CEBU WINLAND DEV. CORP v. ONG SIAO HUA FACTS: Cebu Winland Dev.

Corp owns and are developers of a condominium called Cebu Winland Tower Condominium in Cebu. Ong Siao Hua bought two condo units and 4 parking slots from petitioner. While Cebu tower Condo was under construction, pet offered to sell to respondent condo units in promotional prices ( pet offered 3% discount provided 30% of purchase price is paid as downpayment and balance paid in 24 monthly installments. Respondent accepted offer and bought the two condo units and 4 parking lots. Area per condo unit as indicated in petitioners price list is 155 sam and price per square is P22,378.95. Parking lot price is 240,000 each. Respondent paid P2,298,655 as downpayment and issued 24 postdated check in 223,430 per check for balance of the P5M purchase price. Net purchase price is P7M. parties did not execute any written document in the transaction. Possession was then turned over to respondent. After purchase price was fully paid with last check, respondent requested pet for certificate of title to evidence ownership. Pet sent to respondent documents for respondents signature for the Deed of Absolute Sale for the two condos. Upon examination of the deed of absolute sale , respondent was distressed to find that state floor are was only 127 sam contrary to the 155 sam written in price list. Respondent verified and discovered that the actual area is only 110 sqm per unit. Respondent then demanded from petitioner refund of P2M for excess payments for difference in the area. Petitioner refused. ISSUE: WON there was actual delivery of the subject matter to respondent? HELD: No. Petitioner argues that it delivered possession of the subject properties to respondent on October 10, 1996, hence, respondents action filed on August 7, 1998 has already prescribed. Respondent, on the one hand, contends that his action has not prescribed because the prescriptive period has not begun to run as the same must be reckoned from the execution of the deeds of sale which has not yet been done. Under the Civil Code, ownership does not pass by mere stipulation but only by delivery.[22] Manresa explains, the delivery of the thing . . . signifies that title has passed from the seller to the buyer."[23] According to Tolentino, the purpose of delivery is not only for the enjoyment of the thing but also a mode of acquiring dominion and determines the transmission of ownership, the birth of the real right. The delivery under any of the forms provided by Articles 1497 to 1505 of the Civil Code signifies that the transmission of ownership from vendor to vendee has taken place. In the case at bar, it appears that respondent was already placed in possession of the subject properties. However, it is crystal clear that the deeds of absolute sale were still to be executed by the parties upon payment of the last installment. This fact shows that ownership of the said properties was withheld by petitioner. Following case law, it is evident that the parties did not intend to immediately transfer ownership of the subject properties until full payment and the execution of the deeds of absolute sale.[28] Consequently, there is no delivery to speak of in this case since what was transferred was possession only and not ownership of the subject properties. Court ruled that the transfer of possession of the subject properties on October 10, 1996 to respondent cannot be considered as delivery within the purview of Article 1543 of the Civil Code. It follows that since there has been no transfer of ownership of the subject properties since the deeds of absolute sale have not yet been executed by the parties, the action filed by respondent has not prescribed.

ALFREDO v. BORRAS (2003)

