SALES AND LEASE

Case Doctrines Part 1

1458; 1466-1468; 1489-1492

1. Union bank of the Philippines
vs Maunlad Homes Inc
Section 11 of the contract between Union Bank and Maunlad Homes provides
that "[u]pon payment in full of the Purchase Price of the Property . . ., the
SELLER shall execute and deliver a Deed of Absolute Sale conveying the
Property to the BUYER." 26 "Jurisprudence has established that where the
seller promises to execute a deed of absolute sale upon the completion by the
buyer of the payment of the price, the contract is only a contract to
sell." 27 The presence of this provision generally identifies the contract as
being a mere contract to sell. 28 After reviewing the terms of the contract
between Union Bank and Maunlad Homes, we find no reasonable ground to
exempt the present case from the general rule; the contract between Union
Bank and Maunlad Homes is a contract to sell.
In a contract to sell, the full payment of the purchase price is a positive
suspensive condition whose non-fulfillment is not a breach of contract, but
merely an event that prevents the seller from conveying title to the
purchaser. "The non-payment of the purchase price renders the contract to
sell ineffective and without force and effect." 29 Maunlad Homes' act of
withholding the installment payments rendered the contract ineffective and
without force and effect, and ultimately deprived itself of the right to
continue possessing Maunlad Shopping Mall.
2. Buenaventura vs CA A contract of sale is not a real contract, but a consensual contract. As a
consensual contract, a contract of sale becomes a binding and valid contract
upon the meeting of the minds as to price. If there is a meeting of the minds
of the parties 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 the real price is
not stated in the contract, then the contract of sale is valid but subject to
reformation. If there is no meeting of the minds of the parties as to the price,
because the price stipulated in the contract is simulated, then the contract is
void. Article 1471 of the Civil Code states that if the price in a contract of sale
is simulated, the sale is void. It is not the act of payment of price that
determines the validity of a contract of sale. Payment of the price has nothing
to do with the perfection of the contract. Payment of the price goes into the
performance of the contract. Failure to pay the consideration is different from
lack of consideration. The former results in a right to demand the fulfillment
or cancellation of the obligation under an existing valid contract while the
latter prevents the existence of a valid contract.
3. Fule vs CA There is fraud when, through the insidious words or machinations of one of
the contracting parties, the other is induced to enter into a contract which,
without them, he would not have agreed to. The records, however, are bare
of any evidence manifesting that private respondents employed such
insidious words or machinations to entice petitioner into entering the
contract of barter. Neither is there any evidence showing that Dr. Cruz
induced petitioner to sell his Tanay property or that she cajoled him to take
the earrings in exchange for said property. On the contrary, Dr. Cruz did not
initially accede to petitioner's proposal to buy the said jewelry. Rather, it
appears that it was petitioner, through his agents, who led Dr. Cruz to believe
that the Tanay property was worth exchanging for her jewelry.

