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CHAPTER 1: INTRODUCTION BUENAVENTURA VS. CA A contract of sale is a consensual contract. It becomes binding and valid upon the meeting of the minds as to the price. If there is a meeting of the minds as to the price, the contract of sale is valid, despite the manner of payment, or even the breach of that manner of payment. If there is no meeting of the minds as to the price, because the price stipulated in the contract is simulated, then the contract is void. Payment of the price has nothing to do w/ the perfection of the contract, but goes into the performance. NATIONAL HOUSING AUTHORITY VS. GRACE BAPTIST CHURCH All essential elements of a contract in general must be present in order to create a valid & enforceable contract. The offer of N A to sell was not accepted by !"# as they did not agree on the purchase price. ence, the contract is ine$istent. Their being no concurrence of the offer and acceptance, it did not pass the stage of generation to the point of perfection. GAITE VS. FONACIER A conditional obligation is one whose efficacy or obligatory force is subordinated to the happening of a future and uncertain event. The words of the contract e$press no contingency in the buyer%s obligation to pay& 'the balance of P()*** will be paid+, The payment should certainly be paid, but he e$act date of payment is undetermined. The e$istence of the obligation to pay is recogni-ed, only its demandability is deferred. CELESTINO CO & CO. VS COLLECTOR OF INTERNAL REVENUE ### habitually ma.es sash windows & doors, as it has represented in its advertisements to the public. They admittedly 'manufacture, the same. The fact that their products are made by them only when customers place their orders doesn%t alter the nature of the establishment, for it is obvious that it only accepted such orders as called for the employment of certain materials /frames, panels, etc.0 it ordinarily manufactured or was in a position to habitually manufacture. The doors 1 windows are not specially2made, conforming to special re3uirements. The 4ash 5actory sells goods that it mass produces or habitually ma.es, and trims or ad6usts them to such forms as its customers may desire. CIR VS. ENGINEERING EQUIPMENT & SUPPLY CO. 774 is a contract. It doesn%t manufacture air conditioning units, but had its services contracted for the installation of a central system. 774 didn%t advertise itself as a manufacturer. 774 did not have ready2made air conditioning units for sale, in fact, they did not carry standard units. In fact, each unit must be designed and constructed to meet particular re3uirements. The supply of air conditioning units, whether the said machineries were in hand or not, was especially made for each customer & installed in his building upon his special order. QUIROGA VS. PARSONS HARDWARE CO. The contract between the parties was a contract of sale. There was an obligation on the part of 8uiroga to supply the beds, and to pay the price

agreed upon on the part of Parsons. This is different from a contract of agency, whereby the agent receives the thing to sell it, and doesn%t pay its price upon receipt. e only delivers the price to the principal after he obtains it from the sale of the thing to a 9 rd person. In the case at bar, Parsons was obliged to pay the price w/in the term fi$ed, w/o any other consideration, & whether w/n he sold the beds. GONZALO PUYAT & SONS INC. VS ARCO AMUSEMENT CO. The contract is the law between the parties and should be complied with in good faith. :hat doesn%t appear in the face of the contract is not binding. In this case, the prices agreed upon by the parties were evidenced to be clearly accepted by Arco. The fact that Puyat was obliged to sell the e3uipment at the prices agreed upon, despite the ris. of mis3uotation, loss or mista.e, is inconsistent w/ the concept of agency. In agency, the agent is e$empted from all liability in the discharge of his commission provided the acts are in accordance w/t he instructions from his principal. LO VS. KJS ECO-FRAMEWORK SYSTEM PHIL. INC ;acion en pago is a special mode of payment where the debtor offers another thing to the creditor who accepts it as e3uivalent of payment of an outstanding deb. The underta.ing, is in a sense, a sale where the creditor is buying the thing or property of the debtor. As such, the vendor in good faith shall be responsible for the e$istence & legality of the credit at the time of the sale /warranty0. CHAPTER : PARTIES TO A CONTRACT OF SALE

PARAGAS VS. HEAIRS OF DOMINADOR BALACANO A contract of sale e$ecuted by one who is already of advanced age and senile is null and void. :hile the general rule is that a person is not incompetent to contract merely because of advanced years or by reason of physical infirmities, when such age or infirmities have impaired the mental faculties as to prevent the person from properly, intelligently or firmly protecting his property rights, then he is undeniably incapacitated. The circumstances that the seller was an octogenarian at the time of alleged e$ecution of the ;eed of 4ale and was suffering form liver cirrhosis at that raise grave doubts on his physical & mental capacity to freely give consent to the contract. CALIMLIM-CANULLAS VS. FORTUN #onsent of wife is needed for validity of sale of land of husband on which the con6ugal house was constructed. The law prohibits the sale or donation of properties to spouses. The prohibition also applies to common law spouses. The contract of sale was null and void for being contrary to morals & public policy. The sale was made by a husband in favor of a concubine after he had abandoned his family & left the con6ugal home where his wife & children lived & from whence they derived their support. The sale was subversive to the stability of the family, a basic social institution w/c public policy cherishes & protects.

SIENNA A. FLORES

SALES DOCTRINES

FABILLO VS. IAC Art. <=>< prohibits lawyers from purchasing their clients% properties w/c are the ob6ects of litigation in w/c they may ta.e part by virtue of their profession. owever, this prohibition only applies during the pendency of the case. A contract stipulating a contingent fee is not covered by the prohibition under Art. <>=< /)0 because the payment of said fee is not made during the pendency of the litigation but only after 6udgment has been rendered in the case handled by the lawyer. As long as the lawyer does not e$ert undue influence on his client, that no fraud is committed, or that compensation is not e$cessive, a contract for contingency fee is valid & enforceable. A lawyer may have a lien over funds & property of his client & may apply so much thereof as may be necessary to satisfy his lawful fees & disbursements. RUBIAS VS. BATILLER ?nly contracts between guardians, agents, administrators & e$ecutors can be ratified by means of a new contract. In this case, what transpires is a private wrong between the parties, and therefore the private parties may condone such wrong through e$ecuting a new contract. owever, the new contract, doesn%t retroact to the date of the <st contract. The permanent dis3ualification of public and 6udicial officers and lawyers is grounded on public policy. The nullity of such prohibited contracts is definite & permanent & cannot be cured by ratification. PHILIPPINE TRUST CO. VS. ROLDAN As guardianship is a trust of the highest order, the trustee cannot be allowed to have any inducement to neglect his ward%s interest. :henever the guardian ac3uires the ward%s property through an intermediary, such transaction and subse3uent ones emanating therefrom shall be annulled. The guardian sold the ward%s properties to her brother2in2law, & < wee. after, the latter sold the properties bac. to the guardian. That she planned to get them for herself may be deduced from the very short time bet. the @ sales. CHAPTER !: SUBJECT MATTER OF SALE POLYTECHNIC UNIVERSITY VS. CA The conveyance of the property from N;# to PAP was < of absolute sale, for valuable consideration, & not mere paper transfer as argued by PAP. There is not 6ust < party involved in the 3uestioned transactions. N;# & PAP have their respective charters & therefore each possesses a separate & distinct individual personality. '4ale, brings w/in its grasp the whole gamut of transfers where ownership of a thing is ceded for consideration. Budging from the conduct of the parties in this case, all elements of valid sale attend. #onsent is manifested by Cemo ?rder No. @<=, the cancellation of the liabilities constituted consideration, the sub6ect matter was of course the property sub6ect of the dispute. A party to a contract cannot unilaterally withdraw a right of < st refusal that stands upon valuable consideration.

