Sales Batch 1 of Assigned Cases

SALES AND LEASE FULL TEXT CASES (1ST SET) 2014
1 KASC

THIRD DIVISION
[G.R. No. 59266. February 29, 1988.]
SILVESTRE DIGNOS and ISABEL
LUMUNGSOD, petitioners, vs. HON. COURT OF APPEALS and
ATILANO G. JABIL, respondents.
SYLLABUS
1.CIVIL LAW; CONTRACTS; DEED OF SALE; ABSOLUTE IN NATURE WHERE
THERE IS NO PROVISION THAT TITLE IS RESERVED TO THE VENDOR OR
UNILATERALLY GIVING THE VENDOR THE RIGHT TO RESCIND
CONTRACT. It has been held that 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 (Taguba v. Vda. de
Leon, 132 SCRA 722; Luzon Brokerage Co., Inc. v. Maritime Building Co., Inc.,
86 SCRA 305). A careful examination of the contract shows that there is no such
stipulation reserving the title ofthe 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.
2.ID.; ID.; SALE; ELEMENTS. On the contrary, all the elements of a valid
contract of sale under Article 1458 of the Civil Code, are present, such as: (1)
consent or meetingof the minds; (2) determinate subject matter; and (3) price
certain in money or its equivalent.
3.ID.; ID.; OWNERSHIP IS TRANSFERRED BY DELIVERY OF THE THING
SOLD. In addition, Article 1477 of the same Code provides that "The

2 KASC

ownership of the thing sold shall be transferred to the vendee upon actual or
constructive delivery thereof." As applied in the case of Froilan v. Pan Oriental
Shipping Co., et al. (12 SCRA 276), this Courtheld that in the
absence of stipulation to the contrary, the ownership of the thing sold passes to
the vendee upon actual or constructive delivery thereof.
4.ID.; ID.; ID.; ID.; ACTUAL DELIVERY IN CASE AT BAR. While it may be
conceded that there was no constructive delivery of the land sold in the case at
bar, as subject Deed of Sale is a private instrument, it is beyond question that
there was actual delivery thereof. As found by the trial court, the Dignos spouses
delivered the possession ofthe land in question to Jabil as early as March 27,
1965 so that the latter constructed thereon Sally's Beach Resort also known as
Jabil's Beach Resort in March, 1965; Mactan White Beach Resort on January 15,
1966 and Bevirlyn's Beach Resort on September 1, 1965. Such facts were
admitted by petitioner spouses (Decision, Civil Case No. 23-L; Record
on Appeal, p. 108).
5.ID.; ID.; ID.; SLIGHT DELAY IN THE PERFORMANCE OF OBLIGATION, NOT
SUFFICIENT GROUND FOR RESCISSION. It has been ruled, however, that
"where time is notof the essence of the agreement, a slight delay on the
part of one party in the performance of his obligation is not a sufficient ground for
the rescission of the agreement" (Taguba v. Vda. de Leon, supra). Considering
that private respondent has only a balance of P4,000.00 and was delayed in
payment only for one month, equity and justice mandate as in the aforecited case
that Jabil be given an additional period within which to complete payment of the
purchase price.
D E C I S I O N
BIDIN, J p:

3 KASC

This is a petition for review on certiorari seeking the reversal of the: (1)
Decision* of the 9th Division, Court of Appeals dated July 31, 1981, affirming with
modification the Decision** dated August 25, 1972 of the Court of First
Instance of Cebu in Civil Case No. 23-L entitled Atilano G. Jabil vs. Silvestre
T. Dignos and Isabela Lumungsod deDignos and Panfilo Jabalde, as Attorney-in-
Fact of Luciano Cabigas and Jovita L. de Cabigas; and (2) its Resolution dated
December 16, 1981, denying defendant-appellant's (Petitioner's) motion for
reconsideration, for lack of merit.
The undisputed facts as found by the Court of Appeals are as follows:
"The Dignos spouses were owners of a parcel of land, known as Lot No.
3453, of the cadastral survey of Opon, Lapu-Lapu City. On June 7, 1965,
appellants (petitioners)Dignos spouses sold the said parcel of land to
plaintiff-appellant (respondent Atilano J. Jabil) for the
sum of P28,000.00, payable in two installments, with an
assumption of indebtedness with the First Insular Bank of Cebu in the
sum of P12,000.00, which was paid and acknowledged by the vendors in
the deed of sale (Exh. C) executed in favor of plaintiff-appellant, and the
next installment in the sum of P4,000.00 to be paid on or before
September 15, 1965.
"On November 25, 1965, the Dignos spouses sold the same land in
favor of defendants spouses, Luciano Cabigas and Jovita L. De
Cabigas, who were then U.S. citizens, for the price of P35,000.00. A
deed of absolute sale (Exh. J, also marked Exh. 3) was executed by
the Dignos spouses in favor of the Cabigas spouses, and which was
registered in the Office of the Register of Deeds pursuant to the
provisions of Act No. 3344.
"As the Dignos spouses refused to accept from plaintiff-appellant the
balance of the purchase price of the land, and as plaintiff- appellant
discovered the second sale made by defendants-appellants to the

4 KASC

Cabigas spouses, plaintiff-appellant brought the present suit." (Rollo, pp.
27-28)
After due trial, the Court of First Instance of Cebu rendered its Decision on
August 25, 1972, the decretal portion of which reads:
"WHEREFORE, the Court hereby declares the deed of sale executed on
November 25, 1965 by defendant Isabela L. de Dignos in
favor of defendant Luciano Cabigas, a citizen of the United
States of America, null and void ab initio, and the deed of sale executed
by defendants Silvestre T. Dignos and Isabela Lumungsod
de Dignos not rescinded. Consequently, the plaintiff Atilano G. Jabil is
hereby ordered to pay the sum, of Sixteen Thousand Pesos
(P16,000.00) to the defendants-spouses upon the execution of the
Deed of Absolute Sale of Lot No. 3453, Opon Cadastre and when the
decision of this case becomes final and executory.
"The plaintiff Atilano G. Jabil is ordered to reimburse the defendants
Luciano Cabigas and Jovita L. de Cabigas, through their attorney-in-fact,
Panfilo Jabalde, reasonable amount corresponding to the expenses or
costs of the hollow block fence, so far constructed.
"It is further ordered that defendants-spouses Silvestre T. Dignos and
Isabela Lumungsod de Dignos should return to defendants-spouses
Luciano Cabigas and Jovita L. de Cabigas the sum of P35,000.00, as
equity demands that nobody shall enrich himself at the
expense of another.
"The writ of preliminary injunction issued on September 23, 1966,
automatically becomes permanent in virtue of this decision.
"With costs against the defendants."
From the foregoing, the plaintiff (respondent herein) and defendants-spouses
(petitioners herein) appealed to the Court of Appeals, which appeal was

5 KASC

docketed therein as CA-G.R. No. 54393-R, "Atilano G. Jabil v. Silvestre
T. Dignos, et al."
On July 31, 1981, the Court of Appeals affirmed the decision of the
lower court except as to the portion ordering Jabil to pay for the expenses
incurred by the Cabigas spouses for the building of a fence upon the land in
question. The dispositive portion of said decision of the Court of Appeals reads:
"IN VIEW OF THE FOREGOING CONSIDERATIONS, except as to the
modification of the judgment as pertains to plaintiff-appellant above
indicated, the judgmentappealed from is hereby AFFIRMED in all other
respects.
"With costs against defendants-appellants.
"SO ORDERED.
"Judgment MODIFIED."
A motion for reconsideration of said decision was filed by the defendants-
appellants (petitioners) Dignos spouses, but on December 16, 1981, a resolution
was issued by theCourt of Appeals denying the motion for lack of merit.
Hence, this petition.
In the resolution of February 10, 1982, the Second Division of this Court denied
the petition for lack of merit. A motion for reconsideration of said resolution was
filed on March 16, 1982. In the resolution dated April 26, 1982, respondents were
required to comment thereon, which comment was filed on May 11, 1982 and a
reply thereto was filed on July 26, 1982 in compliance with the resolution of June
16, 1982 . On August 9, 1982, acting on the motion for reconsideration and on all
subsequent pleadings filed, this Courtresolved to reconsider its
resolution of February 10, 1982 and to give due course to the instant petition. On
September 6, 1982, respondents filed a rejoinder to reply ofpetitioners which was
noted on the resolution of September 20, 1982.
Petitioners raised the following assignment of errors:

6 KASC

I
THE COURT OF APPEALS COMMITTED A GRAVE ERROR OF LAW
IN GROSSLY, INCORRECTLY INTERPRETING THE TERMS OF THE
CONTRACT, EXHIBIT C, HOLDING IT AS AN ABSOLUTE SALE,
EFFECTIVE TO TRANSFER OWNERSHIP OVER THE PROPERTY IN
QUESTION TO THE RESPONDENT AND NOT MERELY A
CONTRACT TO SELL OR PROMISE TO SELL; THE COURT ALSO
ERRED IN MISAPPLYING ARTICLE 1371 AS WARRANTING
READING OF THE AGREEMENT, EXHIBIT C, AS ONE OF ABSOLUTE
SALE, DESPITE THE CLARITY OF THE TERMS THEREOF SHOWING
IT IS A CONTRACT OF PROMISE TO SELL.
II
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
INCORRECTLY APPLYING AND OR IN MISAPPLYING ARTICLE
1592 OF THE NEW CIVIL CODE AS WARRANTING THE
ERRONEOUS CONCLUSION THAT THE NOTICE OF RESCISSION,
EXHIBIT G, IS INEFFECTIVE SINCE IT HAS NOT BEEN JUDICIALLY
DEMANDED NOR IS IT A NOTARIAL ACT.
III
THE COURT OF APPEALS COMMITTED AN ERROR OF LAW IN
REJECTING THE APPLICABILITY OF ARTICLES 2208, 2217 and
2219 OF THE NEW CIVIL CODE AND ESTABLISHED
JURISPRUDENCE AS TO WARRANT THE AWARD OF DAMAGES
AND ATTORNEY'S FEES TO PETITIONERS.
IV
PLAINTIFF'S COMPLAINT FOR SPECIFIC PERFORMANCE SHOULD
HAVE BEEN DISMISSED, HE HAVING COME TO COURT WITH
UNCLEAN HANDS.
V

7 KASC

BY AND LARGE, THE COURT OF APPEALS COMMITTED AN ERROR
IN AFFIRMING WITH MODIFICATION THE DECISION OF THE
TRIAL COURT DUE TO GRAVE MISINTERPRETATION,
MISAPPLICATION AND MISAPPREHENSION OF THE
TERMS OF THE QUESTIONED CONTRACT AND THE LAW
APPLICABLE THERETO.

The foregoing assignment of errors may be synthesized into two main issues, to
wit:
I.Whether or not subject contract is a deed of absolute sale or a contract
to sell.
II.Whether or not there was a valid rescission thereof.
There is no merit in this petition.
It is significant to note that this petition was denied by the Second
Division of this Court in its Resolution dated February 10, 1982 for lack of merit,
but on motion for reconsideration and on the basis of all subsequent pleadings
filed, the petition was given due course.
I.
The contract in question (Exhibit C) is a Deed of Sale, with the following
conditions:
"1.That Atilano G. Jabil is to pay the amount of Twelve Thousand Pesos
(P12,000.00) Philippine Currency as advance payment;
"2.That Atilano G. Jabil is to assume the balance of Twelve Thousand
Pesos (P12,000.00) Loan from the First Insular Bank of Cebu;
"3.That Atilano G. Jabil is to pay the said spouses the balance of Four
Thousand Pesos (P4,000.00) on or before September 15, 1965.

8 KASC

"4.That the said spouses agreed to defend the said Atilano G. Jabil from
other claims on the said property;
"5.That the spouses agrees to sign a final deed of absolute sale in
favor of Atilano G. Jabil over the above-mentioned property upon the
payment of the balance ofFour Thousand Pesos." (Original Record, pp.
10-11)
In their motion for reconsideration, petitioners reiterated their contention that the
Deed of Sale (Exhibit "C") is a mere contract to sell and not an absolute sale; that
the same is subject to two (2) positive suspensive conditions, namely: the
payment of the balance of P4,000.00 on or before September 15, 1965 and the
immediate assumption of the mortgage of P12,000.00 with the First Insular
Bank of Cebu. It is further contended that in said contract, title or ownership over
the property was expressly reserved in the vendor, the Dignos spouses, until the
suspensive condition of full and punctual payment of the balance of the purchase
price shall have been met. So that there is no actual sale until full payment is
made (Rollo, pp. 51-52).
In bolstering their contention that Exhibit "C" is merely a contract to sell,
petitioners aver that there is absolutely nothing in Exhibit "C" that indicates that
the vendors thereby sell, convey or transfer their ownership to the alleged
vendee. Petitioners insist that Exhibit "C" (or 6) is a private instrument and the
absence of a formal deed of conveyance is a very strong indication that the
parties did not intend "transfer of ownership and title but only a transfer after full
payment" (Rollo, p. 52). Moreover, petitioners anchored their contention on the
very terms and conditions of the contract, more particularly paragraph four which
reads, "that said spouses has agreed to sell the herein mentioned property to
Atilano G. Jabil . . ." and condition number five which reads, "that the spouses
agrees to sign a final deed of absolute sale over the mentioned property upon the
payment of the balance of four thousand pesos."
Such contention is untenable.

9 KASC

By and large, the issues in this case have already been settled by this Court in
analogous cases.
Thus, it has been held that 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 (Taguba v. Vda. de Leon,
132 SCRA 722; Luzon Brokerage Co., Inc. v. Maritime Building Co., Inc., 86
SCRA 305).
A careful examination of the contract shows that 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.
On the contrary, all the elements of a valid contract of sale under Article
1458 of the Civil Code, are present, such as: (1) consent or meeting of the
minds; (2) determinate subject matter; and (3) price certain in money or its
equivalent. In addition, Article 1477 of the same Code provides that "The
ownership of the thing sold shall be transferred to the vendee upon actual or
constructive delivery thereof. As applied in the case of Froilan v. Pan Oriental
Shipping Co., et al. (12 SCRA 276), this Court held that in the
absence of stipulation to the contrary, the ownership of the thing sold passes to
the vendee upon actual or constructive delivery thereof.
While it may be conceded that there was no constructive delivery of the land sold
in the case at bar, as subject Deed of Sale is a private instrument, it is beyond
question that there was actual delivery thereof. As found by the trial court,
the Dignos spouses delivered the possession of the land in question to Jabil as
early as March 27, 1965 so that the latter constructed thereon Sally's Beach
Resort also known as Jabil's Beach Resort in March, 1965; Mactan White Beach
Resort on January 15, 1966 and Bevirlyn's Beach Resort on September 1, 1965.