Both the trial and appellate courts, therefore, correctly ruled that there were
no legal bases for the nullification of the contract of sale. Ownership over the
parcel of land and the pair of emerald-cut diamond earrings had been
transferred to Dr. Cruz and petitioner, respectively, upon the actual and
constructive delivery thereof. Said contract of sale being absolute in nature,
title passed to the vendee upon delivery of the thing sold since there was no
stipulation in the contract that title to the property sold has been reserved in
the seller until full payment of the price or that the vendor has the right to
unilaterally resolve the contract the moment the buyer fails to pay within a
fixed period. Such stipulations are not manifest in the contract of sale.
4. NHA vs Grace Baptist Church It appearing that there is no dispute that this case involves an unperfected
contract, the Civil Law principles governing contracts should apply. In Vda. de
Urbano v. Government Service Insurance System, 22 it was ruled that a
qualified acceptance constitutes a counter-offer as expressly stated by Article
1319 of the Civil Code. In said case, petitioners offered to redeem mortgaged
property and requested for an extension of the period of redemption.
However, the offer was not accepted by the GSIS. Instead, it made a counter-
offer, which petitioners did not accept. Petitioners again offer to pay the
redemption price on staggered basis. In deciding said case, it was held that
when there is absolutely no acceptance of an offer or if the offer is expressly
rejected, there is no meeting of the minds. Since petitioners offer was denied
twice by GSIS, it was held that there was clearly no meeting of the minds and,
thus, no perfected contract. All that is established was a counter-offer. 23
In the case at bar, the offer of the NHA to sell the subject property, as
embodied in Resolution No. 2126, was similarly not accepted by the
respondent. 24 Thus, the alleged contract involved in this case should be
more accurately denominated as inexistent. There being no concurrence of
the offer and acceptance, it did not pass the stage of generation to the point
of perfection. 25 As such, it is without force and effect from the very
beginning or from its incipiency, as if it had never been entered into, and
hence, cannot be validated either by lapse of time or ratification. 26 Equity
can not give validity to a void contract, 27 and this rule should apply with
equal force to inexistent contracts.
5. PUP vs CA A contract of sale, as defined in the Civil Code, is a contract where one of the
parties obligates himself to transfer the ownership of and to deliver a
determinate thing to the other or others who shall pay therefore a sum
certain in money or its equivalent. It is therefore a general requisite for the
existence of a valid and enforceable contract of sale that it be mutually
obligatory, i.e., there should be a concurrence of the promise of the vendor to
sell a determinate thing and the promise of the vendee to receive and pay for
the property so delivered and transferred. . . . A contract of sale, as defined in
the Civil Code, is a contract where one of the parties obligates himself to
transfer the ownership of and to deliver a determinate thing to the other or
others who shall pay therefore a sum certain in money or its equivalent. It is
therefore a general requisite for the existence of a valid and enforceable
contract of sale that it be mutually obligatory, i.e., there should be a
concurrence of the promise of the vendor to sell a determinate thing and the
promise of the vendee to receive and pay for the property so delivered and
transferred. . . . What is more, the conduct of petitioner PUP immediately
after the transaction is in itself an admission that there was a sale of the NDC
compound in its favor. Thus, after the issuance of Memorandum Order No.
214 petitioner PUP asserted its ownership over the property by posting
notices within the compound advising residents and occupants to vacate the
premises. In its Motion for Intervention petitioner PUP also admitted that its
interest as a "purchaser pendente lite" would be better protected if it was
joined as party-defendant in the controversy thereby confessing that it indeed
purchased the property.