?ur paramount interest on education doesn%t license us, or any party for that matter, to destroy the sanctity of binding obligations D education may be prioriti-ed for legislative/budgetary purposes, but we doubt if such importance can be used to confiscate private property such as the right of < st refusal. ATILANO VS. ATILANO :hen one sells or buys real property D a piece of land, for e$ample D one sells or buys the property as he sees it, in its actual setting and by its physical metes and bounds, and not by the mere lot number assigned to it in the certificate of title. :here the real intention of the parties is the sale of a piece of land but there is a mista.e in designating the particular lot to be sold in the document, the mista.e does not vitiate the consent of the parties, or affect the validity & binding effect of the contract. In such a case, the remedy is reformation of the instrument, there being a meeting of the minds of the parties to a contract. In the case at bar, the deed of sale need not be reformed. The parties have retained possession of their respective properties conformably to the real intention of the parties to that sale, and all they should do is to e$ecute mutual deeds of conveyance. MELLIZA VS. CITY OF ILOILO A sale must have for its ob6ect a determinate thing & this re3uirement is fulfilled as long as, at the time the contract is entered into, the ob6ect of the sale is capable of being made determinate w/o the necessity of a new or further agreement between the parties. YU TEK AND CO VS. GONZALES A contract of sale is not perfected until the parties have agreed upon the price and the thing sold. There is a perfected sale w/ regard to the 'thing, whenever the article of sale has been physically segregated from all other articles A contract whereby a party obligates himself to sell for a price a certain specified 3uantity of sugar of a given 3uality, w/o designating any particular lot of sugar, is not perfected until the 3uantity agreed upon has been selected and is capable of being physically designated & distinguished from all other sugar. Dy: Generic things may now be the object of a contract of sale provided they have the quality of being determinable at the perfection of the contract. NGA VS. IAC The contract of sale is perfected at the moment there is a meeting of the minds upon the thing w/c is the ob6ect f the contract & upon the price. The acceptance referred to w/c determines consent is the acceptance of the offer of < party by the other & not of the goods delivered as contended by petitioners. The fact that the 3uantity is not determinate shall not be an obstacle to the e$istence of the contract, provided that it is possible to determine the same, w/o the need of a new contract between the parties. In this case, there was no need for N5A & 4oriano to enter into a new contract to determine the e$act number of cavans of palay to be sold. 4oriano can deliver so much of his produce so long as it doesn%t e$ceed @(=* cavans.

SIENNA A. FLORES

SALES DOCTRINES

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JOHANNES SCHUBACK & SONS PHIL. TRADING CORP. VS. CA The opening of a letter of credit in favor of a vendor is only a mode of payment. It is not among the essential re3uisites of a sale & therefore doesn%t prevent the perfection of a contract between the parties. The offer by Bohannes was manifested when it submitted its proposal containing the item number, 3uantity, part number, description, the unit price & total to 4an Bose. 4an Bose informed Bohannes of his desire to avail of the prices of the parts at the same time & simultaneously enclosed its Purchase ?rder D w/c signified his acceptance. 8uantity is immaterial in the perfection of a sales contract. :hat is important is the meeting of the minds as to the ob6ect & cause of the sale. Dy: Quality takes precedence over quantity. But quantity is still essential. NOOL VS. CA :here the sellers can no longer deliver the ob6ect of the sale to the buyers, as the buyers themselves have already ac3uired title and delivery thereof from the rightful owner, such contract may be deemed to be inoperative & may thus be considered 'those w/c contemplate an impossible service., The vendor must have a right to transfer ownership of the ob6ect of sale at the time it is delivered. ere, delivery of ownership is no longer possible. It has become impossible. ?ne 'repurchases, only what one has previously sold. The right to repurchase presupposes a valid contract of sale between the same parties. A contract of repurchase arising out of a contract of sale where the seller didn%t have any title to the property 'sold, is not valid. 4ince there was nothing sold, there%s nothing to repurchase. CHAPTER ": PRICE AND OTHER CONSIDERATION MAPALO VS. MAPALO Ander the ?ld & New #ivil #ode, contracts w/o a cause or consideration produce no effect whatsoever. A contract of purchase & sale is void & produces no effect whatsoever where the same is w/o cause or consideration in that the purchase price, w/c appears thereon as paid, has in fact never been paid by the purchaser to the vendor. Ander the ?ld #ivil #ode, the statement of a false consideration renders the contract voidable, unless it is proven that it is supported by another real & licit consideration. A contract that states a false consideration is one that has in fact a real consideration but the same is not the one stated in the document. The action for annulment of a contract on the ground of falsity of consideration shall last = years, the term to run from the date of the consummation of the contract. MATE VS. CA The sale was valid. There was a consideration in the form of a chec. for P=@*.. This was his fee for having e$ecuted the pacto de retro document. It was not only his .indness that impelled him to cede his properties, it was also his interest for profit. The filing of a criminal case /for violation of "P@@0 was a tacit admission by petitioner that there was a consideration of the pacto de retro sale

ONG VS. ONG The conveyance of property for P<.** consideration and other valuable considerations is valid. The apparent inade3uacy is of no moment since the usual practice in deeds of conveyance is to place a nominal amount although there is more valuable consideration given. Although the cause is not stated in the contract it is presumed that it is e$isting unless the debtor proves the contrary. This presumption cannot be overcome by a simple assertion of lac. of consideration especially when the contract itself states that consideration was given, & has been reduced into a public instrument w/ all due formalities & solemnities. "ad faith & inade3uacy of monetary consideration do not render a conveyance ine$istent, as the assignor%s liability may be sufficient cause for a valid contract. BAGNAS VS. CA The apparent gross disproportion between the stipulated price & the undisputably valuable real estate allegedly sold, demonstrates that the deeds of sale in 3uestion, state a false consideration, thereby ma.ing them not merely voidable, but void ab initio. If a contract has no consideration, it is not merely voidable, it is completely void. Price must be in money or its e3uivalent. That 'e3uivalent, must be something representative of money, e.g. a chec. or draft. 4ervices are not the e3uivalent of money insofar as the said re3uirement is concerned & that a contract is not a true sale where the price consists of services or prestations. 4ervices are not only vague & uncertain, but are un.nown & not susceptible of determination w/o the necessity of a new agreement between the parties to said deeds. REPUBLIC VS. PHIL RESOURCES DEV. The purchaser may pay a price certain in money or its e3uivalent D this means that payment of price need not be money. VELASCO VS. CA A definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding & enforceable contract of sale. There was no perfected contract of sale because the terms of payment have not been agreed upon. There has yet to be a meeting of the minds as to the manner of paying the downpayment & installments. CHAPTER #: FORMATION OF A CONTRACT OF SALE MANILA METAL CONTAINER CORP. VS. PNB A definite agreement as to the price is an essential element of a binding agreement to sell personal or real property because it seriously affects the rights & obligations of the parties. :hen the contract of sale is not perfected, it cannot, as an independent source of obligation, serve as a binding 6uridical relation between the parties.

SIENNA A. FLORES

SALES DOCTRINES

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To convert an offer into a contract, the acceptance must be absolute and must not 3ualify the terms of the offer D it must be plain, une3uivocal, unconditional & w/o variance of any sort from the proposal. A counter2offer is considered a re6ection of the original offer & an attempt to end the negotiation between the parties on a different basis. #ontracts or acts of a corporation must be made ether by the board of directors or by a corporate agent duly authori-ed by the board D absent such valid delegation/authori-ation, the rule is that the declarations of an individual director relating to the affairs of the corporation, but not in the course of, or connected w/ the performance of authori-ed duties of such director, are held not binding on the corporation. Absent proof of concurrence of all the essential elements of a contract of sale, the giving of earnest money cannot establish the e$istence of a perfected contract of sale.

SANCHEZ. VS. RIGOS If the option is given w/o consideration, it is a mere offer of a contract of sale, w/c is not binding until accepted. owever, if acceptance is made before a withdrawal, it constitutes a binding contract of sale, even though the option was not supported by a sufficient consideration. An option is unilateral& a promise to sell at the price fi$ed whenever the offeree should decide to e$ercise his option w/in the specified time. After accepting the promise and before he e$ercises his option, the holder of the option is not bound to buy. e is free either to buy or not to buy later. In this case, upon accepting petitioner%s offer, a bilateral promise to sell & buy ensued, and the respondent ipso facto assumed the obligation of a purchaser. It was not a mere option then, it was a bilateral contract of sale. VASQUEZ VS. CA The promisee has the burden of proving that the right to repurchase was supported by a consideration distinct from the price. The signature of the petitioners in the document called right to repurchase doesn%t signify acceptance of the right to repurchase. The respondents didn%t sign the offer. Acceptance should be made by the promise and not the promisors. It would be absurd to re3uire the promisor of an option to buy to accept his own offer instead of the promise to whom the option to buy is given. In this case, no such acceptance was made. The vendor a retro must ma.e actual & simultaneous tender of payment & consignation. Cere e$pressions of readiness or willingness to repurchase are insufficient. The annotation & registration of the right to repurchase at the bac. of the certificate of title of the petitioners cannot be considered as acceptance of the right to repurchase. The right of repurchase must be reserved by the vendor in the same instrument. Dy: $here must be acceptance of the option offer. NIETES VS. CA Notice of creditor%s decision to e$ercise his option to buy need not be coupled w/ actual payment of the price, so long as this is delivered to the owner of the property upon performance of his part of the agreement. There is nothing in the contract that re3uired petitioner to pay the full price before he could e$ercise the option. It was sufficient that he informed !arcia of his choice & that he was at that time ready to pay. The e$ercise of the option need not be coupled w/ actual payment so long as such payment is made upon the fulfillment of the owner%s underta.ing to deliver the property. ?ption contracts involve reciprocal obligations D one does not incur in delay if the other party fails or refuses to comply w/ his respective obligation. ANG YU ASUNCION VS. CA :hen the sale is not absolute but conditional /e.g. contract to sell0, where the ownership of the thing sold is retained until fulfillment of a positive suspensive condition, the breach of the condition will prevent the obligation to convey title from ac3uiring obligatory force. An unconditional mutual promise to buy and sell, w/ an ob6ect that is determinate & price is fi$ed, can be obligatory on the parties.