10 KASC

Such facts were admitted by petitioner spouses (Decision, Civil Case No. 23-L;
Record on Appeal, p. 108).
Moreover, the Court of Appeals in its resolution dated December 16, 1981 found
that the acts of petitioners, contemporaneous with the contract, clearly show that
an absolute deed of sale was intended by the parties and not a contract to sell.
Be that as it may, it is evident that when petitioners sold said land to the Cabigas
spouses, they were no longer owners of the same and the sale is null and void.
II.
Petitioners claim that when they sold the land to the Cabigas spouses, the
contract of sale was already rescinded.
Applying the rationale of the case of Taguba v. Vda. de Leon (supra) which is on
all fours with the case at bar, the contract of sale being absolute in nature is
governed by Article 1592 of the Civil Code. It is undisputed that petitioners never
notified private respondents Jabil by notarial act that they were rescinding the
contract, and neither did they file a suit in court to rescind the sale. The most that
they were able to show is a letter of Cipriano Amistad who, claiming to be an
emissary of Jabil, informed the Dignos spouses not to go to the house of Jabil
because the latter had no money and further advised petitioners to sell the land
in litigation to another party (Record on Appeal, p. 23). As correctly found by
the Court of Appeals, there is no showing that Amistad was properly authorized
by Jabil to make such extra judicial rescission for the latter who, on the contrary,
vigorously denied having sent Amistad to tell petitioners that he was already
waiving his rights to the land in question. Under Article 1358 of the Civil Code, it
is required that acts and contracts which have for their object the
extinguishment of real rights over immovable property must appear in a public
document.
Petitioners laid considerable emphasis on the fact that private respondent Jabil
had no money on the stipulated date of payment on September 15, 1965 and
was able to raise the necessary amount only by mid-October, 1965.

11 KASC

It has been ruled, however, that "where time is not of the essence of the
agreement, a slight delay on the part of one party in the performance of his
obligation is not a sufficient ground for the rescission of the agreement"
(Taguba v. Vda. de Leon, supra). Considering that private respondent has only a
balance of P4,000.00 and was delayed in payment only for one month, equity
and justice mandate as in the aforecited case that Jabil be given an additional
period within which to complete payment of the purchase price.
WHEREFORE, the petition filed is hereby Dismissed for lack of merit and the
assailed decision of the Court of Appeals is Affirmed in toto.
SO ORDERED
Fernan, Gutierrez, Jr., Feliciano and Cortes, JJ., concur.
Footnotes
*Penned by Justice Elias B. Asuncion and concurred by Justices Porfirio V. Sison and
Vicente V. Mendoza.
**Penned by Judge Ramon E. Nazareno.
||| (Dignos v. Court of Appeals, G.R. No. 59266, February 29, 1988)


12 KASC

FIRST DIVISION
[G.R. No. L-29421. January 30, 1971.]
LINO ARTATES & MANUELA POJAS, plaintiffs-
appellants, vs. DANIEL URBI, CRISANTO SOLIVEN, assisted by
his Guardian 'ad litem,' MARCELA B. SOLIVEN, REMEGIO
BUTACAN and NEMESIO OATE, in their private capacities
and/or as Ex-Oficio Provincial Sheriff and Deputy Sheriff of
Cagayan, respectively, and BIENVENIDO CACATIAN, as
Deputy Register of Deeds of Cagayan, defendants-appellees.
Bienvenido J. Jimenez for plaintiffs-appellants.
Rogelio Re. Ubarde for defendants-appellees Daniel Urbi and Crisanto Soliven.
Alfredo J. Donato for defendant-appellee Nemesio Oate.
The Provincial Fiscal (Cagayan) for defendants-appellees Provincial Sheriff and
Deputy Register of Deeds.
D E C I S I O N
REYES, J.B.L., J p:
This is an appeal from the decision of the Court of First Instance of
Cagayan (Civil Case No. 116-T), involving the public sale of a homestead to
satisfy a civil judgment against the grantee.

13 KASC

The records show that in an action filed in the Court of First Instance of Cagayan,
the spouses Lino Artates and Manuela Pojas sought annulment of the execution
of a homestead 1 covered by Patent No. V-12775 issued to them by the proper
land authorities on 23 September 1952, and duly registered in their names (OCT
No. P-572). The public sale, conducted by the Provincial Sheriff of Cagayan on 2
June 1962, was made to satisfy a judgment against Lino Artates in the amount of
P1,476.35, and awarded to Daniel Urbi by the Justice of the Peace Court of
Camalaniugan, Cagayan, in its Civil Case No. 40, for physical injuries inflicted
by Artates upon Urbi on 21 October 1955. In the execution sale, the property was
sold to the judgment creditor, the only bidder, for P1,476.35. In their complaint,
the plaintiffs spouses alleged that the sale of the homestead to satisfy an
indebtedness of Lino Artates that accrued on 21 October 1955, violated the
provision of the Public Land law exempting said property from execution for any
debt contracted within five years from date of the issuance of the patent; that
defendant Urbi, with the intention of defrauding the plaintiffs, executed on 26
June 1961 a deed for the sale of the same parcel of land to defendant Crisanto
Soliven, a minor, supposedly for the sum of P2,676.35; that as a result of the
aforementioned transactions, defendants Urbi and Soliven entered into the
possession of the land and deprived plaintiffs of the owners' share in the rice
crops harvested during the agricultural year 1961-1962. Plaintiffs, therefore,
prayed that the public sale of the land to defendant Urbi, as well as the deed of
sale executed by the latter in favor of defendant Soliven, be declared null and
void; that defendants be ordered to deliver to plaintiffs possession of the land;
and to pay to plaintiffs compensatory damages at the rate of P1,000.00 per
agricultural year until possession is finally restored to them, the sum of P2,000.00
as damages for maliciously casting cloud upon plaintiffs' title on the land, plus
attorneys' fees and costs.
The defendants 2 filed separate answers disputing the averments of the
complaint. On 29 March 1963, the court rendered judgment upholding the
regularity and validity of the execution conducted by the defendant Provincial
Sheriff, but finding that the sale of the lands by defendant Urbi to the minor

14 KASC

Soliven was simulated, intended to place the property beyond the reach of the
judgment debtor, and that plaintiffs had offered to redeem the land within the 5-
year period allowed by Section 119 of the Public Land law for reacquisition
thereof by the grantee. Consequently, the court declared the sale of the land by
defendant Daniel Urbi to defendant Crisanto Soliven null and void; and
DanielUrbi was ordered to reconvey the property to the plaintiffs upon the latter's
payment (to Urbi) of the sum of P1,476.35 plus the sheriff's fee incident to the
sale at public auction, with interest thereon at the rate of 12% per annum from 2
June 1961 until said amount shall have been fully paid, and the further sum of
P783.45 representing the amount paid by defendant Daniel Urbi to the Philippine
National Bank for the release of the real estate mortgage on the land, contracted
by Lino Artates, with legal rate of interest thereon from 29 June 1961.
From this decision, the plaintiffs interposed the present appear assigning several
errors allegedly committed by the court below, all hinged on the validity or
invalidity of the public sale of the lot involved herein.
Section 118 of the Public Land law (Commonwealth Act 141) provides as follows:
"Sec. 118.Except in favor of the Government or any of its branches,
units, or institution, or legally constituted banking corporations, lands
acquired under free patent or homestead provisions shall not be subject
to encumbrance or alienation from the date of the approval of the
application and for a term of five years from and after the date of
issuance of the patent or grant, nor shall they become liable to the
satisfaction of any debt contracted prior to the expiration of said period,
but the improvements or crops on the land may be mortgaged or
pledged to qualified persons, associations or corporations."
xxx xxx xxx
As thus prescribed by law, for a period of five years from the date of the
government grant, lands acquired by free or homestead patent shall not only be
incapable of being encumbered or alienated except in favor of the government
itself or any of its institutions or of duly constituted banking corporations, but also,

15 KASC

they shall not be liable to the satisfaction of any debt contracted within the said
period. 3 whether or not the indebtedness shall mature during or after the
prohibited time. 4 This provision against the alienation or encumbrance of public
lands granted with in five years from the issuance of the patent, it has been held,
is mandatory; 5 a sale made in violation thereof is null and void 6 and produces no
effect whatsoever. Though it may be a limitation on the right of ownership of the
grantee, the sanitary purpose of the provision cannot be denied: it is to preserve
and keep for the homesteader or his family the land given to him gratuitously by
the State, 7 so that being a property owner, he may become and remain a
contented and useful member of our society. 8
In the case at bar, the homestead patent covering the land in question (No. V-
12775) was issued to appellants on 23 September 1952, and it was sold at public
auction to satisfy the civil liability of appellant Lino Artates to Daniel Urbi,
adjudged in the 14 March 1956 decision of the Justice of the Peace Court of
Camalaniugan, Cagayan. There can be no doubt that the award of damages
to Urbi created for Artates a civil obligation, an indebtedness, that commenced
from the date such obligation was decreed on 14 March 1956.Consequently, it is
evident that it can not be enforced against, or satisfied out of, the sale of the
homestead lot acquired by appellants less than 5 years before the obligation
accrued. And this is true even if the sale involved here is not voluntary. For
purposes of complying with the law, it is immaterial that the satisfaction of the
debt by the encumbrancing or alienation of the land grant was made voluntarily,
as in the case of an ordinary sale, or involuntarily, such as that effected through
levy on the property and consequent sale at public auction. In both instances, the
spirit of the law would have been violated. 9
Doubts have been expressed as to whether the words "debt contracted prior to
the expiration of said period" (of 5 years from and after the grant) would include
the civil liability arising from a crime committed by the homesteader. While there
is no direct Philippine precedent on this point, there are various reasons why the
non-liability of the homestead grant should be extended to extra-contractual
obligations. First and foremost, whether it be viewed as an exemption or as a

16 KASC

condition attached to the grant to encourage people to settle and cultivate public
land, the immunity in question is in consonance with the definite public policy
underlying these grants, which is to "preserve and keep in the family of the
homesteader that portion of public land which the State has given to him" so he
may have a place to live with his family and become a happy citizen and a useful
member of society, 10 and the exemption should not be given restrictive
application. 11 A levy and sale of the homestead on account of extra-contractual
liability incurred would uproot the homesteader and his family and turn them into
homeless waifs as effectively as a levy for non-payment of a contractual debt.
Secondly, the word "debt" in exemption statutes,
"in its wider sense, (it) includes all that is due to a man under any
form or obligation or promise, and covers not only obligations
arising under contract, but also those imposed by law without
contract." 12
Considering the protective policy of the law, it becomes apparent that "debt
contracted" was used in it in the sense of "obligation incurred," since Webster
gives the verb to "contract" the meaning of "to bring on; incur; acquire."
Finally, our public land laws being copied from America legislation, 13 resort to
American precedents reveals that, under the weight of authority, exemption
from "debts contracted" by a homesteader has been held to include freedom
from money liabilities, from torts or crimes committed by him, such as from
bigamy (State vs. O'Neil, 7 Ore. 141, 11 Words and Phrases 318) or slander
(Conway vs. Sullivan, 44 Ill. 451, 452), breach of contract (Flanagan vs.
Forsythe, 50 Pac. 152, 153) or other torts (In Re Radway, 20 Fed. Cas. 154,
162).
The execution sale in this case being null and void, the possession of the land
should be returned to the owners, the herein appellants. There would even be no
need order appellee Urbi to execute a deed of reconveyance thereof of to the
owners. It appears that what was issued here to the judgment creditor/purchaser
was only the sheriff's provisional certificate, under which he derived no definite
title or right until the period for redemption has expired, without a redemption

17 KASC

having been made, 14 or issuance of a final deed or certificate of sale. In other
words, the purchaser herein has not acquired an absolute ownership or title in
fee over the land that would necessitate a deed of reconveyance to revert
ownership back to the appellant spouses. As things now stand, title to the
property covered by OCT No. P-572 remains with the appellants, but
LinoArtates shall continue to be under obligation to satisfy the judgment debt to
Daniel Urbi in the sum of P1,476.35, with legal interest thereon accruing from the
date the writ of execution was first returned unsatisfied. It appearing also that
appellee Daniel Urbi paid to the Philippine National Bank the sum of P783.45 to
release the mortgage on the land, appellants should reimburse him of said
amount or of whatever amount appellants have actually been benefited by the
said payment.

FOR THE FOREGOING CONSIDERATIONS, the decision appealed from is
hereby reversed, and appellants are declared entitled to the return and
possession of the lot covered by Original Certificate of Title No. P-572, without
prejudice to their continuing obligation to pay the judgment debt, and expenses
connected therewith. No costs.
Concepcion, C.J., Dizon, Zaldivar, Fernando and Makasiar, JJ., concur.
Makalintal, J., concurs with Mr. Justice Teehankee in a separate opinion.
Castro, J., concurs in the dissenting opinion of Mr. Justice Teehankee.
Teehankee, J., concurs and dissents in a separate opinion.
Barredo, J., dissents in separate opinion.
Villamor, J., concurs in the separate concurring and dissenting opinion of Mr.
Justice Teehankee.
Separate Opinions

18 KASC

MAKALINTAL, J., concurring:
I concur in the opinion of Justice Teehankee, and vote for the affirmance of the
appealed judgment in toto. The date of the issuance of the homestead patent to
appellants was September 23, 1952. Under Section 118 of the Public Land Law
the homestead could not be held liable for the satisfaction of any debt contracted
during a period of five years thereafter, or up to September 23, 1957. The opinion
of the majority holds that since the civil obligation of appellant Artates was
adjudged on March 14, 1956, or within the said period, the homestead cannot be
held liable for its satisfaction. The obvious implication is that if the judgment had
been delayed if for instance it had been rendered on September 24, 1957
the result would have been otherwise. I do not believe that such a difference
should be made to depend upon the more or less fortuitous and irrelevant
circumstance of when the judgment decreeing the obligation was rendered. I am
for giving the word "contracted," as used in the law, its ordinary meaning, for after
all one who contracts with a homestead patentee during the five-year period and
accepts an obligation from him does so with full knowledge of the law's
exempting provision, which is deemed in effect a part of the agreement. The
same, however, is not true of the victim of a tort or a crime, as in the present
case, for here his volition does not come into play, the obligation being imposed
entirely by law.
TEEHANKEE, J., concurring and dissenting:
I vote for the affirmance in toto of the judgment appealed from. Hence, I concur in
that portion of the decision decreeing that appellants should reimburse
appellee Urbi for the sums that Urbi had paid to the Philippine National Bank to
release the mortgage previously executed by appellants on the subject
homestead land, but I dissent from the principal decree thereof that "title to the
property . . . remains with the appellants, but (appellant) Lino Artates shall
continue to be under obligation to satisfy the judgment debt to Daniel Urbi in the
sum of P1,476.35, legal interest thereon accruing from the date the writ of
execution was first returned unsatisfied."