FACTS: The owners of the subject lot in this case were petitioner spouses, Godofredo Alfredo and Carmen Limon Alfredo. The Subject Land is covered by an OCT. Private respondents, spouses Armando Borras and Adelia Lobaton Borras, filed a complaint for specific performance against Godofredo and Carmen before the RTC. Armando and Adelia alleged in their complaint that Godofredo and Carmen mortgaged the Subject Land for 7k with DBP. To pay the debt, Carmen and Godofredo sold the Subject Land to Armando and Adelia for 15k, the buyers to pay the DBP loan and its accumulated interest, and the balance to be paid in cash to the sellers. Armando and Adelia gave Godofredo and Carmen the money to pay the loan to DBP which signed the release of mortgage and returned the owners duplicate copy of OCT to Godofredo and Carmen. Armando and Adelia subsequently paid the balance of the purchase price of the Subject Land. Godofredo and Carmen then delivered to Adelia the owners duplicate copy of OCT, with the document of cancellation of mortgage, official receipts of realty tax payments, and tax declaration in the name of Godofredo. Godofredo and Carmen introduced Armando and Adelia, as the new owners of the Subject Land, to the Natanawans, the old tenants of the Subject Land. Armando and Adelia then took possession of the Subject Land. In January 1994, Armando and Adelia learned that hired persons had entered the Subject Land and were cutting trees under instructions of allegedly new owners of the Subject Land. Subsequently, Armando and Adelia discovered that Godofredo and Carmen had re-sold portions of the Subject Land to several persons. Armando and Adelia filed an adverse claim with the Register of Deeds of Bataan. Armando and Adelia discovered that Godofredo and Carmen had secured an owners duplicate copy of OCT after filing a petition in court for the issuance of a new copy. Armando and Adelia wrote Godofredo and Carmen complaining about their acts, but the latter did not reply. Thus, Armando and Adelia filed a complaint for specific performance. Petitioners asserted that the Subsequent Buyers were buyers in good faith and for value. TC: in favor of Armando and Amelia. RTC: there was perfected contract of sale; all the elements are present (object, purchase price, manner of payment); subsequent buyers not in GF. CA: affirmed RTC Issue: w/n there was perfected contract of sale Held: 1. There was a perfected contract of sale. A contract is perfected once there is consent of the contracting parties on the object certain and on the cause of the obligation. The contract of sale has also been consummated because the sellers and buyers have performed their respective obligations under the contract. In a contract of sale, the seller obligates himself to transfer ownership of the determinate thing sold, and to deliver the same, to the buyer who obligates himself to pay a price certain to the seller. 2. Ownership of the thing sold is transferred to the vendee upon its actual or constructive delivery. Godofredo and Carmen also turned over to Amando and Amelia the documents of ownership. Armando and Amelia paid the full purchase price as evidenced by the receipt. Subsequent buyers not in GF because they were aware of the lis pendens in the title. Also. The settled rules is when ownership or title passes to the buyer, the seller ceases to have any title to transfer to any 3rd person. If the seller sells the same land to another, the 2nd buyer hwo has actual or constructive knowledge of the prior sale cannot be a registrant in good faith. Such 2nd buyer cannot defeat the 1st buyers title.

3.

SANTOS v SANTOS

FACTS: Jesus and Rosalia owned a lot with a 4-door apartment. They sold through a public instrument the said property to their children, Salvador and Rosawho sold her share to Salvador as well. Nonetheless, in spite of the sale, Rosalia remained in possession and control over the property. Jesus, Rosalia and Salvador died. Zenaida, claiming to be Salvadors heir, demanded rent from the tenants. The other children of Jesus and Rosalia filed a case for reconveyance averring that the sale to Salvador was fictitious and done merely to accommodate him. ISSUE: W/N the sale to Salvador was fictitious HELD: YES. While it is true that sale through a public instrument is equivalent to delivery of the things sold which has the effect of transferring ownership, the delivery can be rebutted by clear and convincing evidence. The vendors continuous possession makes the sale dubious. Salvador never took possession of the property. He surrendered the titles to his mother after having registered the lots in his name, he never collected rentals, neither has he paid the taxes thereon. Thus, there was no real transfer of ownership. That being the case, the action for reconveyance was imprescriptible. 2. DYJRvCA FACTS: Perfecto and Wilfredo Dy are brothers. Wilfredo purchased a truck and a tractor, both of which were mortgaged to Libra Financing as security for a loan. Perfecto wanted to purchase the tractor, he convinced his sister to purchase the truck. Perfecto executed a public document to evidence the sale. Libra acceded to the sale and agreed that upon the issuance and encashment of the check that they issued for the purpose, the chattels can be released. However, in a case against Wilfredo filed by Gelac Trading, the sheriff seized the tractor on levy and sold the same on public auction, with Gelac as the highest bidder. Perfecto thus sought to recover the truck from Gelac. ISSUE: W/N Wilfredo, as mortgagor, can sell the tractor subject of a mortgage HELD: YES. The mortgagor (Wilfredo) had every right to sell the property subject to mortgageeven without the consent of the mortgagee as long as the purchaser assumes the liability of the mortgagor . In this case, there was constructive delivery already upon the execution of the public instrument even if the tractor could not yet be delivered. Execution of the public instrument and mutual consent of the parties was equivalent to constructive delivery. Therefore, at the time when the sheriff levied upon the tractor, it was no longer the property of Wilfredo. Also the clearing of the check was not a condition for the consummation of the sale but only upon the extinguishment of the mortgage. 3. ADDISON v FELIX FACTS: Addison owned 4 parcels of land, which he sold to Felix, through public instrument. The down payment was made; the final installment to be paid after the issuance of the certificate of title. Addison sued Felix to compel the latter to pay the last installmentbut Felix refused and sought to rescind the contract due to the absolute failure of Addison to deliver the thing sold. ISSUE: W/N there was delivery HELD: NO. While it is true that execution of a public instrument is tantamount to delivery of the thing sold, in order for such symbolic delivery to have the effect of tradition, the vendor should have had control over the thing and at the moment of the sale, its delivery could have been made. In this case, the ownership was disputed by the Villafuertes, who were in possession of the land. Addison even failed to show the land to Felix due to the hostile opposition; he also failed to have it surveyed. The legal fiction of delivery thus yields to realityno delivery was ever made. Felix had every right therefore to rescind the contract. Had there been an agreement that Felix would have to undertake to evict the Villafuertes, the result may have been different, but there is no such agreement.

