betweet them is a Contract of Sale or Contract to sell? Whether Chua can compel Valdes to cause the issuance of a TCT in Chuas name even before the payment of the purchase price. Held 1. Contract to Sell. Because ownership of the property remained with Valdez as can be gleaned from: Earnest money can be forfeited should Chua fail to pay the balance. The right to sell the property to some other person was reserved to the vendor should the vendee fail to pay the balance The absence of a deed of sale indicates that the parties did not intend an immediate transfer of ownership but only a transfer after full payment of the price. The ownership of the property was not transferred to Chua either by constructive or actual delivery because the Valdez Choi retained possession of the certs of title and other documents. 2. Chua cannot compel Valdes to cause the issuance of a TCT in his name because this is a contract to sell. In a contract to sell, the obligation of the seller to sell becomes demandable only upon the happening of the suspensive condition, which in this case, is

the full payment of the purchase price by Chua. If such full payment is done, then Chua can demand the execution of a contract of sale. - In a contract of sale, the vendor is bound o ransfer the ownership of, and deliver, as well as warrant the thing which is the object of the sale. Ownership is transferred upon the delivery of the thing sold. In a contract of sale of real property, delivery is effected when the instrument of sale is executed in a public document. When the deed of sale is signed by the parties and notarized, the delivery of the property is deemed made by the seller to the buyer. Chua had no right to compel Valdez to transfer the ownership because the suspensive condition, which is the full payment of the price, did not happen.

Addison vs. Felix Facts: In a public instrument, Addison sold to Felix four parcels of land. At the time of the execution, Felix paid P3,000 and the remaining balance of P7,000 was to be paid later on (P2,000 on july 15, 1914 and the (P5,000 after 30 days from the issuance of certicate of title.) Addison led a complaint against Felix for the payment of the rst installment of P2K, in accordance with their contract. Felix prayed to be absolved on the ground that the plaintiff failed to deliver the lands. She also prayed for recission. The evidence showed that the when Addison and a representative of Felix went to see the lands to be delivered to the actual possession of Felix, only 2 out of the 4 lands were designated and rd more that 2/3 of these 2 lands were occupied by a 3 person. Addison admitted that Felix will still have to resort to judicial means to obtain the possession of the land. Issue: Granting that there was a symbolic delivery of the land which is subject matter of the sale, but the land was not placed under the control of the vendee because it was being adversely rd occupied by a 3 person, was there a delivery? Held: There was no delivery. In order for symbolic delivery to produce the effect of delivery, the vendor must have control over the thing sold that , at the moment of the sale, the material delivery can be made. When there is no impediment whatever to prevent the thing sold passing to the control of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufcient. In this case, the symbolic delivery cannot sufce as delivery because the land cannot be placed by the vendor under the control of the vendee by reason of an adverse possessor.

Pasagui vs. Villablanca Facts: The Villablancas executed a public instrument selling a land to Pasagui and Mosar. Later on, Pasagui led a complaint against the Villablancas for allegedly illegally taking possession of the property and prayed that the Villablancas be ordered to surrender the land. The Villablancas argued that the lower court had no jurisdiction, the being an action for forcible entry. The plaintiffs argued that this was not for forcible entry, because it was not alleged that they have been deprived possession of the land by force, stealth, intimidation or stealth. Issue: Did the plaintiffs acquire possession of the land by virtue of the execution of the sale in a public instrument despite the fact that they were not placed in material possession of the land? Held: No. When there is no impediment ot prevent the thing sold passing to the control of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument can sufce. However, if the purchaser cannot have material tenancy of the thing, the execution of sale in a public instrument cannot produce delivery. In this case, the plaintiffs do not alleged that they were placed in the possession of the land prior to the alleged take over by the defendants. This is not case for forcible entry. They were seeking return of the price as an alternative if the possession cannot be given to them. (Case remanded)

Power Commercial and Industrial Corporation vs. CA, Quiambao, PNB Facts: Power Corp bought the land of the spouses Quaimbao and assumed the mortgage over it rd in favor of PNB. The land was being occupied by 3 persons. Power Corp later on led a complaint against the spouses Quiambao for recission of the rd contract on the ground that the land was being occupied by 3 persons.. Power Corp also demanded the PNB to return to it the payments for the mortgage because the mortgage was never approved. Issue: One of the issues in this case is was there an effective symbolic delivery of the land given rd that the land was being occupied by 3 persons? Held: Yes. The execution of a public instrument cannot produce the effect of symbolic delivery if the vendor does not possess control over the thing sold. The key word is control, not possession. When there is no impediment ot prevent the thing sold passing to the control of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument can sufce. However, if the purchaser cannot have material tenancy of the thing, the

execution of sale in a public instrument cannot produce delivery. In this case, lot sold was placed under the control of Power Corp, as can be evidenced by its ling of an ejectment suit. Prior physical delivery is not legally required.

Behn, Meyer vs. Yanco Facts: Pursuant to their contract, Behn from New York, shipped to Yanco, in Manila Soda cans which Yanco will buy. However, the ship was detained n Penang before it reached Manila, and some of its cargo was seized. When the ship arrived in Manila, Yanco refused to accept the remaining soda on the ground that they were in poor condition and that it was not of the Carabao brand. Behn sued Yanco for damages arsing from breach of contract. Issue: What was the contract between the parties? And who owned the goods at the time it was shipped? (If the plaintiff owned the goods, then there was no breach of contract because the buyer, Yanco, cannot be forced to pay for the goods when it arrived at him in poor condition after the incidents; If the buyer Yanco owned the goods, then Behn would be excused by circumstances that transpired and so, Yanco would still be liable to pay for the goods that arrived at him. Held: The plaintiff owned the goods. This was determined by the place of delivery. Place: The place of delivery was Manila, as can be gleaned from the payment of the freight. If the seller pays for the freight, then int can be inferred that it was his duty to see to it that the good reach their destination and that title to the property does not pass until the goods have reached their destination. On the other hand, if the buyer pays for the freight, it can be inferred that the goods were already his at the point of Shipment (in this case, New York). The plaintiff paid for the freight, therefore it can be inferred that he still owned the goods before it reached Manila.

Santa Ana vs. Hernandez Facts: The Sta. Ana Spouses sold 2 separate portions of their property to Hernandez. In the instrument of sale, it was indicated the total price and areas of the sold portions totaling 17,000 sqm, plus an indication of the boundaries. The spouses led a suit against Hernandez claiming she was occupying 17,000 square meters in excess from what she bought from them. Hernandez claimed the area within the boundaries dened in the instrument. Issue: Is this a lump-sum sale or a sale by unit of measure?

Held: Lump-sum sale, and therefore the buyer was entitled to occupy the all portions within the boundaries stated in the instrument, even if they exceeded 17,000 sqm. This is because the sale was of a denite and indentied tract (corpus certum), which obligated the vendor to deliver to the buyer all the land within the boundaries, irrespective of whether the real area is greater or smaller than that recited in the deed. Also, it was held that if the defendant intended to buy by the meters, she should have stated so in the contract. Doctrine: If the price per unit of measure or number is not expressly provided for in the contract, the rules of lump sum shall prevail in the sale of real property.

Esguerra vs. Trinidad Facts: The Esguerra spouses sold to their grandchildren (The petitioners, Esguerra grandchildren) a parcel of land. They also sold a parcel of land to their other grandchildren, the Trinidads. The petitioners later on sold to respondents spouses a portion of about 5000 sqm of the 23,489 sqm land which they acquired from the Esguerra spouses. When a cadastral survey was conducted on the land In the late 1960s, it was discovered that the lot they sold actually measures 6,268 sqm. The parties agreed on a purchase pprice of P1,000 for a predetermined, unserveyed area of 5000sqm more or less. The Trindidad spouses died and the respondents took over the land. The petitioners led a complaint against the respondents wherein they sought the cancellation of certain titles of land on the ground of fraud. Issue: Is the pricing agreement of the parties in this sale of real estate a unit price contract or a lump sum contract? Held: lump sum contract. In sales involving real estate, the parties may choose between 2 types of pricing agreement: Unit price contract, wherein the purchase price is determined by way of reference to a stated rate per unit area, or a lumpsum contract which states a full purchase price for the immovable, the area of which may be declared based on the estimate or where both area and boundaries are stated, the boundaries shall prevail over the stated area. In this case, the pricing agreement is of lumpsum because the parties agreed on a purchase price of P1,000 for the unsurveyed area of 5000 sq and not on a particular unit area. Carceller vs. CA, State Investment Houses Facts: STIH leased its property to Carceller with an option to purchase. 3 weeks before the option to purchase expired, STIH informed Carceller of the impeding expiration. Carceller, in a letter requested that STIH extend the contract of lease, which STIH refused. 18 days later,

Carceller manifested his desire to exercise his option to buy the property. However, STIH refusaed, saying the option had already expired. STIH also said that it is willing to sell the property at a price 90% higher than what they have agreed in the option to purchase. Carceller prays for specific performance to compel STIHI to sell him the property. Issue: Can Carceller still exercise the option? Held: Yes. Carceller had already manifested his desire to purchase the property when he requested STHI to extend the lease. Also, it will be highly iniquitous if he will not be allowed to purchase it given the unsubstantial delay of 18 days from which he can purchase the property.

Soriano vs. Bautista Facts: The Spouses Bautista mortgaged their land in favor of Soriano and Olimpia de Jesus. The mortgage contract has a stipulation that the mortgagees are given the option to buy the property within the 2 year term of the mortgage. The mortgages (Soriano et al) decided to exercise their right the land. The Bautista spouses refused, saying such is immoral for depriving them as mortgagors of their right to redeem the property. Issue: Can the spouses Soriano exercise their right to repurchase? Held: Yes. There is nothing illegal or immoral about the stipulation granting a mortgagee the right to purchase a mortgaged land. It renders the right to redeem of a mortgagor defeasible. The mortgagors promise was in the nature of a continuing offer, non-withrawable suring a

period of 2 years, which upon acceptance by the mortgagees gave rise to a perfected sale.

Limson vs. Spouses De Vera, Cuenca, and Sunvar Corp Facts: The spouses de Vera offered to sell their land to Limson. Limson sent them an earnest money of P20,000., which was evidenced by a receipt that such money is earnetst payment with an option to purchase the land in 10 days. The 10 days elapsed without Limson exercising her right. De Vera demanded payment of the purchase price of the land, but Limson did nnot pay. De Vera then sold the land to Sunvar Corp. Limson later on assailed the sale on the ground that there was a perfected sale between her and De Vera. De Vera argued that there was no perfected sale, but rather, there was only an option to buy which Limson failed to exercise. Issue: Was the contract between Limson and De Vera an option to buy or a contract of sale? Held: An option to buy. The receipt shows that is an option contract that gave Limson the right to buy the property witin 10 days. An option is a continuing offer by which the owner stipulates with another that the latter shall have the right to buy the property at a fixed price within a certain time. It is not a purchase but merely secures the right to purchase. The earnest money paid here is not really an earnest money but a separate consideration for the option contract. Difference: earnest money is part of the purchase price ption money is a separate consideration ; earnest money is given only when there is a sale, option money applies to a sale not yet perfected; when earnest money is paid, the buyer is bound to pay the balance. An option money paid does not make the payer obliged to pay the purchase price.

Sanchez vs. Rigos Facts: Rigos and Sanchez executed an instrument with a caption Option to purchase wherein Rigos gave Sanchez the option to purchase her land for P1,510 within 2 years. There was no separate consideration distinct from the purchase price. Sanchez later on sued Rigos for specific performance saying he exercised his . Rigos said that the contract is void for not having a valid consideration (not important fact, useless argument). Issue: As the option did not have a consideration distinct from the purchase price, but was accepted and such acceptance was communicated by the offeree to the offerror, did it make the option enforceable? Held: Yes. Where an option to buy which is not founded on a distinct consideration from the purchase price, is accepted and such acceptance is communicated by the offeree to the offeror, the same shall give rise to a perfected contract of sale. An option not founded on consideration can be withdrawn anytime by the offeror even without notice to the offeree. However, if such offeree decides to exercise his right before the option is withrawm, the same shall give rise to a valid contract of sale.

Yao Ka Sin vs. CA, White Cement Corp Facts: The Chairman and President of WCC sent Yao Ka Sin a letter-offer for the sale of some P45,000 bags of cement. The letter offer also gave Yao Ka Sin an option to renew the contract under the same terms, prices, and conditions. This transaction was not approved by the Board of Directors of White Cement Corp. Yao Ka Sin accepted the offer.

The Board of Director of White Cement Corp learned about this and informed Tao Ka Sin that the offer was not authorized and therefore unenforceable. It sent another offer of 10,000 bags of cement to Yao Ka Sin (which was paid for by Yao Ka Sin). Yao Ka Sin sued White Cement Corp. White Cement Corp said the contract was unenforceable for being entered into by its President without the approval of the Board. Also, the optio to renew it is also unenforceable? Issue: Is the contract unenforceable? Held: Yes. Lack of authority. Also an option to renew a contract, in order to be valid, must have a consideration. The option to renew the contract herein has no consideration.

Ang Yu Asuncion, Go, Keh Tiong vs. CA, Buen Realty Facts: The petitioners were lessees in the property of the Cu Unijieng. The Cu Unijieng offered to sell the property to the petitioners and the petitioner counter-offered. Cu unijieng sold the property to Buen Realty for P15M. The petitioners later on sued Keh Tiong for specific performance to sell them the property. Judgment was rendered dismissing the complaint, but upheld the right of first refusal of the petitioners to buy the property should Cu Unijieng decide to sell it for P11M or less. When Buen Realty asked the petitioners to vacate the property, the petitioners prayed the court for a writ of execution of the judgment rendered. Issue: Is a writ of execution in order? Held: No. The petitioners were only given a right of first refusal if the land is sold for P11M or less. The land was sold for P15M. A writ of execution is not proper because they have no cause of action.

Discussion of court: ROFR, Options are new developments in real estate. An option is an offer to buy or sell. It is an imperfect offer (policitiacion). Where a period is given to the offerre within which to accept the offer, the ff rules shall apply: If the period is not founded on consideration, the offeror has the right to withdraw it before acceptance by the offeree. He may also withdraw it even if the offerree has accepted but such acceptance has not yet been communicated to him. If the period is founded on separate consideration, an option contract is deemed perfected. If the offeror withdraws it before acceptance, the offeree may not sue for specific performance but only for damages because since there was no acceptance of offer, no contract of sale was perfected. If the offer was accepted but the offeror withdraws the option, spec perfrom. Eulogio vs. Spouses Apeles Facts: The spouses Apeles owned a property, which is being leased by Eulogio (car business). Euglogio alleged that the spouses entered into a 3-year contract of lease with him in which he was given an option to buy the property within the 3 year period for a price not more than P1.5M. Eugolio decided to exercise his purported option to purchase the property. The spouses Apeles denied signing the contract. Eugolio sued for specific performance. Issue: Is the option valid? Held: No. An option in order to be valid, must be founded on a consideration separate and distinct from the price.

Villamor vs. Reyes Facts: The spouses Reyes sold a property (paraphernal) to the Villamors @ 7O pesos/ sqm. This property was a the half-portion of a property Reyes owns. Reyes and the Villamors later on executed an option contract wherein it was stated that the reason why the Villamors agreed to buy the property at a higher price of P70 as compared to its market value (P25 or P17) is because Reyes agreed to sell them the other half for the same price should the need arises from Villamor or Reyes. The option did not contain a period. 17 years later, Villamor decided to exercise her option but the Reyes spouses refused to honor it. Issue: Did the option have a valid, distinct, consideration separate from the purchase price? Held: Yes. The consideration was the premium the Villamors were willing to pay on top of the market value (P70 as compared to P25) to secure the option. However, since the option did not contain a period, it became ineffective after 10 years.