19 KASC

The issue at bar is whether the execution sale conducted in 1962 by the sheriff
of Artates' homestead lot acquired in 1952 to satisfy a 1956 judgment
against Artates in favor of Urbi (for physical injuries inflicted
by Artates upon Urbi in 1955), at which public sale the homestead lot was sold
to Urbi as the only bidder for the amount of his judgment credit in the sum of
P1,476.35 should be held null and void, as the majority would now hold, by virtue
of the prohibitory provisions of Section 118 of the Public Land Law. The key
provision cited is that providing that such homesteads "shall not be subject to
encumbrance or alienation from the date of the approval of the application
and for a term of five years from and after the date of issuance of the patent or
grant, nor shall they become liable to the satisfaction of any debt contracted prior
to the expiration of said period . . ."
Under the cited provision, all sales and alienations of the homestead property
made by the homesteader within the 5-year prohibition are null and void.
Similarly, the homestead is held not liable to the satisfaction of any
debt contracted by the homesteader within the said period, even though it
be contracted that the indebtedness shall mature after the prohibited period. The
law's purpose is clear and salutary: to preserve and keep for the homesteader
the land given to him gratuitously by the State and to protect him from his own
weakness and improvidence.
But in the case at bar, the judgment debt of the homesteader in favor
of Urbi * was not contracted but duly adjudicated by a competent
by Artates upon Urbi in 1955, which, gauging the same from the substantial
amount of P1,476.35 awarded, must have been quite serious. The happenstance
that Artates' assault on Urbi and the judgment award occurred within the
prohibitory period should not be construed beyond the law's text and intent to
favor the wrongdoer Artates as against his victim Urbi.
We would have the anomalous situation thereby where, while recognizing
that Artates has a just and continuing obligation to pay Urbi the judgment debt,
the debt would in effect be nullified. The judgment debt was awarded

20 KASC

since 1956 and would by now have prescribed, but the majority decision would
nullify the levy and public sale of the land to satisfy Urbi's judgment credit
conducted in 1966 long after the expiration of the statutory five-year prohibitory
period. The majority decision bars Urbi forever from looking toArtates homestead
property for the satisfaction of his judgment credit. Artates' evasion of his
judgment debt to Urbi is thereby made certain. Any later creditor of Artates, real
or simulated, from one day after the expiration on 23 September 1957 of the said
five-year prohibitory period is given sole and exclusive preference to look to the
said property for satisfaction as against Urbi beyond whose reach it is placed,
contrary to the priority and preference that Urbi would lawfully be entitled to as
a bona fide judgment creditor.
Finally, pursuant to Artates' offer to redeem the property from Urbi within the 5-
year redemption period allowed by section 119 of the Public Land Law, the lower
court in its appealed judgment so ordered such redemption and reconveyance.
This strikes me as an eminently fair an just judgment which should be
upheld. Artates, the homesteader, is thus assured of keeping and preserving his
homesteader, is thus assured of keeping and preserving his homestead in
accordancer ** with the spirit of the law and the lawful judgment credit
of Urbi against him is at the same time duly satisfied.
BARREDO, J., dissenting:
I regret I am unable to concur in the ruling in this decision that the provision of
Section 118 of the Public Land which says that "lands acquired under free patent
homestead provisions shall not . . . become liable to the satisfaction of any debt
contracted prior to the expiration of five years from and after the date of issuance
of the patent or grant" contemplates inclusively "the civil liability arising from a
crime committed by the homesteader" within said period. Indeed, I do not feel it is
necessary I deep into the Webster's dictionary meaning of the verb "to contract"
or to look for state court decisions in America which could be isolated and based
on statutes not similarly phrased and oriented as Ours, to resolve the legal issue
before Us, it being sufficient, towards that end, to consider only the basic

21 KASC

principles that underlie the disposition of public lands under our own laws on the
matter.
I understand that the ultimate reason behind the exceptions contained in the
cited provision of the Public Land Law is to insure the accomplishment of the
double purpose of a homestead grant, which is to encourage the development of
arable lands and enhance their productivity in the interest of the national
economy and, at the same time, provide qualified citizens with a piece of land
which they and their families may call their own, on which they can live and which
they can work and thereby become useful members of society. Accordingly, the
homesteader is safeguarded against his own weaknesses, imprudence and
improvidence by making it impossible for him to directly or indirectly, by his
voluntary ad, dispose of or lose the land in favor of others. So also do the
exceptions make it impossible for him to allow himself to be utilized as dummy of
opportunists. If this understanding of mine is correct, it should follow necessarily
that for these purposes to be achieved, a homesteader must be, during the
exempt period, in physical condition to work the land granted to him. I cannot
help wondering how a person who has been convicted of a crime, the penalty for
which is most likely to include a period of incarceration can work on and develop
his homestead in the manner conceived in the law. That such a contingency may
not be true in all instances, for there may be punishment of crimes with
imprisonment of insignificantly short duration or even fines only, does not affect
the general principle involved. I consider it implicit in all land grants by the State
that the grantees bind themselves to be loyal and useful members of society, at
least, during the period of development thereof that the law contemplates,
namely, the first five years from the grant. Surely, one who commits an offense
against the State and his fellow-citizens or other inhabitants in this country is far
from being a useful member of society. To be sure his act of committing an
offense is voluntary, but this is not the voluntary act of imprudence and
improvidence against which the law guards the homesteader even against
himself. Crime is an assault upon the sovereign people and the social order,
even if not always directly against the national security. and it is my considered

22 KASC

view that, in principle, one who is guilty thereof forfeits whatever rights he might
have acquired by virtue of the State's generosity, particularly, when, as in this
case, it is a grant of a special privilege under specified circumstances and not
generally and commonly enjoyed by all citizens/inhabitants of the country.

For these reasons, I vote to affirm the judgment of the court a quo which, after
all, recognizes the appellants' right to redeem the land in question under Section
119 of the Public Land Law, which is the most they should expect from the State,
as thus, their right to the land is reinstated without practically depriving the
innocent victims of the crime herein involved of their remedy for the private injury
they have suffered. In other words, under the trial court's decision, all the ends of
justice and equity are subserved, whereas it is difficult to say the same of the
decision of this Court.
Footnotes
1.Lot No. 151 of the Allacapan Public Land Subdivision, situated in barrio Allig,
municipality of Allacapan, province of Cagayan.
2.Defendant Crisanto Soliven, a minor, was represented by Marcela B. Soliven, who
was appointed by the court as his guardian ad litem.
3.Francisco vs. Parsons Hardware, 67 Phil 234.
4.Bautista vs. Marcos, L-17072, 31 October 1961.
5.Republic vs. Ruiz, L-23712, 29 April 1968, 23 SCRA 348.
6.Eugenio vs. Perdido, 97 Phil. 41; Angeles vs. Court of Appeals, 102 Phil. 1006;
Cadiz vs. Nicolas, 102 Phil. 1032; Santander vs. Villanueva, 103 Phil. 1; Felices
vs. Iriola, 103 Phil. 125; Del Rosario vs. Abad, L-10881, 30 Sept. 1958;
Republic vs. Garcia, 105 Phil. 826; Republic vs. Ruiz, supra.; Baje vs. Court of
Appeals, L-18783, 25 May 1964.
7.Manzano vs. Ocampo, L-14778, 28 February 1961, 1 SCRA 691.
8.Cadiz vs. Nicolas, supra.

23 KASC

9.Beach vs. Pacific Commercial Co., 49 Phil. 765; Francisco vs. Parsons Hardware
Co., 67 Phil. 234; Gonzalo Puyat & Sons vs. De las Ama, 74 Phil. 3; Cadiz vs.
Nicolas, 102 Phil. 1032, 1039.
10.Pascual vs. Talens, 80 Phil. 792; Santos vs. Roman Catholic Church, 94 Phil. 406,
409; Cadiz vs. Nicolas, 102 Phil. 1039; Jocson vs. Soriano, 45 Phil. 375;
Beniga vs. Bugas, L-28918, 29 September 1970.
11.Duling vs. Salaz, 26 Pac. 2d. 1069; 22 Am. Jur. 80 793, 795.
12.Duling vs. Salaz, 26 Pac. 2d. 1069; 22 Am. Jur. 80.
13.Jocson vs. Soriano, 45 Phil. 375, 379.
14.Section 26, Revised Rule 39: 2 Moran's Comments on the Rules of Court, 1970
ed., page 327.
*Editor's Note: Should be read "Urbi."
**Editor's Note: Should be read "accordance."

||| (Artates v. Urbi, G.R. No. L-29421, January 30, 1971)


24 KASC

FIRST DIVISION
[G.R. No. L-54070. February 28, 1983.]
HEIRS OF ENRIQUE ZAMBALES and
JOAQUINA ZAMBALES, petitioners, vs. THE COURT OF APPEA
LS, NIN BAY MINING CORPORATION, ANGELA C. PREYSLER
and JOAQUIN B. PREYSLER, respondents.
Reynaldo S. Yap for petitioners.
Benjamin T. Garcia for respondents.
SYLLABUS
1.REMEDIAL LAW; APPEAL; FACTUAL
FINDING OF THE COURT OF APPEALS, SUSTAINED IN THE CASE AT BAR.
The Court sustains the finding of the Court of Appeals that fraud and
misrepresentation did not vitiate petitioners' consent to the Agreement when it
observed: Taking into account the foregoing observations, this Court is not
convinced that indeed appellees were victims of a fraudulent scheme employed
upon them by their former counsel by reason of their alleged illiteracy and
ignorance. The evidence discloses that appellees, although unschooled, are
intelligent, well-informed and intelligent people. They are not the kind of persons
who could easily be fooled oftheir rights and interests.
2.ID.; ID.; AUTHORITY OF THE SUPREME COURT TO REVIEW MATTERS
NOT ASSIGNED AS ERRORS IN THE APPEAL. The fact that the issue was

25 KASC

not raised in the Courtsbelow is not a deterrent factor considering that the
question affects the validity of the agreement between the parties. The
Supreme Court has the authority to review matters even if they are not assigned
as errors in the appeal, if it is found that their consideration is necessary in
arriving at a just decision of the case. (Saura Import & Export Co., Inc. vs. Phil.
International Surety Co., Inc., 8 SCRA 143 [1963]; Miguel vs. Court of Appeals,
29 SCRA 760 [1969]).
3.ID.; ID.; CHANGE IN LEGAL THEORY ALLOWED IF ON THE FACTUAL
BASES THEREOF, PRESENTATION OF FURTHER EVIDENCE NOT
REQUIRED. A party may change his legal theory on appeal only when the
factual bases thereof would not require presentation of any further evidence by
the adverse party in order to enable it to properly meet the issue raised in the
new theory. (Lianga Lumber Company vs. Lianga Timber Co., Inc., 76 SCRA 197
[1977]).
4.CIVIL LAW; HOMESTEAD; SALE WITHIN THE PROHIBITORY PERIOD,
ILLEGAL AND VOID. The sale of a homestead lot within the five-year
prohibitory period is illegal and void. The law does not distinguish between
executory and consummated sales. The bilateral promise to buy and sell the
homestead lot at a price certain, which was reciprocally demandable (Article
1479. Civil Code), was entered into within the five-year prohibitory period and is
therefore, illegal and void. Further, the agency to sell the homestead lot to a third
party was coupled with an interest inasmuch as a bilateral contract was
dependent on it and was not revocable at will by any of the parties. (Article 1927,
ibid.) To all intents and purposes, therefore, there was an actual executory sale
perfected during the period of prohibition except that it was reciprocally
demandable thereafter and the agency to sell to any third party was deferred until
after the expiration of the prohibitory period. That "rentals" were ostensibly to be
paid during the five-year prohibitory period, and the agency to sell made effective
only after the lapse of the said period, was merely a devise to circumvent the
prohibition. The Court holds, therefore, that the bilateral promise to buy and sell,
and the agency to sell, entered into within five years from the date of the

26 KASC

homestead patent, was in violation of Section 118 of the Public Land Law,
although the executed sale was deferred until after the expiration of the five-year-
prohibitory period.
5.ID.; ID.; ID.; ACTION FOR DECLARATION OF ITS INEXISTENCE,
IMPRESCRIPTIBLE. As the contract is sold from the beginning, for being
expressly prohibited by law (Article 1409, ibid.) the action for the declaration of its
inexistence does not prescribe. (Article 1410, ibid.) Being absolutely void, it is
entitled to no authority or respect, the sale may be impeached in a collateral
proceeding by any one with whose rights and interest it conflicts. There is no
presumption of its validity. (Inton vs. Quintana, 81 Phil. 97 [1948].) The
approval of the sale by the Secretary of Agriculture and Natural Resources after
the lapse of five years from the date of the patent would neither legalize the sale.
(Santander vs. Villanueva, 103 Phil. 1 [1958]; Cadiz vs. Nicolas, 102 Phil. 1032
[1958]; cited in Mansano vs. Ocampo, 1 SCRA 691 [1961]).
6.ID.; ID.; ID.; ACTION FOR REVERSION NOT DISCOUNTED. The
homestead in question should be returned to the Zambaleses, petitioners herein,
who are, in turn, bound to restore to the Corporation the sum of P8,923.70 as the
price thereof. This is without prejudice to the corresponding action on the
part of the State for reversion ofthe property and its improvements, if any, under
Section 124 of the Public Land Act.
D E C I S I O N
MELENCIO-HERRERA, J p:
The Decision of respondent Court of Appeals in the case entitled
"Enrique Zambales and Joaquina Zambales, Plaintiffs-appellees vs. Atty.
Perfecto de los Reyes, Nin Bay Mining Corporation and Joaquin B. Preysler,
Defendants-appellants" (CA-G.R. No. 59386-R), setting aside the
judgment of the Court of First Instance of Palawan in Civil Case No. 678 for