The right of first refusal is an integral and indivisible part of the contract of
lease and is inseparable from the whole contract. The consideration for the
right is built into the reciprocal obligations of the parties. Thus, it is not
correct for petitioners to insist that there was no consideration paid by
FIRESTONE to entitle it to the exercise of the right, inasmuch as the stipulation
is part and parcel of the contract of lease making the consideration for the
lease the same as that for the option. It is a settled principle in civil law that
when a lease contract contains a right of first refusal, the lessor is under a
legal duty to the lessee not to sell to anybody at any price until after he has
made an offer to sell to the latter at a certain price and the lessee has failed to
accept it. The lessee has a right that the lessor's first offer shall be in his favor.
The option in this case was incorporated in the contracts of lease by NDC for
the benefit of FIRESTONE which, in view of the total amount of its
investments in the property, wanted to be assured that it would be given the
first opportunity to buy the property at a price for which it would be offered.
Consistent with their agreement, it was then implicit for NDC to have first
offered the leased premises of 2.60 hectares to FIRESTONE prior to the sale in
favor of PUP. Only if FIRESTONE failed to exercise its right of first priority
could NDC lawfully sell the property to petitioner PUP.
6. Gaite vs Fonacier What characterizes a conditional obligation is the fact that its efficacy or
obligatory force is subordinated to the happening of a future and uncertain
event; so that if the suspensive condition does not take place, the parties
would stand as if the conditional obligation had never existed. A contract of
sale is normally commutative and onerous: not only does each of the parties
assume a correlative obligation, but each party anticipates performance by
the other from the very start. Although the obligation of one party can be
lawfully subordinated to an uncertain event, so that the other understands
that he assumes the risk of receiving nothing for what he gives, it is not in the
usual course of business to do so; hence, the contingent character of the
obligation must clearly appear. Sale is essentially onerous, and if there is
doubt whether the parties intended a suspensive condition or a suspensive
period for the payment of the agreed price, the doubt shall be settled in favor
of the greatest reciprocity of interests, which will obtain if the buyer's
obligation is deemed to be actually existing, with only its maturity postponed
or deferred.
7. Monongsong vs Estimo Nevertheless, the trial court held that the Kasulatan was void because the
Property was conjugal at the time Navarro sold it to Enriqueta Lopez
Jumaquio. We do not agree. The trial court's conclusion that the Property was
conjugal was not based on evidence, but rather on a misapprehension of
Article 160 of the Civil Code, which provides: All property of the marriage is
presumed to belong to the conjugal partnership, unless it be proved that it
pertains exclusively to the husband or to the wife. As the Court of Appeals
correctly pointed out, the presumption under Article 160 of the Civil Code
applies only when there is proof that the property was acquired during the
marriage. Proof of acquisition during the marriage is an essential condition for
the operation of the presumption in favor of the conjugal partnership. There
was no evidence presented to establish that Navarro acquired the Property
during her marriage. There is no basis for applying the presumption under
Article 160 of the Civil Code to the present case. On the contrary, Tax
Declaration No. 911 showed that, as far back as in 1949, the Property was
declared solely in Navarro's name. This tends to support the argument that
the Property was not conjugal. We likewise find no basis for the trial court's
declaration that the sale embodied in the Kasulatan deprived the compulsory
heirs of Guevarra of their legitimes. As opposed to a disposition inter vivos by
lucrative or gratuitous title, a valid sale for valuable consideration does not
diminish the estate of the seller. When the disposition is for valuable
consideration, there is no diminution of the estate but merely a substitution
of values, that is, the property sold is replaced by the equivalent monetary
consideration. Under Article 1458 of the Civil Code, the elements of a valid
contract of sale are: (1) consent or meeting of the minds; (2) determinate
subject matter and (3) price certain in money or its equivalent. The presence
of these elements is apparent on the face of the Kasulatan itself. The,
Property was sold in 1957 for P250.00.
8. Delpher trades corp vs IAC It is to be stressed that by their ownership of the 2,500 no par shares of stock,
the Pachecos have control of the corporation. Their equity capital is 55% as
against 45% of the other stockholders, who also belong to the same family
group. In effect, the Delpher Trades Corporation is a business conduit of the
Pachecos. What they really did was to invest their properties and change the
nature of their ownership from unincorporated to incorporated form by
organizing Delpher Trades Corporation to take control of their properties and
at the same time save on inheritance taxes.
The "Deed of Exchange" of property between the Pachecos and Delpher
Trades Corporation cannot be considered a contract of sale. There was no
transfer of actual ownership interests by the Pachecos to a third party. The
Pacheco family merely changed their ownership from one form to another.
The ownership remained in the same hands. Hence, the private respondent
has no basis for its claim of a right of first refusal under the lease contract.
9. Celestino Co. vs Coll.

When a factory accepts a job that requires the use of extraordinary or
additional equipment, or involves services not generally performed by it, it
thereby contracts for a piece of work.
- In the case at bar, the orders exhibited were not shown to be special. They
were merely orders for work nothing is shown to call them special
requiring extraordinary service of the factory. The factory sold materials
ordinarily manufactured by it sash, panels, mouldings to Teodoro & Co.,
although in such form or combination as suited the fancy of the purchaser.
Such new form does not divest the factory of its character as manufacturer.
Neither does it take the transaction out of the category of sales under Article
1467 above quoted, because although the Factory does not, in the ordinary
course of its business, manufacture and keep on stock doors of the kind sold
to Teodoro, it could stock and/or probably had in stock the sash, mouldings
and panels it used therefor (some of them at least).
10. Comm. of Int. Rev. vs
Engineering