Nietes vs. CA, Dr. Garcia Facts: On October 1959, Dr. Garcia leased his property (a land with school building) to Nietes for a term of 5 years with an option to purchase before the expiration of the contract. The lease price was P5K per year or a total of P25,000 for the entire term. Nietes paid Garcia a total of P24,757 as of August 1961. Dr. Garcia sent a demand letter to Nietes for the unpaid balance and threatened him with rescission. Nietes replied that he had sent additional sums of P3,000 and P2,000 which Dr. Garcia accepted. He also signified his willingness exercise his option to purchase the property. Dr. Garcia argued that these amounts were part of the rentals

and not part of the payment of the purchase price, and therefore, Nietes did not validly exercise his right to purchase. Issue: Did Nietes validly exercise his right to purchase the property? Held: Yes. In an option to buy, the creditor may validly exercise his right by merely advising the debtor of the formers decision to by and expressing his readiness to pay the price stipulated, provided that the same is available for delivery to the debtor upon the execution of a deed of sale in his favor by the debtor. Notice of desire to exercise the option to buy need not be coupled with a payment of the price. Nietes had manifested his desire to exercise his right.

Sales Digest 5 PAGE \* MERGEFORMAT 9

Carbonell vs. CA, INfante, Poncio Facts: Carbonnell, Infante, and Poncio are neighbors. Carbonell agreed to buy the land of Poncio and agreed to assumed the mortgage over the property. When a deed of sale was brought by Carbonells counsel to Poncio, Poncio refused to sign it because he sold the same land to Infante. Carbonell sought a dialogue with Infante, but Infante refused to see her. Carbonell, informed that the sale to yet registered, caused his counsel to register his adverse claim over the land in the Register of Deeds on Feb 8, 1995. Infante registered the deed of sale on Feb 12, 1955. She thereafter took possession of the land. Carbonell sought the nullification of the second sale to Infante on the ground of the prior sale to her. ( Infante put up the defense of unenforceability of the sale to Carbonell under the Statute of Frauds, but this was brushed aside by the SC since the sale to Carbonell was partially executed). Issue: Who has a superior right over the land? Held: Carbonell because she registered her claim over the land first, and she was in good faith. Art 1544: Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in possession, and in the absence thereof, to the person who presents the oldest title, provided there is good faith. Carbonnel was the first buyer and she was in good faith because there was no other buyer

during that time. She was able register her claim over the property 4 days before Infante. Her good faith did not cease when she was informed of the 2nd sale to Infante. Infante, on the other hand, is in bad faith as can be gleaned from the ff: She refused to see Carbonell, her neighbor, which indicates that she knew of the prior sale Carbonell was already in possession of the mortgage book, which should have compelled her to inquire why the mortgage book was not with the seller Most important: When she registered her deed of sale, the adverse claim of Carbonell was already inscribed in the title, so she was therefore informed that there was a prior sale.

Consolidated Rural Bank vs. CA, heirs of Dela Cruz Facts: The Madrid brothers owned a land. On Aug 15, 1957, Rizal Madrid, with the conformity of his brothers, sold to Gamio and Dayag a part of his share in the land. The deed of sale was not registered. On May 26, 1964, Gamiao and Dayag sold the southern half of a lot they bought to Teodero dela Cruz. Dela Cruz took possession and cultivated the land. Teodoro Dela Cruz died and his heirs continued the possession of the land. The Madrid Brothers sold a land (which included the portion sold to Gamiao and Dayag who sold it to Dela Cruz) to Marquez. The Deed of Sale was registered on May 2, 1982. Marquez mortgaged portions of the land to petitioner Consolidated Rural Bank to secure a loan. He defaulted, and CRB bought the land in a foreclosure sale. The heirs now filed for the nullification of the sale to CRB and the certificates of titles held by Marquez. Marquez claimed to be a buyer in good faith and pointed out that the sale to Dela Cruz was not registered. CRB interposed the defense of good faith and reliance on the titles held by Marquez which were free from encumbrance and liens. CRB also asserted that it acquired the property from Marquez, who was the registered owner. Issue: Given that the sale to Dela Cruz was not registered and the sale to Marquez was registered, who has a superior right? Held: The heirs of Dela Cruz has superior right even if the sale to them was not registered. Article 1544 which says that where a property is sold twice, the one who registered it first will be upheld is only applicable if the double (or more) sale was done by the same vendor. It cannot

be invoked where 2 contracts of sale was done by 2 different persons. In this case, the vendors in the first deed of sale were Gamiao and Dayag (who sold the land to Dela Cruz) who acquired the land from Rizal Madrid, with the conformity of all the Madrid Brothers. The vendors in the later deed were the Madrid brothers, but at the time they executed the sale, they were no longer the owners because they already disposed the land to Gamaio and Dayag. In order that tradition/delivery may be considered performed, the requisites are: The vendor had the right to convey the property The vendor had the will to convey the property. Intention to convey is insufficient, for it only constitutes will. In a situation where not all the requisites are present, which would warrant the application of Article 1544, the rule he who is first in time is preferred in right shall apply. This means that the first vendee has the superior right because he is undisputedly in good faith as there were no other vendees prior to him. In this case, the sale to the heirs by Dayag and Gamiao, who first bought the land from Rizal Madrid, was anterior to the sale by the Madrid brothers to Marquez. It was also the heirs who possessed the property first in time. Also, it is a principle that one cannot give what he does not have. Therfore, when the Madrid Brothers sold the land, they were no longer the owners. Also, granting that article 1544 is applicable, the heirs will still have a superior right because Marquez was not a buyer in good faith, even if he registered the sale. The fact that the land was in possession by people who were not the vendor negates his good faith because he should have inquired about their possible claim. Article 1544, in the double sale of immovable lays down the rules of preference: The first registrant in good faith Should there be no entry, the first in possession in good faith In the absence thereof, the buyer who presents the oldest title in good faith. (Reference by SC: Carpio vs. Exevea)

Cheng vs. Genato, Da Jose Facts: Genato owned a lot. He entered into a contract to sell with the Da Jose Spouses. The Da Jose spouses paid partially the price and the balance was to be 30 days after the execution of the contract or on or before October 6, 1989. The contract was executed in a public instrument and was registered The vendees failed to pay the balance, and Genato executed an affidavit to annul the contract to sell. Later on, Cheng offered to buy the land. He was made aware of the contract to sell in favor of the but he nevertheless pushed through with his desire to purchase and gave Genato P50,000 as partial payment. When Genato went to the Register of Deeds, he encountered the Da Jose spouses and informed them of his plan to rescind the contract to sell and to sell the land to Cheng. The spouses reminded him of the extension he granted them to settle the remaining balance and reiterated their willingness to buy the land. Cheng filed a complaint for specific performance and damages to compel Genato to sell the land to him. The Da Jose spouses, intervened saying they have a superior right. Issue: Who has a superior right?

Held: The Da Jose Spouses under the principle first time, stronger right. The contract between Genato and Cheng was a contract to sell, which was subject to a suspensive condition that never took place, therefore, there was no double sale in this case and are: 2 or more sales transactions in issue pertaining to the same subject matter 2 or more buyers at odds over the rightful ownership of the subject matter must each reflect conflicting interests 2 or more buyers must have bought the subject matter from the same seller. In a contract to sell, the above-mentioned situations cannot take place because there was no transfer of ownerhip. However, the governing principle of article 1544, which is first in time, stronger in right shall apply. Also, the spouses Da Jose registered their deed of sale first. San Lorenzo Dev Corp vs. CA, Babasanta, Lu Facts: The Spouses Lu owned the land which was the subject of the controversy in this case. It was purported that the land was sold to Babasanta. Later on, they sold the land to San Lorenzo Dev Corporation, which sale was consummated on May 3,1989. Babasanta filed a complaint for specific performance against the Lus to compel them to sell the land to him, but the Lu averred that the sale did not push through for failure of Babasanta to pay the price on time. SLDC intervened, saying it had superior right over the property because it was able to register it on June 2, 1989. Babasanta say that SLDC was not a buyer in good faith because when it registered the property, the notice of lis pendens was already annotated. Issue: Who between Babasanta and SLDC had a superior right over the property? Held: SLDC, because it was the first vendee that registered the property and took possession of the property. First of all, the contract between Babasanta and the Lus is a contract to sell and not a contract of sale, because it can be gleaned from their actions that ownership was reserved with the seller until full payment of the price. Therefore, the land was not really sold to Babasanta. Also, granting that the contract with Babasanta was of sale, SLDC still had a better right because it took possession of the property and had it registered and a public instrument was executed it its favor. The property was never delivered to the ownership of Babasanta. Also, even if Babasantas claim was inscripted in the title before SLDC had it registered in June 2, 1989, the same cannot negate SLDCs good faith because the sale in its favor was consummated on May 3, 1989 or before the annotation of the adverse claim. Taredo/ Tanedo vs. CA, Taredo, Facts: On October 1962, Lazaro Taredo executed a notarized deed of absolute sale in favor of his brother, Ricardo Taredo and his wife (respondents) covering whatever his future inheritance share in a land. Upon the death of their parents, Lazaro executed an Affidavit of Conformity on Feb 28, 1980, reaffirming the sale he made 1962. January 13, 1981, Lazaro executed another notarized deed of sale in favor of the respondents wherein he conveyed his undivided share in another land left by their parents. The respondents learned that Lazaro his share in the same property to his children through a deed of sale dated December 1980. On June 7, 1982, the respondents registered their deed of sale in the Register of Deeds. Petitioners filed a complaint for rescission of the deeds of sale to the respondents, on the ground

that the sale in 1962 was void for being a sale of future inheritance, and that the sale on 1981 was registered in bad faith because they were already in possession f the land and that the respondents knew of the sale. Respondents averred that the sale in 1961 was reaffirmed and that the sale in 1982 was registered ahead of the petitioners claim. Issue: Who has a better right? Held: As for the sale in 1961, the sale is void for being a sale of future inheritance. The affidavit that reaffirms it shall also be void. As for the double sale of the inherited land which happened after the death of the parents, the respondents have a better right because they registered the sale first on June 7, 1982. (The SC affirmed the findings of the CA which found that the respondents were registrants in good faith and that the petitoners testimony was self-serving).

Raymundo vs. De Leon Facts: On March 1993, Raymundo sol 3 parcels of land to Respondent Ong. The Deed of Sae says that the petitioner absolutely and irrevocably sells to De Leon the properties. De Leon also agreed to assume the mortgage. Persuant to this, the mortgagee bank conducted to a credit investigation on De Leon to determine her fitness to assume the mortgage. Raymundo informed the bank that he authorizes it to accept payment from De Leon and he also delivered the keys to the locks of the properties. After the sale on March 1993, Raymundo sold the same properties to Viloria. De Leon learned about this and learned further that Raymundo paid the amount due on the mortgage. Respondent filed a case for specific performance against Raymundo. Raymundos defense was that the contract between him and De Leon was a contract to sell subject to the suspensive condition of approval by the bank of the application for assumption of mortgage. Issue: Who has a better right over the property-De Leon or Viloria? Held: De Leon because she took possession of the properties first There was a double sale (The CA erred in holding that the 2nd sale to Viloria is void. ) It can be gleaned that the properties was delivered to her when Raymundo gave her the keys and authorized the bank to accept payments from her. Also, this is a contract of sale because the deed of sale says that the land was being conveyed absolutely and irrevocably, meaning ownership was not reserved with the seller. Also, granting that this was a contract to sell, the sale was deemed perfected when the suspensive condition, which is that in case the bank approves the application for assumption of mortgage by De Leon, was deemed fulfilled when Raymundo rendered its happening impossible by paying the amount due on the mortgage. Agricultural and Home Extn Dev Corp (petitioner) vs. CA, Librado Cabatuan Facts: On March 29, 1972, the Diaz spouses sold a parcel of land to Gundran. The owners duplicate was turned over to Gundran. The sale was not registered however, because Gundran was advised by the Register of Deeds of the existence of lis pendens on the title. On August 30, 1976, petitioner entered into a join venture agreement for the improvement of the land. This agreement was not registered as well.

On August 30, 1976, Josefa Mia-Diaz (one of the Diaz spouses), sold the same land to respondent Cabatuan. Cabatuan was able to register the sale on Sep 3, 1976. Gundran sued for reconveyance of the property and Petitioner intervened to protect its interest. Petitioenr argued, among others the Cabautuan was not a buyer in good faith and therefore, even if he had the sale registered, he should not have a superior right over Gundran. Issue: Is Cabatuan a buyer in good faith? Held: Yes. A buyer in good faith is defined as one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same at the time of such purchase or before he has notice of the claim of interest of some other person. The claims and interests of Gundran and the petitioner were not registered, and the certificate of title issued to Cabatuan was free from adverse claims. Therefore, Cabatuan is in good faith.

Navera and Amador vs. Nares, Nares CA Facts: Lot 1460 was co-owned by Elena Navera-Nares and Eduarda Navera. Elena died in 1924, and her heirs, including respondents Arsenio Nares, and Felix Nares acquired her share in the property as inheritance. On May 14, 1947, Eduarda Navera executed a sale of her share the property in a public instrument in favor of Aresenio Nares. This sale was not registered A second sale covering the same property was executed in a public instrument by Eduarda in favor of Mariano Navera (predecessor-interest of petitioner) on June 26, 1948. This sale was not registered as well. The respondents Nares filed a complaint against the petitioners saying that they are the absolute owners of lot 1460. Issue: Given that both sales were not registered, who has a better right over the property? Held: The respondents Nares. Since both sales were not registered, ownership shall be vested upon the person who in good fath, was first in possession of the disputed lot. Possession can be actual or symbolic. Symbolic possession is acquired by the execution of a public instrument. This means that after the sale of a real property by means of a public instrument the vendor who resells it to another, does not transmit anything to the second vendee. In this case, the prior sale of the land to the respondent Nares by means of a public instrument was tantamount to delivery resulting in material and symbolic possession of Nares. Therefore, Nares had a better right over Navera because Narres possessed the land first.

Naawan Community Rural Bank vs. CA, Lumo spouses Facts: On May 17, 1988, the Comayas executed a deed of sale in favor of the Lumo spouses covering a parcel of land. This deed was registered on June 9, 1988. A new title was registered to the spouses. After obtaining their TCT, the spouses requested for issuance of tax declaration certificates in

their names. They were surprised to learn that the property was also declared for tax purposes in the name off Naawan Bank. Apparently, on February 7, 1983, Comayas mortgaged the property to the bank to secure a loan. The property was still then an unregistered land. This property was subsequently bought by the bank in a foreclosure sale and thereafeter, a sheriffs certificate of sale was issued in favor of the Bank. and registered in the Register of Deeds on Dec 2, 1986. On Jully 23, 1984, the TCT of the land in the name of Comayas was enteref in the RD of Cagayan. The Lumo spouses instituted an action for quieting of title of the land. The spouses argued that they acquired the land when it was registered under the Torrens System, and therefore they have a superior right. The Bank argued that they sheriffs deed of final conveyance was registered on December 2, 1986, and therefore, it registered it first. Issue: In light of the fact that the land was unregistered when the Bank acquired it and it was registered under the Torrens System when the spouses acquired it, who has a better right? Held: The spouses. The land was still untitled when the bank acquired it by virtue of a deed of ceonveyance. On the other hand, when the spouses purchased the property, it was already registered under the Torrens System. Therefore, the spouses had a better right.

Carumba vs. CA, Balbuena Facts: The spouses Canuto sold an unregistered land (the property in question) to the spouses Carumba on April 12, 1955. The deed of sale was never registered. On April 15, 1967, a judgment in a civil case was rendered ordering the Canuto spouses to pay their judgment creditor (Balbuena). On October 1, 1968, the sheriff issued a definite deed of sale of the subject property in favor Balbuena. The sale was registered on October 3, 1958. Issue: Who between Carumba and Balbuena has superior right over the unregistered land? Held: Carumba. The rule on double sales under article 1544 does not apply in this case because the subject property is an unregistered land. The purchaser of an unregistered land at a sheriffs auction sale only step into the shoes of the judgment debto and merely acquires the latters interest in the property sold as of the time the property was levied upon. In this case, while the time of levy does not appear, it was certainly made after April 15, 1957, when the decision against the former owners of the land was rendered in favor of Balbuena. The deed of sale in favor of Canuto was executed 2 years before, on April 12, 1955. Even if it was merely embodied in a private document, the buyer Carumba took possession of the unregistered land, which was sufficient to vest ownership on him. Therefore, when the levy was made by the Sheriff, the judgment debtor no longer had a right over the property that could pass to the purchaser in the execution sale.