27 KASC

Annulment of a Deed of Sale with Recovery of Possession and Ownership with
Damages", is the subject of this Petition for Review on Certiorari. LLjur
Joaquin B. Preysler is now deceased and was substituted by Angela C. Preysler,
his widow.
Atty. Perfecto de los Reyes was originally a defendant in Civil Case No. 678 but
he did not appeal from the Decision of the lower Court.
The Zambales spouses (Zambaleses, for brevity) were the homestead
patentees of a parcel of land with an area of 17.8474 hectares situated in the
Municipality of Del Pilar, Roxas, Palawan, covered by Original Certificate of Title
No. G-1193 of the Registry of Deeds for the Province of Palawan, issued
pursuant to Homestead Patent No. V-59502 dated September 6, 1955.
Claiming that the Nin Bay Mining Corporation (Corporation, for short) had
removed silica sand from their land and destroyed the plants and others
improvements thereon, the Zambaleses instituted, on November 10, 1958, Civil
Case No. 316 before the Court of First Instance of Palawan claiming damages in
the total sum of P48,000.00.
The Corporation denied having caused any damages and claimed that it had
excavated and extracted silica sand only from its own mining claims and on
which it had mining lease contracts with the Philippine Government.
On October 29, 1959, the Zambaleses, duly assisted by their counsel, Atty.
Perfecto de los Reyes, and the Corporation, entered into a Compromise
Agreement, the portions ofwhich, pertinent to this case, read:
"1.DEFENDANT shall pay the PLAINTIFFS a rental of TWENTY
(P20.00) PESOS per hectare per year from September 9, 1955 to
September 30, 1960, or a total rental price of ONE THOUSAND SEVEN
HUNDRED EIGHTY-FOUR PESOS AND SEVENTY-FOUR CENTAVOS
(P1,784.74), Philippine currency, in lieu of all damages . . .
"2.The payment to the PLAINTIFFS of the above-mentioned rental price
shall be considered full, absolute and final payment and indemnity for all

28 KASC

the alleged damages to PLAINTIFFS' property and its improvements, or
any other actual, moral, exemplary or other damages that PLAINTIFFS
may have suffered or will suffer in connection with the mining
operations of DEFENDANT on the property in question, which property,
by virtue of the terms of this Agreement shall be used by DEFENDANT
as occupant thereof until September 30, 1960.
"3.PLAINTIFFS hereby agree and bind themselves to sell, transfer and
convey, and DEFENDANT or its assigns, qualified to acquire or hold
lands of the public domain, hereby agrees to purchase and pay for, the
aforesaid property of the PLAINTIFFS, containing an area of 17.8474
hectares, situated in the Municipality of Del Pilar, Roxas, Palawan, and
covered by Original Certificate of Title No. G-1193 of the
Registry of Deeds of Palawan, at the fixed selling price of FIVE
HUNDRED (P500.00) PESOS per hectare or a total purchase
price of EIGHT THOUSAND NINE HUNDRED TWENTY THREE
PESOS and SEVENTY CENTAVOS (P8,923.70), Philippine currency.
The contract to purchase and sell herein provided for, shall be
reciprocally demandable and enforceable by the parties hereto on
September 10, 1960. PLAINTIFFS hereby irrevocably constitute and
appoint DEFENDANT, its successors and/or assigns their true and
lawful attorney-in-fact with full power and authority to sell, transfer and
convey on September 10, 1960 or at any time thereafter the whole or
any part of PLAINTIFFS' property hereinabove mentioned to the
DEFENDANT, its successors and/or assigns, or to any third party, and to
execute and deliver all instruments and documents whatsoever
necessary for the purpose, and all acts done and to be done by
DEFENDANT, its successors and/or assigns in conformity with the
powers herein granted are hereby ratified and confirmed by the
PLAINTIFFS. . . ."
"4.In consideration of the payment of the amount of P1,784.74 by
DEFENDANT, and of other good and valuable consideration,

29 KASC

PLAINTIFFS, jointly and severally, do hereby forever release, fully and
completely, said DEFENDANT, its successors and/or assigns in interest,
from any and all liabilities, whether arising from past, present or future
excavation or removal of silica sand from the property in question or
otherwise, and from all the other claims against the DEFENDANT
contained in their Complaint in Civil Case No. 316 of the Court of First
Instance of Palawan." 1
The Trial Court rendered judgment on October 29, 1959 based on the
Compromise Agreement. The document was duly annotated an OCT No. G-1193
(Exhibit "A") the day after, or on October 30, 1959 (Exhibit "10-A"). prcd
On September 10, 1960, the Corporation, as attorney-in-fact for the Zambaleses,
as Vendors, sold the disputed property to Joaquin B. Preysler for the
sum of P8,923.70 fixed in the Compromise Agreement (Exhibit "11"). Transfer
Certificate of Title No. T-970 was issued in the vendee's name on December 19,
1960 (Exhibit "12").

The Deed of Sale to Preysler contained the following proviso:
"The VENDORS hereby represent and warrant that the five-year
restrictive period on alienation of lands acquired under the homestead
provisions of Commonwealth Act No. 141, as amended, otherwise
known as the Public Land Act, has already expired, the
date of issuance of the herein homestead patent to the VENDORS as
aforesaid being September 6, 1955 as shown in Original
Certificate of Title No. G-1193."
On October 18, 1960, the Secretary of Agriculture and Natural Resources
approved the sale to Preysler of the subject property (Exhibit "13").
On December 6, 1969, or ten (10) years after the Trial Court's Decision based on
the Compromise Agreement, and nine (9) years after the sale to Preysler, the
Zambaleses filed Civil Case No. 678 before the Court of First

30 KASC

Instance of Palawan for "Annulment of a Deed of Sale with
Recovery of Possession and Ownership with Damages". They contended that it
was their lawyer who prevailed upon them to sign the Compromise Agreement;
that they are unschooled and did not understand the contents thereof; that they
were made to understand that they would receive the sum of P10,700.00, only as
payment for damages sustained by the land from 1955 to 1960; that through
fraud, deceit and manipulation by their lawyer and the Corporation, they were
made to agree to appoint the Corporation as their attorney-in-fact with full power
and authority to sell; that it was never their intention to sell the land; that in
September 1969, they were surprised to learn that the land was already titled in
the name of Joaquin B. Preysler; that the land was acquired and registered in the
latter's name through fraud and deceit. The Zambaleses then prayed that the
deed of sale and the title in Preysler's name be annulled on the ground of fraud
and that the property be reconveyed to them.
In their Answer, the Corporation denied all allegations that the Zambaleses had
signed the Compromise Agreement without understanding the contents thereof,
the truth being that it was read to them by their counsel, Atty. Perfecto de los
Reyes, who explained thoroughly the full implication and legal
consequence of each and every provision, which was then submitted and
approved by then Presiding Judge Juan L. Bocar; and that the Corporation had
sold the property to Preysler as a duly constituted attorney-in-fact pursuant to the
Compromise Agreement. LLjur
After trial, the lower Court rendered judgment in favor of the Zambaleses, the
dispositive part of which reads:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs
and against the defendants as follows:
1)That the deed of sale executed by Nin Bay Mining Corporation through
its president, to Joaquin B. Preysler is hereby declared null and void;
2)That the defendant Joaquin B. Preysler is hereby ordered to reconvey
the land subject matter of this litigation to the plaintiffs;

31 KASC

3)That the defendants Nin Bay Mining Corporation and Joaquin B.
Preysler shall pay the plaintiffs the sum of P85,000.00 as actual
damages plus the legal rate ofinterest from September 30, 1960 up to
the time the amount is fully paid;
4)That the defendants to pay the sum of FIVE THOUSAND (P5,000.00)
PESOS as attorneys fees; and
5)The defendants to pay the costs."
On appeal by the Corporation, the Court of Appeals reversed the Trial Court,
after finding that the alleged fraud or misrepresentation in the execution of the
Compromise Agreement had not been substantiated by evidence.
The case is now before us on review.
The controversy revolves around the issue of due execution and validity of the
Compromise Agreement (Exhibit "8") dated October 29, 1959, and of the
subsequent Deed ofSale (Exhibit "11"), dated 10 September 1960.
I.
The general rule is that whoever alleges fraud or mistake must substantiate his
allegation, since the presumption is that a person takes ordinary care of his
concerns and that private transactions have been fair and regular. The rule
admits of an exception in Article 1332 of the Civil Code which provides:
"When one of the parties is unable to read, or if the contract is in a
language not understood by him, and mistake or fraud is alleged, the
person enforcing the contract must show that the terms thereof have
been fully explained to the former."
For the proper application of said provision, it has first to be established
convincingly that the illiterate or the party at a disadvantage could not read or
understand the language in which the contract was written. 2 The evidence
discloses that the spouses Zambales are unschooled. They cannot read, speak,
much less understand English or write, except to sign their names. 3 The

32 KASC

Zambaleses alleged in their Complaint that the Compromise Agreement (Exhibit
"8") was executed through fraud by the Corporation and by their counsel Atty.
Perfecto de los Reyes, whom they included as a defendant. The burden of proof,
therefore, shifted to the Corporation to show that the compromise agreement had
been fully explained to the plaintiffs. prcd
In refuting the allegation that plaintiffs were misled into signing the compromise
agreement, their former counsel, Atty. Perfecto de los Reyes, and the notary,
Atty. Salomon Reyes, a lawyer for Nin Bay Mining Corporation, established that
the terms and conditions of the Compromise Agreement were thoroughly
explained and fully understood by the spouses Zambales in accordance with
their proposal to sell the land at P500.00 a hectare; that before the signing of the
Compromise Agreement, the notary requested Atty. de los Reyes to read and
explain each and every provision to the spouses, and with the help of Ricardo
Nuala, Atty. de los Reyes did so in their dialect (Cuyuno). Thereafter, the parties
went to Judge Juan Bocar, who was assured that the
spouses Zambales understood and signed the Compromise Agreement. 4
We sustain the finding of the Court of Appeals that fraud and misrepresentation
did not vitiate petitioners' consent to the Agreement when it observed:
"Taking into account the foregoing observations, this Court is not
convinced that indeed appellees were victims of a fraudulent scheme
employed upon them by their former counsel by reason of their alleged
illiteracy and ignorance. The evidence discloses that appellees, although
unschooled, are intelligent, well-informed and intelligent people. They
are not the kind of persons who could easily be fooled of their rights and
interests. Even as commented by the court a quo, which had a chance to
observe the demeanor of the witness, it had no observation that the
witness, Joaquina Zambales, is ignorant. As correctly observed by
appellants, appellees 'are political leaders and chief campaigners; they
speak in the platform during political rallies; and they are widely
travelled' (p. 28, Appellants' Brief). As a matter of fact they are

33 KASC

knowledgeable of the right connections in the government. They had
approached former Sen. Rogelio de la Rosa, no less, the congressman
and the governor. Even the lawyers they have retained previous to their
present counsel are the Padilla Law Office and the Diokno Law Office. It
is common knowledge that these law offices are among the established
law offices in Manila. It is far convincing that an ignorant couple would
have knowledge of these law firms. All these are obvious
manifestations of their being well-informed and the way they have
conducted their way of living apparently is inconsistent with the
plea of being illiterate and/or ignorant. They cannot capitalize on the fact
that they are uneducated only because they had no formal schooling
inasmuch as one's knowledge of the facts of life is not dependent on
whether one had formal schooling or not and it does not necessarily
follow always that if one is unschooled he is ignorant.
Furthermore, when plaintiffs-appellees signed the questioned
compromise agreement they were duly assisted and represented by
their counsel, Atty. de los Reyes. When Atty. de los Reyes testified
in court he categorically declared that it was to the best interest of his
clients that they compromise Civil Case No. 316. This declaration finds
support in Joaquina Zambales' testimony wherein she stated thus:
ATTY. SEMBRANO:
Q.Except for this present case, would you say to the Court that Atty. de
los Reyes extended to you legal assistance to your satisfaction?
A.Yes, sir, he is good to us.
xxx xxx xxx
Q.So these people never gave their services to you?
A.Nobody was able to help us except Atty. de los Reyes. (Tsn., pp. 29,
31 & 32, June 19, 1974).

34 KASC

. . . Thus, it having been established that appellees could not have
been misled by their former counsel into signing the compromise
agreement and taking into account the acts of the appellees and
their children subsequent to the execution of the compromise
agreement perforce the court a quo erred in not giving credence to
the clear and convincing testimonies of Atty. Perfecto de los Reyes
and Atty. Salomon Reyes anent the execution of the compromise
agreement." 5
However, although we find that the Zambaleses were not misled into signing the
Compromise Agreement, we hold that there has been violation of the Public Land
Act. The evidence on record shows that the land in question was awarded to the
Zambaleses as a homestead on September 6, 1955 (Exhibit "A"), Before us, the
Zambaleses now argue that the Compromise Agreement executed on October
29, 1959 is in violation of the Public Land Act, which prohibits alienation and
encumbrance of a homestead lot within five years from the issuance of the
patent. 6
We sustain that contention. The fact that the issue was not raised in
the Courts below is not a deterrent factor considering that the question affects
the validity of the agreement between the parties. The Supreme Court has the
authority to review matters even if they are not assigned as errors in the appeal,
if it is found that their consideration is necessary in arriving at a just
decision of the case. 7 Moreover, a party may change his legal theory
on appeal only when the factual bases thereof would not require
presentation of any further evidence by the adverse party in order to enable it to
properly meet the issue raised in the new theory. 8 In the case at bar it is
indisputable that Homestead Patent No. V-59502 was issued on September 6,
1955 as shown in Original Certificate of Title No. 1193 (Exhibit "A"). LLpr

The sale of a homestead lot within the five-year prohibitory period is illegal and
void. The law does not distinguish between executory and consummated sales.