DANGUILAN v IAC FACTS: Domingo owned 2 lots, which he donated through a private instrument to Danguilan for the consideration that the latter must take care of him for the remainder of his life and manage his burial. Domingos daughter, Apolonia, laid claim to the land, presenting a public document allegedly executed in her favor , the purchase price being paid for by her mother . She however failed to take possession of the said property after the execution of the deed. In fact, she moved out of the farm when Danguilan started to cultivate the same for as long as she was given a share from the harvests. She decided to file a case only after the deliveries of farm produce have ceased. ISSUE: Who has a better title over the land, Danguilan or Apolonia? HELD: DANGUILAN. At the onset, the donation in favor of Danguilan was valid even though embodied in a private instrument, because it was an onerous donation. The deed of sale presented by Apolonia was also suspicious. It was only 3 years old and the consideration was paid for by her mother. Assuming that it was valid, still the presumptive delivery is overcome by the fact that she failed to take possession of the property. Ownership, after all, is not transferred by mere stipulation but by actual and adverse possession. She even transferred the same to Danguilan possession of the same. She cannot have a better right in this case than Danguilan. POWER COMMERCIAL AND INDUSTRIAL CORP. v CA FACTS: Power Commercial Corp. entered into a contract of sale with the Quiambao spouses. It agreed to assume the mortgages thereon. A Deed of Absolute Sale with Assumption of Mortgage was executed. Power Commercial failed to settle the mortgage debt contracted by the spouses, thus it could not undertake the proper action to evict the lessees on the lot. Power Commercial thereafter sought to rescind the contract of the sale alleging that it failed to take actual and physical possession of the lotwhich allegedly negated constructive delivery. ISSUE: W/N there was delivery HELD: YES. First, such a condition that the Quiambao spouses would evict the lessees therein was not stipulated in the contract. In fact, Power Commercial was well aware of the presence of the tenants therein. Also in this case, Power Commercial was given control over the said lot and it endeavored to terminate the occupation of the actual tenants. Control cannot be equated with actual possession. Power Commercial, as purchaser, agreed voluntarily to assume the risks involved. The public instrument executed amounted to symbolic delivery of the property sold and authorized the buyer to use the document as proof of ownership. Power Commercial was deprived of ownership only after it failed to remit the amortizations, but not due to failure of delivery. CHUA v CA FACTS: Valdes-Choy is the owner of the subject matter, when she advertised the property for sale. Chua responded to the advertisement, and met up with Valdes-Choy. They agreed for the purchase price of P10,800,000, to be paid on July 15, 1989. This was evidenced by an earnest money for P100,000, which was put on a receipt, stating that the money will be forfeited upon failure to pay on the dat stipulated. On July 13, Valdes-Choy executed two deeds of absolute sale, first, pertaining to the house and lot, valued at P8,000,000, and second, pertaining to the movable properties therein. The next day, Chua issued a check worth P485,000 for the purpose paying the capital gains tax. The value was deducted from the balance, with an outstanding value of P10,295,000 (additional P80,000 for the documentary stamp tax). Chua also showed a check worth P10,215,00 to Valdes-Choy, however, he demanded that the TCT should first be transferred to his name before paying the check. Out of anger, Valdes- Choy tore the deed of absolute sale. On the reckoning date, Valdes-Choy tried