Radiowealth vs.Palileo Facts: On April 13, 1970, the spouses Castro sold to respondent Palileo a parcel of an

unregistered land. The deed of sale was notarized but not registered. On November 29, 1976, a judgment was rendered against Castro in a civil case, wherein he was ordered to pay Radiowealth a sum of money. The subject land was levied upon execution and sold to Radiowealth. On April 13, 1970, a certificate of sale was executed by the sheriff in favor of Radiowealth. The period of redemption expired and a deed of final sale was executed in favor of Radiowealth. Radiowealth registered both deeds. When the Palilio learned about the status of the land, he filed an action for quieting of title. Radiowealth argued that it had a better right over the land because it was able to register the deeds of sale. Issue: Who between Radiowealth and Palileo had a better right over the unregistered land? Held: Palileo. In the sale of unregistered land, mere registration of a sale in ones favor does not give him any right over the land if the vendor was not anymore the owner of the land, having previously sold the same to someone else, even if the earlier slae was unrecorded. In this case, when the land was levied upon execution it was no longer owned by the judgment debtor. It was already owned by the Palileo spouses who purchased it from Castro before. (SC took reference to the case of Carumba vs. CA, where it was held that Article 1544 does not apply to double sale of unregistered land) Paulmitan and Fanesa vs. CA, Paulmitan Facts: Agatona Paulmitan died, leaving among others, lot 1091 as part of her estate. She was survived by 2 heirs, Petitioner Donato and Pascual Paulmitan. Shortly after her death, Pascual Paulmitan died, and he was survived by his heirs (respondents herein). Petitioner Donato sold the subject land to her daughter, Petitioner Fanesa. The land was later on sold in a public auction for failure of the owner to pay the realty taxes therein. Fanesa was able to redeem the land. The respondents learned about this transaction and filed for the partition of the property. Fanesa argued that she acquired absolute ownership over the and when her co-owners failed to join her in redeeming the property. Issue: What is the effect of the sale of Donato to Fanesa, given the fact that he was not the absolute owner of the property at the time of the sale? Held: The sale merely transferred of Donatos pro indiviso (undivided) share to Fanesa. A sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights of the co-owner-seller are transferred, making the buyer a co-owner of the property. When Donato sold the property, it was co-owned by him and the respondents (who were the heirs of Pascual Paulmitan). Therefore, what he transferred was his undivided share of the land. After the sale, the buyer Fanesa became a co-owner with the respondents. Also, when the co-owners were not able to join Fanesa in the redemption of the land, such did not effect the termination of the co-ownership and the vesting to Fanesa the entire ownership of the property. It only gave Fanesa the right ot be reimbursed by the co-owners of the redemption price, and until she is reimbursed, she holds a lien over the their share of the property. Mindanao Academy, et al (plaintiff-apellees) vs. Yap, Rosenda De Nuqui, Sotero De Nuqui Facts: Roesnda, and her son Sortero, sold properties to Ildefenso Yap. The properties consisted of a land, school building, books, furniture, and fixtures. The land was actually co-owned by

them and the other children of Rosenda (who did not take part in the sale). The school building, the furniture, fixtures, and books therein were actually owned by Mindanao Academy. Mindanao Academy, together with the other children of Rosenda De Naqui (who did not tkaep art in the sale) filed for the annulment of the sale. Issue: 1 What is the status of the sale of the land, which was actually co-owned by the vendors and the other children of Rosenda (who did not take part in the sale)? What is the status of the sale of the building, fixtures, books, and furniture which was not owned by the vendors, and actually owned by Mindanao Academy? Held: 1. The sale of the land together with the buildings, furniture, fixture, and books is void void because the prestation involved is indivisible (the buyer Yap would not have entered into the sale if he could not acquire the property in its entirety.)

Estoque vs. Pajimula Facts: Lot 802 was originally owned by the Perez spouses. They were survived by their children, including Crispina Perez. Crispina Perez sold the 1/3 portion of the land to Petitioner Estoque. In the deed of sale, the specific portion of lot 802 which was sold was identified. Later on, the siblings of Cripsina (and their respective spouses amd children) assigned to Crispina their rights and interests over lot 802. Crispina then sold 2/3 of the land to Pajimula. This specific portion was likewise identified in the deed of sale. Estoque now argues that being a co-owner of lot 802 with Crispina, she should be allowed to redeem the portion sold by Crspina to Pajimula. Pajimula argued that there was no coownership because the specific portions of the lot sold were identified. Issue: Was there a co-ownership that existed? Held: None. Crispina sold a specific protion of the land to Estoque. Even if she was not yet the absolute owner of the land and could not have conveyed that specific portion, she became the absolute owner thereof when her co-heirs assigned to her all their interests over the land. Therefore, by operation of law, the title of the property passed to the buyer. Estoque, the buyer became the specific portion sold to her. The land sold to Pajimula was a specific portion as well. Therefore, no co-ownership existed between Estoque and Crispina. Estoque never acquired the right to redeem the property from Pajiumla.

Almendra, Almendta, Ojeda, Ceno vs. IAC, Almendra Facts: During her lifetime, Aleja made the ff sale transactions covering some real properties: A sale of a specific part in an not-yet-partitioned conjugal property after her husband, Santiagos death. A sale of of her paraphernal property (which she inherited from her father). A sale of a subdivided portion of a property which previously adjudicated to her in a civil case A sale of a subdivided portion of a property which was previously adjudicated to her in the same previous civil case, which was subject to the rights of her son, Magdaleno Ceno. On January 21, 1977, her children, Margarita Alemendra , Delia Almendara, and Bernardina Ojeda (Petitioners) filed a complaint against Angeles Almendra and Roman Almednra (respondents) for the annulment of the deeds of sale in their favor and for the partition of the properties. Issue: What are the status of the sale transactions executed by Aleja in favor of the respondents? Held: The sale of the unpartitioned conjugal property is valid on so far as Alejas 1/2 undivided share therein is concerned. This is because Aleja could not sell the entire conjugal property while it was not yet partitioned. The sale of her paraphernal property is valid in its entirety, since Aleja was the absolute owner theref. The sale of a subdivided property previously adjudicated to her is also valid because she was the absolute owner. The sale of the property adjudicated to Aleja subject to the rights of Magdaleno Ceno is covered by the rule Buyers Beware. Since the buyer was informed that the thel ad was subject to the rights of petitioner Ceno, Cenos rights are protected. Republic vs. Heirs of Fransisca Dignos et al Facts: 2 lots were adjudicated to Tito Dignos and the respondents predecessors after a Cadastral Survey. The heirs of Tito Dignos sold the entire land to the Civil Aeronautics Admin (CAA), the predecessor-in-interest of Petitioner Mactann Intl Airport (MCAA) MCAA ignored the request of the respondents to prohibit 3rd persons from occupying the land. This prompted the respondents to file a case for quieting of title. The respondents averred that their prdecessors-in-interest never sold their part of the land and were never given a written notice of the sale. Issue: What is the status of the sale of the entire land by a co-owner without the knowledge of the other co-owners? Held: The sale is valid only in so far as Tito Dignos share is concerned and subject to the right of the co-owners to redeem the share sold.

Bucton vs. Gabar, CA Facts: On January 19, 1946, the Buctons paid the Gabars P1,000 as part of the payment for the purchase price of a property. The property was not yet owned at that time by the Gabars. On January 24, 1947, the Villarins (the then owners of the property) executed a deed of sale covering the property in favor of Gabar. Pursuant to their purchase of the property, the Buctons requested the assistance of Gabars in securing registering the portion that they bought. The Gabars refused. The Buctons then filed a case for specific performance, to compel the Gabars to exececute a deed of sale in their favor. The Gabars raised the defense of prescription. Issue: What is the status of the sale of the land to the Buctons, given that the Gabars were not yet the owners of the land at the time of the sale? Held: The ownership of the land was automatically vested in the Buctons when the Gabars subsequently acquired title thereto. When an non-owner sells a property and he subsequently acquires titile thereto, such title passes by operation of law to the buyer. The defense of prescription cannot be upheld because the action is actually for quieting of title which is inprescriptible.

City of Manila vs. Bugsuk Facts: The City of Manila demanded Bugsuk to pay taxes pursuant to an ordinance, for being engaged in the sales of timber products in the City of Manila. Bugsuk refused , saying it was not a dealer of timber products because what it sold in its Manila office were its products directly coming from its concessions. The City of Manila filed a complaint against Bugsuk. Issue: Is Bugsuks Manila office a merchant store, and therefore, taxable by the ordinance? Held: No. A merchant store is a place were goods are kept for sale; or where goods are deposited and sold by one engaged in buying and selling them The transactions that transpired in the Manila office were mere placement of orders for the goods and making payments thereto. The office is not a store because there were no goods therein displayed for sale nor was Bugsuk buying and selling lumber products because what is sold there were the produce of its concessions.

Aznar vs. Yapdiangco (defendant-appellee), Santos (intervenor-appellee) Facts: Teodoro Santos agreed to sell his car to Vicente Marella. The understanding was that the price would be paid only after the car has been registered in his name. A deed of sale over the car was subsequently executed in favor of Marella and the car was registered under his name. The price, however, remained unpaid. At the time that payment should exchange hands, Marella said that the amount he has is short of P2,000. He pleaded Ireneo Santos to allow him to procure the P2,000 from his sisters house. Ireneo Santos and Marella drove to the supposed sisters house. When they arrived there, Marella asked Santos to wait in the living room. Santos waited for a long time, until he realized that Marella already ran away with the car and the registration papers. Marella sold the car to appellant Aznar. While Aznar was registering the car in his name, it was seized by law enforcers as a consequence of the report to them by Santos. Aznar filed a complaint for replevin against Yapdiangco (of the Phil Constabulary) Santos intervened. One of Aznars argument was that where a seller of goods has a voidable title thereto, but his title has not been voided at the time of the sale, the buyer in good faith acquires good title (Article 1506). Issue: Who between Santos and Aznar have a better right to possess the car? Held: Santos. Santos was unlawfully deprived of the car. Therefore, he can recover it from the one in possession of the same. Even though there was a contract of sale between Marella and Santos, Marella took possession of the car by stealing it from Santos son. Therefore, the car was never delivered to him and there was not transfer of ownerhip. As to Aznars argument that the seller has a voidable title, it is not applicable in this case. The seller, Marella, never had title because the ownership of the car was never transferred to him. Tagatac vs. Jimenez Facts: Tagatac was swayed by Warner Feist (who was posing as a wealthy man) to sell him her car. The car was delivered to Feists possession and Feist issued a check as payment. A deed of sale in a private document was executed in favor of Feist. Tagatac soon found out that the check Fiest issued was unfunded. Meanwhile, Feist was able to have the deed of sale in his favor notarized, and had the registration certificate of the car transferred to his name. Feist sold the car to Sanchez. Sanchezz sold the car to Jimenez. Jimenez then transferred the car to a car exchange to be offered for sale. He also later on transferred the car to Masalonga to be offered by the latter for sale. When Masalonga failed to sell the car, transferred it to Villanueva so that he will sell it for Jimenez. On Sep 3, 1952, the certificate of registration was retransferred to Jimenez. Meanwhile, on August 31, 1952, Tagatac found out that the car was in the car exchange. She filed a suit for recovery of the car. It was her contention that she had a better right over the car because she was unlawfully deprived of the car when Fesit swindled her, and that Jimenez was a purchaser in bad faith as can be gleaned from the fact that when the car was retransferred to him for the second time on Sep 3, 1952, he was already aware of its infirmities Issue: Who between Jimenez and Tagatac has a better right over the car?

Held: Jimenez because he is a purchaser in good faith. First of all, the title obtained by Feist over the car was a voidable one because he employed fraud on Tagatac to induce her to sell the car to her. Unless this voidable contract is annulled, it remained valid and consequently, ownership was transferred to Feist. Siince ownership was transferred to Feist, he was able to transfer ownership over the car to Sanchez, who then transferred it to Jimenez. Jimenez is a buyer in good faith because when he bought the car, he was not aware of the voidable title of Feist. The fact that he became aware of the
cars infirmities on when the car was retransferred to him is of no moment because the second transfer to him was merely a for the purpose of returning the car to him after his transferees failed to sell them.

Edea Publishing vs. Santos Facts: A person posing as Professor Jose Cruz placed an order with Petitioner EDCa publishing for 406 books, payable on delivery. Edca Prepared an invoice and delivered the books, and Cruz issued a check as payment. Cruz then sold 120 out of the 406 book to Leonor Santos, who relied on the sellers invoice held by Cruz as evidence of his ownership over the books. Edca discovered that Cruz was a poser and that the check he issued was unfunded. He caused the recovery of the books from the respondent Santos by the police. Santos argued that he bought the books in good faith, and therefore, entitled to its possession. Issue: Who between EDCA and Santos has a better right over the books? Held: Santos because EDCA was not unlawfully deprived of the books. The contract between EDCA and Cruz was perfected by mere consent. Therefore, when EDCA delivered thr books to Cruz by virtue of this contract, ownership was transferred to Cruz. The fact that Cruz was not able to pay for the books did not negate the transfer of ownership. Therefore, when Cruz sold the books to Santos, ownership was transferred. Roman vs. Grimalt Facts: Roman has a schooner. He negotiated with Grimalt for the latters purchase of the schooner. Grimalt agreed to purchase the vessel at an agreed price, provided that the title papers are in proper form. Roman failed to perfect his title to the vessel. As a consequence, Grimal did not pay the purchase price. The vessel was later on sunk by a storm. Roman filed a complaint against Grimalt, praying that he be ordered to pay him the purchase price. Issue: Can Grimalt be compelled to pay the purchase price? Held: No. There was no perfected contract to begin with because when Roman failed to perfect his title, Grimalt did not give his consent to the contract.

Lawyers Cooperative vs. Perfecto Tabora Facts: The Lawyers Cooperative Publishing Co sold and delivered to Tabora a complete set of American Jurisprudence, payable on installments. The books were placed in the law office of Tabora. A fire broke out, which resulted to the burning of the books. Lawyers Cooperative tried to collect the balance from Tabora but Tabora refused to pay. Lawyers cooperative filed a complaint for the recovery of the balance. Tabora argued that since ownership of the books were reserved with the Lawyers Cooperative, until full payment of the price, he should not bear the loss of the books. He also argued that the fire is a fortuitous event which excused him from his obligation to pay for the books. Issue: Was Tavera excused from paying the price of the books? Held: No. Where delivery of the goods has been made to the buyer or to the bailee for the buyer, in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance b the buyer off his obligation under the contract, the goods are at the buyers risk. The reservation of the title to the books in the sellers name is for the purpose of securing the payment of the price and the books were already sold and delivered. Therefore, the buyer Tabora bears the risk. Also, the fire cannot excuse him from payment because first of all, the books are not determinate, and secondly, Tabor assumed the risk of loss after the delivery.