CARCELLER VS. CA An option is a separate agreement distinct from the contract w/c the parties may enter into upon the consummation of the option. The delay of <E days is not substantial. #arceller%s letter e$pressing his intent to purchase the lot was fair notice of intent to e$ercise the option despite the re3uest for e$tension. #arceller should be allowed to buy the lots. Dy: hat matters is that there was an e!press" clear # unequivocal interest to buy land. TAYAG VS. LACSON An option is a contract w/c the owner of the property agrees w/ another person that he shall have the right to buy his property at a fi$ed price w/in a certain time. Ander the deed of assignment, the tenants granted to petitioner not only an option but an e$clusive right to buy the landholding. "ut the grantors were merely tenants, and not registered owners of the property. Not being the registered owners of the property, the tenants could not legally grant to petitioner the option, much less the e$clusive right to buy the property. ?ne cannot give what one does not have. VILLAMOR VS. CA The consideration is the 'why of the contracts, the essential reason w/c moves the contracting parties to enter into the contract., Actions upon written contracts must be brought w/in <* years. The option is supported by consideration D that being the difference of the agreed price & the mar.et price of the other half of the land w/c was sold to the Fillamors. Thus, it is valid & may be enforced by the Fillamors. The consideration may consist of anything of value. The acceptance of an offer to sell for a price certain created a bilateral contract to sell and buy upon acceptance, the offeree, ipso facto assumes obligations of a vendee. 4ince the Fillamors e$ercised their option, this is tantamount to an acceptance of the offer D a valid and obligatory contract of sale was thus perfected. 5ailure of either parties to demand performance of the obligation of the other for an unreasonable length of time renders the contract ineffective.

SIENNA A. FLORES

SALES DOCTRINES

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Perfected option contract 2 an accepted unilateral promise w/c specifies the thing to be sold and the price to be paid, when coupled w/ valuable consideration distinct and separate from the price. The option is not the contract of sale itself. The optionee has the right, but not the obligation to buy. once the option is e$ercised timely, a bilateral promise to sell & buy ensues and both parties are then reciprocally bound to comply w/ their respective underta.ings. If a period is given to the offeree w/in w/c to accept the offer, and the period is not itself founded upon or supported by a consideration, the offeror is still free & has the right to withdraw the offer before its acceptance, or, if an acceptance has been made, before the offeror%s coming to .now of such fact, by communicating that withdrawal to the offeree. owever, the right to withdraw must not be e$ercised whimsically or arbitrarily. The remedy in case the withdrawal was made capriciously & arbitrarily would be to sue on the basis of abuse of right. If the period has a separate consideration, a contract of 'option, is deemed perfected, & it would be a breach of contract to withdraw the offer during the agreed period. owever the option is an independent contract by itself. If the offeror withdraws the offer before its acceptance by the offeree, the latter may not sue for specific performance on the proposed contract. "ut the offeror renders himself liable for damages for breach of the option.

There should be identity between the terms & conditions to be offered to the buyer holding a right of <st refusal if such right is not to be rendered illusory. In a right of <st refusal, the seller cannot offer the property to another for a lower price or under terms more favorable. It must be offered under the same terms & conditions, otherwise the right becomes illusory. The basis of the right of < st refusal must be the current offer to sell or offer to purchase of any prospective buyer. ?nly after the optionee fails to e$ercise its right of <st priority under the same terms and w/in the period contemplated, could the owner validly offer to sell the property to a 9 rd person, again, under the same terms as offered to the optionee.

VASQUEZ VS. AYALA CORP. In a right of <st refusal, while the ob6ect might be made determinate, the e$ercise of the right would be dependent not only on the grantor%s eventual intention to enter into a binding 6uridical relation w/ another, but also on the terms, including the price, that are yet to be firmed up. VILLONCO VS. BORMAHECO Acceptance w/c contains re3uest for changes in offer but doesn%t essentially change terms of offer doesn%t constitute a counter2offer. An acceptance may contain a re3uest for certain changes in the terms of the offer & yet be a binding acceptance. 4o long as it is clear that the meaning of the acceptance is positively & une3uivocally to accept the offer whether such re3uest is granted or not, a contract is formed. The alleged changes or 3ualifications in the revised counter offer are not material or are mere clarifications of what the parties had previously agreed upon. There is no incompatibility in the offer & counter2offer. :henever earnest money is given in a contract of sale, it shall be considered as part of the price & as proof of the perfection of the contract. The vendor%s acceptance of the part payment of P<**. shows that the sale was conditionally consummated or partly e$ecuted sub6ect to the purchase by the vendor of the Punta property. The non2consummation of that purchase would be a negative resolutory condition. SPOUSES DOROMAL VS. CA The fact that #arlos received P). doesn%t suffice to prove that an actual sale was made. It was not proven to be earnest money w/c could signify the perfection of the sale. It was a mere guarantee that the buyer wouldn%t bac. out considering that there was yet to be a clear agreement. Hedemption should only be for the price stipulated in the deed of sale. FULE VS. CA 5ormal re3uirements are for the benefit of 9 rd persons. Non2compliance therewith doesn%t adversely affect the validity of the contract nor the contractual rights & obligations of the parties thereof. There is fraud when, through insidious words or machinations of < of the contracting parties, the other is induced to enter into a contract w/c, w/o them, he would not have agreed to. To invalidate a contract, mista.e must refer to the substance of the ob6ect of the contract, or to those conditions w/c have principally moved < or both parties to enter into the contract.

EQUATORIAL REALTY DEV. INC. VS MAYFAIR THEATER INC. The deed of option or the option clause in a contract in order to be valid and enforceable must indicate the definite price at w/c the person granting the option is willing to sell. The option is not the contract of sale itself. An option is a contract granting a privilege to buy or sell w/in an agreed time & a determined price. The clause in the lease agreement was not an option contractG it was a right of <st refusal. It did not contain a stipulation as to the price of the said property. The re3uirement of separate consideration doesn%t apply to a right of < st refusalG the consideration is already an integral part of the lease. The consideration for the lease includes the consideration for the right of < st refusal. Hights of <st refusal are governed by the law on contracts, not the amorphous principles on human relations. Ac3uisition by a 9rd person of the property sub6ect of the contract is an obstacle to the action for its rescission where it is shown that such 9 rd person is in lawful possession of the sub6ect of the contract & that he did not act in bad faith. 73uatorial was a buyer in bad faith. 73uatorial was aware of the lease contracts, hence it cannot claim to be a purchaser in good faith, and therefore rescission lies. PARANAQUE KINGS ENTERPRISES INC. S. CA In order to have full compliance w/ the contractual right granting a party the <st option to purchase, the sale of the properties for the price for w/c they were finally sold to a 9 rd person should have li.ewise been < st offered to the former.

SIENNA A. FLORES

SALES DOCTRINES

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DALION VS. CA The provision of Art. <9)E on the necessity of a public document is only for convenience, not for validity or enforceability. It is not a re3uirement for the validity of a contract of sale of a parcel of land that is to be embodied in a public instrument. A sale of real property may be in a private instrument, but that contract is valid & binding between the parties upon its perfection. And a party may compel the other party to e$ecute a public instrument embodying their contract affecting real rights once the contract appearing in a private instrument has been perfected. :hen the sale of land is made through a public instrument, the e$ecution thereof is e3uivalent to the delivery of the thing. ;elivery may be either actual/real or constructive. Thus delivery of a parcel of land may be done by placing the vendee in control & possession of the land /real0 or embodying the sale in a public instrument /constructive0. SECUYA VS. VDA. DE SELMA :hile a sale of a piece of land appearing in a private deed is binding between the parties, it cannot be considered binding on 9 rd persons, if it is not embodied in a public instrument & recorded in the Hegistry of Property. YUVIENGCO VS. DACUYCUY Although there was no perfected contract of sale, the complaint has a cause of action when there was an agreement of sale of the property & downpayment of the sale was made. Cere claim that the petitioners un6ustifiable refused to proceed w/ the sale of the property is unenforceable under the 4tatute of 5rauds in the absence of any note or memorandum & signed agreement of sale. Ander the 4tatute of 5rauds, the contents of the note or memorandum is considered the contract itself, e$cept as to the form. The value of money varies from day to day, hence the indispensability of providing in any sale of the terms of payment when no e$pressly or impliedly intended as cash. LIMKETKAI SONS MILLING INC. VS CA The fact that the deed of sale still has to be signed & notari-ed doesn%t mean that no contract has already been perfected D the re3uisite form under Art. <=)E of the N## is merely for greater efficacy or convenience, and failure to comply therewith doesn%t affect the validity and binding effect of the act between the parties. #ontracts infringing the 4tatute of 5rauds are ratified when the defense fails to ob6ect, or as. 3uestions on cross2e$amination. An e$ception to the unenforceability of contracts pursuant to the 4tatute of 5rauds is the e$istence of a written note or memorandum evidencing the contract, w/c memorandum may be found in several writings, not necessarily in < document. A buyer couldn%t be considered an innocent purchaser for value where it ignored the notice of lis pendens on the title when it bought the lot. ORTEGA VS. LEONARDO