to make a compromise with Chua, but she did not get any response. T wo days later , Chua filed an action for specific performance, which the trial court dismissed. A week later, he filed another action for specific performance, where the court ruled in favor of him. On appeal, CA reversed. ISSUE: 1. Whether the agreement was a contract of sale or contract to sell 2. Whether registration is needed to transfer ownership RULING: It is a contract to sell. First, when the agreement was made, the earnest money is forfeited in favor of Valdes-Choy who may then sell the land to other interested parties. This is the nature of reserving the ownership of the property, subject to the full payment of the purchase price. Second, absent of a formal deed of conveyance of the property in favor of the buyer shows that there was no intention to transfer ownership immediately. The non-fulfillment of the suspensive condition, which is payment of the full purchase price prevents the obligation to sell from arising, where the owner retains the ownership over the property. Art 1482 speaks of earnest money as an evidence of a perfected contract of sale. However, in this case, the earnest money was paid in part consideration of a contract to sell, and therefore, art 1482 does not apply. Delivery is effected upon execution of the sale in a public instrument. However, registration is not needed in order to complete the deed of sale. Delivery is what transfers ownership, and not registration in the Registry of Property. Registration is only necessary to bind third persons; it is not a mode of acquiring ownership. VIVE EAGLE LAND INC v CA FACTS: In 1987, Spouses Flores, as owners, sold 2 parcels of land in Cubao to Tatic Square International Corp for P5.7M. Tatic applied for a loan with Capital Rual Bank of Makati to finance its purchase of the said lots, which the bank granted provided that the torrens title over the lots would be registered under its name as collateral for the payment of the loan. In 1988, Tatic sold these parcels of land to Vive Eagle Land Inc (VELI) for P6.3M, although the torrens titles over the lots were still in the custody of the bank. During the same year, VELI sold one of these parcels of land to Genuino Ice Co. Inc. for P4M. Also, a deed of assignment of rights in which VELI assigned in favor of Genuino Ice all rights and interests under the Deed of Sale executed by spouses Flores and the other Deed of Sale executed by Tatic in VELI's favor, in so far as that lot is concerned. Flores!Tatic (2 lots)!VELI (2 lots)!Genuino Ice (1 lot) Genuino Ice demanded that VELI pay its capital gains tax amounting to P285,000. However, VELI refused saying that the Spouses Flores and Tobias (broker of the sale) are responsible to pay the tax. Genuino Ice filed an action for specific performance against VELI, contending that VELI failed to transfer title to and in the name of Genuino Ice, to cause the eviction of the occupants, and to pay the tax and other dues to effectuate the transfer of the title of the property. RTC ruled in favor of Genuino Ice, CA affirmed. ISSUE: W/N VELI is obliged to pay for the expenses to transfer the title of the property to Genuino Ice HELD: YES. Under Art. 1487 of the CC, the expenses for the registration of the sale should be shouldered by the vendor (VELI) unless there is a stipulation to the contrary. In the absence of the stipulation of the parties relating to the expenses for the registration of the sale and the transfer of the title to the vendee (Genuino Ice), Art. 1487 shall be applied in a supplementary manner . Under Art. 1495 of the CC, VELI, as vendor, is obliged to transfer title over the property and deliver the same to the vendee (Genuino Ice). While Art. 1498 of the CC provides that the execution of a

notarized deed of absolute sale shall be equivalent to the delivery of the property, the same shall not apply if from the deed the contrary does not appear or cannot clearly be inferred. In this case, Genuino Ice and VELI agreed that the latter would cause the eviction of the tenants and deliver possession of the property. It is clear that at the time the petitioner executed the deed of sale in favor of Genuino Ice, there were tenants in the property. It cannot be concluded that the property was thereby delivered to Genuino Ice. HEIRS OF PEDRO ESCANLAR v CA FACTS: The Heirs of Cari-an executed a Deed of Sale of Rights, Interests, and Participation over a parcel of undivided land in favor of the Heirs of Escanlar. It was stipulated that the contract shall become effective only upon approval of the CFI of Negros Occidental. The Heirs of Escanlar failed to pay the balance of the purchase price, but the Heirs of Cari-an never demanded payment and continued to accept belated payments. They later on sold their interests over the same land to the Chuas and assailed the validity of the Deed of Sale they executed with the Heirs of Escanlar. The lower courts annulled the contract for not having the approval of the court as stipulated. ISSUE: W/N the Deed of Sale to the Heirs of Escanlar is valid HELD: YES. There is a distinction between the validity and effectivity. Only the effectivity was made subject to the condition. So long as all the requisites (consent, subject matter, and price) are present, as in this case, the contract is already perfected. Nonetheless, the intent of the parties clearly manifests their intention to give efficacy to the contract. In fact, the vendors continued to accept payments. That being the case, the sale in favor of the Heirs of Escanlar must be preferred as it is a valid and subsisting one.