The distinction between a contract of sale and one for work, labor and
materials is tested by the inquiry whether the thing transferred is one not in
existence and which never would have existed but for the order of the party
desiring to acquire it, or a thing which would have existed and has been the
subject of sale to some other persons even if the order had not been given.
If the article ordered by the purchaser is exactly such as the plaintiff makes
and keeps on hand for sale to anyone, and no change or modification of it is
made at defendant's request, it is a contract of sale, even though it may be
entirely made after, and in consequence of, the defendants order for it.
The word "contractor" has come to be used with special reference to a person
who, in the pursuit of the independent business, undertakes to do a specific
job or piece of work for other persons, using his own means and methods
without submitting himself to control as to the petty details.
11. Quiroga vs Parsons

Where the price of the objects is paid within the terms fixed without any
other consideration and regardless as to whether the objects are sold, the
contract is one of sale.
(In order to classify a contract, due regard must be given to its essential
clauses. A contract is what the law defines it to be, and not what it is called by
the contracting parties.)
- In the case at bar, it shows that the cause and subject matter which are to
furnish the defendant with beds and in turn, pay for the stipulated price, are
precisely the essential features of contract of purchase and sale. There was an
obligation on the part of the plaintiff to supply beds and on defendants part,
to pay the price which in turn, excludes the legal conception of an agency.
- In an agency, there is an order to sell whereby the agent receives a thing to
sell it and he is not required to pay its price but is required to turn over to the
principal the price he obtains for the sale. If he does not succeed in selling it,
he will have to return the thing. This is not the case of the matter in the case
at bar. By virtue of the contract between the plaintiff and the defendant, the
latter, on receiving the beds, was necessarily obliged to pay their price within
the term fixed, without any other consideration and regardless as to whether
he had or had not sold the beds. Hence, the contract by and between the
parties is one of purchase and sale.
12. Ker & Co vs Lingad

The transfer of title or agreement to transfer it for a price paid is the essence
of sale. If such transfer puts the transferee in the position of an owner and
makes him liable for the agreed price, the transaction is a sale. On the other
hand, the essence of an agency to sell is the delivery to an agent, not as his
property, but as the property of his principal, who remains the owner and has
the right to control sales, fix the price and terms, demand and receive the
proceeds less the agent's commission upon sales made.
- In the case at bar, the relationship between the petitioner and US Rubber
International is one of brokerage or agency because of the following
contractual stipulations:
*that petitioner can dispose of the products of the Company only to certain
persons or entities and within stipulated limits, unless excepted by the
contract or by the Rubber Company (Par. 2);
*that it merely receives, accepts and/or holds upon consignment the
products, which remain properties of the latter company (Par. 8);
*that every effort shall be made by petitioner to promote in every way the
sale of the products (Par. 3);
*that sales made by petitioner are subject to approval by the company (Par.
12);
*that on dates determined by the rubber company, petitioner shall render a
detailed report showing sales during the month (Par. 14);
*that the rubber company shall invoice the sales as of the dates of inventory
and sales report (Par. 14);
*that the rubber company agrees to keep the consigned goods fully insured
under insurance policies payable to it in case of loss (Par. 15);
*that upon request of the rubber company at any time, petitioner shall render
an inventory of the existing stock which may be checked by an authorized
representative of the former (Par. 15); and
*that upon termination or cancellation of the Agreement, all goods held on
consignment shall be held by petitioner for the account of the rubber
company until their disposition is provided for by the latter (Par. 19).
13. VICMICO vs CA

The question of whether a contract is one of sale or agency depends on the
intention of the parties as gathered from the whole scope and effect of the
language employed. That the authorization given to CSC contained the phrase
"for and in our (STM's) behalf" did not establish an agency. Ultimately, what is
decisive is the intention of the parties. That no agency was meant to be
established by the CSC and STM is clearly shown by CSC's communication to
petitioner that SLDR No. 1214M had been "sold and endorsed" to it. The use
of the words "sold and endorsed" means that STM and CSC intended a
contract of sale, and not an agency. Hence, on this score, no error was
committed by the respondent appellate court when it held that CSC was not
STM's agent and could independently sue petitioner.
The terms and conditions under SLDR No. 1214M clearly show that petitioner
transferred title to the sugar to the buyer or his assignee upon payment of the
purchase price. Said terms clearly establish a contract of sale, not a contract
to sell. Petitioner is now estopped from alleging the contrary. The contract is
the law between the contracting parties. And where the terms and conditions
so stipulated are not contrary to law, morals and good customs, public policy
or public order, the contract is valid and must be upheld. Having transferred
title to the sugar in question, petitioner is now obliged to deliver it to the
purchaser or its assignee.
14. Filinvest Credit Corp vs CA