Asset Privatization Trust vs. TJ Enterprises Facts: Asset Privatization acquired from the DBP some machineries and refrigeration equipment. It stored these assets at Golden City Compound. The compound was leased to and in physical possession of Creative Lines. APT sold some of these equipment to TJ Enterprises. TJ Assets failed to pull out all of the equipment because the employees of Creative Lines prevented the egrest of some of the equipment it bought. TJ Enterprises filed a complaint of specific performance and damages against AST and Creative Lines. One of the arguments raised by the petitioner was that the reason for the failure to make actual

delivery was not attributable to it and is beyond its control. Issue: Can APT be held liable for the failure to deliver? Held: Yes. First of all, the failure to deliver cannot be considered unavoidable or unforeseeable to constitute a fortuitous event event because APT knew for a fact that the properties to be sold were housed in the premises leased by Creative Lines. Hence, APT cannot be excused in its failure to deliver. Where actual delivery has been delayed through the fault of either the buyer or seller, the goods are at the risk of the party at fault. The risk of loss or deterioration of the goods sold does not pass to the buyer until there is actual or constructive delivery of the machinery and equipment. Since there was no delivery in this case, the risk of loss is to be borne by the APT. Assuming for the sake of argument, that Creative Lines refusal to allow the hauling of machinery and equipment is a fortuitous event, APT can still be held liable because it is guilty of negligence or delay. Levy Hermanos vs. Gervacio Fact: Levy sold to Gervacio a car. Gervacio maid an initial payment and executed a promissory note for the balance of P2,400, payable on or before June 15, 1937 @ 12% intereset p.a. Gervacio falied to pay, and Levy foreclosed the mortgage. At the auction, Levy was the highest bidder for P800. Levy instituted an action to collect the P1,600 deficiency. The lower court, in ruling against Levy said that in a contract of sale of movable property in installments, failure to pay 2 or more installments shall confer upon the vendor the right to cancel the sale or foreclose the mortgage, if a mortgage has been constituted on the property, without reimbursements to the purchaser of the installments already paid. It went on saying that if the vendor chose to foreclose the mortgage, he shall have no further action against the purchaser for the recovery of the unpaid balance, and any agreement to the contrary shall be null and void. (It cited article 1454 of Civil Code) Issue: Can Ley still collect the unpaid balance of P1,600 after it bought the car at a foreclosure sale for P800? Held: Yes. The above-cited provision is only applicable to purchases on installments. In this case, the balance was payable on or before a specified date. The rationale of the above-cited provision is to prevent buyers in installments from being tempted to buy beyond their means. Where the balance is to be paid in a single payment, there is no such temptation.

Visayan Sawmill v. CA, RJH Trading Facts: Visayan Sawmill agreed to sell to RJH the scrap iron located in the sawmills land. The sale was subject to the condition that RJH will open a letter of credit in the amount of P250,000 in favor of Visayan Sawmill on or before May 15, 1983. When RJHs men started gathering, the scrap metals, they were stopped by Visayan Sawmill. RJH filed a complaint against Visayan Sawmill praying that it be compelled to deliver to it the scrap iron. Visayan Sawmill claimed that the cancellation of the contract was justified because of the failure of RJH

Trading to open a letter of credit, which was a condition of the contract. Issue: Should Visayan Sawmill be compelled to deliver the scrap iron? Held: No because the rescission was justified. This is a contract is not of sale but a contract to sell subject to the suspensive condition that RJH will open a letter of credit by May 15, 1983 in favor of Visayan Sawmill. Until this condition is complied with, the obligation of RJH cannot be compelled by specific performance to deliver the scrap iron because its obligation did not yet arise. Moreover, Visayan Sawmill can rescind the contract for failure of RJH Trading to comply with the condition.

Delta Motors Saless Corp (plaintif-appellee) vs. Niu Kim Duan and Chan Fue Eng(defendantsappellants) Facts: Plaintiff sold to defendants 3 air-condition units all valued at P19,350. Under the terms of the sale, defendant shall pay a downpayment of P774 and the balance of P18,575 shal lbe paid in 24 installments. Until the purchase price is fully paid, the title to the units shall remain with the plaintiffs. If any 2 installments are not paid by the defendants, the whole principal sum remaining shall become due. The defendants paid a total of P6,429 (P774 downpayment, and P5,655 installments). They failed to pay the installments thereafter. The plaintiff demanded the return of the aircondition units, but the defendants refused. The plaintiff was able to retrieve the possession of the units, and in view of the defendants failure to pay their balance, the P6,429 was considered as rentals for the 2 years it had used the aircon units. Defendants, on appeal , argue that the stipulation in the contract that the installments it paid shall be forfeited in favor of the plaintiff as rentals for the aircon-units should be voided for being unconscionable, given the fact that they already paid 1/3 of the entire price of the air con units (P6,243 out of P19,350). Issue: Was the stipulation valid? Held: Yes. The vendor in a sale of personal property payable in installments may exercise 1 of 3 remedies: 1.) exact the fulfillment of the obligation should the vendee fail to pay, 2.)cancel the sale upon the vendees failure to pay 2 or more installments 3.) foreclose the chattel mortgage, if one has been constituted on the property sold, upon the vendees failure to pay 2 or more installments. The 3rd option however, I subject to the limitation that the vendor cannot recover any unpaid balance of the price an any agreement to the contrary is void. The plaintiff in this case chose the 2nd option, which is to cancel the sale upon rge defendants failure to pay 2 or more installments. The stipulation that the installments will be forfeited as rent is valid because it is not unconscionable given the fact that the defendant used the aircon for 22 months. However, the plaintiff, having chosen the 2nd option, can no longer collect the

unpaid balance.

Tajanlangit vs. Southern Motors Facts: The Tajanlangits bought from Southern Motors some machineries, payable in installments. They executed a promissory notein favor of Southenr Motors wherein it was stipulated that in case of default, the total price, plus interest, shall be demandable. The Tajanlangits failed to pay, and they were sued by Southern Motors. The Tajanlangits were adjudged to owe Souther Motors the amount of P24, 755. The machineries were levied upon execution by the sheriff and they were bought by Southern Motors at a public auction for P10,000. Since the amount recovered was insufficient to satisfy the Tajanlangits obligation, The Southern Motors caused the attachment by the sheriff of certain real properties of the Tajanlangits to be sold on execution. The Tajanlangits prayed for the annulment of the writ of execution and the proceedings that were subsequent thereto. They argued that since they have returned the machineries to Southern Motors, they have settled their accounts, and 2, as Souther Motors repossessed the machines purchased on installments and mortgaged, and tese machineries were bought buy Souther Motors in an auction sale, they, the buyers, are thereby relieved from further responsibility in view of the recto Law (now Art 1484). Issue: Can Southern Motors collect further the balace remaining from the Tajanlangits? Held: Yes. The vendor in a sale of personal property payable in installments may exercise 1 of 3 remedies: 1.) exact the fulfillment of the obligation should the vendee fail to pay, 2.)cancel the sale upon the vendees failure to pay 2 or more installments 3.) foreclose the chattel mortgage, if one has been constituted on the property sold, upon the vendees failure to pay 2 or more installments. The 3rd option however, I subject to the limitation that the vendor cannot recover any unpaid balance of the price an any agreement to the contrary is void. On the argument that the machineries were already repossessed and sold at a public auction and

therefore, the Tajanlangits should be relieved of further responsibility, it is not meritorious because in this case, there was no foreclosure of chattel mortgage, nor a foreclosure sale. Therefore, the prohibition against further collection does not apply. While there was a chattel mortgage on the goods sold, the Southern Motors elected the choice of exacting fulfillment of the obligation to pay. In choosing to sue on the promissory note (1st remedy), it was not limited to the proceeds of the sale on execution of the mortgaged goods. On the argument that the Tajanlangits already returned the goods to the vendors, and therefore, they should be relieved of their obligation, the same cannot be believed. The goods were placed in the possession of the plaintiff by the sheriff to prepare it for a foreclosure sale.

Nonato Vs. IAC, Investors Finance Corp. Facts: Nonato purchased a car from them Peoples Car. They executed a promissory note and a chattel mortgage in favor of Peoples Car. Peoples Car assigned its rights over the promissory note and mortgage to Investors Finance Corp. Nonato failed to pay 2 installments, and the car was repossessed by IFC. The IFC issued a receipt in favor of Nonato indicating that the car can be redeemed within 15 days. IFC then filed a complaint against Nonato for the payment of the balance of the price. Nonato argued that since the car was already repossessed by IFC, it is now precluded from recovering the unpaid balance. The repossession was an act of cancelling the sale contract. IFC denied that its repossession of the car was an acto of exercising its right to cancel the sale. Issue: Is IFC barred from collecting the unpaid balance? Held: Yes. The vendor in a sale of personal property payable in installments may exercise 1 of 3 remedies: 1.) exact the fulfillment of the obligation should the vendee fail to pay, 2.)cancel the sale upon the vendees failure to pay 2 or more installments 3.) foreclose the chattel mortgage, if one has been constituted on the property sold, upon the vendees failure to pay 2 or more installments. The 3rd option however, I subject to the limitation that the vendor cannot recover any unpaid balance of the price an any agreement to the contrary is void. In repossessing the car, the IFC exercised its right to cancel the sale. Therefore, it is barred from collecting the unpaid balance. The receipt it issued is an indication that that should the debtor fail to redeem the car in 15 days, the company would retain permanent possession of the vehicle.

Ridad vs. Filipinas Investment Corp Facts: The Ridad spouses bought 2 cars from the Supreme Sales ad Development Corp, payable on installments. The Ridads executed a promissory note in favor of Supreme Sales and to secure this obligation, they also executed a promissory note in favor covering not just the cars they bought, but also over another car (Chevrolet) and their franchise to operate taxicabs. The rights of Supreme Sales over the promissory note and mortgage were assigned to Filipinas Investment Corp. The Ridads failed to pay at least 2 installments, and the FIC chose to foreclose on the mortgage of the 2 vehicles sold. It bought the 2 vehicles at the foreclosure sale. Since, the amount obtained from the foreclosure sale was insufficient to satisfy the unpaid balance, it chose to foreclose on the mortgage over the Chevrolet and the franchise. The Ridads filed for the nullification of the contract. Issue: Given the fact that FIC already foreclosed on the chattel mortgage covering the movables sold, can it still foreclose on the other movables that were offered as security in the chattel mortgage? Held: No. The vendor in a sale of personal property payable in installments may exercise 1 of 3 remedies: 1.) exact the fulfillment of the obligation should the vendee fail to pay, 2.)cancel the sale upon the vendees failure to pay 2 or more installments 3.) foreclose the chattel mortgage, if one has been constituted on the property sold, upon the vendees failure to pay 2 or more installments. The 3rd option however, I subject to the limitation that the vendor cannot recover any unpaid balance of the price an any agreement to the contrary is void. It has been held that where the vendor of a personal property chooses to foreclose on the chattel mortgage on the thing sold, he shall be precluded from having a recourse against the additional security offered to guarantee the payment of the price. In this case, FIC already chose to foreclose the chattel mortgage. Therefore, it is now precluded from collecting the unpaid balance. Zayas vs. Luneta Motors Facts: Zayag bought a motor vehicle from Ecano Enterprises, dealer of respondent Luneta Motors, payable in installments. Zayas executed a promissory note in favor of Luneta Motors, and to secure the balance, executed a chattel mortgage over the motor vehicle he bought. Zayas failed to pay the balance, and Luneta Motorse bought the motor vehicle in the judicial foreclosure sale. Luneta Mottors then moved to collect the remaining balance.. Zayas said that Lunta Motors can no longer collect from him because it aleady chose to foreclose the mortgage. Luneta Motors premised its right to collect the remaining balance on its allegation that it is a different entity from Escano Enterprises, he vendee of the cars mortgaged. It is its contention that Art 1484 is not applicable. Issue: Can Luneta Motors collect the remaining balance? Held: No. Contrary to its argument that it and Escano Entrprises are different entities, it being only a financier and Esano Enterprises the vendee, it can be gleaned that they are not different entities. Escano Enterprises is the agent of Luneta Motors. Also, assuming for the sake of argument that they are different entities, article 1484 is still applicable to Luneta Motors, because when Escano assigned its rights to the sale to Luneta, the

nature of the sale transaction did not change.. Therefore, the assignee, Luneta, did not acquire better rights than the assignor.

v Cruz vs. Filipinas Investment Corp Facts: Cruz bought a bus from Far East Motor Corp, payable on installments. Hee executed a promissory note in favor of Far East in the amount of P44,616. To secure this obligation, he executed a chattel mortgage over the bus in favor of Far-East. Since Far East deemed the security given by Cruz was insufficient, it was able to convince him to put up additional security. Cruz was able to make Mrs. Reyes agree to offer her real property as additional security. Far East assigned all of its rights over the promissory note and mortgage in favor of Filipinas Investment Corp. Cruz defaulted on his payment obligations. Filipinas Investment foreclosed the chattel mortgage over the bus and bought it at the auction sale for P15,000. Since the amount was insufficient to satisfy Cruzs indebtedness, Far East moved to foreclose on them mortgage over the real property of Mrs Cruz. Mrs. Cruz cited article 1484 as a defense. Filipinas Investment Corp said that art 1484 only precludes the vendor to recover from the purchaser, and not from 3rd parties who guaranteed the payment of the debt. Issue: Can Filipinas Investment Coorp go after Mrs. Cruzs real property which was mortgaged to it? Held: No. Art 1484 prohibits the vendor from further collecting the deficiency in case he had already elected the choice of foreclosing on the chattel mortgage over the movable sold. To uphold the contention of Filipinas Investment Corp is to allow the subversion of Article 1484, because the guarantor who is charged for the deficiency will have to collect from the vendee.

a\ Borbon vs. Servicewide Specialist Facts: The Borbons bought a motor vehicle from Pangasinan Auto Mart, payable on installments. They executed a promissory note in favor of the auto mart, and to secure this debt, they executed a chattel mortgage over the vehicle they bought. The promissory note had a stipulation that in case of default and the services of an attorney were needed, the debtor shall be liable for attorneys fees and liquidated damages. Pangasinan Auto Mart assigned its rights over the promissory note and chattel mortgage in favor of Filinvest Credit Corp, which then assigned it to Serivicewide Specialists. The Borbons failed to pay the installments, and so an action for replevin was instituted by Serviceide Specialist to gain possession of the mortgaged chattel to prepare it for a foreclosure sale. The trial court ruled in favor of Service Wide. The CA affirmed the trial court and adjudged the Borbons to be liable for the payment of

liquidated damages and attorneys fees pursuant to the promissory note. The Borbons, it their petition to the SC, said argued that they since Servicewide already chose to foreclose on the chattel mortgage, it can no longer collect from it attorneys fees and liquidated damages even if the promissory note has a stipulation allowing it to. Servicewide argued that what art. 1484 (which the Brobons invoke) prohibits is the collection of unpaid balance, not attorneys fees and liquidated damages. Issue: Does article 1484, in prohibiting the vendor from collecting the unpaid balance in case he elects the choice to foreclose on the chattel mortgage, also prohibits other claims that may arise from the promissory note? Held: Yes. Servicewide can no longer collect attorneys fees and liquidated damages. This is because the prohibition in article 1484 is not only limited to the unpaid balance, but also to all claims that may arise from the promissory note against the buyer-mortgagor, including liquidated damages and attorneys fees. Filipinas Investment vs. Ridad 30 SCRA 28. Facts: The Ridad spouses bought from Supreme Sales & Development Corp, a car, payable on installments. The spouses executed a promissory note in favor of Supreme Sales and as a security to their indebtedness, executed a chattel mortgage over their car. The rights over the promissory note and the mortgage were later on assigned to Filipinas Investment Corp. The Ridad spouses defaulted on their installment payments. Filipinas instituted a replevin suit against the spouses for their unjustifiable failure and refusal to deliver the car to Filipinas. The sheriff seized the car and brought it to Filipinas possession. Filipinas bought the car in the foreclosure sale. In the course of the suit, Filipinas investment incurred expenses for Attorneys fees and actual costs of the cars seizure. The lower court ordered the Ridad spouses to pay Filipinas attorneys fees and the cost of seizure.The spouses assailed this award saying that since Filipinas had already chosen to foreclose the sale, it is now precluded from collecting any claims arising from the promissory note. Filipinas Investment claim that it is entitled to the monetary awards despite it having chosen to foreclose the chattel because the it incurred these expenses as a result of the spouses unjustifiable refusal and failure to deliver the car to it. Issue: Can Filipinas still collect from the spouses attorneys the expenses it incurred for attorneys fees and for the seizure of the car? Held: Yes. While in all proceedings for the foreclosure of chattel mortgage, executed on chattels which have been sold on the installment plan, the mortgagee is limited to the property mortgaged, this case is different. Where the buyer-mortgagee plainly refuses to deliver the chattel subject of the mortgage upon his failure to pay 2 or more or if he conceals the chattel to a place it beyond the reach of the mortgagee, the mortgee, who resorted to the necessary legal action must be compensated for the necessary expenses he incurred. In this case, the Ridads deliberately failed to return the car, and Filipians has to resort to legal action that necessarily entailed expenses. Therefore, it must be paid. PCI Leasing and Finance Inc vs. Giraffe-X Facts: PCI leased out to Giraffe-X 2 equipment. Together with this lease agreement was 2 documents of loan/credit transaction wherein Giraffe, as a borrower, undertook to pay 36 monthly installments, plus penalties in case of delay. By the terms of the agreement, Giraffe also undertook to remit to PCI the sum a guaranty deposit. Giraffe-X defaulted became 3 months in default in payment of the installments due. PCIs