FORTUNE TOBACCO CORP V. NLRC FACTS: Respondents filed a complaint for illegal dismissal against their employer petitioner Fortune TObacco Corp to NLRC praying that they be reinstated in the company with full back wages and w/o loss of seniority rights. Petitioner maintained that is had already sold its refrying plant. in due time Labor Arbiter rendered a decision ordering the reinstatement of respondents to their former positions with full back wages. Petitioner appealed to the decision of the Labor Arbiter to NLRC. NLRC then modified decision of labor arbiter in a resolution that petitioner must pay separation pay to all those who opt not be rehired by the new owner of the plant and must also pay back wages up to the date plant was actually sold. Petitioner then appealed. But thus decision of NLRC became final and executory. On August 28, 1990, in a hearing set up for the purpose, the petitioner was given ample time to establish by way of competent proof the date of the actual sale of the plant and its facilities cited in the final and executory decision of the NLRC. the petitioner filed its manifestation to which was attached a certified copy of the "Deed of Conditional Sale" executed by and between the petitioner and Premium Tobacco Redrying and Fluecuring Company, Inc. (PTRFC) the petitioner has taken the position that the date of the actual sale of the plant and its facilities is October 17, 1985 and as such the amount stated in the computation of the research unit of the NLRC should be substantially reduced. Respondents filed their "Opposition to Manifestation" with annexes showing a certification from the Office of the Municipal Assessor of Marikina, Metro Manila, a copy of a Declaration of Real Property and an affidavit of one of the complainants in this case alleging that there was no actual sale of the plant and its facilities to the alleged vendee. The opposition alleges, among

others, that there was no actual transfer or actual sale of the plant and its facilities in favor of the PTRFCI; that only a change in name and form has been undertaken by the petitioner; that the properties are still declared in the name of the petitioner; that the PTRFCI representative, a certain Mr. Angelo Ang, is the plant manager of the Vigan, Ilocos Sur plant of the petitioner; that the control, management, operation and funding of the plant are in the hands of the petitioner notwithstanding the alleged sale; and that the computation made by the NLRC is in order. The petitioner filed its comment/rejoinder alleging that the sale on October 17, 1985 is valid and that the property remains in the name of the petitioner pending the full payment of the purchase price agreed upon by the vendor and the vendee . Labor Arbiter Reyes issued an order holding there was no actual sale between petitioner and PTFRCI that the deed of conditional sale has no stated consideration and no actual sale took place. The petitioner maintains that the plant and its facilities were sold on October 17, 1985 by virtue of the Deed of Conditional Sale, bearing the same date, executed by the petitioner and the PTRFCI. Thus put, the petitioner contends that the amount of backwages to be paid to the private respondents should be based on the period covering October 5 to 17, 1985. On the other hand, the private respondents maintain that there has been no actual sale of the plant and its facilities up to the present time and as such the backwages to be paid should be computed accordingly. The NLRC shares the view of the private respondents. ISSUE: WON There was actual sale of plant to PTFRCI? HELD: NO Court finds that there is no actual sale of the plant and its facilities up to the present time. While the Deed of Conditional Sale was executed on October 17, 1985, it does not necessarily follow that the plant and its facilities were, ipso facto, sold on that very day. Careful evaluation of the stipulations of the agreement will show that the petitioner has no intention to transfer ownership over the plant and its facilities to the vendee unless there is full payment of the purchase price on the part of the latter. In fact, it is clearly stipulated that ownership over the plant and its facilities will be transferred to the vendee by way of "a final and absolute deed of sale" only after such fun payment, inclusive of interest charges. The terms and conditions of the agreement speak for themselves. At any rate, even accepting that the plant and its facilities hive been sold on a conditional basis, there can be no actual sale thereof unless the plant and its facilities are unconditionally conveyed to the PTRFCI by virtue of "a final or absolute deed of sale" in accordance with the terms and conditions stated in the agreement between the parties. The Solicitor General manifests that the tax records of the petitioner as well as the certification issued by the Municipal Assessor of Marikina reveal that the plant is still registered in the name of the petitioner. The Solicitor General points out that under these circumstances, petitioner may not validly contend that there has been an actual sale of the plant and its facilities to the PTRFCI. These observations are well-taken. The petitioner, however, correctly asserts that the award of backwages should be limited to cover a three-year period, and, a fortiori, any award in excess of such period is null and void. The contention finds support in prevailing jurisprudence. A modification is, therefore, in order. The backwages to be paid to the private respondents should not exceed a period covering three years, computed from October 5, 1985. Petitioner is dismissed The backwages to be paid to the private respondents should, however, not exceed a period covering three (3) years, computed from October 5, 1985 PACIFIC VEGETABLE OIL CORP v SINGZON FACTS: Petitioner and respondent entered into a contract in the US whereby Singzon agreed to ship 500