As a general rule, an oral agreement to sell a piece of land is not provable, owever, where there is partial performance of the sale contract, the principle e$cluding evidence of parol contracts for the sale of realty will not apply. 4ome circumstances indicating partial performance of an oral contract of sale of realty are& o Helin3uishment of rights o #ontinued possession o "uilding of improvements o Tender of payment o Hendition of services o Payment of ta$es o 4urveying of the land at the vendee%s e$pense

CLAUDEL VS. CA Nowhere does law or 6urisprudence prescribe that the contract of sale be put in writing before such contract can validly cede or transmit rights over a certain real property between the parties themselves. owever, in the event that a 9rd party disputes the ownership of the property, the person against whom that claim is brought cannot present any proof of such sale & hence has no means to enforce it. The 4tatute of 5rauds was devised to protect the parties in a contract of sale of real property so that no such contract is enforceable unless certain re3uisites, for purposes of proof are met. ALDREDO VS. BORRAS The contract of sale of the sub6ect land has also been consummated because the sellers & buyers have performed their respective obligations under the contract. The physical delivery of the sub6ect land also constituted a transfer of ownership. It is not necessary that the seller himself deliver the title because the thing is understood as delivered when it is placed in the control & possession of the vendee. The 4tatute of 5rauds applies only to e$ecutory contracts & not to contracts either partially or totally performed. The e$istence of the receipt dated << Carch <>@*, w/c is a memorandum of the sale, removes the transaction from the provisions of the 4tatute of 5rauds. TOYOTA SHAW INC. VS. CA A definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale. This is because the agreement as to the manner of payment goes into the price such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. In the case at bar, here was no perfected contract of sale. There was no obligation on the part of Toyota to transfer ownership of a determinate thing to 4osa & no correlative obligation on the part of the latter to pay therfor a rice certain appears therein. The provisions on the downpayment of P<**. made no specific reference to a sale of the vehicle. Nothing was mentioned about the full purchase price & the manner the installments were to be paid.

SIENNA A. FLORES

SALES DOCTRINES

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In order that symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have control over the thing sold that, at the moment of sale, its material delivery could have been made. PASAGUI V. VILLABLANCA It is true that the e$ecution of the deed of absolute sale in a public instrument is e3uivalent to delivery of the land sub6ect of the sale. This presumptive delivery only holds true when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee. It can be negated by the reality that the vendees actually failed to obtain material possession of the land sub6ect of the sale. POWER COMMERCIAL AND INDUSTRIAL CORP. V. CA If the parties intended to impose on respondent spouses the obligation to e6ect the tenants from the lot sold, it should have included such provision in the contract. Hescission was not allowed as the breach was not substantial and fundamental to the fulfillment by the petitioners of the obligation to sell. 4ymbolic delivery, as a species of constructive delivery, effects the transfer of ownership through the e$ecution of a public document. Its efficacy can be prevented if the vendor does not possess control over the thing sold. In order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold. It is not enough to confer upon the purchaser the ownership & the right of possession. The thing sold must be placed in his control. Prior physical delivery of possession is not legally re3uired and the e$ecution of the deed of sale is deemed e3uivalent to delivery. This deed operates as a formal or symbolic delivery of the property sold & authori-es the buyer to use the document as proof of ownership. CHUA VS. CA Art. <=E@ of the ## provides that 'whenever earnest money is given in a contract of sale, it shall be considered as part of the price and proof of the perfection of the contract., "ut this article spea.s of earnest money given in a contract of sale, not a contract to sell. In the case at bar, the earnest money was given in a contract to sell. The receipt evidencing the contract to sell stipulates that the earnest money is a forfeitable deposit, to be forfeited if the sale is not consummated should the buyer fail to pay the balance of the purchase price. The earnest money forms part of the consideration only if the sale is consummated upon full payment of the purchase price. It is only upon the e$istence of the contract of sale that the seller becomes obligated to transfer the ownership of the thing sold to the buyer, & the buyer is obligated to pay the purchase price to the seller. The delivery of the thing constitutes an indispensable re3uisite for the purpose of ac3uiring ownership. ?ur law does not admit the doctrine of transfer of property by mere consentG the ownership, the property right, is derived only from the delivery of the thing. Payment of the capital gains ta$ is not a pre2re3uisite to the transfer of ownership to the buyer. The transfer of ownership ta.es effect upon the signing & notari-ation of the deed absolute sale.

CHAPTER $: CONSUMMATION SANTOS V. SANTOS It is true that neither ta$ receipts nor declarations of ownership for ta$ation purposes constitute sufficient proof of ownership. They must be supported by other effective proofs. The circumstances that, despite the alleged sale, the vendors D the parents of the vendee D still continued to possess & administer the property and en6oy its fruits by leasing it to 9 rd persons, the vendee did not e$ercise any right of ownership over it, after the vendee registered the property in his name, he surrendered the title to his mother, are clear indications that ownership still remained w/ the original owners. The vendor%s continued possession of the property ma.es dubious the contract of sale between the parties. Nowhere in the ## does it provide that e$ecution of a deed of sale is a conclusive presumption of delivery of possession. 5or the e$ecution of a public instrument to effect tradition, the purchaser must be placed in control of the thing sold. :hen there is no impediment to prevent the thing sold from converting to tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the e$ecution of a public instrument is sufficient. If, notwithstanding the e$ecution of the instrument, the purchaser cannot have the en6oyment & material tenancy nor ma.e use of it himself or though another in his name, then delivery has not been effected. The critical factor in the different modes of effecting delivery, w/c gives legal effect to the act, is the actual intention of the vendor to delivery, & it%s acceptance by the vendee D w/o the intention, there is no tradition. ADDISON V. FELI& It is the duty of the vendor to deliver the thing sold. 4ymbolic delivery by the e$ecution of a public instrument is e3uivalent to actual delivery only when the thing sold is sub6ect to the control of the vendor. If the vendor fails to deliver the thing sold the vendee may elect to rescind the contract. DANGUILAN V. IAC The conveyances in the case at bar being onerous donations are not covered by the rule in Art. I=> of the ## re3uiring donations of real properties to be effected through a public instrument. ?wnership does not pass by mere stipulation but only by delivery. The e$ecution of a public document does not constitute sufficient delivery where the property involve is in the actual & adverse possession of 9rd persons.

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SALES DOCTRINES

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VIVE EAGLE LAND INC. VS. CA The e$penses for the registration of the sale should be shouldered by the vendor unless there is a stipulation to the contrary. The vendor is obliged to transfer title over the property & deliver the same to the vendee. DY( JR. V. CA The mortgagor who gave the property as security under the chattel mortgage did not part w/ the ownership over the same. e had the right to sell it although he was under the obligation to secure the written consent of the mortgagee or he lays himself open to criminal prosecution under Art. 9<> of the HP#. BEHN MEYER & CO. V. YANGCO If the contract be silent as to the person or mode by w/c the goods are to be sent, delivery by the vendor to a common carrier in the usual & ordinary course of business, transfers the property to the vendee. If the buyer is to pay the freight, it is reasonable to suppose that he does so because the goods become his at point of shipment. ?n the other hand, if the seller is to pay the freight, the inference is that title to property not pass until the goods have reached their destination. The letters 'c.i.f., stands for costs, insurance, and freight. They signify that the price fi$ed covers not only the cost of the goods, but the e$pense of freight & insurance to be paid by the seller. The letters 'f.o.b., stand for the words 'free on board,. The meaning is that the seller shall bear all e$penses until the gods are delivered where they are to be 5.?.". GENERAL FOODS V. NACOCO :here the arties agreed that the payment of the price of the copra sold was to be according to the 'net landed weight, upon arrival in NJ, the vendor has the burden of proof to show that the shortage was due to ris.s of the voyage & not to the natural drying up of the copras while in transit, or to reasonable allowances for errors in the weighing of the gross cargo & emptying bags in Canila. In the absence of such proof the net landed weight of the agreement, the vendor should be held liable for the amount w/c it had overdrawn from the vendee%s letter of credit covering the price. VALLARTA V. COURT OF APPEALS In a 'sale on return,, the ownership passes to the buyer on delivery. ;elivery or tradition, as a mode of ac3uiring ownership must be in conse3uence of a contract. SANTA ANA V. HERNANDEZ To hold the buyer to no more than the area recited in the deed, it must be made clear that the sale was made by unit of measure at a definite price for each unit. As bet. the absence of a recital of a given price per unit of measurement & the specification of the total area sold, the former must prevail & it determines the applicability of the norms concerning sales for a lump sum