lawyer sent a demand letter to Giraffe, urging it to either pay the rentals or surrender the equipment. PCI then instituted a complaint against Giraffe-x, and was able to gain possession of the equipment through a writ of replevin. Also in the complaint, PCI prayed that Giraffe be ordered to pay the unpaid rental balance. Giiraffe-X argued that PCI leasing should be barred from further recourse against it after it had already gained possession of the equipment through replevin (which is equivalent to foreclosure), because their lease agreement is actually a lease agreement with an option to buy, thus under the purview of article 1484 and Article 1485. Article 1485 says that article 1484 shall be applicable to contracts purporting to be lease agreements with option to buy, when the lessee is deprived of the possession or enjoyment of the thing. PCI argued that their agreement was purely a lease agreement, and thus, articles 1464 and 1485 are not applicable. Issue: Is the lease agreement a lease agreement with an option to buy and so article 1484 is applicable? Held: Yes. The conduct of the parties indicate that they really intended a lease agreement with an option to buy. This can primarily be gleaned from the following: demand letter sent by the lawyer of PCE to Giraffe saying that it should pay the rentals OR surrender the equipment which means that the respondent may keep the equipment as its own if it pays the balance. Therefore, PCI is can no longer collect the unpaid balance.
Villarica vs. CA, Consunji, Francisco Facts: On Maay 25, 1951The spouses Villarica executed a deed of sale conveying their land to the Consunjis. In a separate instrument, which was executed on the same day, The Consunjis granted the Villaricas a right to repurchase the land within 1 year from the sale. On February 1953, The Consunjis sold the land to Francisco. The Villaricas filed for the reformation of their deed of sale, arguing that it should be presumed as an equitable mortgage because (among other grounds they enumerated), the period of one year for the repurchase granted in the instrument was extended for 1 month. Issue: Should the deed of sale be presumed an equitable mortgage? Held: No. What was granted to the Vilaricas by the Consunjis is not a right to repurchase but an option to buy. Said option to buy is different and distinct from the right of repurchase which must be reserved by the vendor, by stipulation to that effect, in the contract of sale. This is clear from Article 1601 of the Civil Code, which provides: Conventional redemption shall take place when the vendorreservesthe right to repurchase the thing sold, with the obligation to comply with the provisions of article 1616 and other stipulation which may have been agreed upon. The right of repurchase is granted by the vendee to the vendor in the same instrument, not in a subsequent one. Once a deed of absolute sale is executed, the vendor can no longer reserve the right to repurchase. Any right thereafter granted the vendor by the vendee in a separate instrument cannot be a right of repurchase but some other right like the option to buy in the instant case. Hence, the contract cannot be considered as contract of sale withpacto de retro. Since it is not e a right to repurchase but an option to buy, the extension of the period of one year for the exercise of the option by one month does not fall under No. 3, of Article 1602 of the Civil Code, which provides that: The contract shall be presumed an equitable mortgage in any of the ff cases: xxx 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. Mclauglin vs. CA, Flores

Facts: Petitioner Mclaughlin entered into a contract of conditional sale of a real property with respondent Flores. An amount of P26,550 was paid by Flores as price upon execution of the contract and the balance of P113,450 was payable on or before May 31, 1977. Flores failed to pay the remaining balance. Mclaughlin filed for the rescission of the deed with the CFI. The parties then entered into a compromise agreement, wherein Flores undertook to pay the balance. Flores also agreed to pay P1,000 per month until his obligation is duly paid for the use of the property. The compromise agreement had a stipulation to the effect that in event of default by Flores, all payments he had paid shall be forfeited in favor of Mclaughlin as liquidated damages. Mclaughlin demanded Flores to pay the balance. He moved to execute the rescission of the contract and to forfeit all the payments. Flores assailed the rescission. He also tendered his payment. Issue: Should the contract be rescinded and the payments made by Flores Forefeited? Held: No. To allow it would be inequitable. In sale of real property, where less than 2 years of installments were paid, the seller shall give the buyer a grace period of not less than 60 days from the date the installment became due. If the buyer fails to pay, the installment due at the expiration of the grace period, the seller may rescind the contract after 30 days from the receipt by the buyer of the cancellation or the demand for rescission by a notarial act. In this case, Mclaughlins motion for execution which was filed on November 7, 1980 is the notice of cancellation. He could cancel the contract after 90 days from Flores receipt of the Notice. Since Flores already tendered his payment before the expiration of the 90-day period, Mclaughlin can no longer rescind the contract. Doctrines: 1. Although the law seem to require that rescission and cancellation to be both by notarial act, Mclaughlin would hold notarial act as merely applicable to rescission, whereas notice of cancellation need not be a notarial act. 2. Even after the expiration of the grace period provided by Law, the buyer still can prevent rescission or cancellation of the contract within the 30-day period when rescission or cancellation is to take effect. This case provided for 2 grace periods: the one provided by law which is a minimum of 60 days, and the nd other would be the period before the rescission or cancellation takes place. The first is statutory while the 2 is jurisprudential.

Mortel Vs. KASSCO (Defective ruling according to Villanueva because The macdea law also applies to contract to sell real properties, not just contracts of sale) Facts: KASSCO owned a land. It mortgaged it to PNB. Later on, KASKO decided to build a condominium over the land. To secure a license to sell condominium units and to secure registration, KASSCO wrote PNB to request the partial cancellation of mortgage over the fully paid units. KASSCO then entered into an agreement with petitioner Mortel, wherein it bound itself to execute a deed of absolute sale in favor of Mortel and to transfer the condo certificate of title (CCT) corresponding to the second

floor, upon the securing of the CCT ovr the building. In return, the petitioner Mortel undertook to pay KASSCo for the condominium unit sold. The parties also agreed that pending the delivery of the Title to the Mortel, a nd contract of lease for 1 year shall exist between them covering the 2 floor of the KASSCO Building. The application for partial cancellation of mortgage remained pending with the PNB, while the lease agreement expired. A new lease agreement was executed for another year. This lease agreement expired as well without KASSCO being able to secure partial release from mortgage from PNB. KASSCO ordered Mortel to vacate the premises. Mortel demanded KASSCO to deliver the certificate of title. KASSCO filed a an ejectment case against Mortel. Mortel filed a case for specific performance against KASSCO to compel it to deliver the CCT. Mortel argued that since the agreements he entered into with KASSCO, were in the nature of contract to sell a condo unit, then the Condominium Law and Law on Sale of Real Estate on installment shall apply to the effect that he can recover whatever he paid as partial payment and monthly rental fee, and be reimbursed for the improvements he introduced. Issue: Should the laws cited by Mortel be applied in this case Held: No. Those laws will only be applicable if there is an existing contract to sell a condominium. First of all, this is a contract to sell because ownership was reserved with the seller until the full payment of the purchase price. The effectivity of this contract to sell is conditioned upon the obtainment and delivery of the CCT to Mortel. When KASSCO failed to secure a partial cancellation of mortgage from PNB, it became impossible for it to register the condominium nad obtain a CCT. Therefore, when KASSCO failed to secure the CCTs over the condo, the contract to sell did not take into effect. There was no effective contract to sell, and therefore, the laws cited by Mortel cannot be applied.

Active Realty Development Corp vs. Daroya Facts: Active Realty sold a land Daroya. The price was payable on installments. Daroya defaulted on the payment of 3 monthly amortizations. Active Realty sent Daroya a notice of cancellation of a the contract to sell. Daroya offered to pay the balance but Active Realty sodl the subject land to aonther buyer. Daroya filed for specific performance. She argued that she is entitled to a deed of sale since she has already paid P314,816 which is P90,835 greater than the contract price of P224,025, and that she has already offered to pay the balance of P24,000. Issue: Can Active Realty be compelled to refund to Daroya the value of the lot or to deliver a substitute lot (at Daroyas option)? Held: Yes because the contract to sell subsists for failure of Active Realty adhere to the procedural requirements of the Maceda Law. The Maceda law (which was legislated to protect middle and lower class buyers from abusive realty developers)

govern this case. The law provides that in case of default by a buyer in the payment of installments, where he has already paid at least 2 years of installments,, the buyer shall have the ff rights: To pay,, without additional interest, the unpaid installments due within the total grace period earend by him, which is fixed at the rate of 1 month grace period for every one year of installments paid. If the contract is cancelled, the seller shall refund to the buyer the cash surrender value of the payments on the property equivalent to 50% of the total payments made; provided that that actual cancellation of the contract shall take place after 30 days from the receipt by the buyer of the notice or the demand for rescission of contract by a notarial act and upon full payment of the cash surrender value to the buyer. In this case, the buyer already aid 4 years worth of installments or a total of P314,860, which is P90,835 more than the contract price of P224,035. When the buyer defaulted on 3 monthly ammortizations due, Active Realty decided to cancel the contract. Active Realty refused Daroyas tender of payment on the ground that it already sold the lot to another buyer. Active Realty failed to satisfy 2 requirements of the law: 1.) it failed to send a notarizef notice of cancellation and 2.) Refund the cash surrender at value.

Fabrigas vs. San Francisco Del Monte Facts: San Francisco del monte sold a land to the Fabrigas spouses. Fabrigas paid a downpayment and the balance was payable in installments within 10 years. The contract to allowed the seller to automatically rescind and forfeit all payments made to it in case of default of the buyer. The Fabrgias eventually defaulted in paying the amortizations. Del Monte snet 4 demand letters, the last of which was received by the spouses on Dec 23, 1983. Del Monte considered the contract cancelled 15 days thereafter, but did not furnish the spouses any notice of cancellation. The spouses and Del Montre agreed to restructure the contract and entered into a new contract to sell covering the property. The spouses defaulted in paying the amortizations due. On March 24, 1988, Del Monte sent the spouses a demand letter for the payment of the balance due. It also gave the spouses 30 days to pay or else the contract will be rescinded. The spouses failed to pay, and Del Monte rescinded the contract on March 30, 1989. It demanded the spouses to vacate the property. The spouses argued that the first contract to sell was not validly cancelled by sending of amere notice by Del Monte. Issue: Was the first contract to sell validly cancelled? Held: No. The automatic rescission clause in the first contract to sell is void for being a violation of the Maceda

Law. In this case, less than 2 years installments were paid by the buyer, therefore, the ff rules of the Maceda law shall apply: First, the seller must extend the buyer a grace period of at lleast 60 days from the due date of the installment. Second, at the end of the grace period, the seller shall furnish the buyer a notice of cancellation or demand rescission by a notarial act, effective 30 days from the receipt by the buyer. While del Monte had complied with the 60-day grace period, it did not comply with the requirement of notice of cancellation or a demand for rescission because it was not a notarial act. It instead appled the automatic rescission clause of the contract, which is void. However, the contract was validly novated by the 2 contract. nd contract. Therefore, Del Monte can enforce the 2 nd

Monteclavo vs. Heirs of Primero Facts: Eugenia Monteclavo leased her land to Irene. She later on agreed to sell the land to Irene. Thy agreed that Irene will deposit P40,000 as part of the donwpayment. The payment of the balance was to be negotiated in 30-45 days and that the balance of P410,000 was to be paid.In case of default in payment, the deposit would be returned within 10 days from the lapse of the negotiation period and the Agreement shall be deemed terminated. Should the agreement push through, the balance o full value of P860,000 would be paid in 10 monthly installments. Irene failed to pay the full dowpayment within the 3-45 period. She however, continued to occupy the property and made several payments in the amount of P293,000. Eugeia did not return the P40,000 deposit and refused to accept payments from Irene in 192. Egunia filed an ejectment case against Irene. Irene filed a case for specific performance to compel Eugenia to surrender to convey the land. Issue: Is the contract a contract of sale or contract to sell? Held: Contract to sell. In a contract to sell, the prospective seller reserves the transfer of title to the prospective buyer until the happening of an event (like full payment of the price). In this case, the Agreement was entered for the purpose of negotiating the sale of the property. The term of the negotiation was for a period of 30-45 days from the receipt of the P40,000 and the buyers has to pay the balance of 50% down payment amounting to P410,000 shall be paid in 10 monthly installments. In the Agreeement,, the full payment of the purchase price, in installments within the period stipulated was the positive suspensive condition. Since Irene failed to comply with this, the obligation of Eugenia to execute a

deed of sale never arose.

BPI (successor in interest of Far Eastern Bank) vs. SMP Facts: Clothespak ordered 4000 bags of ploysterine products from SMP. It issued checks in favor of SMP. The checks were dishonored by the drawee bank. In the meantime, Far Eastern Trust Company filed a case against Clothespak for recovery of money. The court ordered that the real and personal properties of Clothespack be levied and attached. SMP claimed ownership of the 4000 bags of polysterine taken from the Clothspack Factory as a result of the levy and attachment. SMP filed for the recovery of the polysterine, saying there was a wrongful attachment because the ownership over these goods were never transferred to Clothespack. It argues that the provisional receipt issued to Clothespack expressed that ownership of the goods shall belong to SMP until the check is cleared. Far Eastern argued that the buyer Clothespack already acquired ownership over the goods at the time of attachment because SMP already delivered the goods too it. Therefore, they can be attached. Issue: Whether or not at the time of attachment, SMP still owned the goods? Held: SMP still owned the goods at the time of the attachment, therefore, they cannot be attached to satisfy Clothespacks obligations. First of all, this is a contract to sell because ownership was reserved with the seller until the full payment of the price. This is evidenced by the provisional receipt issued to Clothesack by SMP which expressed that ownership over the goods shall remain with SMP until the check payment is cleared. Since the check was not cleared, the ownership was never transferred to Clothespack. Hence, SMP owned the goods and they cannot be attached.

Platinum Plans Vs. Cucero Facts: Cucero leases a condominium unit from Platinum. He offered to buy the condo unit and Platinum accepted. The price is P2,000,000, payable on 2 installments. A series of offers and counter offers then ensued between the parties regarding the full payment of the purchase price. Cucero filed a case against Platinum to compel it to execute a deed of sale over the property in his favor. Platinum argued that the contract between them is just a contract to sell Issue: Is the contract a contract to sell or contract of sale? Held: Neither. There was no perfected contract because the manner of payment was not agreed upon. However, the SC discussed the difference between a contract to sell and a contract of sale: In a contract of sale, there is the intention to transfer ownership. Whereas in contract to sell, ownership is reserved until the suspensive condition is fulfilled. In a contract of sale, the vendor cannot recover ownership of the thing sold until unless the contract is rescinded/ resolved / set aside. On the other hand, in a contract to sell, where the would-be seller desires to eject the would be buyer from the subject property, he is merely enforcing the contract and not resolving it.

Ver Reyes vs. Salvador Facts: Nicomedes owned the subject property in this case, which was an unregistered land he inherited from his parents. He entered into 3 sale contract covering the land: st 1 : A deed of conditional sale in favor of Emma Ver Reyes. The contract had a stipulation to that should the buyer fail to pay the price, it shall be null and void and that the vendor may sell it to someone else. The buyer Ver Reyes failed to pay the price. 2nd: An agreement of purchase and sale with Rosario wherein it was also provided that in case of non-payment of the price, the contract shall be deemed null and void. Rosario failed to pay the price. rd 3 : A deed of absolute sale in favor of Maria. This deed was later on ratified by the heirs of Nicomedes. Eventually, the property was subject to the conflicting claims of these buyers. Issue: Who among the parties has a best right over the property? Held: Maria Cristobal Dulos has a best right. The contracts with Emma and Rosario were mere contracts to sell, that were suspended by the payment of price. Since they failed to pay the price, ownership was never transferred to them. The contract with Maria Cristobal Dulos is a contract of sale that transferred ownership. The SC considered the contracts with Emma as contract to sell because: It provided for automatic cancellation of the contract in the event of failure to pay the price In the event of this automatic cancellation, the vendor can sell the property to 3 rd persons

Did not provide for reversion or reconveyance of the subject property to vendor in the event of nonpayment by the vendee of the purchase price. Most importantly: The contract stated that the deed of absolute sale was to be executed upon full payment of the purchase price. Also, even if a contract does not contain express stipulation to the effect that ownership is reserved with the seller until full payment of the price, it may still be deemed as a contract to sell based on its provisions.