35 KASC

"The law prohibiting any transfer or alienation of homestead land within
five years from the issuance of the patent does not distinguish between
executory and consummated sales; and it would hardly be in keeping
with the primordial aim of this prohibition to preserve and keep in the
family of the homesteader the piece ofland that the state had gratuitously
given to them, to hold valid a homestead sale actually perfected during
the period of prohibition but with the execution of the formal
deed of conveyance and the delivery of possession of the land sold to
the buyer deferred until after the expiration of the prohibitory period,
purposely to circumvent the very law that prohibits and declares invalid
such transaction to protect the homesteader and his family." 9
In the compromise agreement executed between the parties, (1) the Zambaleses
promised to sell and the Corporation agreed to buy the disputed lot at P500.00
per hectare, the contract to be reciprocally demandable and enforceable on
September 10, 1960; and as a substitute procedure, (2) an irrevocable agency
was constituted in favor of the Corporation as attorney-in-fact to sell the land to
any third person on September 10, 1960 or any time thereafter.
Clearly, the bilateral promise to buy and sell the homestead lot at a price certain,
which was reciprocally demandable 10 , was entered into within the five-year
prohibitory period and is therefore, illegal and void. Further, the agency to sell the
homestead lot to a third party was coupled with an interest inasmuch as a
bilateral contract was dependent on it and was not revocably at will by any of the
parties. 11 To all intents and purposes, therefore, there was an actual executory
sale perfected during the period ofprohibition except that it was reciprocally
demandable thereafter and the agency to sell to any third party was deferred until
after the expiration of the prohibitory period. That "rentals" were ostensibly to be
paid during the five-year prohibitory period, and the agency to sell made effective
only after the lapse of the said period, was merely a devise to circumvent the
prohibition.

36 KASC

To hold valid such an arrangement would be to throw the door wide open to all
possible subterfuges that persons interested in homesteads may devise to defeat
the legal prohibition against alienation within five years from the issuance of the
patent. LibLex
We hold, therefore, that the bilateral promise to buy and sell, and the agency to
sell, entered into within five years from the date of the homestead patent, was in
violation ofsection 118 of the Public Land Law, although the executed sale was
deferred until after the expiration of the five-year-prohibitory period.
As the contract is void from the beginning, for being expressly prohibited by
law 12 the action for the declaration of its inexistence does not prescribe. 13 Being
absolutely void, it is entitled to no authority or respect, the sale may be
impeached in a collateral proceeding by any one with whose rights and interest it
conflicts. There is no presumption ofits validity. 14 The approval of the sale by the
Secretary of Agriculture and Natural Resources after the lapse of five years from
the date of the patent would neither legalize the sale. 15
The homestead in question should be returned to the Zambaleses, petitioners
herein, who are, in turn, bound to restore to the Corporation the
sum of P8,923.70 as the price thereof. The actual damages awarded by the
Trial Court of P85,000.00 have not been adequately substantiated. Moreover,
under the agreement, the total rental price ofP1,784.74 was intended to be "in
lieu of all damages, or any other actual, moral, exemplary or other damages."
This is without prejudice to the corresponding action on the part of the State for
reversion of the property and its improvements, if any, under Section 124 of the
Public Land Act. 16
WHEREFORE, the judgment under review is hereby REVERSED, and another
one entered (1) declaring null and void a) the bilateral promise to buy and sell
entered into between Enrique Zambales and Joaquina Zambales, on the one
hand, and the Nin Bay Mining Corporation on the other, and b) the sale executed
by Nin Bay Mining Corporation in favor of Joaquin B. Preysler; (2) ordering
Angela C. Preysler to reconvey the land subject; matter of this litigation to

37 KASC

petitioners upon refund by the latter to the Nin Bay Mining Corporation of the
sum of P8,923.70, all expenses for the reconveyance to be borne by private
respondents; (3) ordering Nin Bay Mining Corporation to pay rentals to
petitioners at the price of P20.00 per hectare per year from December 6, 1969,
the date of the institution of the Complaint, till the date that possession is turned
over to petitioners; and (4) ordering the Register of Deeds for the
Province of Palawan to cancel Transfer Certificate of Title No. T-970 of his
Registry, and reissue to the Heirsof Enrique Zambales and
Joaquina Zambales the title to the homestead in question.
Let a copy of this Decision be served on the Solicitor General.
No costs. llcd
SO ORDERED.
Teehankee, Plana, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
Footnotes
1.Annex "E", pp. 88-90, Rollo.
2.Bunyi vs. Reyes, 39 SCRA 504 (1971).
3.T.s.n., February 23, 1972, p. 18; t.s.n., January 8, 1973, pp. 4, 20 & 26; t.s.n., June
19, 1974, p. 30.
4.T.s.n., July 28, 1975, pp. 23-27; Deposition of Atty. Salomon F. Reyes (Exhibit "18"),
pp. 27-33.
5.Pp. 61-63, Rollo.
6.Sec. 118, Commonwealth Act No. 141, as amended.
7.Saura Import & Export Co., Inc. vs. Phil. International Surety Co., Inc., 8 SCRA 143
(1963); Miguel vs. Court of Appeals, 29 SCRA 760 (1969).
8.Lianga Lumber Company vs. Lianga Timber Co., Inc., 76 SCRA 197 (1977).
9.Manzano vs. Ocampo, 1 SCRA 691, 697 (1961).

38 KASC

10.Article 1479, Civil Code.
11.Article 1927, ibid.
14.Inton vs. Quintana, 81 Phil. 97 (1948).
15.Santander vs. Villanueva, 103 Phil. 1 (1958); Cadiz vs. Nicolas, 102 Phil. 1032
(1958); cited in Manzano vs. Ocampo, 1 SCRA 691 (1961).
16.SEC. 124.Any acquisition, conveyance, alienation, transfer, or other contract made
or executed in violation of any of the provisions of sections one hundred and
eighteen, one hundred and twenty, one hundred and twenty-one, one hundred
and twenty-two, and one hundred and twenty-three of this Act shall be unlawful
and null and void from its execution and shall produce the effect of annulling
and cancelling the grant, title, patent, or permit originally issued, recognized or
confirmed, actually or presumptively, and cause the reversion of the property
and its improvements to the State.

||| (Heirs of Zambales v. Court of Appeals, G.R. No. L-54070, February 28, 1983)


39 KASC

EN BANC
[G.R. No. 11491. August 23, 1918.]
ANDRES QUIROGA, plaintiff-appellant, vs. PARSONS
HARDWARE CO., defendant-appellee.
Alfredo Chicote, Jose Arnaiz and Pascual B. Azanza, for appellant.
Crossfield & O'Brien, for appellee.
SYLLABUS
1.SALES; INTERPRETATION OF CONTRACT. For the classification
of contracts, due regard must be paid to their essential clauses. In the
contract in the instant case, what was essential, constituting its cause and
subject matter, was that the plaintiff was to furnish the defendant with the
beds which the latter might order, at the stipulated price, and that the
defendant was to pay this price in the manner agreed upon. These are
precisely the essential features of a contract of purchase and sale. There was
the obligation on the part of the plaintiff to supply the beds, and, on that of the
defendant, to pay their price. These features exclude the legal conception of
an agency or older to sell whereby the mandatary or agent receives the thing
to sell it, and does not pay its price, but delivers to the principal the price he
obtains from the sale of the thing to a third person, and if he does not succeed

40 KASC

in selling it, he returns it, Held: That this contract is one of purchase and sale,
and not of commercial agency.
2.ID., ID. The testimony of the person who drafted this contract, to
the effect that his purpose was to be an agent for the beds and to collect a
commission on the sales, is of no importance to prove that the contract was
one of agency, inasmuch as the agreements contained in the contract
constitute, according to law, covenants of purchase and sale, and not of
commercial agency. It must be understood that a contract is what the law
defines it to be, and not what it is called by the contracting parties.
3.ID.; ID. The fact that the contracting parties did not perform the
contract in accordance with its terms, only shows mutual tolerance and gives
no right to have the contract considered, not as the parties stipulated it, but as
they performed it.
4.ID.; ID. Only the acts of the contracting parties, subsequent to and
in connection with, the performance of the contract must be considered in the
interpretation of the contract when such interpretation is necessary, but not
when, as in the instant case its essential agreements are clearly set forth and
plainly show that the contract belongs to a certain kind and not to another
5.ID.; ID. The defendant obligated itself to order the beds from the
plaintiff by the dozen. Held: That the effect of a breach of this clause by the
defendant would only entitle the plaintiff to disregard the orders which the
defendant might place under other conditions, but if the plaintiff consents to fill
them, he waives his right and cannot complain for having acted thus at his
own free will.
D E C I S I O N
AVANCEA, J p:

41 KASC

On January 24, 1911, in this city of Manila, a contract in the following
tenor was entered into by and between the plaintiff, as party of the first part,
and J. Parsons (to whose rights and obligations the present defendant later
subrogated itself), as party of the second part:
CONTRACT EXECUTED BY AND BETWEEN ANDRES
QUIROGA AND J. PARSONS, BOTH MERCHANTS ESTABLISHED IN
MANILA FOR THE EXCLUSIVE SALE OF QUIROGA BEDS IN THE
VISAYAN ISLANDS.
"ARTICLE 1.Don Andres Quiroga grants the exclusive right to sell
his beds in the Visayan Islands to J. Parsons under the following
conditions:
"(A)Mr. Quiroga shall furnish beds of his manufacture to Mr.
Parsons for the latter's establishment in Iloilo, and shall invoice them at
the same price he has fixed for sales, in Manila, and, in the invoices,
shall make an allowance of a discount of 25 per cent of the invoiced
prices, as commission on the sales; and Mr. Parsons shall order the
beds by the dozen, whether of the same or of different styles.
"(B)Mr. Parsons binds himself to pay Mr. Quiroga for the beds
received, within a period of sixty days from the date of their shipment.
"(C)The expenses for transportation and shipment shall be borne
by M. Quiroga, and the freight, insurance, and cost of unloading from the
vessel at the point where the beds are received, shall be paid by Mr.
Parsons.
"(D)If, before an invoice falls due, Mr. Quiroga should request its
payment, said payment when made shall be considered as a prompt
payment, and as such a deduction of 2 per cent shall be made from the
amount of the invoice.
"The same discount shall be made on the amount of any invoice
which Mr. Parsons may deem convenient to pay in cash.

42 KASC

"(E)Mr. Quiroga binds himself to give notice at least fifteen days
before hand of any alteration in price which he may plan to make in
respect to his beds, and agrees that if on the date when such alteration
takes effect he should have any order pending to be served to Mr.
Parsons, such order shall enjoy the advantage of the alteration if the
price thereby be lowered, but shall not be affected by said alteration if
the price thereby be increased, for, in this latter case, Mr. Quiroga
assumed the obligation to invoice the beds at the price at which the
order was given.
"(F)Mr. Parsons binds himself not to sell any other kind except the
'Quiroga' beds.
"ART. 2.In compensation for the expenses of advertisement
which, for the benefit of both contracting parties, Mr. Parsons may find
himself obliged to make, Mr. Quiroga assumes the obligation to offer and
give the preference to Mr. Parsons in case anyone should apply for the
exclusive agency for any island not comprised within the Visayan group.
"ART. 3.Mr. Parsons may sell, or establish branches of his
agency for the sale of 'Quiroga' beds in all the towns of the Archipelago
where there are no exclusive agents, and shall immediately report such
action to Mr. Quiroga for his approval.
"ART. 4.This contract is made for an unlimited period, and may be
terminated by either of the contracting parties on a previous notice of
ninety days to the other party "
Of the three causes of action alleged by the plaintiff in his complaint,
only two of them constitute the subject matter of this appeal and both
substantially amount to the averment that the defendant violated the following
obligations: not to sell the beds at higher prices than those of the invoices; to
have an open establishment in Iloilo; itself to conduct the agency; to keep the
beds on public exhibition, and to pay for the advertisement expenses for the
same; and to order the beds by the dozen and in no other manner. As may be

43 KASC

seen, with the exception of the obligation on the part of the defendant to order
the beds by the dozen and in no other manner, none of the obligations
imputed to the defendant in the two causes of action are expressly set forth in
the contract. But the plaintiff alleged that the defendant was his agent for the
sale of his beds in Iloilo, and that said obligations are implied in a contract of
commercial agency. The whole question, therefore, reduces itself to a
determination as to whether the defendant, by reason of the contract
hereinbefore transcribed, was a purchaser or an agent of the plaintiff for the
sale of his beds.
In order to classify a contract, due regard must be given to its essential
clauses. In the contract in question, what was essential, as constituting its
cause and subject matter, is that the plaintiff was to furnish the defendant with
the beds which the latter might order, at the price stipulated) and that the
defendant was to pay the price in the manner stipulated. The price agreed
upon was the one determined by the plaintiff for the sale of these beds in
Manila, with a discount of from 20 to 25 per cent, according to their class.
Payment was to be made at the end of sixty days, or before, at the plaintiff's
request, or in cash, if the defendant so preferred, and in these last two cases
an additional discount was to be allowed for prompt payment. These are
precisely the essential features of a contract of purchase and sale. There was
the obligation on the part of the plaintiff to supply the beds, and, on the part of
the defendant, to pay their price. These features exclude the legal conception
of an agency or order to sell whereby the mandatory or agent received the
thing to sell it, and does not pay its price, but delivers to the principal the price
he obtains from the sale of the thing to a third person, and if he does not
succeed in selling it, he returns it. 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.
It would be enough to hold, as we do, that the contract by and between
the defendant and the plaintiff is one of purchase and sale, in order to show

44 KASC

that it was not one made on the basis of a commission on sales, as the
plaintiff claims it was, for these contracts are incompatible with each other.
But, besides, examining the clauses of this contract, none of them is found
that substantially supports the plaintiff's contention. Not a single one of these
clauses necessarily conveys the idea of an agency. The
words commission on sales used in clause (A) of article 1 mean nothing else,
as stated in the contract itself, than a mere discount on the invoice price. The
word agency, also used in articles 2 and 3, only expresses that the defendant
was the only one that could sell the plaintiff's beds in the Visayan Islands.
With regard to the remaining clauses, the least that can be said is that they
are not incompatible with the contract of purchase and sale.
The plaintiff calls attention to the testimony of Ernesto Vidal, a former
vice-president of the defendant corporation and who established and
managed the latter's business in Iloilo. It appears that this witness, prior to the
time of his testimony, had serious trouble with the defendant, had maintained
a civil suit against it, and had even accused one of its partners, Guillermo
Parsons, of falsification. He testified that it was he who drafted the contract
Exhibit A, and when questioned as to what was his purpose in contracting
with the plaintiff, replied that it was to be an agent for his beds and to collect a
commission on sales. However, according to the defendant's evidence, it was
Mariano Lopez Santos, a director of the corporation, who prepared Exhibit A.
But, even supposing that Ernesto Vidal has stated the truth, his statement as
to what was his idea in contracting with the plaintiff is of no importance,
inasmuch as the agreements contained in Exhibit A which he claims to have
drafted, constitute, as we have said, a contract of purchase and sale, and not
one of commercial agency. This only means that Ernesto Vidal was mistaken
in his classification of the contract. But it must be understood that a contract is
what the law defines it to be, and not what it is called by the contracting
parties.