tons of copra, with the agreement CIF, Pacific Coast Singzon failed to deliver, but the parties entered into a settlement, whereby Singzon would deliver 300 tons at the same terms the contract provided that should Singzon again default, he would pay $10,000 for damages and the original contract would be revived Singzon again failed to ship the copra, and he did not pay the fine or ship the 500 tons as originally agreed Pacific filed an action to recover damages Singzon claims that Pacific had no legal personality to sue because it is a foreign corporation HELD: The contract was perfected in the US by a broker and representatives of the parties payment was made to a bank in California and delivery undertaken through CIF, Pacific Coast Under that arrangement, the vendor is to pay not only the cost of goods, but also the freight and insurance expenses, and this is taken to indicate that the delivery is to be made at the port of destination Since CIF includes both insurance and freight expenses to be paid by the seller, ordinarily, before the vessel arrives at the point of destination the risk of loss be for the account of the seller. INDUSTRIAL TEXTILE MANUFACTURING COMPANY OF THE PHILIPPINES, INC., Petitioner vs. LPJ ENTERPRISES, INC., Respondent FACTS: Respondent LPJ Enterprises, Inc. had a contract to supply 300,000 bags of cement per year to Atlas Consolidated Mining and Development Corporation (Atlas for short), a member of the Soriano Group of Companies. The cement was delivered packed in kraft paper bags. Sometime in October, 1970, Cesar Campos, a Vice-President of petitioner Industrial Textile Manufacturing Company of the Philippines (or Itemcop, for brevity), asked Lauro Panganiban, Jr., President of respondent corporation, if he would like to cooperate in an experiment to develop plastic cement bags. Panganiban agreed because Itemcop is a sister corporation of Atlas, respondent's major client. A few weeks later, Panganiban accompanied Paulino Ugarte, another Vice-President of Itemcop, to the factory of respondent's supplier, Luzon Cement Corporation in Norzagaray, Bulacan, to test fifty (50) pieces of plastic cement bags. The experiment, however, was unsuccessful. Cement dust oozed out under pressure through the small holes of the woven plastic bags and the loading platform was filled with dust. The second batch of plastic bags subjected to trial was likewise a failure. Although the weaving of the plastic bags was already tightened, cement dust still spilled through the gaps. Finally, with three hundred (300) "improved bags", the seepage was substantially reduced. Ugarte then asked Panganiban to send 180 bags of cement to Atlas via commercial shipping. Campos, Ugarte, and two other officials of petitioner company followed the 180 bags to the plant of Atlas in Cebu where they professed satisfaction at the performance of their own plastic bags. Campos sent Panganiban a letter proclaiming dramatic results in the experiment. Consequently, Panganiban agreed to use the plastic cement bags. Four purchase orders were thereafter issued. Petitioner delivered the orders consecutively on January 12, February 17, March 19, and April 17, 1971. Respondent, on the other hand, remitted the amounts of P1,640.00, P2,480.00. and P13,230.00 on March 31, April 31, and May 3, 1971 respectively, thereby leaving a balance of P84,123.80. No other payments were made, thus prompting A. Soriano y Cia of petitioner's Legal Department to send demand letters to respondent corporation. Reiterations thereof were later sent by petitioner's counsel. A collection suit was filed on April 11, 1973 when the demands remained unheeded. At the trial on the merits, respondent admitted its liability for the 53,800 polypropylene lime bags covered by the first purchase order. With respect to the second, third, and fourth purchase orders, respondent, however, denied full responsibility therefor. Respondent said that it will pay, as it did pay for, only the 15,000 plastic bags it actually used in packing cement. As for the remaining 47,000 bags, the workers of Luzon Cement strongly objected to the use thereof due to the serious health hazards