The real intention of the parties should prevail. The nomenclature of the
agreement cannot change its true essence, i.e., a sale on installments. It is
basic that a contract is what the law defines it and the parties intend it to be,
not what it is called by the parties. It is apparent here that the intent of the
parties to the subject contract is for the so-called rentals to be the installment
payments. Upon the completion of the payments, then the rock crusher,
subject matter of the contract, would become the property of the private
respondents. This form of agreement has been criticized as a lease only in
name.
15. Domingo vs CA

Irregularities abound regarding the execution and registration of the alleged
deed of sale. The original was nowhere to be found and none could be
presented at the trial. The carbon copy on file, which is allegedly a duplicate
original, shows intercalations and discrepancies when compared to purported
copies in existence. Furthermore, it appears that the alleged vendor was
never asked to vacate the premises she had purportedly sold. The alleged
vendor's continued possession of the property in this case throws an inverse
implication, a serious doubt on the due execution of the deed of sale.
Noteworthy, the same parcels of land involved in the alleged sale were still
included in the will subsequently executed by Paulina and notarized by the
same notary public, Atty. Tagatag. These circumstances, taken together,
militate against unguarded acceptance of the due execution and genuineness
of the alleged deed of sale.
We have to take into account the element of consideration for the sale. The
price allegedly paid by private respondents for nine (9) parcels, including the
three parcels in dispute, a house and a warehouse, raises further questions.
Consideration is the why of a contract, the essential reason which moves the
contracting parties to enter into the contract. On record, there is unrebutted
testimony that Paulina as landowner was financially well off. She loaned
money to several people. We see no apparent and compelling reason for her
to sell the subject parcels of land with a house and warehouse at a meager
price of P850 only.
The general rule is that a person is not incompetent to contract merely
because of advanced years or by reason of physical infirmities. However,
when such age or infirmities have impaired the mental faculties so as to
prevent the person from properly, intelligently, and firmly protecting her
property rights then she is undeniably incapacitated. The unrebutted
testimony of Zosima Domingo shows that at the time of the alleged execution
of the deed, Paulina was already incapacitated physically and mentally. She
narrated that Paulina played with her waste and urinated in bed. Given these
circumstances, there is in our view sufficient reason to seriously doubt that
she consented to the sale of and the price for her parcels of land. Moreover,
there is no receipt to show that said price was paid to and received by her.
16. Guiang vs CA

By the specific provision of the law [Art. 1390, Civil Code] therefore, the Deed
of Transfer of Rights cannot be ratified, even by an amicable settlement. The
participation by some barangay authorities in the amicable settlement cannot
otherwise validate an invalid act. Moreover, it cannot be denied that the
amicable settlement entered into by plaintiff Gilda Corpuz and defendant
spouses Guiang is a contract. It is a direct offshoot of the Deed of Transfer of
Rights. By express provision of law, such a contract is also void. Thus, the legal
provision, to wit: 'Article 1422. A contract which is the direct result of a
previous illegal contract, is also void and inexistent.' (Civil Code of the
Philippines). In summation therefore, both the Deed of Transfer of Rights and
the amicable settlement are null and void."
Neither can the "amicable settlement" be considered a continuing offer that
was accepted and perfected by the parties, following the last sentence of
Article 124. The order of the pertinent events is clear: after the sale,
petitioners filed a complaint for trespassing against private respondent, after
which the barangay authorities secured an "amicable settlement" and
petitioners filed before the MTC a motion for its execution. The settlement,
however, does not mention a continuing offer. Its tenor was to the effect that
private respondent would vacate the property. By no stretch of the
imagination, can the Court interpret this document as the acceptance
mentioned in Article 124. ScT
17. Medina vs Coll. of Int. Rev.