NAAWAN COMMUNITY RURAL BANK( INC. V. CA :hen a person claims to have superior proprietary rights over another on the ground that he derived his title from a sheriff%s sale registered in the Hegistry of Property, Art. <=I9 of the ## will apply only if said e$ecution sale of real estate is registered under Act =>(. Ander the Torrens 4ystem, registration is the operative act that gives validity to the transfer or creates a lien upon the land. Issuance of a certificate of title had the effect of relieving the land of all claims e$cept those noted thereon. Cere registration of title in case of double sale is not enough D good faith must concur w/ the registration. The 'priority in time, principle being invo.ed by petitioner is misplaced because its registration referred to land not w/in the Torrens 4ystem but under Act 99==. on the other hand, when respondents bought the sub6ect property, the same was already registered under the Torrens 4ystem. NAVAL V. COURT OF APPEALS Art. <)== of the ## has no application to land not registered under the Torrens 4ystem. Hegistration by the <st buyer is constructive notice to the @ nd buyer that can defeat his rights as such buyer in good faith. The issue of good faith or bad faith of the buyer is relevant only where the sub6ect of the sale is registered land and the purchaser is buying the same from the registered owner whose title to the land is clean. :hat cannot be collaterally attached is the certificate of title and the title or ownership w/c is represented by such certificate. A certificate of title is merely an evidence of ownership or title over the particular property described therein. An action for reconveyance does not prescribe when the plaintiff is in possession of the land to be reconveyed. CARBONELL V. CA In case of double sale of an immovable property, Art. <)== par.@ directs that ownership should be recogni-ed in favor of < who in good faith < st recorded his right. If there is no inscription, what is decisive is prior possession in good faith. CONSOLIDATED RURAL BANK )CAGAYAN VALLEY*( INC. V. CA Art. <)== of the ## cannot be invo.ed where @ different contracts of sale are made by @ different persons, one of them not being the owner of the property sold. And even if the sale was made by the same person, if the @ nd sale was made when such person was no longer the owner of the property, because it had been ac3uired by the <st purchaser in full dominion, the @nd purchaser cannot ac3uire any right. In a situation where not all the re3uisites are present w/c would warrant the application of Art. <)==, the principle of 'he who is first in time is preferred in right, should apply. The <st vendee is undisputedly a purchaser in good faith because at the time he bought the property, there was still not sale to a @ nd vendee. Prior registration of the sub6ect property does not by itself confer ownership or better right over the property D before the @ nd buyer can obtain priority over

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the < , he must show that he acted in good faith throughout from the time of ac3uisition until the title is transferred to him by registration. ?ne who purchases real property w/c is in actual possession of others should at least ma.e some in3uiry concerning the rights of those in possession. 5or merely relying on the certificates of title & for its failure to ascertain the status of the mortgaged properties as is the standard procedure in its operations, the ban. is a mortgagee in bad faith. In a situation where a party has actual .nowledge of the claimant%s actual, open & notorious possession of a disputed property at the time of registration, the actual notice & .nowledge are e3uivalent to registration. The re3uirement of good faith in the possession of the property finds no application in cases where there is no @nd sale. Ta$ declarations are god indicia of possession in concept of an owners, for no one in his right mind would be paying ta$es for a property that is not in his actual or constructive possession.
st

AMODIA VDA. DE MELENCION VS. CA If the land is registered under the Land Hegistration Act /and therefore has a Torrens Title0, and it is sold and the sale is registered not under the Land Hegistration Act but under Act 99==, such sale is not considered registered as the term is used under Art. <)== of the ##. The fact that the certificate of title over the registered land is lost does not convert it into unregistered land D a certificate of title is merely an evidence of ownership or title over the particular property described therein. AGRICULTURAL AND HOME E&TENSION DEV. V. CA A notice of lis pendens does not have the effect of establishing a lien or encumbrance on the property affected. Their only purpose was to give notice to 9rd persons & to the whole world that any interest they might ac3uire in the property pending litigation would be sub6ect t he result of the suit. ABRIGO V. DE VERA A registration must be done in the proper registry in order to bind the land D where the property in dispute is already registered under the Torrens system, registration of the sale under Act 99== is not effective for purposes of Art. <)== of the ##. A Torrens title, once registered, serves as a notice, and no one can plead ignorance of the registration. Art. <)== of the ## re3uires the @ nd buyer to ac3uire the immovable in good faith & to register it in good faith. #onstructive notice to the @nd buyer through registration under Act 99== does not apply if the property is registered under the Torrens 4ystem. CARUMBA V. CA :hile under Art. <)== of the ## registration in good faith prevails over possession in the event of a double sale by the vendor of the same piece of land to different vendees, said article is not applicable even if the later vendee was ignorant of the prior sale made by his 6udgment debtor in favor of another vendee. RADIOWEALTH FINANCE CO. V. PALILEO A bona fide purchaser of registered land at an e$ecution sale ac3uires a good title as against a prior transferee if such transfer was unrecorded. Art. <)== does not apply to land not registered under Act =>(. The purchaser of unregistered land at a sheriff%s e$ecution sale only steps into the shoes of the 6udgment debtor, and merely ac3uires the latter%s interest in the property sold as of the time the property was levied upon. BAYOCA VS. NOGALES :hat finds relevance & materiality is not w/n the @ nd buyer was a buyer in good faith, but w/n said buyer registers such @ nd sale in good faith, that is, w/o .nowledge of any defect in the title of the property sold. Hegistration by the <st buyer under Act 99== can have the effect of constructive notice to the @nd buyer that can defeat his right as such buyer. PAULMITAN V. CA

MENDOZA V. KALAW The preventative precautionary notice obtained by K created no advantage in his favor, for the reason that such a notice on the records of the registry of deeds only protects the rights of the person securing it for a period of 9* days. ADALIN V. CA The sale was conditional only inasmuch as there remained yet to be fulfilled, the obligation of the sellers to e6ect their tenants & the obligation of the buyers to pay the balance of the purchase price. The choice of who to sell the property to, however, had already been made by the sellers and is thus no longer sub6ect to any condition, nor open to any change. In that sense, therefore, the sale made was definitive and absolute. Though the @nd sale to the tenants was registered, such prior registration cannot erase the gross bad faith that characteri-ed such @ nd sale, and conse3uently, there is no legal basis to rule that such @ nd sale prevail over the <st sale of the said property. CHENG V. GENATO Hegistration means any entry made in the boo.s of the registry, including both registration in its ordinary & strict sense, and cancellation, annotation, and even marginal notes. In its strict acceptation, it is the entry made in the registry w/c records solemnly & permanently the right of ownership & other real rights. SAN LORENZO DEV. CORP. V. CA :hen the thing sold twice is an immovable, the one who ac3uires it & <st records it in the Hegistry of Property, both made in good faith, shall be deemed the owner. If a vendee in a double sale registers the sale after he has ac3uired .nowledge of a previous sale, the registration constitutes registration in bad faith & does not confer upon him any right. Art. <)== does not apply to a case where there was a sale to < party of the land itself while the other contract was a mere promise to sell the land, or at most an actual assignment of the right to repurchase the same land.