45 KASC

The plaintiff also endeavored to prove that the defendant had returned
beds that it could not sell; that, without previous notice, it forwarded to the
defendant the beds that it wanted; and that the defendant received its
commission for the beds sold by the plaintiff directly to persons in Iloilo. But all
this, at the most only shows that, on the part of both of them, there was
mutual tolerance in the performance of the contract in disregard of its terms;
and it gives no right to have the contract considered, not as the parties
stipulated it, but as they performed it. Only the acts of the contracting parties,
subsequent to, and in connection with, the execution of the contract, must be
considered for the purpose interpreting the contract, when such interpretation
is necessary, but not when, as in the instant case, its essential agreements
are clearly set forth and plainly show that the contract belongs to a certain
kind and not to another. Furthermore, the return made was of certain brass
beds, and was not effected in exchange for the price paid for them, but was
for other beds of another kind; and for the purpose of making this return, the
defendant, in its letter Exhibit L-1, requested the plaintiff's prior consent with
respect to said beds, which shows that it was not considered that the
defendant had a right, by virtue of the contract, to make this return. As
regards the shipment of beds without previous notice, it is insinuated in the
record that these brass beds were precisely the ones so shipped, and that, for
this very reason, the plaintiff agreed to their return. And with respect to the so-
called commissions, we have said that they merely constituted a discount on
the invoice price, and the reason for applying this benefit to the beds sold
directly by the plaintiff to persons in Iloilo was because, as the defendant
obligated itself in the contract to incur the expenses of advertisement of the
plaintiff's beds, such sales were to be considered as a result of that
advertisement.
In respect to the defendant's obligation to order by the dozen, the only
one expressly imposed by the contract, the effect of its breach would only
entitle the plaintiff to disregard the orders which the defendant might place

46 KASC

under other conditions; but if the plaintiff consents to fill them, he waives his
right and cannot complain for having acted thus at his own free will.
For the foregoing reasons, we are of opinion that the contract by and
between the plaintiff and the defendant was one of purchase and sale, and
that the obligations the breach of which is alleged as a cause of action are not
imposed upon the defendant, either by agreement or by law. The judgment
appealed from is affirmed, with costs against the appellant. So ordered.
Arellano, C.J., Torres, Johnson, Street and Malcolm, JJ., concur.
||| (Quiroga v. Parsons Hardware Co., G.R. No. 11491, August 23, 1918)

FIRST DIVISION
[G.R. No. 117574. January 2, 1997.]
CONCRETE AGGREGATES CORPORATION, petitioner, vs. THE
HONORABLE COURT OF APPEALS, HON. PRISCILA S.
AGANA, Regional Trial Court of Cebu City, Branch 24, and
VIVIEN S. SORIGUEZ, respondents.
Oreta Suarez & Narvasa for petitioner.
Arsenio C. Villalon, Jr. for private respondent.
SYLLABUS
1.REMEDIAL LAW; CIVIL PROCEDURE; ADMISSION BY ADVERSE PARTY;
PURPOSE AND FUNCTION THEREOF. As held in Po vs. Court of Appeals,
No. L-34341, August 22, 1988, Rule 26 as a mode of discovery contemplates of
interrogatories that would clarify and tend to shed light on the truth or falsity of
the allegations in a pleading. That is its primary function. It does not refer to a

47 KASC

mere reiteration of what has already been alleged in the pleadings. In Uy Chao
vs. De la Rama Steamship, No. L-14495, 29 September 1962, we observed that
the purpose of the rule governing requests for admission of facts and
genuineness of documents is to expedite trial and to relieve parties of the costs
of proving facts which will not be disputed on trial and the truth of which can be
ascertained by reasonable inquiry. LibLex
2.ID.; ID.; PLEADINGS; SHOULD BE LIBERALLY CONSTRUED AS TO DO
SUBSTANTIAL JUSTICE. Although not under oath the reply to the request
readily showed that the intent of private respondent was to deny the matters set
forth in the Request for Admission. That the reply is not under oath is merely a
formal and not a substantive defect. This procedural lapse may be dispensed
with if the circumstances call for the dispensing of the rule in the interest of
justice. While we commend petitioner's zeal in promoting faithful adherence to
the rules of procedure we cannot ignore the well-entrenched doctrine that all
pleadings should be liberally construed as to do substantial justice. (Sec. 6, Rule
7, Rules of Court.)
3.ID.; ID.; SUMMARY JUDGMENT; CANNOT TAKE THE PLACE OF TRIAL
WHERE FACTS PLEADED BY THE PARTIES ARE DISPUTED. There being
genuine issues of fact between the private parties, public respondents correctly
denied the motion of petitioner for summary judgment. Where facts pleaded by
the parties are disputed or contested, proceedings for summary judgment cannot
take the place of trial. Trial courts have limited authority to render summary
judgments and may do so only when there is clearly no genuine issue as to any
material fact. Verily there is a need to determine by presentation of evidence if
respondent is really liable for the stolen articles and for violating its contract for
security services with petitioner. Until these issues are determined, no legal
compensation can take place between the parties. This factual dispute can only
be resolved by trying the case on the merits, a process which need not take long
to conclude.
D E C I S I O N

48 KASC

BELLOSILLO, J p:
Does Rule 26 of the Revised Rules of Court require a party to respond to
a Request for Admission of matters raised in his pleadings? Will his failure to
place under oath his denials in his response to the request be deemed an
admission of the matters sought to be admitted?
Petitioner is a domestic corporation engaged in the business of manufacturing
and selling Bituminous Concrete Mix, Ready Mix Concrete and other construction
materials. It has several plant sites in the country one of which is the Cebu plant
site situated in Tuyan, Naga, Cebu. Private respondent on the other hand is
engaged in the business of providing security services to various establishments
under the name and style 101 Security and Detective Services.
Sometime in October 1990 petitioner retained the services of private respondent
for its Cebu plant site. On 8 November 1991 it terminated the services of private
respondent alleging that it was dissatisfied with the latter's services because she
failed to prevent and promptly investigate a theft case which occurred in its Cebu
plant site.
On 6 October 1992 private respondent Vivien S. Soriguez instituted an action
with the Regional Trial Court of Cebu 1 for collection of unpaid fees for her
security services rendered to petitioner. She also claimed that the termination of
her services was unlawful so that she should be awarded moral damages.
Petitioner contended that its refusal to pay was justified because private
respondent was answerable for the losses it incurred arising from the theft
attributable to her fault. Petitioner thus claimed that there was legal set-off or
compensation regarding the unpaid fees due private respondent and the amount
of the stolen articles owned by petitioner.
On 30 August 1993 petitioner sent private respondent a Request for
Admission by the latter of her responsibility of the theft that occurred on 5 June
1991 at the Cebu plant site. 2 Thereafter private respondent through counsel
filed a Manifestation and Reply to the Request for Admission. 3 It was not under
oath.
On 8 October 1993 petitioner filed a Motion for Summary Judgment positing that
private respondent impliedly admitted the matters set forth in theRequest for

49 KASC

Admission by failing to respond under oath as required under Sec. 2, Rule 26, of
the Rules of Court. 4 Petitioner contended that the manifestation and reply not
being verified was ineffectual and thus should be stricken off the records. Private
respondent countered that her reply although not under oath effectively denied
the matters set forth in the request.
Public respondents ruled in favor of private respondent holding that the
circumstances warranted a relaxation of the rules in the interest of justice. 5The
trial court rationalized that
While it is desirable that the Rules of Court be faithfully and even
meticulously observed, courts should not be so strict about procedural
lapses as in this case which do not really impair the proper
administration of justice. Considering that the protection of the
substantive rights of the parties is paramount over mere technicalities,
the court elects to deny defendant's motion for summary judgment. 6
Respondent courts further ruled that a summary judgment was improper because
the dispute involved factual issues which could only be resolved in a full-blown
hearing. 7
After the trial court denied its motion for reconsideration petitioner elevated the
matter to the Court of Appeals in a special civil action for certioraribut the latter
likewise denied the petition for lack of merit; hence, the instant petition.
The pivotal issue in this case is the effect of the Request for Admission filed by
petitioner and, consequently, whether private respondent may be considered to
have impliedly admitted the matters referred to in the request when she filed a
manifestation and reply that was not under oath. 8
We deny the petition.
The Request for Admission of petitioner does not fall under Rule 26 of the Rules
of Court. As we held in Po v. Court of Appeals 9 and Briboneria v. Court of
Appeals, 10 Rule 26 as a mode of discovery contemplates of interrogatories that
would clarify and tend to shed light on the truth or falsity of the allegations in a
pleading. That is its primary function. It does not refer to a mere reiteration of
what has already been alleged in the pleadings.

50 KASC

A cursory reading of petitioner's Request for Admission clearly shows that it
contains the same material averments in his Answer to respondent'sComplaint in
the trial court. Petitioner merely recopied or reproduced in its Request for
Admission its affirmative defenses and counterclaims alleged in its Answer. As
we held in Po v. CA, 11 petitioner's request constitutes an utter redundancy and a
useless, pointless process which the respondent should not be subjected to. In
the first place, what the petitioner seeks to be admitted by private respondent is
the very subject matter of the complaint. In effect, petitioner would want private
respondent to deny her allegations in her verified Complaint and admit the
allegations in theAnswer of petitioner (Manifestation and Reply to Request for
Admission). Plainly, this is illogical if not preposterous. Respondent cannot be
said to have admitted the averments in the Answer of petitioner just because she
failed to have her response to the request placed under oath since these are the
very matters she raises in her verified Complaint in the court below. The following
allegations specifically contained therein are self-evident
9.That, in compliance thereto (sic) (referring to the request for
investigation), herein plaintiff, through her authorized representative,
went at (sic) the place and conducted the necessary investigation and
found out that the herein plaintiff was not responsible for those alleged
losses simply because of the following, to wit:
a.Those alleged losses like Blower, Oil Filter, transmission and
others were taken and brought outside the guarded place by
certain Danny Baterna, driver of defendant, as reflected in the Log
Book of the plaintiff . . . . 12
Clearly, therefore, private respondent need not reply to the Request for
Admission because her Complaint itself controverts the matters set forth in
the Answer of petitioner which were merely reproduced in the request. In Uy
Chao v. De la Rama Steamship 13 we observed that the purpose of the rule
governing requests for admission of facts and genuineness of documents is to
expedite trial and to relieve parties of the costs of proving facts which will not be
disputed on trial and the truth of which can be ascertained by reasonable inquiry.
In the aforesaid cases of Po and Briboneria we held that

51 KASC

A party should not be compelled to admit matters of fact already
admitted by his pleading and concerning which there is no issue, nor
should he be required to make a second denial of those already denied
in his answer to the complaint. 14 cda
To this we add that a party should not be made to deny matters already averred
in his complaint. At this point, it is necessary to emphasize what this Court laid
down in the same Po and Briboneria cases

A request for admission is not intended to merely reproduce or reiterate
the allegations of the requesting party's pleading but should set forth
relevant evidentiary matters of fact, or documents described in and
exhibited with the request, whose purpose is to establish said party's
cause of action or defense. 15
Since the answer of private respondent to the request is no longer required in the
instant case, it therefore becomes unnecessary to dwell on the issue of the
propriety of an answer that is not under oath. Even assuming that a response to
the request is needed, private respondent had already substantially complied
with the requirement of the law when she specifically denied the material
allegations of the petitioner in her Manifestation and Reply to the Request for
Admission. Although not under oath the reply to the request readily showed that
the intent of private respondent was to deny the matters set forth in the Request
for Admission. That the reply is not under oath is merely a formal and not a
substantive defect. This procedural lapse may be dispensed with if the
circumstances call for the dispensing of the rule in the interest of justice. While
we commend petitioner's zeal in promoting faithful adherence to the rules of
procedure we cannot ignore the well-entrenched doctrine that all pleadings
should be liberally construed as to do substantial justice. 16
There being genuine issues of fact between the private parties, public
respondents correctly denied the motion of petitioner for summary judgment.
Where facts pleaded by the parties are disputed or contested proceedings for
summary judgment cannot take the place of trial. 17 Trial courts have limited
authority to render summary judgments and may do so only when there is clearly
no genuine issue as to any material fact. 18 Verily, there is a need to determine

52 KASC

by presentation of evidence if respondent is really liable for the stolen articles
and for violating its contract for security services with petitioner. Until these
issues are determined no legal compensation can take place between the
parties. This factual dispute can only be resolved by trying the case on the
merits, a process which need not take long to conclude. 19
WHEREFORE, finding no reversible error committed by the respondent Court of
Appeals, as well as by the Regional Trial Court of Cebu, the instant petition is
DENIED and the records of this case are remanded to the court of origin for
further proceedings.
Costs against petitioner.
SO ORDERED.
Padilla, Vitug, Kapunan and Hermosisima, Jr., JJ., concur.
Footnotes
1.Presided over by Judge Priscila S. Agana, RTC-Br. 24, Cebu City.
2.Id., p. 67
3.Id., p. 70.
4.Id., p. 73.
5.CA Decision penned by Justice Eugenio S. Labitoria with Justices Emeterio C. Cui
and Fermin A. Martin Jr. concurring.
6.Id., p. 43.
7.Id., pp. 8, 43.
8.Manifestation and Reply to Request for Admission, Rollo, p. 70.
9.No. L-34341, August 22, 1988.
10.G.R. No. 101682, December 14, 1992.
11.See Note 9.
12.Rollo, p. 47.
13.No. L- 14495, 29 September 1962.