University of the Philippines vs. De los Angeles Facts: UP and Alumco entered into a logging agreement, wherein Alumco was granted the exclusive authority to cut, collect, and remove timber from the Land Grant, in consideration of payment to UP of fees. Alumco incurred unpaid balances and UP warned it of rescission. Almuco executed an instrument wherein it acknowledged its indebtedness to UP and recognized the right of UP to rescind the contract without the necessity of judicial proceedings in the event that it failed to pay. Alumco incurred unpaid account. UP informed Alumco that it had rescinded their contract. UP then filed a suit for collection of the unpaid balance. Alumco argued that UP cannot rescind the contract without judicial pronouncement. Issue: Can UP extrajudically rescind the contract? Held: Yes. A party who deems the contract violated may consider it rescinded without court action, but he proceeds at his own risk of being challenged in court. The rationale behind this is that a party injured by the breach should not wait for judicial order decreeing the rescission while he watches his losses accumulate.

Cheng vs. Genato, Da Jose spouses. (1998) Facts: Genato owned a land. He entered in a contract to sell the land to the Da Jose spouses covering the land. The Da Jose spouses failed to pay the downpayment within the stipulated period. Genato agreed to extend the period when the spouses asked for an extension.

While the extended period had not yet lapsed, and without informing the spouses, Genato executed an affidavit to annul the contract to sell, citing as a ground, the failure of the spouses to pay the downpayment. Cheng then offered to buy the property. He was informed by Genato about the contract to sell with the Da Jose spouses. He nevertheless decided to push through with the purchase because he was anticipating that the contract with the Da Jose spouses will be annulled. He gave a downpayment of P50,000. When Genato was about to register the affidavit to annul the contract to sell with the spouses, he encountered the spouses on his way to the Register of Deeds. He informed them of the rescission but the spouses reminded him that they were given extension. Genato then decided not to push through with the contract to sell with Cheng andm instead honor his contract with the spouses. Cheng filed a case for specific performance, claiming that the contract with the spouses had already been rescinded, and so his contract with Genato was should be upheld. Issue: Was the contract with the spouses validly rescinded? Held: No. The contract with the spouses was not validly rescinded because the 30 day period extension given to them had not yet expired. Therefore, the spouses were not yet in default. Also, assuming for the sake of argument that the spouses defaulted in their contract to sell, the execution by Genato of an affidavit to annul the contract was not necessary since in a contract to sell, the non payment of the full purchase price is a suspensive condition that prevents the birth of the obligation. Nevertheless, Genato must give a notice verbal or written to the Da Jose spouses to inform them of his decision to rescind the contract. It has been held in many cases that even though a contract authorizes the automatic rescission of a contract to sell in case of breach, at least a written botice must be sent to the party at default informing him of the same.

Torralba vs. Hon. Delos Angeles, San Juan (1980) Facts; PHHC entered into a contract to sell with Torralba covering a piece of land. The contract provided that in case of breach of its terms or failure of Torralba to pay the installments due, the contract shall be deemed annulled. Torralba failed to pay, and PPHC sent him a written notice of cancellation of the contract. It gave Torralba 90 days to pay the amount due in order to revive the contract. Torralba failed to pay within the period. She nevertheless deposited the amount of P1,000 as payment for the installments due. The property was sold to respondent Florencia San Juan. Torralba now claims that PPHCs acceptance of the P1,000 payment she made reinstated their contract to sell. Also, Torralba argued that PPHC should have

resorted to judicial means in rescinding the contract before it awarded it to Issues: 1. Was the contract reinstated? 2. Should PPHC resort to judicial means in rescinding the contract? st Held: 1 issue: The contract was not reinstated because the payment was done when the period given to settle it lapsed already. Torralba was notified of the cancellation on July 11, 1952. She was informed that she has 90 days to pay the installments due in order to revive the contract. Torralba only paid the installments due on Nov 23, 1960, way beyond the period given. nd 2 issue: Resort to judicial proceedings to rescind the contract is not necessary. The contract provided that it shall be cancelled and PHHC can possess and dispose the property to some other person upon the default of Torralba. Hence, there was no contract to rescind in court because from the moment Torralba defaulted, the contract was ipso fact rescindned.

Romero vs. Enriqueta Chua vda. De Ongsiong Facts: Ongsiong owned the land which is the subject matter of this case. Romero entered in a Deed of Conditional Sale with Ongsionh, wherein he agreed to purchase the land. The parties further agreed that Romero will advance the amount of P50,000 for the ejectment of the squatters and that the remaining balance of the purchase price will be paid in the condition that the squatters will be ejected within 60 days. The ejectmenr case proceeded and judgment was rendered ordering the ejectment of the squatters. However, this judgment was handed down beyond the 60-day period imposed by the contract. Ongsiong tried to refund the P50,000 paid by Romero but Romero refused, saying that he wanted to push through with the sale. Ongsiong averred that they can no longer push through with the sale because it is now null and void in light of her failure to satisfy the condition of ejecting the squatters within the imposed period. Also, she said that she is no longer willing to sell the property. Ongsiong filed for the rescission of the sale.

Issue: Can the vendor Ongsion demand the rescission of the sale of a land for a cause traceable to her own failure to have the squatters therein ejected within the stipulated period? Held: No because the right to choose between rescinding the sale or proceeding with it belonged to the injured party, Romero. If the condition is imposed on an obligation of party which is not complied it, the other party may either refuse to proceed or waive the said condition. (Article 1545) In this case, the ejectment of the squatters within the stipulated period is a condition imposed on Ongsiong in order for Romero to pay the remaining balance of the purchase price. Ongsiong failed to eject the squatters within the time stipulated, the choice on whether to proceed or rescind the sale belonged to Romero. Since Romero chose to proceed with the sale, Ongsiong cannot back out from their perfected contract.

Heirs of Pedro Escanlar, Holgado, and Spouses Jayme vs. CA, Martines, Caria-an et al Facts: The heirs of Carian (respondents) sold their rights and interests over 2 lots to the petitioners. It was stipulated by the parties that the balance of the purchase price shall be paid on or before May 1979. The petitioners were not able to pay the balance within the due date. However, they made payments beyond the due date, which was accepted by the respondents. The respondents sold the land again to the Chuas. The respondents then filed a case for the cancellation of the sale of the lots to the petitioners on the ground that the petitioners failed to pay the price before May 1979, as stipulated in the contract. The petitioners argued that the respondents did not have the right to resell the lots because ownership was already conveyed to them, and that the respondents accepted their delayed payments. Issue: Can the respondents resell the lots? Held: No because the land is already owned by the petitioners and the respondents waived their rights to rescind the contract when they accepted the delayed payments. First of all, the contract was a deed of sale and not contract to sell because there were no stipulations reserving the ownership over the lots with the seller until the full payment of the price. Since the land was already occupied by petitioners as lessees, they became occupants thereof in the concept of an owner after the sale. Therefore, when the petitioners sold their rights over the lots to the Chuas, they no longer had ownership to transfer.

With respect to the rescission of a sale of a real property, even if it was stipulated that upon the failure to pray the price at the agreed time, the rescission of the contract shall take place, the vendee may still pay, even after the expiration of the period, as long as no demand for rescission has been made upon him either judicially or by a notarial act. In this case, when the period stipulated already expired, the respondents made no judicial demand or demand by notarail act on the petitioners. They instead, accepted the payments made by the petitioners. Such acceptance is deemed a waiver of their right to rescind the contract.

Nutrimix Feeds Corp vs. CA, Evangelista Facts: Nutrimix Food Corp supplied the respondents with animal feeds. Eventually, the respondents incurred aggregate unpaid obligations due to Nutrimix. When Nutrimix filed a complaint for the collection of sum of money, the respondents argued that their refusal to pay is justified because the animal feeds supplied caused the deaths of their animals. Issue: Are the petitioners guilty of breach of warranty due to hidden defects? Held: Yes. The respondents failed to prove that the animals feeds contained defects when it left the premises of the petitioner. The SC cited 2 laws: Article 1591: The vendor shall be responsible for warranty against hidden defects which the thing sold may have, should they render it unfit for the use for which it is intended, or should they diminish its fitness for such use to such extend that, had the vendee been aware thereof, he would not have acquired it or would have given a lower price for it; but the vendor shall not be answerable for patent defects or those wich may be visible or for those which are visible if the vendee is an expert who, by reason og his trade or profession, should have known them. Article 1566: The vendor is responsible to the vendee for any hidden faults or defects in the thing sold, even though he was not aware thereof. The provision shall not apply of the contrary has been stipulated and the

vendor was not aware of the hidden defects or faults. A hidden defect is onw which is unknown or cludl not have been known the the vendee. Under the law, the requisites to recover on account of the hidden defects are: The defect must be hidden The defect must exist at the time the sale was made The defect must ordinarily have been excluded from the contract The defect must be important so as to render the thing unfit or considerably decreases its fitness In this case, the respondents failed to adduce evidence that the animal feeds delivered to it contained defects when the product left the premises of the petitioner. The petitioners delivered the animal feeds allegedly containing rat posion on July 26, 1993, but the respondents only had them examined on October 20, 1993, or 3 months after the animals died.

Villarica vs. Consunji, CA Facts:On May 25, 1951, under a deed of sale, the Villarica spouses sold to the Consunjis a land. On the same date, The Consunjis executed a separate instrument wherein they granted the Villaricas the right to buy the land within 1 year. On April 14, 1953, The Villaricas brought ann action for the reformation of the contract, saying, it was actually an equitable mortgage and not fo sale.. The Consunjis denies this allegation and maintained that the real intention of the parties was a deed of sale. Issue: Is the contract an equitable mortgage or of sale? Held: Sale because the price is not inadequate, the vendors did not remain in possession of the land, and the right granted to the Villaricas was an option to buy and not a right to repurchase.. A right to repurchase is different from an option to buy in the sense that in the former, the vendor reserves to himself by stipulation in the contract of sale the right to repurchase the property within a specified period. If such right is not reserved in the same contract, as in this case, it cannot be deemed as a sale with right to repurchase, but as some other type of contract, like an option to buy in this case. Article 1601 says Conventional redemption shall take place when the vendor reserves the right to repurchase the thing sold, with the obligation to comply with the provisions of Article 1616 and other stipulation which may have been agreed upon. In this case, the vendors did not reserve his right to repurchase the land in the same contract, but rather, they were granted by the vendee the right to buy the land within the stipulated period.

Gurrero vs. Ynigo, CA Facts: Catabona was the owner of the subject land. He had been mortgaging the land to Ynigo to secure the payment of his loans. On October 24, 1946, he sold the eastern half of the land to Gurrero. On November 16, 1946, he sold the Ynigo in an instrument titled mortgage with conditional sale wherein it was stipulated that the vendor Catabona reserves his right to redeem the property after 5 years by returning the price paid and the right of possession within the said period, and should the vendor fail to exercise this right to redeem, titile shall be vested absolutely in the vendee. Issue: In light of these 2 conveyances to Ynigo and Guerrero, who between them has a better right over the eastern half which was sold to Gurerrero? Held: Guerrero because the mortgage with conditional sale in favor of Ynigo is void for being a pactum commissorium. The SC construed the price paid by the vendee as the amount loaned by the vendor. The contract of mortgage with conditional sale gave the vendor 5 years to redeem the property by paying the loan, but after 5 years, the mortgagor may no longer redeem it. The contract also gave the vendee the right to own the property should the vendor pay the loan within 5 years- a clause that is void for being a pactum commisorium.

Ramos vs. Sarao Facts: The spouses Ramos executed a deed of sale with pacto de retro in favor of Sarao. The contract gave the spouses the right to repurchase the property by paying the amount of P1,310,430 plus 4.5% interest per month. They also agreed that should the vendor fail to repurchase the property within the period, the deed shall be construed as an absolute sale. Ramos continued to reside in the property. Myrna Ramos tendered the payment of 1,633,034, which was refused by Sarao. This prompted her to file for the redemption of the property.. Sarao later on filed for the consodlitation of ownership over the property. Ramos argued that their real intention was to enter into an equitable mortgage, and not a pacto de retro sale (sale with right to repurchase). Issue: Is this a pacto de retro sale or an equitable mortgage? Held: An equitable mortgage because the vendor remained in possession of the property. A contract shall be presumed to be an equitable mortgage if ANY of the following circumstances is present: When the price of the sale with right to repurchase is unusually inadequate When the vendor remains in possession as lessee or otherwise 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 When the purchaser retains for himself a part of the purchase price When the vendor binds himself to pay the taxes on the thing sold 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 an obligation. In any of the foregoing cases, money or other benefit received by the vendee as rent or otherwise, shall be considered as interest which shall be subject to usury laws.

Also, a pacto de retro may be deemed as an equitable mortgage when the terms and circumstances suggest that it was entered to circumvent the prohibition against pactum comissorium. On the other hand, a bona fide pact de retro immediately transfers to the vendee a retro the ownership over the property, subject only to the repurchase by the vendor within the agreed period. The failure of the vendor to repurchase vests upon the vendee the absolute title over the property.

Ayson vs. Spouses Paragas Facts: Ayson filed an ejectment case against the respondents Spouses Paragas, claiming to be the owner of the land the spouses occupy. He premises his ownership on the deed of sale executed by the spouses in his favor. The trial courts ordered the ejectment of the spouses. Meanwhile, the spouses filed for the nullity of the deed of absolute sale they executed in favor eof Ayson. They allege that they executed the deed under the threat that Felix will be incarcerated after he failed to account the amount of P3,000 in his workplace. His salary was regularly deducted until the amount was fully paid, and that the property was sold to Ayson to secure his obligation to pay the P3,000. Issue: Is the deed of sale actually an equitable mortgage? Held: Yes because the spouses remained in possession of the land after the sale. A contract shall be presumed to be an equitable mortgage, in any of the ff circumstances: (1) When the price of the sale with right to repurchase is unusually inadequate; When the vendor remains in possession as lessee or otherwise; 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; When the purchaser retains for himself a part of the purchase price; When the vendor binds himself to pay the taxes on the thing sold; 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.

(2) (3)

(4)

(5)

(6)

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.

The SC also noted that an Equitable mortgage is a voidable contract, which may be annulled within 4 years after the cause of action accrues. Howeverm in this case, the contract was not merely voidable for being an equitable mortgage but also because it was vitiated with intimidation. The action was filed well-within the prescriptive period because it within 4 years after the intimidation ceased.

Reyes vs. Hamada Facts: Hamada mortgaged the subject land to PNB. The PNB sold the subject land in a foreclosure sale to Reyes, subject to the right of redemption of Hamada. At 10pm on the last day of redemption, Hamada redeemed the property by delivering check payments to the Sheriff. Reyes refused to recognize the validity of this redemption. He filed with the CFI a declaration of ownership and right of possession. He later on filed for recovery of the rentals. Hamada argued that the first case Reyes filed wherein the issues are the validity of the redemption payment and the right to possession of the properties preclude the filing of another action for the recovery of the rentals receivable from the same properties. Issue: Is the action filed for the determination of the validity of the redemption and the right to possess a bar to another action for the recovery of rentals? Held: Yes because the issue on who is entitled to the rentals is necessarily included in the action for the determination of the validity of the redemption and the right to possess. The judgment debtor or mortgagor is entitled to the possession of the property before the expiration of the 1 year redemption period. While the ROC allows the purchaser to collect rentals if the purchased property is occupied by tenants, such amounts still belong to the mortgagor and are deductible from the redemption price.