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7ven if a co2owner sells the whole property as his, the sale will affect only his own share but not those of the other co2owners who did not consent to the sale. 4ince a co2owner is entitled to sell his undivided share, sale of the entire property by one co2owner w/o the consent of the other co2owners is not null & void. CHAPTER ': SALE BY NON-OWNER OR BY ONE HAVING VOIDABLE TITLE: THE LIFE OF A CONTRACT OF SALE MINDANAO V. YAP A contract of sale is entirely null & void where it purports to sell properties of w/c the sellers were not the only owners & the prestation involved was indivisible, and therefore incapable of partial fulfillment. Dy: hat was null # void was the purported transfer of ownership. ESTOQUE V. PAJIMULA :here the seller was not the owner of a thing sold later ac3uires title thereto, the transaction was validate and became fully effective. Dy: the sale %transfer of ownership& was ineffective as of the date of e!ecution of the deed" since the seller could not validly transfer a specific '() portion w(c he didn*t own. BUCTON V. GABAR The sale of land in a private instrument is binding upon the parties. ?ne who sells something he does not as yet own is bound by the sale when he ac3uires the thing later. CITY OF MANILA VS. BUGSUK LUMBER CO. The placing of an order for goods & the ma.ing of payment thereto at a principal office does not transform said office into a store, for it is a necessary element that there must also be goods or wares stored therein or on display, & provide also that the firm or person maintaining that office is actually engaged in the business of buying & selling. SUN BROS. & CO. V. VELASCO A person who buys a thing at a merchant%s store after the same has been put on display, ac3uires a valid title to the thing although his predecessors in interest did not have any right of ownership over it. The policy of the law has always been that where the rights & interests of a vendor come into clash w/ that of an innocent buyer for value, the latter must always be protected. TAGATAC V. JIMENEZ In a case where there is no proof of illegal or unlawful deprivation, there is no 6ustification in applying the Art. ))> of the N##. The rights of a stranger in good faith, ac3uired before the resolution of the contract, are entitled to protection. EDCA PUBLISHING V. SANTOS Possession of movable property ac3uired in good faith is e3uivalent to a title.

Non2payment creates a right to demand payment or to rescind the contract, or to criminal prosecution. CRUZ VS. PAHATI( ET AL. A person illegally deprived of any movable may recover it from the person in possession of the same & the only defense the latter may have is if he has ac3uired it in good faith at a public sale, in w/c case, the owner cannot obtain its return w/o reimbursing the price paid therefore. AZNAR V. YAPDIANGCO A person unlawfully deprived of the possession of his persona property has a better right to the possession thereof as against a buyer in god faith for value from a seller who had no title thereto. Ander Art. <)*( of the ##, it is essential that the seller should have a voidable title at least. It is inapplicable where the seller had no title at all. A contract of sale of property does not serve to transfer ownership where the vendee too. possession of the sub6ect matter thereof by stealing the same while it was in the custody of the vendor%s agent. Ander Art. ))> of the ##, there are @ e$ceptions to the general rule on irrevindicability, to wit& o :hen the owner has lost the thing, or o :hen the owner has been unlawfully deprived thereof In these cases, the possessor cannot retain the thing as against the owner, who may recover it w/o paying any indemnity, e$cept when the possessor ac3uired it in a public sale. DIZON V. SUNTAY The owner of a diamond ring may recover the possession of the same from a pawnshop where another person had pledged it w/o authority to do so. Art. ))> of the ## applies & the defense that the pawnshop ac3uired possession of the ring w/o notice of any defect in the title of the pledgor is unavailing. CHAPTER +: LOSS( DETERIORATION( FRUITS & OTHER BENEFITS ROMAN V. GRIMALT The disappearance or loss of property w/c the owner intended or attempted to sell can only interest the owner, who should suffer the loss, & not a 9 rd party who has ac3uired no rights nor incurred any liability w/ respect thereto. LAWYER-S COOP V. TABORA In a contract of sale where the seller agreed that the ownership of the boo.s sold shall remain w/ it until the purchase price shall have been fully paid, it is held that such stipulation cannot ma.e the seller liable in case of loss, not only because such was agreed merely to secure the performance by the buyer of his obligation but also because in the very contract itself, it was agreed that the loss or damage to the boo.s after delivery to the buyer shall be borne by the buyer. The rule that an obligor should be held e$empt from liability when the loss occurs thru a fortuitous event only holds true when the obligation consists in the delivery of determinate thing & there is no stipulation holding him liable even in case of fortuitous event. It doesn%t apply when the obligation is

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pecuniary in nature & the obligor binds himself to assume the loss after delivery of the goods to him. CHAPTER 1,: REMEDIES FOR BREACH OF CONTRACT OF SALE HERMANOS( INC. VS. GERVACIO In order to apply the provisions of Art. <=)=2A of the ##, it must appear that there was a contract for the sale of personal property payable in installments & that there has been a failure to pay @ or more installments. In the case at bar, the contract was not one on installments, but on straight term, in w/c the balance, after payment of the initial sum, should be paid in its totality at the time specified in the promissory note. Accordingly, the mortgagee is not bound by the prohibition therein contained as to its right to the recovery of the unpaid balance VISAYAN SAWMILL COMPANY( INC. V. COURT OF APPEALS :hen the obligation of the petitioner corporation to sell did not arise, it therefore cannot be compelled by specific performance to comply w/ its prestation. TAJANGLANGIT V. SOUTHERN MOTORS In a contract of sale of personal property the price of w/ is payable in installments, secured by a mortgage on the goods sold, the vendor who chooses to e$act fulfillment of the obligation to pay is not limited to the proceeds of the sale, on e$ecution of the mortgaged goods. The vendor may still recover from the purchaser of the unpaid balance of the price, if any. NONATO V. IAC Hemedies of a seller where the buyer fails to pay personal property in installments is alternative, not cumulative, that the e$ercise of < would bar the e$ercise of the others. Possession by the assignee of a car purchased in installments where the buyer defaulted in payment thereof bars it from e$acting from the defaulted buyer the balance of the purchase price of the vehicle repossessed. RIDAD V. FILIPINAS INVESTMENT Ander Art. <=E= of the N## the vendor of personal property sold on installment who chooses the remedy of foreclosure of the chattel mortgage is limited to the foreclosure of the items sold only & not to other items not sub6ect of the sale although also given as additional security. The foreclosure of the latter items is null & void. ZAYAS V. LUNETA MOTORS The foreclosure & actual sale of mortgaged chattel bars further recovery by the vendor of any balance on the purchaser%s outstanding obligation not so satisfied by the sale. CRUZ V. FILIPINAS INVESTMENT & FINANCE CORP. The word 'action, used in Art. <=E= may be construed as referring to any 6udicial or e$tra6udicial proceeding by virtue of w/c the vendor may lawfully be enabled to e$act recovery of the supposed unsatisfied balance of the purchase

price from the purchaser or his privy. #ertainly, an e$tra6udicial foreclosure of a real estate mortgage is one such proceeding. BORBON II V. SERVICEWIDE SPECIALISTS( INC. In ordinary alternative obligations, a mere choice categorically & une3uivocally made & then communicated by the person entitled to e$ercise the option concludes the parties. The creditor may not thereafter e$ercise any other option, unless the chosen alternative proves to be ineffectual or unavailing due to no fault on his part. In alternative remedies, the choice generally becomes conclusive only upon the e$ercise of the remedy. :hen the assignee forecloses on the mortgage, there can be no further recovery of the deficiency, and the seller2mortgagee is deemed to have renounced any right thereto. MACONDRAY & CO. V. EUSTAQUIO 'Any unpaid balance, includes interest on the principal, attorney%s fees, e$penses of collection, and the costs. FILIPINAS INVESTMENT & FINANCE CORP. V. RIDAD :here the mortgagor plainly refuses to deliver the chattel sub6ect of the mortgage upon his failure to pay @ or ore installments, or if he conceals the chattel to place it beyond the reach of the mortgagee, the mortgagee is entitled to recovery necessary e$penses incurred by him in the prosecution of the action for replevin so that he can regain possession of the chattel. Hecoverable e$penses would include e$penses properly incurred in effecting sei-ure of the chattel & reasonable attorney%s fees in prosecuting the action for replevin. PCI LEASING & FINANCE( INC. VS. GIRAFFE-& CREATIVE IMAGING( INC. :here a lease agreement is in reality a lease w/ an option to purchase an e3uipment to w/c Art. <=E) of the ## applies. The 4# has long been aware of the practice of vendors of personal property of denominating a contract of sale on installment as one of lease to prevent the ownership of the ob6ect of sale from passing to the vendee until & unless the price is fully paid. The lessor in a lease w/ option to purchase, in choosing, through replevin, to deprive the lessee of possession of the leased e3uipment, waived its right tot bring an action to recover unpaid rentals on the said leased items. The remedies provided for in Art. <=E= of the ## are alternative, not cumulative. The e$ercise of one bars the e$ercise of the others. This limitation applies to contracts purporting to be leases of personal property w/ option to buy by virtue of Art. <=E). The condition that the lessor has deprived the lessee of possession of en6oyment of the thing for the purpose of applying Art. <=E) was fulfilled in this case by filing by petitioner of the complaint for a sum of money w/ prayer for replevin to recover possession of the office e3uipment. "y virtue of the writ of sei-ure issued by the trial court, the petitioner has effectively deprived respondent of their use, a situation w/c, by force of Hecto Law, in turn precludes the former from maintaining an action for recovery of 'accrued rentals, or the recovery of the balance of the purchase price plus interest.