53 KASC

14.See Notes 9 and 10.
15.Ibid.
16.Sec. 6, Rule 7, Rules of Court.
17.Archipelago Builders v. Intermediate Appellate Court, G.R. No. 75282, February
19, 1991, 194 SCRA 207, 212, citing the cases of Auman v. Estenzo, No. L-
40500, 27 February 1976, 69 SCRA 524; Loreno v. Estenzo, No. L-43306, 29
October 1976, 73 SCRA 630; Viajar v. Estenzo, No. L- 45321, 30 April 1979, 89
SCRA 684.
18.Ibid.
19.Ibid.

||| (Concrete Aggregates Corp. v. Court of Appeals, G.R. No. 117574, January 02,
1997)

SECOND DIVISION
[G.R. No. 61623. December 26, 1984.]
PEOPLE'S HOMESITE & HOUSING CORPORATION, petitioner-
appellant, vs. COURT OF APPEALS, RIZALINO L. MENDOZA
and ADELAIDA R. MENDOZA, respondents-appellees.
Manuel M. Lazaro, Pilipinas Arenas Laborte and Antonio M. Brillantes for
petitioner PHHC.
Tolentino, Cruz, Reyes, Lava and Manuel for private respondents.
SYLLABUS

54 KASC

CIVIL LAW; OBLIGATIONS AND CONTRACTS, NON-PERFECTION OF
CONTRACT OF SALE; CONDITIONAL OR CONTINGENT AWARD PROPERLY
WITHDRAWN; CASE AT BAR. There was no perfected sale of Lot 4. It was
conditionally or contingently awarded to the Mendozas 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. The city council
did not approve the subdivision plan. The Mendozas were advised in 1961 of the
disapproval. In 1964, when the plan with the area of Lot 4 reduced to 2,608.7
square meters was approved, the Mendozas should have manifested in writing
their acceptance of the award for the purchase of Lot 4 just to show that they
were still interested in its purchase although the area was reduced and to obviate
any doubt on the matter. They did not do so. The People's Homesite and
Housing corporation (PHHC) board of directors acted within its rights in
withdrawing the tentative award. 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 law governing the form of contracts." (Art. 1475, Civil
Code). "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." (Art. 1181, Civil Code).
Under the facts of the 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.
D E C I S I O N
AQUINO, J p:
The question in this case is whether the People's Homesite & Housing
Corporation bound itself to sell to the Mendoza spouses Lot 4 (Road) Pcs-4564
of the revised consolidation subdivision plan with an area of 2,608.7 (2,503.7)
square meters located at Diliman, Quezon City.
The PHHC board of directors on February 18, 1960 passed Resolution No. 513
wherein it stated "that subject to the approval of the Quezon City Council of the

55 KASC

above-mentioned Consolidation Subdivision Plan, Lot 4, containing 4,182.2
square meters be, as it is hereby awarded to Spouses Rizalino Mendoza and
Adelaida Mendoza, at a price of twenty-one pesos (P21.00) per square meter"
and "that this award shall be subject to the approval of the OEC (PHHC)
Valuation Committee and higher authorities".
The city council disapproved the proposed consolidation subdivision plan on
August 20, 1961 (Exh. 2). The said spouses were advised by registered mail of
the disapproval of the plan (Exh. 2-PHHC). Another subdivision plan was
prepared and submitted to the city council for approval. The revised plan, which
included Lot 4, with a reduced area of 2,608.7, was approved by the city council
on February 25, 1964 (Exh. H).
On April 26, 1965 the PHHC board of directors passed a resolution recalling all
awards of lots to persons who failed to pay the deposit or down payment for the
lots awarded to them (Exh. 5). The Mendozas never paid the price of the lot nor
made the 20% initial deposit. LexLib
On October 18, 1965 the PHHC board of directors passed Resolution No. 218,
withdrawing the tentative award of Lot 4 to the Mendoza spouses under
Resolution No. 513 and reawarding said lot jointly and in equal shares to Miguela
Sto. Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo Redublo and Jose
Fernandez, subject to existing PHHC rules and regulations. The prices would be
the same as those of the adjoining lots. The awardees were required to deposit
an amount equivalent to 20% of the total selling price (Exh. F).
The five awardees made the initial deposit. The corresponding deeds of sale
were executed in their favor. The subdivision of Lot 4 into five lots was approved
by the city council and the Bureau of Lands.
On March 16, 1966 the Mendoza spouses asked for reconsideration of the
withdrawal of the previous award to them of Lot 4 and for the cancellation of the
re-award of said lot to Sto. Domingo and four others. Before the request could be
acted upon, the spouses filed the instant action for specific performance and
damages.
The trial court sustained the withdrawal of the award. The Mendozas appealed.
The Appellate Court reversed that decision and declared void the re-award of Lot

56 KASC

4 and the deeds of sale and directed the PHHC to sell to the Mendozas Lot 4
with an area of 2,603.7 square meters at P21 a square meter and pay to them
P4,000 as attorney's fees and litigation expenses. The PHHC appealed to this
Court.
The issue is whether there was a perfected sale of Lot 4, with the reduced area,
to the Mendozas which they can enforce against the PHHC by an action for
specific performance.
We hold that there was no perfected sale of Lot 4. It was conditionally or
contingently awarded to the Mendozas 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.
The city council did not approve the subdivision plan. The Mendozas were
advised in 1961 of the disapproval. In 1964, when the plan with the area of Lot 4
reduced to 2,608.7 square meters was approved, the Mendozas should have
manifested in writing their acceptance of the award for the purchase of Lot 4 just
to show that they were still interested in its purchase although the area was
reduced and to obviate any doubt on the matter, They did not do so. The PHHC
board of directors acted within its rights in withdrawing the tentative award.
"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 law governing the form of contracts." (Art.
1475, Civil Code).
"Son, sin embargo, excepcion a esta regla los casos en que por virtud
de la voluntad de las partes o de la ley, se celebra la venta bajo una
condicion suspensiva, y en los cuales no se perfecciona la venta hasta
el cumplimiento de la condicion" (4 Castan Tobeas, Derecho Civil
Espaol 8th ed. p. 81).
"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". (Art. 1181, Civil
Code). "Se llama suspensiva la condicion de la que depende la

57 KASC

perfeccion, o sea el principio del contrato". (9 Giorgi, Teoria de las
Obligaciones, p. 57).
Under the facts of this case, we cannot say there was a meeting of minds on the
purchase of Lot 4 with an area of 2,608.7 square meters at P21 a square meter. cdll
The case of Lapinig vs. Court of Appeals, 115 SCRA 213 is not in point because
the awardee in that case applied for the purchase of the lot, paid the 10% deposit
and a conditional contract to sell was executed in his favor. The PHHC could not
re-award that lot to another person.
WHEREFORE, the decision of the Appellate Court is reversed and set aside and
the judgment of the trial court is affirmed. No costs.
SO ORDERED.
Makasiar, Concepcion, Jr., Abad Santos, Escolin and Cuevas, JJ ., concur.
||| (People's Homesite & Housing Corp. v. Court of Appeals, G.R. No. 61623,
December 26, 1984)

FIRST DIVISION
[G.R. No. 116650. May 23, 1995.]
TOYOTA SHAW, INC., petitioner, vs. COURT OF APPEALS and
LUNA L. SOSA, respondents.
SYLLABUS
1. CIVIL LAW; SPECIAL CONTRACTS; SALES; CONTRACT OF SALE;
ELEMENT OF DEFINITENESS OF PRICE FOR PERFECTION THEREOF; NOT
PRESENT IN CASE AT BAR. Article 1458 of the Civil Code defines a contract

58 KASC

of sale and Article 1475 specifically provides when it is deemed perfected. It is
not a contract of sale. No obligation on the part of Toyota to transfer ownership of
a determinate thing to Sosa and no correlative obligation on the part of the latter
to pay therefor a price certain appears therein. The provision on the
downpayment of P100,000.00 made no specific reference to a sale of a vehicle.
If it was intended for a contract of sale, it could only refer to a sale on installment
basis, as the VSP executed the following day confirmed. But nothing was
mentioned about the full purchase price and the manner the installments were to
be paid. This Court had already ruled that 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 so 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. Definiteness as to the
price is an essential element of a binding agreement to sell personal property.
2. ID.; ID.; ID.; ID.; ELEMENT OF MEETING OF MINDS; NOT ESTABLISHED IN
CASE AT BAR. Exhibit "A" shows the absence of a meeting of minds between
Toyota and Sosa. For one thing, Sosa did not even sign it. For another, Sosa
was well aware from its title, written in bold letters, viz., AGREEMENTS
BETWEEN MR SOSA & POPONG BERNARDO OF TOYOTA SHAW, INC. that
he was not dealing with Toyota but with Popong Bernardo and that the latter did
not misrepresent that he had the authority to sell any Toyota vehicle. He knew
that Bernardo was only a sales representative of Toyota and hence a mere agent
of the latter. It was incumbent upon Sosa to act with ordinary prudence and
reasonable diligence to know the extent of Bernardo's authority as an agent in
respect of contracts to sell Toyota's vehicles. A person dealing with an agent is
put upon inquiry and must discover upon his peril the authority of the agent.
Financing companies are defined in Section 3(a) of R.A. No. 5980, as amended
by P.D. No. 1454 andP.D. No. 1793, as "corporations or partnerships, except
those regulated by the Central Bank of the Philippines, the Insurance
Commission and the Cooperatives Administration Office, which are primarily
organized for the purpose of extending credit facilities to consumers and to
industrial, commercial, or agricultural enterprises, either by discounting or
factoring commercial papers or accounts receivables, or by buying and selling
contracts, leases, chattel mortgages, or other evidence of indebtedness, or by

59 KASC

leasing of motor vehicles, heavy equipment and industrial machinery, business
and office machines and equipment, appliances and other movable property.
Accordingly, in a sale on installment basis which is financed by a financing
company, three parties are thus involved: the buyer who executes a note or
notes for the unpaid balance of the price of the thing purchased on installment,
the seller who assigns the notes of discounts them with a financing company,
and the financing company which is subrogated in the place of the seller, as the
creditor of the installment buyer. Since B.A. Finance did not approve Sosa's
application, there was then no meeting of minds on the sale on installment basis.
We are inclined to believe Toyota's version that B.A. Finance disapproved Sosa's
application for which reason it suggested to Sosa that he pay the full purchase
price. When the latter refused, Toyota cancelled the VSP and returned to him his
P100,000.00. Sosa's version that the VSP was cancelled because, according to
Bernardo, the vehicle was delivered to another who was "mas malakas" does not
inspire belief and was obviously a delayed afterthought. It is claimed that
Bernardo said, "Pasensiya kayo, nasulot ang unit ng ibang malakas," while the
Sosas had already been waiting for an hour for the delivery of the vehicle in the
afternoon of 17 June 1989. However, in paragraph 7 of his complaint, Sosa
solemnly states: On June 17, 1989 at around 9:30 o'clock in the morning,
defendant's sales representative, Mr. Popong Bernardo, called plaintiff's house
and informed the plaintiff's son that the vehicle will not be ready for pick-up at
10:00 a.m. of June 17, 1989 but at 2:00 p.m. of that day instead. Plaintiff and his
son went to defendant's office on June 17, 1989 at 2:00 p.m. in order to pick-up
the vehicle but the defendant, for reasons known only to its representatives,
refused and/or failed to release the vehicle to the plaintiff. Plaintiff demanded for
an explanation, but nothing was given; . . . The VSP was a mere proposal which
was aborted in lieu of subsequent events. It follows that the VSP created no
demandable right in favor of Sosa for the delivery of the vehicle to him, and its
non-delivery did not cause any legally indemnifiable injury.
3. ID.; ID.; ID.; ID.; STAGES THEREOF; CASE AT BAR. At the most, Exhibit
"A" may be considered as part of the initial phase of the generation or negotiation
stage of a contract of sale. There are three stages in the contract of sale, namely:
(a) preparation, conception, or generation, which is the period of negotiation and
bargaining, ending at the moment of agreement of the parties; (b) perfection or

60 KASC

birth of the contract, which is the moment when the parties come to agree on the
terms of the contract; and (c) consummation or death, which is the fulfillment or
performance of the terms agreed upon in the contract. The second phase of the
generation or negotiation stage in this case was the execution of the VSP. It must
be emphasized that thereunder, the downpayment of the purchase price was
P53,148.00 while the balance to be paid on installment should be financed by
B.A. Finance Corporation. It is, of course, to be assumed that B.A. Finance Corp.
was acceptable to Toyota, otherwise it should not have mentioned B.A. Finance
in the VSP.
4. ID.; DAMAGES; MORAL DAMAGES; NOT WARRANTED TO COMPENSATE
MISPLACED PRIDE AND EGO. The award then of moral and exemplary
damages and attorney's fees and costs of suit is without legal basis. Besides, the
only ground upon which Sosa claimed moral damages is that since it was known
to his friends, townmates, and relatives that he was buying a Toyota Lite Ace
which they expected to see on his birthday, he suffered humiliation, shame, and
sleepless nights when the van was not delivered. The van became the subject
matter of talks during his celebration that he may not have paid for it, and this
created an impression against his business standing and reputation. At the
bottom of this claim is nothing but misplaced pride and ego. He should not have
announced his plan to buy a Toyota Lite Ace knowing that he might not be able
to pay the full purchase price. It was he who brought embarrassment upon
himself by bragging about a thing which he did not own yet.
5. ID.; ID.; EXEMPLARY DAMAGES; WHEN AVAILABLE. Since Sosa is not
entitled to moral damages and there being no award for temperate, liquidated, or
compensatory damages, he is likewise not entitled to exemplary damages. Under
Article 2229 of the Civil Code, exemplary or corrective damages are imposed by
way of example or correction for the public good, in addition to moral, temperate,
liquidated, or compensatory damages.
6. ID.; ATTORNEY'S FEES; WHEN WARRANTED. It is settled that for
attorney's fees to be granted, the court must explicitly state in the body of the
decision, and not only in the dispositive portion thereof, the legal reason for the
award of attorney's fees. No such explicit determination thereon was made in the
body of the decision of the trial court. No reason thus exists for such an award.