Contracts violative of the provisions of Article 1490 of the Civil Code are null
and void (Uy Sui Pin vs. Cantollas, 70 Phil. 55; Uy Coque vs. Sioca, 45 Phil., 43),
and the sales made by the petitioner to his wife being void, the sales made by
the latter are deemed the original sales subject to tax.
18. Matabuena vs Cervantes

While Art. 133 of the Civil Code considers as void a "donation between the
spouses during the marriage", policy considerations of the most exigent
character as well as the dictates of morality require that the same prohibition
should apply to a common-law relationship. A 1954 Court of Appeals decision
Buenaventura v. Bautista, interpreting a similar provision of the old Civil Code
speaks unequivocally. If the policy of the law is, in the language of the opinion
of the then Justice J.B.L. Reyes of that Court, "to prohibit donations in favor of
the other consort and his descendants because of fear of undue and improper
pressure and influence upon the donor, a prejudice deeply rooted in our
ancient law; 'porque no se engaen despojandose el uno al otro por amor que
han de consuno,' [according to] the Partidas (Part. IV, Tit. Xl, LAW IV),
reiterating the rationale 'Ne mutuato amore invicem spoliarentur' of the
Pandects (Bk 24, Tit. I, De donat, inter virum et uxorem); then there is every
reason to apply the same prohibitive policy to persons living together as
husband and wife without benefit of nuptials. For it is not to be doubted that
assent to such irregular connection for thirty years bespeaks greater influence
of one party over the other, so that the danger that the law seeks to avoid is
correspondingly increased. Moreover, as already pointed out by Ulpian (in his
lib. 32 ad Sabinum, fr. 1), it would not be just that such donations should
subsist lest the condition of those who incurred guilt should turn out to be
better. So long as marriage remains the cornerstone of our family law, reason
and morality alike demand that the disabilities attached to marriage should
likewise attach to concubinage.
19. Cruz vs CA

Although under Art. 1490 the husband and wife cannot sell property to one
another as a rule which, for policy consideration and the dictates of morality
require that the prohibition apply to common-law relationships, 4 petitioner
can no longer seek reconveyance of the property to her as it has already been
acquired by respondent Vizconde in good faith and for value from her own
transferee.

The real purpose of the Torrens system of registration is to quiet title to land
and to put a stop to any question of legality of the title except claims which
have been recorded in the certificate of title at the time of registration or
which may arise subsequent thereto. 5 Every registered owner and every
subsequent purchaser for value in good faith holds the title to the property
free from all encumbrances except those noted in the certificate

Where innocent third persons, relying on the correctness of the certificate of
title thus issued, acquire rights over the property the court cannot disregard
such rights and order the total cancellation of the certificate. 7 The effect of
such an outright cancellation would be to impair public confidence in the
certificate of title, for everyone dealing with property registered under the
Torrens system would have to inquire in every instance whether the title has
been regularly or irregularly issued. This is contrary to the evident purpose of
the law. 8 Every person dealing with registered land may safely rely on the
correctness of the certificate of title issued therefor and the law will in no way
oblige him to go behind the certificate to determine the condition of the
property. 9 Even if a decree in a registration proceeding is infected with
nullity, still an innocent purchaser for value relying on a Torrens title issued in
pursuance thereof is protected. A purchaser in good faith is one who buys the
property of another without notice that some other person has a right to or
interest in such property and pays a full and fair price for the same at the time
of such purchase or before he has notice of the claim of another person.
20. Rubias vs Batiller The purchase by a lawyer of the property in litigation from his client is
categorically prohibited by Article 1491, paragraph (5) of the Philippine Civil
Code, and that consequently, plaintiff's purchase of the property in litigation
from his client (assuming that his client could sell the same since his client's
claim to the property was defeated and rejected) was void and could produce
no legal effect, by virtue of Article 1409, paragraph (7) of our Civil Code which
provides that contracts "expressly prohibited or declared void by law are
inexistent and that "these contracts cannot be ratified. Neither can the right
to set up the defense of illegality be waived."
21. Dignos vs CA A deed of sale is absolute in nature although denominated as a "Deed of
Conditional Sale" where nowhere in the contract in question is a proviso or
stipulation to the effect that title to the property sold is reserved in the
vendor until full payment of the purchase price, nor is there a stipulation
giving the vendor the right to unilaterally rescind the contract the moment
the vendee fails to pay within a fixed period. In this case, there is no such
stipulation reserving the title of the property on the vendors nor does it give
them the right to unilaterally rescind the contract upon non-payment of the
balance thereof within a fixed period. Furthermore, all the elements of a valid
contract of sale under Article 1458 of the Civil Code, are present