Olimpia Fernandez vda de Zulueta vs. Octaviano Facts: Olimpia owned the subject land. It was mortgaged to Gumayan. She sold the land under a Deed of Absolute and Definite sale in favor of Aurelio Octaviano. On the same date, November 25, 1952, in a separate instrument, Octaviano gave Olimpia the option to repurchase the property at any time after May 1958 but not later than May 1960. Aurelio took possession of the sale. Since Aurlio was having difficulties registering the sale because Gumayan did not want to surrender the certificate of title without being paid the obligation of Olimpia to him, Aurelio asked Olimpia to just repurchase the land. Olimpia refused, saying she did not have the money to exercise her right to repurchase. Octaviano took this as a renunciation by Olimpia of her right to repurchase the land, and he thereafter sold the land to his brother, Isauro Octaviano. On February 16, 1962 (or 2 years after the deadline of the right to repurchase), Olimpia manifested her desire to purchase the land. Isauro refused. Olimpia then filed an action for recovery of ownership and possession of the land. She said that she should be allowed to repurchase the land because since 1958, she had been looking for Aurelio to express her desire to exercise her right to repurchase, but Aurelio was nowhere to be found. Issue: Should Olimpia be allowed to exercise her right to repurchase? Held: No because several years had already elapsed from the deadline. First of all, the sale of the land to Aurelio was not a pacto de retro sale because Olimpia did not reserve her right to repurchase the land in the same instrument. What was given to Olimpia was an option to buy the land because this right was granted to her in a separate instrument. Granting for the sake of argument that it was a pacto de retro sale, Olimpia still cannot exercise her right to repurchase even because she did not make an actual and simultaneous tender of payment and consignation. To effectively exercise the right to repurchase, a vendo a retro must make an actual and simultaneous tender of payment or consignation.

Almeda and Torrecamp0 (plaintiffs) vs. Daluro and Daluro (defendants) Facts: The defendants sold a land to the plaintiffs under a pacto de retro sale on May 4, 1956. On August 2, 1957, the defendants redeemed the land. The parties further agreed that the palay harvested shall be equally divded between the plaintiffs and the defendants. An initial harvest of Palay was reaped by September 30, 1957, and this was equally divided among the parties. Thereafter, a second harvest of palay was reaped, which the defendants appropriated for themselves. The plaintiffs demanded their share but the defendants refused, saying they were only entitled to share with the September harvest. The plaintiffs filed this action for specific performance, saying that what they agreed upon was to divide the harvest of the palay which they planted on June 1957, while the land was still theirs. The defendants invoked Article 1671 which says in essence that: should there be fruits which are growing or visible in the land at the time it was sold, there shall be no reimbursement for or prorating of those existing at the time of redemption of no indemnity was paid by the purchaser when the sale was executed Should there have been no fruits at the time of the sale, and some exist at the time of redemption, they shall be appropriated between the redemptioer and the vendee, giving the latter the part corresponding to the time he possessed in the last year counted from the anniversary of the sale. Issue: In light of article 1671, is the plaintiff still entitled to the of the second harvest? Held: Yes. Article 1671 is not applicable because there was an agreement between the parties. The agreement was not contrary to law and this took the place of what was provided for by the law.

Calma vs. Santos Facts: Calma bought shares in the subject Fishpond from various co-owners. These vendors co-owned the

fishpond with the respondents. The respondents refused Calmas demands for partition of the Fshpond. This prompted Calma to file a complaint for specific performance and partition. One of the respondents answers to the complaint was that as co-owners, they are entitled to redeem the property. Issue: Can Calma demand for the partition of the Fishpond? Held: Calma can only demand for the partition of the property if the co-owners failed to redeem the property. Article 1623: The right of legal redemption shall not be exercised except within 30 days from the notice in writing by the prospective vendor, or by the vendor as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. Interpreting this provision, the SC said that the requisites of legal redemption are as follows: There must be a co-ownership One of the co-owners sold his right to a stranger The sale was made before the partition of the co-owned property The right of redemption must be exercised by one of the co-owners within 30 days to be counted from the time he or they were notified in writing by the co-owner vendor The vendee must be reimbursed the price of the sale (With respect to the written notice requirement, an exception is when the co-owner has actual notice of the sale) In this case, the petitioner failed to prove that there was an actual notice to the respondent-co-owners. Therefore, a written notice is required in order for the period of redemption to run. Since there was no written notice, the petitioners action for partition cannot prosper unless the respondents fail to redeem the property.

De Guzman vs. CA, Austria, Umali, Trinidad Facts: The petitioners and respondents are siblings. Their mother, Teofila Manimtim, sold a land with right to repurchase within 7 years. Mainimtim died 2 days after the sale. One of her heirs, petitioner De Guzman

redeemed the property. The other co-heirs of the petitioner, which are the respondents in this case, asserted their right to co-own the land. Issue: Whether or not after the repurchase of the land by De Guzman, ownership was vested solely in De Guzman Held: The land is still co-owned by the siblings. Article 1612: If several persons, jointly and in same contract, should sell an undivided immovable with the right of repurchase, none of them may exercise this right for more than his respective share. The same rule shall apply if the person who sold an immovable alone has left several heirs, in which case the latter may only redeem the part which he may have acquired. Should one of the co-owners or co-heirs succeed alone in redeeming the whole property, such co-owner or coheir shall be considered a mere trustee with respect to the shares of his co-owners or co-heirs. The share of the other co-owners is subject to al in favor of the redemptioner for the amount paid by him corresponding to the value of the share. No prescription can run against the other co-owners. In this case, the land is still co-owned by siblings even if it was the petitioner who was the only one who redeemed the property.

Soriano vs. Bautista Facts: The spouses Bautista mortgaged their land to the Soriano spouses. The mortgage contract also contained a stipulation that the Sorianos can exercise within 2 years their right to purchase the land. The possession of the land was thereafter transferred to the Sorianos, who cultivated the same. Later on, and within the 2 years granted to them by the contract, the Soriano spouses decided to exercise their

right to purchase the land. The Bautista spouses refused to sell the land, saying that such action would deprive them of their right as mortgagors, to redeem the land. Issue: Can the mortgagees buy the land? Held: Yes, the stipulation granting them the right to purchase the land is valid. While a mortgagor may redeem the land mortgaged, this contract carried an additional stipulation that the mortgagees may exercise their right to purchase the property. This right granted to them renders the right of the mortgagors to redeem the property defeasible.

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Villarica vs. Consunji, CA Facts:On May 25, 1951, under a deed of sale, the Villarica spouses sold to the Consunjis a land. On the same date, The Consunjis executed a separate instrument wherein they granted the Villaricas the right to buy the land within 1 year. On April 14, 1953, The Villaricas brought ann action for the reformation of the contract, saying, it was actually an equitable mortgage and not fo sale.. The Consunjis denies this allegation and maintained that the real intention of the parties was a deed of sale. Issue: Is the contract an equitable mortgage or of sale? Held: Sale because the price is not inadequate, the vendors did not remain in possession of the land, and the right granted to the Villaricas was an option to buy and not a right to repurchase.. A right to repurchase is different from an option to buy in the sense that in the former, the vendor reserves to himself by stipulation in the contract of sale the right to repurchase the property within a specified period. If such right is not reserved in the same contract, as in this case, it cannot be deemed as a sale with right to repurchase, but as some other type of contract, like an option to buy in this case. Article 1601 says Conventional redemption shall take place when the vendor reserves the right to repurchase the thing sold, with the obligation to comply with the provisions of Article 1616 and other stipulation which

may have been agreed upon. In this case, the vendors did not reserve his right to repurchase the land in the same contract, but rather, they were granted by the vendee the right to buy the land within the stipulated period.

Gurrero vs. Ynigo, CA Facts: Catabona was the owner of the subject land. He had been mortgaging the land to Ynigo to secure the payment of his loans. On October 24, 1946, he sold the eastern half of the land to Gurrero. On November 16, 1946, he sold the Ynigo in an instrument titled mortgage with conditional sale wherein it was stipulated that the vendor Catabona reserves his right to redeem the property after 5 years by returning the price paid and the right of possession within the said period, and should the vendor fail to exercise this right to redeem, titile shall be vested absolutely in the vendee. Issue: In light of these 2 conveyances to Ynigo and Guerrero, who between them has a better right over the eastern half which was sold to Gurerrero? Held: Guerrero because the mortgage with conditional sale in favor of Ynigo is void for being a pactum commissorium. The SC construed the price paid by the vendee as the amount loaned by the vendor. The contract of mortgage with conditional sale gave the vendor 5 years to redeem the property by paying the loan, but after 5 years, the mortgagor may no longer redeem it. The contract also gave the vendee the right to own the property should the vendor pay the loan within 5 years- a clause that is void for being a pactum commisorium.

Ramos vs. Sarao Facts: The spouses Ramos executed a deed of sale with pacto de retro in favor of Sarao. The contract gave the spouses the right to repurchase the property by paying the amount of P1,310,430 plus 4.5% interest per month. They also agreed that should the vendor fail to repurchase the property within the period, the deed shall be construed as an absolute sale. Ramos continued to reside in the property. Myrna Ramos tendered the payment of 1,633,034, which was refused by Sarao. This prompted her to file for the redemption of the property.. Sarao later on filed for the consodlitation of ownership over the property. Ramos argued that their real intention was to enter into an equitable mortgage, and not a pacto de retro sale (sale with right to repurchase). Issue: Is this a pacto de retro sale or an equitable mortgage? Held: An equitable mortgage because the vendor remained in possession of the property. A contract shall be presumed to be an equitable mortgage if ANY of the following circumstances is present: When the price of the sale with right to repurchase is unusually inadequate When the vendor remains in possession as lessee or otherwise 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 When the purchaser retains for himself a part of the purchase price When the vendor binds himself to pay the taxes on the thing sold 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 an obligation. In any of the foregoing cases, money or other benefit received by the vendee as rent or otherwise, shall be considered as interest which shall be subject to usury laws. Also, a pacto de retro may be deemed as an equitable mortgage when the terms and circumstances suggest that it was entered to circumvent the prohibition against pactum comissorium. On the other hand, a bona fide pact de retro immediately transfers to the vendee a retro the ownership over the property, subject only to the repurchase by the vendor within the agreed period. The failure of the vendor to repurchase vests upon the vendee the absolute title over the property.

Ayson vs. Spouses Paragas Facts: Ayson filed an ejectment case against the respondents Spouses Paragas, claiming to be the owner of the land the spouses occupy. He premises his ownership on the deed of sale executed by the spouses in his favor. The trial courts ordered the ejectment of the spouses. Meanwhile, the spouses filed for the nullity of the deed of absolute sale they executed in favor eof Ayson. They allege that they executed the deed under the threat that Felix will be incarcerated after he failed to account the amount of P3,000 in his workplace. His salary was regularly deducted until the amount was fully paid, and that the property was sold to Ayson to secure his obligation to pay the P3,000. Issue: Is the deed of sale actually an equitable mortgage? Held: Yes because the spouses remained in possession of the land after the sale. A contract shall be presumed to be an equitable mortgage, in any of the ff circumstances: (1) When the price of the sale with right to repurchase is unusually inadequate; When the vendor remains in possession as lessee or otherwise; 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; When the purchaser retains for himself a part of the purchase price; When the vendor binds himself to pay the taxes on the thing sold; In any other case where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the

(2) (3)

(4)

(5)

(6)

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. The SC also noted that an Equitable mortgage is a voidable contract, which may be annulled within 4 years after the cause of action accrues. Howeverm in this case, the contract was not merely voidable for being an equitable mortgage but also because it was vitiated with intimidation. The action was filed well-within the prescriptive period because it within 4 years after the intimidation ceased.

Reyes vs. Hamada Facts: Hamada mortgaged the subject land to PNB. The PNB sold the subject land in a foreclosure sale to Reyes, subject to the right of redemption of Hamada. At 10pm on the last day of redemption, Hamada redeemed the property by delivering check payments to the Sheriff. Reyes refused to recognize the validity of this redemption. He filed with the CFI a declaration of ownership and right of possession. He later on filed for recovery of the rentals. Hamada argued that the first case Reyes filed wherein the issues are the validity of the redemption payment and the right to possession of the properties preclude the filing of another action for the recovery of the rentals receivable from the same properties. Issue: Is the action filed for the determination of the validity of the redemption and the right to possess a bar to another action for the recovery of rentals? Held: Yes because the issue on who is entitled to the rentals is necessarily included in the action for the determination of the validity of the redemption and the right to possess. The judgment debtor or mortgagor is entitled to the possession of the property before the expiration of the 1 year redemption period. While the ROC allows the purchaser to collect rentals if the purchased property is occupied by tenants, such amounts still belong to the mortgagor and are deductible from the redemption price.

Olimpia Fernandez vda de Zulueta vs. Octaviano Facts: Olimpia owned the subject land. It was mortgaged to Gumayan. She sold the land under a Deed of Absolute and Definite sale in favor of Aurelio Octaviano. On the same date, November 25, 1952, in a separate instrument, Octaviano gave Olimpia the option to repurchase the property at any time after May 1958 but not later than May 1960. Aurelio took possession of the sale. Since Aurlio was having difficulties registering the sale because Gumayan did not want to surrender the certificate of title without being paid the obligation of Olimpia to him, Aurelio asked Olimpia to just repurchase the land. Olimpia refused, saying she did not have the money to exercise her right to repurchase. Octaviano took this as a renunciation by Olimpia of her right to repurchase the land, and he thereafter sold the land to his brother, Isauro Octaviano. On February 16, 1962 (or 2 years after the deadline of the right to repurchase), Olimpia manifested her desire to purchase the land. Isauro refused. Olimpia then filed an action for recovery of ownership and possession of the land. She said that she should be allowed to repurchase the land because since 1958, she had been looking for Aurelio to express her desire to exercise her right to repurchase, but Aurelio was nowhere to be found. Issue: Should Olimpia be allowed to exercise her right to repurchase? Held: No because several years had already elapsed from the deadline. First of all, the sale of the land to Aurelio was not a pacto de retro sale because Olimpia did not reserve her right to repurchase the land in the same instrument. What was given to Olimpia was an option to buy the land because this right was granted to her in a separate instrument. Granting for the sake of argument that it was a pacto de retro sale, Olimpia still cannot exercise her right to repurchase even because she did not make an actual and simultaneous tender of payment and consignation. To effectively exercise the right to repurchase, a vendo a retro must make an actual and simultaneous tender of payment or consignation.

Almeda and Torrecamp0 (plaintiffs) vs. Daluro and Daluro (defendants) Facts: The defendants sold a land to the plaintiffs under a pacto de retro sale on May 4, 1956. On August 2, 1957, the defendants redeemed the land. The parties further agreed that the palay harvested shall be equally divded between the plaintiffs and the defendants. An initial harvest of Palay was reaped by September 30, 1957, and this was equally divided among the parties. Thereafter, a second harvest of palay was reaped, which the defendants appropriated for themselves. The plaintiffs demanded their share but the defendants refused, saying they were only entitled to share with the September harvest. The plaintiffs filed this action for specific performance, saying that what they agreed upon was to divide the harvest of the palay which they planted on June 1957, while the land was still theirs. The defendants invoked Article 1671 which says in essence that: should there be fruits which are growing or visible in the land at the time it was sold, there shall be no reimbursement for or prorating of those existing at the time of redemption of no indemnity was paid by the purchaser when the sale was executed Should there have been no fruits at the time of the sale, and some exist at the time of redemption, they shall be appropriated between the redemptioer and the vendee, giving the latter the part corresponding to the time he possessed in the last year counted from the anniversary of the sale. Issue: In light of article 1671, is the plaintiff still entitled to the of the second harvest? Held: Yes. Article 1671 is not applicable because there was an agreement between the parties. The agreement was not contrary to law and this took the place of what was provided for by the law.

Calma vs. Santos Facts: Calma bought shares in the subject Fishpond from various co-owners. These vendors co-owned the fishpond with the respondents. The respondents refused Calmas demands for partition of the Fshpond. This prompted Calma to file a complaint for specific performance and partition. One of the respondents answers to the complaint was that as co-owners, they are entitled to redeem the property. Issue: Can Calma demand for the partition of the Fishpond? Held: Calma can only demand for the partition of the property if the co-owners failed to redeem the property. Article 1623: The right of legal redemption shall not be exercised except within 30 days from the notice in writing by the prospective vendor, or by the vendor as the case may be. The deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given written notice thereof to all possible redemptioners. Interpreting this provision, the SC said that the requisites of legal redemption are as follows: There must be a co-ownership One of the co-owners sold his right to a stranger The sale was made before the partition of the co-owned property The right of redemption must be exercised by one of the co-owners within 30 days to be counted from the time he or they were notified in writing by the co-owner vendor The vendee must be reimbursed the price of the sale (With respect to the written notice requirement, an exception is when the co-owner has actual notice of the sale) In this case, the petitioner failed to prove that there was an actual notice to the respondent-co-owners. Therefore, a written notice is required in order for the period of redemption to run. Since there was no written notice, the petitioners action for partition cannot prosper unless the respondents fail to redeem the property.