posed by the continued seepage of cement dust. The trial court rendered its decision sentencing the defendant to pay the sum of P84,123.80 with l2% interest per annum from May, 1971 plus 15% of the total obligation as attorney's fees, and the costs. Respondent corporation's appeal was upheld by the appellate court when it reversed the trial court's decision and dismissed the case with costs against petitioner. ISSUE: WON respondent may be held liable for the 47,000 plastic bags which were not actually used for packing cement as originally intended. HELD: The conditions which allegedly govern the transaction according to respondent may not be considered. The trial court correctly observed that such conditions should have been distinctly specified in the purchase orders and respondent's failure to do so is fatal to its cause. The Court found that Article 1502 of the Civil Code, invoked by both parties herein, has no application at all to this case. The provision in the Uniform Sales Act and the Uniform Commercial Code from which Article 1502 was taken, clearly requires an express written agreement to make a sales contract either a "sale or return" or a "sale on approval". Parol or extrinsic testimony could not be admitted for the purpose of showing that an invoice or bill of sale that was complete in every aspect and purporting to embody a sale without condition or restriction constituted a contract of sale or return. If the purchaser desired to incorporate a stipulation securing to him the right of return, he should have done so at the time the contract was made. On the other hand, the buyer cannot accept part and reject the rest of the goods since this falls outside the normal intent of the parties in the "on approval" situation. Therefore, the transaction between respondent and petitioner constituted an absolute sale. Accordingly, respondent is liable for the plastic bags delivered to it by petitioner.

MENDOZA V. DAVID FACTS: Petitioner ordered 3 sets of furniture and issued specifications to respondent for P185,650.00. A down payment of85,650 pesos has been paid. Upon delivery, petitioner rejected it because of inferior material and quality and thereby asked for a refund. Respondent ignored it and demanded for the balance of P100,000.00. He reclaimed the said furniture. Respondent David retrieved the said furniture due to non payment of the balance.Thus, petitioners complaint herein stands: the CA, who dismissed her case, erred since the transaction was by description or by sample (who avers that the said that the delivered materials were supposed to match bulk goods.) ISSUE: WON the transaction between the parties was that of a sale by description or by sample. HELD: Neither. The court clarified that: In a sale by sample, the standard of quality a small quantity is exhibited by the seller as a fair specimen of the bulk, which is not present and there is no opportunity to inspect or examine the same. In a sale by description, a sellers description of the goods which is made part of the basis of the transaction creates a warranty that the goods will conform to that description. In the present case, the sale was not considered by sample because it does not constitute an agreement to correspond with a certain pattern. There is no agreement to replicate the goods in respondent Davids furniture store. It is also not by description because it would require the seller to be the one who would give the description. In this case it was the buyer. Clearly, this is a made to order sale.

RUDOLF LIETZ INC v CA FACTS: Buriol previously owned a parcel of unregistered land in Palawan. In 1986, he entered into a lease agreement with Flaviano and Tiziana Turatello and Sani (Italians) involving a hectare of his property. This agreement was for a period of 25 years, renewable for another 25 years. After the paying P10,000 downpayment, Turatello and Sani took possession of the land. However, this agreement was only reduced into writing in 1987. After 11 months, Buriol sold the same parcel of land (5 hec) to Rudolf Lietz Inc for P30,000. Later on, Rudolf Lietz Inc discovered that Buriol owned only 4 hectares with one hectare covered by the lease; thus, only 3 hectares were delivered to it. Rudolf Lietz Inc instituted a complaint for the annulment of the lease against Buriol, Sani and the Turatellos before the RTC. RTC and CA ruled in favor of Buriol, Sani and Turatellos. ISSUE: Whether the sale between Buriol and Rudolf Lietz Inc is a lump sum or unit price sale HELD: LUMP SUM SALE. The Deed of Absolute Sale shows that the parties agreed on the purchase price on a predetermined area of 5 hectares within the specified boundaries and not based on a particular rate per area. In accordance with Art. 1542, there shall be no reduction in the purchase price even if the area delivered to Rudolf Lietz Inc is less than that states in the contract. In the instant case, the area within the boundaries as stated in the contract shall control over the area agreed upon in the contract.