22. Visayan Sawmill vs CA The petitioner corporation's obligation to sell is unequivocally subject to a
positive suspensive condition, i.e., the private respondent's opening, making
or indorsing of an irrevocable and unconditional letter of credit. The former
agreed to deliver the scrap iron only upon payment of the purchase price by
means of an irrevocable and unconditional letter of credit. Otherwise stated,
the contract is not one of sale where the buyer acquired ownership over the
property subject to the resolutory condition that the purchase price would be
paid after delivery. Thus, there was to be no actual sale until the opening,
making or indorsing of the irrevocable and unconditional letter of credit. Since
what obtains in the case at bar is a mere promise to sell, the failure of the
private respondent to comply with the positive suspensive condition cannot
even be considered a breach casual or serious but simply an event that
prevented the obligation of petitioner corporation to convey title from
acquiring binding force. In Luzon Brokerage Co., Inc. vs. Maritime Building Co.,
Inc., this Court stated: ". . . The upshot of all these stipulations is that in
seeking the ouster of Maritime for failure to pay the price as agreed upon,
Myers was not rescinding (or more properly, resolving) the contract, but
precisely enforcing it according to its express terms. In its suit Myers was not
seeking restitution to it of the ownership of the thing sold (since it was never
disposed of), such restoration being the logical consequence of the fulfillment
of a resolutory condition, express or implied (Article 1190); neither was it
seeking a declaration that its obligation to sell was extinguished. What it
sought was a judicial declaration that because the suspensive condition (full
and punctual payment) had not been fulfilled, its obligation to sell to
Maritime never arose or never became effective and, therefore, it (Myers)
was entitled to repossess the property object of the contract, possession
being a mere incident to its right of ownership.

Romero, dissenting
Article 1458 of the Civil Code has this definition: "By a contract of sale, one of
the contracting parties obligates himself to transfer the ownership of and to
deliver a determinate thing and the other to pay therefor a price certain in
money or its equivalent." Article 1475 gives the significance of this mutual
undertaking of the parties, thus: "The contract of sale is perfected at the
moment there is a meeting of minds upon the thing which is the object of the
contract and upon the price. From that moment, the parties may reciprocally
demand performance, subject to the provisions of the law governing the form
of contracts." Thus, when the parties entered into the contract entitled
"Purchase and Sale of Scrap Iron" on May 1, 1983, the contract reached the
stage of perfection, there being a meeting of the' minds upon the object
which is the subject matter of the contract and the price which is the
consideration. Applying Article 1475 of the Civil Code, from that moment, the
parties may reciprocally demand performance of the obligations incumbent
upon them, i.e., delivery by the vendor and payment by the vendee.
23. Peoples homesite vs CS There was no perfected sale of a lot when it was conditionally or contingently
awarded subject to the approval by the city council of the proposed
consolidation subdivision plan and the approval of the award by the valuation
committee and higher authorities. When the plan was approved, the
Mendozas should have manifested in writing their acceptance of the award
for the purchase of the lot just to show that they were still interested in its
purchase, although the area was reduced. Yet, they did not do so. Article 1475
of the NCC provides that the contract of sale is perfected at the moment
there is a meeting of the minds..." Under the facts of this case, there was no
meeting of minds on the purchase of Lot 4 with an area of 2,608.7 square
meters at P21 a square meter.
As to the conditional nature of the sale, Article 1181 of the NCC states that
in conditional obligations, the acquisition of rights, as well as the
extinguishment or loss of those already acquired, shall depend upon the
happening of the event which constitutes the condition.