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LEGARDA V. SALDA.A :here one purchases from a subdivision owner @ lots & has paid more than the value of < lot, the former is entitled to a certificate of title to < lot in case of default. JESTRA DEVELOPMENT & MANAGEMENT CORP. VS PACIFICO HA (==@ was enacted to protect buyers of real estate on installment against onerous & oppressive conditions. :hile the seller has under the Act the option to cancel the contract due to non2payment of installments, he must afford the buyer a grace period to pay them and, if at least @ years installments have already been paid, to refund the cash surrender value of the payments. MCLAUGHLIN V. CA After a purchaser by installments has paid substantial portion of the purchase price, it would be ine3uitable to have the amount paid forfeited as li3uidated damages, particularly if tender of payment was made. Ander the Caceda Law, a lot installment buyer is given a grace period to pay installments in arrears. In the case at bar, the grace period has not yet e$pired when a tender of payment was made. ?ffer of payment by certified chec. is valid tender of payment. :here an obligor fails to follow a valid tender of payment w/ a court consignation, the court may allow him time to pay his obligation w/o rescinding the deed of sale. CHAPTER 11: REMEDY OF RESCISSION IN SALES CONTRACTS COVERING IMMOVABLES: CONTRACT OF SALE VS. CONTRACT TO SELL ADELFA PROPERTIES( INC. V. CA A deed of sale is considered absolute where there is neither a stipulation in the deed that title to the property sold is reserved in the seller until the full payment of the price, nor one giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay w/in a fi$ed period. An implied stipulation that ownership shall not pass to the purchaser until he had fully paid the price is valid & therefore binding & enforceable between the parties. The important tas. in contract interpretation is always the ascertainment of the intention of the contracting parties. In a perfected contract to sell, Art. <)>* would properly apply. In Art. <)>*, the vendor is bound to ma.e payment even w/ the e$istence of a vindicatory action if the vendee should give a security for the return of the price. It is consignation w/c is essential in order to e$tinguish petitioner%s obligation t pay the balance of the purchase price. A contract to sell involved the performance of an obligation, not merely the e$ercise of a privilege or a right. Thus, performance of payment may be effected not by tender of payment alone but by both tender & consignation. Budicial action for rescission of a contract is not necessary where the contract provides for automatic rescission in case of breach.

Hesolution of reciprocal contracts may be made e$tra6udicially unless successfully impugned in court. If the debtor impugns the declaration, it shall be sub6ect to 6udicial determination. ?therwise, if said party does not oppose it, the e$tra6udicial rescission shall have legal effect. CORONEL V. CA A contract to sell may be defined as a bilateral contract whereby the prospective seller, while e$pressly reserving the ownership of the sub6ect property despite delivery thereof to the prospective buyer, binds himself to sell the said property e$clusively to the prospective buyer upon fulfillment of the condition agreed upon, that is, full payment of the purchase price. A contract to sell may not even be considered as a conditional contract of sale because in a conditional contract of sale, the < st element of consent is present, although it is conditioned upon the happening of a contingent even w/c may or may not occur. In a contract to sell, upon the fulfillment of the suspensive condition, ownership will not automatically transfer to the buyer D the prospective buyer still has to convey title to the prospective buyer by entering into a contract of absolute sale. In a contract to sell, there being no previous sale of the property, a 9 rd person buying such property despite the fulfillment of the suspensive condition such as the full payment of the purchase price cannot be deemed a buyer in bad faith & the prospective buyer cannot see. the relief of reconveyance of the property D there is no double sale in such case. In a conditional contract of sale, upon the fulfillment of the suspensive condition, the sale becomes absolute & this will definitely affect the seller%s title thereto. :hen the sellers declared in the 'Heceipt of ;own Payment, that they received an amount as purchase price for their house & lot w/o any reservation of title until full payment of the entire purchase price, the natural & ordinary meaning idea conveyed is that they sold their property. A seller cannot unilaterally & e$tra6udicially rescind a contract of sale where there is no e$press stipulation authori-ing him to e$tra6udicially rescind PNB V. CA A contract to sell is a.in to a conditional sale where the efficacy or obligatory force of the vendor%s obligation to transfer title is subrogated to the happening of a future & uncertain event. It is not enough to say that the contract of sale, being consensual became automatically & immediately effective. CONTRACT OF SALE The title to the property passes to the vendee upon the delivery of the thing sold The vendor loses ownership over the property & cannot recover it until & unless the contract is resolved/rescinded Non2payment of the price is a negative resolutory condition CONTRACT TO SELL ?wnership is, by agreement, reserved in the vendor and is not to pass to the vendee until full payment of the purchase price Payment of the purchase price is a positive suspensive condition, failure of w/c is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective 5ull payment is a positive suspensive condition

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SALES DOCTRINES

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BABASA V. COURT OF APPEALS A deed of sale is absolute in nature although denominated a 'conditional sale, absent such stipulations reserving title to the vendor until full payment of the purchase price, nor any stipulation giving them the right to unilaterally rescind the contract in case of non2payment. There is a distinction between a condition imposed on the perfection of a contract & a condition imposed merely on the performance of an obligation. :hile failure to comply w/ the < st condition results in the failure of a contract, failure to comply w/ the @nd merely gives the other party the option to either refuse to proceed w/ the sale or to waive the condition. ROQUE V. LAPUZ There can be non rescission or resolution of an obligation as yet non2e$istent, because the suspensive condition did not happen. Art. <)>@ of the N## re3uiring demand by suit or notarial act n case the vendor of realty wants to rescind does not apply to a contract to sell or promise to sell, where title remains w/ the vendor until fulfillment to a positive condition, such as full payment of the price. This absence of a formal deed of conveyance is a very strong indication that the parties did not intend immediate transfer of ownership & title, but only a transfer after full payment of the price. Art. <<>< of the N## applies in rescission of a contract to sell realty. The benefit stated in Art. <<>< of the N## allowing the court to fi$ the period w/in w/c the obligor may fulfill his obligation will not be granted where to allow him such term will amount to sanctioning bad faith, as where the obligor2vendee refused to pay more than <<( monthly installments. Cere fact that the obligor has built a house on land he intends to buy will not 6ustify grant of mere term to pay installments where his default was 3uite substantial. 4ubdivision owner%s duty to put up facilities is not correlative to duty of lot buyer to pay his monthly installments. ANGELES V. CALASANZ Nothing in Art. <<>< of the N## prohibits agreement on cancellation of contract by a party w/o 6udicial intervention. The right to cancel a contract even if agreed upon may be 3uestioned in court by the affected party to determine w/n cancellation was warranted. Anilateral cancellation of contract to sell was not warranted if breach is only slight or casual. Acceptance of delayed installment payments beyond grace period amounts to waiver of right of rescission. #ontracts to sell lots are contracts of adhesion when buyer is merely re3uired to sign a prepared agreement. :here installment buyer has paid more than the agreed price, the fact that during delayed payments of some monthly installments the same was applied to interest agreed upon, would not 6ustify cancellation of contract for failure to pay a small balance of re3uired installment. DIGNOS V. COURT OF APPEALS