De Guzman vs. CA, Austria, Umali, Trinidad Facts: The petitioners and respondents are siblings. Their mother, Teofila Manimtim, sold a land with right to repurchase within 7 years. Mainimtim died 2 days after the sale. One of her heirs, petitioner De Guzman redeemed the property. The other co-heirs of the petitioner, which are the respondents in this case, asserted their right to co-own the land. Issue: Whether or not after the repurchase of the land by De Guzman, ownership was vested solely in De Guzman Held: The land is still co-owned by the siblings. Article 1612: If several persons, jointly and in same contract, should sell an undivided immovable with the right of repurchase, none of them may exercise this right for more than his respective share. The same rule shall apply if the person who sold an immovable alone has left several heirs, in which case the latter may only redeem the part which he may have acquired. Should one of the co-owners or co-heirs succeed alone in redeeming the whole property, such co-owner or coheir shall be considered a mere trustee with respect to the shares of his co-owners or co-heirs. The share of the other co-owners is subject to al in favor of the redemptioner for the amount paid by him corresponding to the value of the share. No prescription can run against the other co-owners. In this case, the land is still co-owned by siblings even if it was the petitioner who was the only one who redeemed the property.

Soriano vs. Bautista

Facts: The spouses Bautista mortgaged their land to the Soriano spouses. The mortgage contract also contained a stipulation that the Sorianos can exercise within 2 years their right to purchase the land. The possession of the land was thereafter transferred to the Sorianos, who cultivated the same. Later on, and within the 2 years granted to them by the contract, the Soriano spouses decided to exercise their right to purchase the land. The Bautista spouses refused to sell the land, saying that such action would deprive them of their right as mortgagors, to redeem the land. Issue: Can the mortgagees buy the land? Held: Yes, the stipulation granting them the right to purchase the land is valid. While a mortgagor may redeem the land mortgaged, this contract carried an additional stipulation that the mortgagees may exercise their right to purchase the property. This right granted to them renders the right of the mortgagors to redeem the property defeasible.

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Licaros vs. Gatmaitan Facts: Businessman Licaros placed investments in Anglo-Asean Bank in the amount of $150,000. Soon, he, had difficulty retrieving this investment. Licaros engaged investment banker Gatmaitan to help him in retrieving his money. The 2 entered in to an agreement wherein Licaros assigned and sold to Gatmaitan his collectibles from Anglo-Asean Bank (debtorbank) and that Gatmaitan will be liable to Licaros for the payment of $150,000. The agreement had a stipulation to the effect that the conformity of the bank was necessary and that at the bottom of the agreement, there was a space allotted for the banks signature which was labeled with our conformity. The debtor banks conformity to the agreement was not obtained. Gatmaitan then executed a promissory not with assignment of dividends in favor of Licaros to secure the payment of his indebtedness. Gatmaitan failed to collect from the bank, and so, he did not make payments to Licaros of the amount he undertook to pay. Licaros demanded payment, saying that Gatmaitan is liable to pay him regardless of whether Gatmaitan was able to collect from the bank or not. Licaros sued Gatmaitan for the payment of the amount. Gatmaitan argued that the agreement was a conventional subrogation. Licaros argued it was an assignment of credit. Issue: Is the agreement between Licaros and Gatmaitan an assignment of credit or of convetional subrogation? If it is an assignment of credit, then Gatmaitan shall be liable to Licaros for the payment of the amount. If it is a conventional subrogation, and Gatmaitan cannot be liable to pay the amount in the absence of the conformity of the debtor-bank.

Held: It is one of conventional subrogation, and therefore, Gatmaitan cannot be liable to pay Licaros, in the absence of the conformity of the debtor bank. It is a conventional subrogation because it can be gleaned from the contract that the conformity of the debtor bank, Anglo-Asean Bank was needed. An assignment of credit is the process of transferring the right of the assignor to the assignee who would have the right to proceed against the debtor. The assignment may be done gratuitously, or onerously, in which case, the assignment has an effect similar to that of a sale. rd On the other hand, a subrogation of credit is the transfer of all the rights of the creditor to a 3 person, who substitutes him in all the rights. It may be legal or conventional. Legal subrogation takes place by operation of law while conventional subrogation takes place by agreement of the parties. The 2 concepts are distinct in the following senses: 1. In subrogation of credit, the debtors consent is necessary, in assignment it is not required; 2.) Subrogation extinguishes the obligation and gives birth to a new one, assignment refers to the same right which passess from a person to another. 3.) The nullity of an old obligation can be cured by subrogation such that the new obligation will be valid, but in assignment, the nullity of the obligation is not remedied by the assignment of the creditors rights to another. For this case purpose, the material difference between the 2 lies in the concept that it in subrogation, the debtors conformity is required, while in assignment, what is required is a mere notice to the debtor. Since the conformity of the debtor-bank was needed, this contract is a subrogation.

PNB vs. CA. Industrial Enterprises Inc. Facts: IEI entered into a coal operating contract with the Bureau of Energy covering the Gipolos Coal Project. Under a MOA, IEI assigned its rights and interests over the contract to MMIC. MMIC, undertook to pay IEI some amount of money, in consideration of this assignment. Meanwhile, MMIC, took loans from PNB and DBP and to secure these loans, MMIC executed a mortgage over some of its assets, including those in the Gipolos Coal Project. MMIC defaulted on its loan payment, and PNB commenced foreclosure proceedings over the chattels in the Gipolos Coal Project. MMIC also failed to pay IEI, and so IEI mo moved to rescind the MOA it entered with MMIC. IEI informed PNB that it should not foreclose the chattels in the Gipolos Coal Project because MMIC failed to pay their consideration and the contract that assigned them to MMIC was being rescinded. PNB nevertheless proceeded in foreclosing the chattels. IEI amended its complaint for rescission against MMIC to include PNB.

Issue: Are the chattels in the Gipolos covered by the MOA so as to put them under the ownership of MMIC and therefore, can be foreclosed by PNB? Held: Yes, it can be gleaned from the contract that the chattels were part of the assignment of rights and interest made by IEI in favor of MMIC. MMIC therefore, acquired ownership over the properties. An assignment is a transfer or making over to another of the whole of any property, real, or personal, in possession, or in action, or any estate or right therein. It includes transfers of all kinds of property. In this case, what was transferred was not merely the rights of MMIC over the project, but also the interests therein. Interest encompasses the things that may be found therein, which included the subject movables in this case. Morevoer, while the MOA was expressed to be an assignment, it is actually a contract of sale. In an assignment, consideration is not always a requirement unlike in a contract of sale. This is a sale because IEI undertook to deliver the things under the MOA and transfer their ownership to MMIC, in consideration of the price to be paid by MMIC. Therefore, when the Gipolog project was transferred to MMIC, MMIC acquired ownership over the properties therein, despite its non-payment of price. PNB could foreclose them. However, the foreclosure proceedings of PNB was deemed invalid by the SC and therefore, in light of the rescission of the MOA, the chattels were ordered returned to IEI, or for PNB to pay their value. Sonny Lo vs. KJS Eco-Formwork System Phil, Inc Facts: KJS sold and delivered scaffolding equipment to Sonny Lo. There was a downpayment and the balance was payable on 10 installments. Lo failed to pay the first 2 installments. To answer for his unpaid obligation, Lo executed a Deed of Assignment in favor of KJS whereby he assigned his receivables due from Jomero Realty Corp. Eco Formwork failed to collect from Jomero because Jomero alleged that its obligation to Lo has already been extinguished by compensation since Lo also owed it money. KJS brought a suit for collection of money against Lo. Lo argued that the Deed of Assignment already extinguished his obligation to KJS, regardless whether KJS can collect the credit or not. Issue: Did the Deed of Assignment extinguish Los obligation to KJS? Held: No, because Sonny Lo had to warrant the existence of the credit. An assignment of credit is an agreement by virtue of which the owner of a credit, known as the assignor, by 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 assignee, who acquires the power to enforce it to the same extent as the assignor could enforce it against the debtor. Corollary, in dacion en pago, as a special mode of payment, the debtor offers a thing to the creditor, who accepts it as equivalent of payment of an outstanding debt. Hence, an assignment of credit, which is the nature of sale of personal property, produced effects of a dation on payment which may extinguish the obligation. However, as in any other contract of sale, the vendor or assignor is bound by certain warranties.. In this case, Sonny Lo, the assignor or vendor, is bound to warrant the existence of the credit it assigned to KJS. Since KJS failed to collect the credit because it was alleged by the debtor to be extinguished already, Sonny Lo is bound to make good his warranty.

Nyco Sales Corp vs. BA Finance Facts: Sanshell Corporation asked Nyco for a credit accommodation. Sanshell wanted to use Nycos discounting privileges with BA Finance, to which Nyco agreed. Pursuant to this, Sanshell endorsed a check to Nyco, which Nyco endorsed to BA finance. BA Finance then issued a discounted check to NYco, which endorsed it to

Sanshell. This exchange of checks was accompanied by a deed of assignment executed by Nyco in favor BA Finance with the conformity of Sanshell as the debtor. The subject of the deed was the check endorsed by Sanshell to NYco, which it endorsed to BA Finance. The aforementioned check was dishonored, and Sanshell issued another check to replace it. This second check was also dishonored. BA Finance filed a complaint for the collection of money against Nyco and Sanshell. One of the defenses raised by Nyco is that it cannot be held liable for the dishonored checks because the check it assigned was replaced by a subsequent check. Issue: Can Nyco be held liable to its assignee, BA Finance for the dishonored checks? Held: Yes, because what was assigned to BA Finance were not the checks, but the credit they represented. The checks were mere incidents and evidence of the credit. An assignment of credit is the process of transferring the right of the assignor to the assignee to proceed against the debtor. The assignor-vendor warrants the existence and the legality of the credit itself but not (as a general rule), the debtors solvency. The debtors solvency is also warranted if there is a stipulation to that effect, which is present in this case. In this case, Nyco executed a deed of assignment in favor of BA finance wherein the debtor was Sanshell. Nyco was not being held liable for the checks, but rather for the credit of Sanshell. Since the deed had a stipulation to the effect that Nyco warrants the solvency of Sanshell, it can be held liable for Sanshells insolvency.

Macario King, et al, vs. Hernaez et al Facts: Macario King, a naturalized Filipino, is the owner of a wholesale and retail grocery. 3 of his employees therein are Chinese, who are his co-petitioners in this case. King sought the permission of the President of the Philippines to permit him to retain the services of the 3 Chinese employees. The Secretary of Commerce and Industry recommended the denial of the request, saying that the retention of the Chinese Men are prohibited by the Retail Trade Act and the Anti Dummy Law. The Retail Trade Act prohibits aliens from engaging in the retail business in the Philippines. The Ant-Dummy Law prohibits the employment of aliens in the management, operation, administration, and control in retail businesses, with the exception of technical personnel who may be permitted by the president. The petitioners filed for a mandamus and relief from the denial. The petitioners argued that the prohibitions set forth by the Retail Trade Act and the Anti-Dummy Law covers only foreigners who are engaged in the retail trade as owners, and employees who hold control positions. It is their contention that since the Chinese men were mere employees who hold non-control positions, they are not covered. The respondents argued that the laws prohibit the engagement of aliens in the retail business, regardless whether they are in control, or non-control positions (with the exception of technical staff). Issues: What is the coverage of the Retail Trade Act and the Anti Dummy Law? Can the Chinese men continue with their employment? Held: The laws prohibit the employment of aliens in all kinds of position. The Retail Trade Act was enacted to nationalize the retail industry in the country by prohibiting foreigners to own retail businesses. The Anti-Dummy law was enacted to prevent the circumvention of the Retail Trade Act by prohibiting retail businesses from employing aliens in positions of management, operation, administration, and control, whether as ann officer, employee, or laborer. This means that the laws prohibit the employment of aliens in all kinds of positions. Therefore, the Chinese men cannot continue with their employment.

Balmaceda vs. Union of Carbide Philippines Facts: Union of Carbide Philippines (UCP) was engaged in the selling of raw materials and component of raw materials such as metals, carbides, plastics, industrial chemicals, plastics, etc. The petitioner accused it of being engaged in the retail business, in which aliens are prohibited by law. Issue: Is the respondent engaged in the retail business? Held: No. Retail business is defined as occupation or calling of habitually selling direct to the general public merchandise, commodities or goods for consumption. It excludes the manufacturers or processors selling to the industrial and commerciall users or consumers who use the products as raw materials or component of raw materials. Consumer goods are goods for final and end uses of a product which directly satisfy human wants and desires and are needed for home and daily life. In this case, the products of the respondents are industrial products which are used as raw materials or component of raw materials. Therefore, they are not consumer goods.

B.F Goodrich Philippines vs. Reyes (Sec of Commerce and Industry) Facts: B.F was engaged in the manufacturing and selling of rubber products. It also desired to sell to the Government Under the law, it cannot engage in the retail business- a business of selling consumer goods directly to the general public. It is the contention of the respondent that the petitioner is engaged in retail business. Issue: Is the petitioner engaged the retail business? Held: No. Retail business is the habitual selling directly to the general public consumer goods. The law excludes the following from its coverage: Manufacturers, porcessors, laborers, or workers selling to the general public the products manufactures or produced by him if his capital does not exclude P5,000. Farmers or agriculturist selling the products of his farm Manufacturers, processors selling to industrial and commercial users or consumers who use the product bought by them to render service to the general public and/or to produce or manufacture goods, which in turn are sold A hotel owner or keeper operating a restaurant irrespective of the amount of capital, provided that the restaurant is incidental to the hotel business The products of the petitioner are sold to proprietary planters and persons engaged in the exploration of natural

resources. These persons are included in the term industrial and commercial consumers. Therefore, the petitioner is not engaged in the retail business.

The Goodyear Tire and Rubber Co of The Phil vs. Reyes; Intervenor: Firestone Tire and rubber Co,. Facts: The petitioner and Intervenor sold their rubber products to various customers which are: The Government of the Philippines, which used them to render services to the public Public utilities such as bus fleets, which used them to render services Agricultural enterprises which used them to perform services to the general public Logging, mining and other entities engaged in the exploitation of natural resources Automotive assembly plants who but the rubber in bulk for use in assembly of equipment. Industrial and Commercial enterprises engaged in the manufacturing and sales of prime and essential commodities Employees and officers of the petitioner-intervenor Issue: Are the petitioner and intervener engaged in the retail business? Held: No because they sold them to industrial and commercial consumers. However, in so far as the intervenor is engaged in sales to its employees and officers of the rubber products, the intervenor is deemed engaged in the retail business.

Marsman & Company vs. First Coconut Central Facts: First Coconut Central purchased on installment basis a diesel generating unit from Madrid Trading. A chattel mortgage was constituted on the machinery. Madrid Trading assigned its rights in the mortgage to Marsman. First Coconut failed to pay the balance and so, Marsman sued for its collection. The trial court ruled in favor of Marsman. However, the Court of Appeals declared the sale null and void for violation of the Retail Trade Nationalization Law and the Ant-Dummy Law. It was the CAs opinion that Marsman, in selling diesel generating unit, was engaged in retail trading. Marsman now petitions to the SC.

Issue: Did the sale, which had a diesel-generating machine as a subject matter violate the Retail Nationalization Law and the anti Dummy Law? Held: No because the machinery sold is a producer goods, not consumer goods. As used in the Act, retail business is the habitual selling direct to the public goods for public consumption. The act does not cover a manufacturer or processor selling to industrial and commercial users who use products bought by them to render service to the general public or to produce goods which are in turn sold by them. In this case, the machinery sold was not for the publics consumption, but rather for commercial and industrial consumption. Its intended use was for the coconut central. Since the machine is not a consumer goods, the sale cannot be considered prohibited by the Retail Nationalziation Law and the Anti-Dummy law.