Although there was no constructive delivery of the land sold, as the deed of sale is a private instrument there was actual delivery thereof by the delivery of possession of the land to the vendees. The act of the petitioners of delivering the possession of the land to the vendees, contemporaneous w/ the contract, clearly showing that an absolute deed of sale was intended by the parties & not a contract to sell. 4ale of the property by the vendors to a @ nd vendee is null & void as at the time of sale they were no longer owners of the property. 4light delay on the part of < party in the performance of his obligation is not sufficient ground fro rescission of the agreement. 73uity & 6ustice mandate the vendee be given an additional period to complete payment of the purchase price. TOPACIO V. CA 7arnest money is something of value to show that the buyer was really in earnest, and given to the seller to bind the bargain. It is considered a part of the purchase price & as proof of the perfection of the contract. LUZON BROKERAGE CO.( INC. V. MARITIME BUILDING CO.( INC. In contracts to sell, where ownership is retained by the seller & is not to pass until the full payment of the price, such payment is a positive suspensive condition, the failure of w/c is not a breach, casual or serious, but simply an event that prevented the obligation of the vendor to convey title from ac3uiring binding force. A 6udicial action for rescission of a contract is not necessary where the contract provides that it may be revo.ed & canceled for violation of any of its terms & conditions. Hesort to 6udicial action for rescission is obviously not contemplated. The validity of the stipulations cannot be seriously disputed. The remedy of the party opposing the rescission for any reason is to file the corresponding action to 3uestion the rescission & enforce the agreement. UNIVERSITY OF THE PHILIPPINES V. DE LOS ANGELES The act of a party in treating a contract as cancelled or resolved on account of infractions by the other contracting party must be made .nown to the other & is always provisional, being ever sub6ect tot scrutiny & review by the proper court. If the other party denies that rescission is 6ustified, it is free to resort to 6udicial action in its own behalf, & bring the matter to court. The party who deems the contract violated may consider it resolved or rescinded, & act accordingly, w/o previous court action, but it proceeds at its own ris.. 5or it is only the final 6udgment of the corresponding court that will conclusively & finally settle whether the action ta.en was or was not correct in law. "ut the law definitely does not re3uire that the contracting party who believes itself in6ured must <st file suit & wait for a 6udgment before ta.ing e$tra6udicial steps to protect its interest. :e see no conflict bet. this ruling & the previous 6urisprudence of this #ourt invo.ed by responding declaring that 6udicial action is necessary for the resolution of a reciprocal obligation, since in every case where the e$tra6udicial resolution is contested only the final award of the court of competent 6urisdiction can conclusively settle whether the resolution was proper or not. It is in this sense that 6udicial action will be necessary, as w/o it, the e$tra6udicial resolution will remain contestable & sub6ect to 6udicial

SIENNA A. FLORES

SALES DOCTRINES

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invalidation, unless attac. thereon should become barred by ac3uiescence, estoppel or prescription. PALAY INC. V. CLAVE Budicial action for the rescission of a contract is not necessary where the contract provides that it may be revo.ed & cancelled for violation of any of its terms & conditions, provided written notice is sent to defaulter informing him of the rescission. 7$tra6udicial rescission has legal effect, unless the other party impugns it. It is a matter of public policy to protect buyers of real estate on installment payments against onerous & oppressive conditions, such as a waiver of notice. TORRALBA V. DE LOS ANGELES To revive the contract, the petitioner should pay to the P # all the installments due & interests thereon w/in >* days from notice. In the case at bar, the contract e$pressly provided that the contract shall be at deemed annulled & cancelled & the P # shall be at liberty to ta.e possession of said property & dispose the same to any other person upon default of the petitioner to pay the installments due. ence there was no contract to rescind in court because from the moment the petitioner defaulted in the timely payment of the installments, the contract between the parties was deemed ipso facto rescinded. CHAPTER 1 : CONDITIONS & WARRANTIES HEIRS OF PEDRO ESCANLAR V. CA :here the sellers, instead of availing of their right to rescind, accept & receive delayed payments of installments beyond the period stipulated, & the buyers are in arrears, the sellers in effect waive & are estopped from e$ercising said right to rescind. POWER COMMERCIAL AND INDUSTRIAL CORP. V. CA If the parties intended to impose on the respondents the obligation to e6ect the tenants from the lot sold, it should have included such provision in the contract. He3uisites for breach of warranty against eviction& o The purchase has been deprived of the whole or part of the thing sold o This eviction is by final 6udgment o The basis thereof is by virtue of a right prior to the sale made by the vendor o The vendor has been summoned & made co2defendant in the suit for eviction at the instance of the vendee As petitioner failed to impugn the integrity of the contract, it is presumed, under the law, to be valid & subsisting. NUTRIMI& FEEDS CORP. VS. CA A hidden defect is one w/c is un.nown or could not have been .nown to the vendee. He3uisites to recover on account of hidden defects& o The defect must be hidden

The defect must e$ist at the time the sale was made The defect must ordinarily been e$cluded from the contract The defect must be important such that it renders the thing unfit or considerably decreases fitness o The action must be instituted w/in the statute of limitations Things to be established in order to prove liability on the basis of breach of implied warranty o They sustained in6ury because of the product o The in6ury occurred because the product was defective or unreasonable unsafe o The defect e$isted when the product left the hands of the petitioner o o o CHAPTER 1!: E&TINGUISHMENT OF SALE VILLARICA V. CA :here o The price of the real estate property 2 sub6ect matter of an instrument of absolute sale 2 was not ade3uate o The vendor did not remain in possession of the land sold as lessee or otherwise o The vendee as new owner granted the vendor merely an option to buy the property sold w/in a certain period of time from the e$ecution of the instrument of sale, and o The ta$es paid by the vendor were bac. ta$es up to the time of the sale 22 said instrument of absolute sale cannot be presumed and construed as an e3uitable mortgage MISTERIO V. CEBU STATE COLLEGE OF SCIENCE AND TECHNOLOGY The essence of a pacto de retro sale is that title & ownership of the property sold is immediately vested in the vendee a retro, sub6ect to the restrictive conditions of repurchase by the vendee a retro w/in the period provided in Art. <(*( of the N##. Pending the repurchase of the property, the vendee a retro may alienate, mortgage, or encumber the same, but such alienation or encumbrance is as revocable as is his right. VDA. DE ZULUETA V. OCTAVIANO :here the vendee in a subse3uent document gave the vendor the right to buy bac. the property sold, there is no contract of redemption. A contract of redemption is not a right granted by the vendee to the vendor. A deed of sale cannot be deemed a pactum commmissorium where the vendor owed nothing to the vendee who merely assumed to pay the vendor%s debt to another out of part of the purchase price. Hedemptioner must deposit redemption price in court if offer to pay fails. REYES V. HAMADA Pendency of an action involving validity of tender of redemption price & ownership precludes another action for recover of rentals.

SIENNA A. FLORES

SALES DOCTRINES

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"efore the e$piration of the <2year period w/in w/c the 6udgment2debtor or mortgagor may redeem the property, the purchaser thereof is not entitled, as a matter of right, to possession of the same. The rentals receivable from tenants, although may be collected by the purchaser during the redemption period, do not belong to him but still pertain to the debtor or mortgagor, for w/c the purchaser is accountable to the latter when he affects the redemption. ALMEDA V. DALURO Fendee a retro has a right to share in the harvest of palay planted when said vendee was still owner of the land, esp. when there is an agreement thereon SORIANO V. BAUTISTA The stipulation in a deed of mortgage w/c renders the mortgagor%s right to redeem defeasible at the election of the mortgagee is not illegal or immoral, being merely an option to buy when supported by a consideration distinct from the purchase price. CHAPTER 1": ASSIGNMENT NYCO SALES CORP. V. BA FINANCE The vendor2assignor warrants both the credit itself /its e$istence & legality0 and the person of the debtor /his insolvency0, if so stipulated. CHAPTER 1$: RETAIL TRADE LIBERALIZATION ACT OF ,,, & RELATED PROVISIONS OF THE ANTI-DUMMY LAW KING V. HERNAEZ The employment of aliens in control & non2control position in a retail establishment or trade is prohibited by the Anti2;ummy law, e$cept for technical positions w/ previous authority of the President. BALMACEDA V. UNION CARBIDE PHILIPPINES( INC. A corporation is not engaged in the retail trade where the goods it manufactures are generally sold to producers, processors, fabricators, and industries. B.F. GOODRICH PHILIPPINES( INC. V. REYES( SR.( A corporation manufacturing & selling rubber products to dealers, to the government, public utilities, agricultural enterprises, logging, mining, & e$ploration firms, assembly plants who buy in bul., & to its officers & employees is not engaged in the retail business under HA <<E* as amended by P; I<=, e$cept as to its sales of rubber products to its employees. GOODYEAR TIRE V. REYES( SR. MARSMAN & CO.( INC. V. FIRST COCONUT CENTRAL CO.( INC. Ander the Hetail Trade Nationali-ation Law, sales of rubber products by the !oodyear Tire & Hubber #o. to all types of customers e$cept its sales to its employees & officers, is not covered by said law. MARSMAN & CO.( INC. VS. FIRST COCONUT CENTRAL CO.( INC.

7lements that should concur for a sale to be considered as retail& o The seller should be habitually engaged in selling o The sale must be direct to the general public o The ob6ect of the sale is limited to merchandi-e, commodities or goods for consumption The last element refers to consumption or consumer goods w/c are not intended for resale or further use in the production of other products. Producer goods are goods that are factors in the production of other goods and that satisfy wants only indirectly called also au$iliary goods, instrumental goods, intermediate goods. :holesaling has been defined as selling to retailers or 6obbers rather than to consumers or a sale in large 3uantity to one who intends to resell.

SIENNA A. FLORES

SALES DOCTRINES

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