61 KASC

D E C I S I O N
DAVIDE, JR., J p:
At the heart of the present controversy is the document marked Exhibit
"A" 1 for the private respondent, which was signed by a sales representative of
Toyota Shaw, Inc. named Popong Bernardo. The document reads as follows:
4 June 1989
AGREEMENTS BETWEEN MR. SOSA &
POPONG BERNARDO OF TOYOTA
SHAW, INC.
1.all necessary documents will be submitted to TOYOTA SHAW,
INC. (POPONG BERNARDO) a week after, upon arrival of
Mr. Sosa from the Province (Marinduque) where the unit
will be used on the 19th of June.
2.the downpayment of P100,000.00 will be paid by Mr. Sosa on
June 15, 1989.
3.the TOYOTA SHAW, INC. LITE ACE yellow, will be pick-up [sic]
and released by TOYOTA SHAW, INC. on the 17th of June
at 10 a.m.
Very truly yours,
(Sgd.) POPONG BERNARDO
Was this document, executed and signed by the petitioner's sales
representative, a perfected contract of sale, binding upon the petitioner,
breach of which would entitle the private respondent to damages and
attorney's fees? The trial court and the Court of Appeals took the affirmative
view. The petitioner disagrees. Hence, this petition for review on certiorari. llcd
The antecedents as disclosed in the decisions of both the trial court and
the Court of Appeals, as well as in the pleadings of petitioner Toyota Shaw,
Inc. (hereinafter Toyota) and respondent Luna L. Sosa (hereinafter Sosa) are
as follows. Sometime in June of 1989, Luna L. Sosa wanted to purchase a
Toyota Lite Ace. It was then a seller's market and Sosa had difficulty finding a

62 KASC

dealer with an available unit for sale. But upon contracting Toyota Shaw, Inc.,
he was told that there was an available unit. So on 14 June 1989, Sosa and
his son, Gilbert, went to the Toyota Shaw Boulevard, Pasig, Metro Manila.
There they met Popong Bernardo, a sales representative of Toyota.
Sosa emphasized to Bernardo that he needed the Lite Ace not later
than 17 June 1989 because he, his family, and a balikbayan guest would use
it on 18 June 1989 to go to Marinduque, his home province, where he would
celebrate his birthday on the 19th of June. He added that if he does not arrive
in his hometown with the new car, he would become a "laughing stock."
Bernardo assured Sosa that a unit would be ready for pick up at 10:00 a.m.
on 17 June 1989. Bernardo then signed the aforequoted "Agreements
Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc." It was also
agreed upon by the parties that the balance of the purchase price would be
paid by credit financing through B.A. Finance, and for this Gilbert, on behalf of
his father, signed the documents of Toyota and B.A. Finance pertaining to the
application for financing.

The next day, 15 June 1989, Sosa and Gilbert went to Toyota to deliver
the downpayment of P100,000.00. They met Bernardo who then
accomplished a printed Vehicle Sales Proposal (VSP) No. 928, 2 on which
Gilbert signed under the subheading CONFORME. This document shows that
the customer's name is "MR. LUNA SOSA" with home address at No. 2316
Guijo Street, United Paraaque II; that the model series of the vehicle is a
"Lite Ace 1500" described as "4 Dr minibus"; that payment is by "installment,"
to be financed by "B.A.," 3 with the initial cash outlay of P100,000.00 broken
down as follows: Cdpr
a)downpaymentP53,148.00
b)insuranceP13,970.00
c)BLT registration feeP1,067.00
CHMO fee2,715.00
service fee500.00
accessories29,000.00

63 KASC

and that the "BALANCE TO BE FINANCED" is "P274,137.00." The spaces
provided for "Delivery Terms" were not filled-up. It also contains the following
pertinent provisions:
CONDITIONS OF SALES
1.This sale is subject to availability of unit.
2.Stated Price is subject to change without prior notice. Price
prevailing and in effect at time of selling will apply. . . .
Rodrigo Quirante, the Sales Supervisor of Bernardo, checked and approved
the VSP.
On 17 June, at around 9:30 a.m., Bernardo called Gilbert to inform him
that the vehicle would not be ready for pick up at 10:00 a.m. as previously
agreed upon but at 2:00 p.m. that same day. At 2:00 p.m., Sosa and Gilbert
met Bernardo at the latter's office. According to Sosa, Bernardo informed
them that the Lite Ace was being readied for delivery. After waiting for about
an hour, Bernardo told them that the car could not be delivered because
"nasulot ang unit ng ibang malakas."
Toyota contends, however, that the Lite Ace was not delivered to Sosa
because of the disapproval of B.A. Finance of the credit financing application
of Sosa. It further alleged that a particular unit had already been reserved and
earmarked for Sosa but could not be released due to the uncertainty of
payment of the balance of the purchase price. Toyota then gave Sosa the
option to purchase the unit by paying the full purchase price in cash but Sosa
refused. prcd
After it became clear that the Lite Ace would not be delivered to him,
Sosa asked that his downpayment be refunded. Toyota did so on the very
same day by issuing a Far East Bank check for the full amount of
P100,000.00, 4 the receipt of which was shown by a check voucher of
Toyota, 5which Sosa signed with the reservation, "without prejudice to our
future claims for damages."
Thereafter, Sosa sent two letters to Toyota. In the first latter, dated 27
June 1989 and signed by him, he demanded the refund, within five days from
receipt, of the downpayment of P100,000.00 plus interest from the time he

64 KASC

paid it and the payment of damages with a warning that in case of Toyota's
failure to do so he would be constrained to take legal action. 6 The second,
dated 4 November 1989 and signed by M.O. Caballes, Sosa's counsel
demanded one million pesos representing interest and damages, again, with
a warning that legal action would be taken if payment was not made within
three days. 7 Toyota's counsel answered through a letter dated 27 November
1989 8 refusing to accede to the demands of Sosa. But even before this
answer was made and received by Sosa, the latter filed on 20 November
1989 with Branch 38 of the Regional Trial Court (RTC) of Marinduque a
complaint against Toyota for damages under Articles 19 and 21 of the Civil
Code in the total amount of P1,230,000.00. 9 He alleges, inter alia, that:
9.As a result of defendant's failure and/or refusal to deliver the vehicle to
plaintiff, plaintiff suffered embarrassment, humiliation, ridicule,
mental anguish and sleepless nights because: (i) he and his
family were constrained to take the public transportation from
Manila to Lucena City on their way to Marinduque; (ii) his
balikbayan-guest cancelled his scheduled first visit to Marinduque
in order to avoid inconvenience of taking public transportation;
and (iii) his relative, friends, neighbors and other provincemates,
continuously irked him about "his Brand-New Toyota Lite Ace
that never was." Under the circumstances, defendant should be
made liable to the plaintiff for moral damages in the amount of
One Million Pesos (P1,000,000.00). 10
In its answer to the complaint, Toyota alleged that no sale was entered
into between it and Sosa, that Bernardo had no authority to sign Exhibit "A"
for and in its behalf, and that Bernardo signed Exhibit "A" in his personal
capacity. As special and affirmative defenses, it alleged that: the VSP did not
state a date of delivery; Sosa had not completed the documents required by
the financing company, and as a matter of policy, the vehicle could not and
would not be released prior to full compliance with financing requirements,
submission of all documents, and execution of the sales agreement/invoice;
the P100,000.00 was returned to and received by Sosa; the venue was
improperly laid; and Sosa did not have a sufficient cause of action against it. It
also interposed compulsory counterclaims. LibLex

65 KASC

After trial on the issue agreed upon during the pre-trial session, 11 the
trial court rendered on 18 February 1992 a decision in favor of Sosa. 12It ruled
that Exhibit "A," the "AGREEMENTS BETWEEN MR. SOSA AND POPONG
BERNARDO," was a valid perfected contract of sale between Sosa and
Toyota which bound Toyota to deliver the vehicle to Sosa, and further agreed
with Sosa that Toyota acted in bad faith in selling to another the unit already
reserved for him.
As to Toyota's contention that Bernardo had no authority to bind it
through Exhibit "A," the trial court held that the extent of Bernardo's authority
"was not made known to plaintiff," for a testified to by Quirante, "they do not
volunteer any information as to the company's sales policy and guidelines
because they are internal matters." 13 Moreover, "[f]rom the beginning of the
transaction up to its consummation when the downpayment was made by the
plaintiff, the defendants had made known to the plaintiff the impression that
Popong Bernardo is an authorized sales executive as it permitted the latter to
do acts within the scope of an apparent authority holding him out to the public
as possessing power to do these acts." 14 Bernardo then "was an agent of the
defendant Toyota Shaw, Inc. and hence bound the defendants." 15
The court further declared that "Luna Sosa proved his social standing in
the community and suffered besmirched reputation, wounded feelings and
sleepless nights for which he ought to be compensated." 16 Accordingly, it
disposed as follows:
WHEREFORE, viewed from the above findings, judgment is
hereby rendered in favor of the plaintiff and against the defendant:
1.ordering the defendant to pay the plaintiff the sum of
P75,000.00 for moral damages;
2.ordering the defendant to pay the plaintiff the sum of
P10,000.00 for exemplary damages;
3.ordering the defendant to pay the sum of P30,000.00 attorney's
fees plus P2,000.00 Lawyer's transportation fare per trip in
attending to the hearing of this case;

66 KASC

4.ordering the defendant to pay the plaintiff the sum of P2,000.00
transportation fare per trip of the plaintiff in attending the
hearing of this case and
5.ordering the defendant to pay the cost of suit.
SO ORDERED.
Dissatisfied with the trial court's judgment, Toyota appealed to the Court
of Appeals. The case was docketed as CA-G.R. CV No. 40043. In its decision
promulgated on 29 July 1994, 17 the Court of Appeals affirmed in toto the
appealed decision.
Toyota now comes before this Court via this petition and raises the core
issue stated at the beginning of the ponencia and also the following related
issues: (a) whether or not the standard VSP was the true and documented
understanding of the parties which would have led to the ultimate contract of
sale, (b) whether or not Sosa has any legal and demandable right to the
delivery of the vehicle despite the non-payment of the consideration and the
non-approval of his credit application by B.A. Finance, (c) whether or not
Toyota acted in good faith when it did not release the vehicle to Sosa, and (d)
whether or not Toyota may be held liable for damages. llcd
We find merit in the petition.
Neither logic nor recourse to one's imagination can lead to the
conclusion that Exhibit "A" is a perfected contract of sale.
Article 1458 of the Civil Code defines a contract of sale as follows:
ART. 1458.By the contract of the 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.
A contract of sale may be absolute or conditional.
and Article 1475 specifically provides when it is deemed perfected:
ART. 1475.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.

67 KASC

From that moment, the parties may reciprocally demand performance,
subject to the provisions of the law governing the form of contracts.
What is clear from Exhibit "A" is not what the trial court and the Court of
Appeals appear to see. It is not a contract of sale. No obligation on the part of
Toyota to transfer ownership of a determinate thing to Sosa and no correlative
obligation on the part of the latter to pay therefor a price certain appears
therein. The provision on the downpayment of P100,000.00 made no specific
reference to a sale, it could only refer to a sale on installment basis, as the
VSP executed the following day confirmed. But nothing was mentioned about
the full purchase price and the manner the installments were to be paid.
This Court had already ruled that 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. 18 This is so 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.
Definiteness as to the price is an essential element of a binding agreement to
sell personal property. 19

Moreover, Exhibit "A" shows the absence of a meeting of minds
between Toyota and Sosa. For one thing, Sosa did not even sign it. For
another, Sosa was well aware from its title, written in bold letters, viz., Cdpr
AGREEMENTS BETWEEN MR. SOSA & POPONG BERNARDO
OF TOYOTA SHAW, INC.
that he was not dealing with Toyota but with Popong Bernardo and that the
latter did not misrepresent that he had the authority to sell any Toyota vehicle.
He knew that Bernardo was only a sales representative of Toyota and hence
a mere agent of the latter. It was incumbent upon Sosa to act with ordinary
prudence and reasonable diligence to know the extent of Bernardo's authority
as an agent 20 in respect of contracts to sell Toyota's vehicles. A person
dealing with an agent is put upon inquiry and must discover upon his peril the
authority of the agent. 21

68 KASC

At the most, Exhibit "A" may be considered as part of the initial phase of
the generation of negotiation stage of a contract sale. There are three stages
in the contract of sale, namely:
(a)preparation, conception, or generation, which is the period of
negotiation and bargaining, ending at the moment of agreement
of the parties;
(b)perfection or birth of the contract, which is the moment when the
parties come to agree on the terms of the contract; and
(c)consummation or death, which is the fulfillment or performance of the
terms agreed upon in the contract. 22
The second phase of the generation or negotiation stage in this case was the
execution of the VSP. It must be emphasized that thereunder, the
downpayment of the purchase price was P53,148.00 while the balance to be
paid on installment should be financed by B.A. Finance Corporation. It is, of
course, to be assumed that B.A Finance Corp. was acceptable to Toyota,
otherwise it should not have mentioned B.A. Finance in the VSP. LLjur
Financing companies are defined in Section 3(a) of R.A. No. 5980, as
amended by P.D. No. 1454 and P.D. No. 1793, as "corporations or
partnerships, except those regulated by the Central Bank of the Philippines,
the Insurance Commission and the Cooperatives Administration Office, which
are primarily organized for the purpose of extending credit facilities to
consumers and to industrial, commercial, or agricultural enterprises, either by
discounting or factoring commercial papers or accounts receivables, or by
buying and selling contracts, leases, chattel mortgages, or other evidence of
indebtedness, or by leasing of motor vehicles, heavy equipment and industrial
machinery, business and office machines and equipment, appliances and
other movable property." 23
Accordingly, in a sale on installment basis which is financed by a
financing company, three parties are thus involved: the buyer who executes a
note or notes for the unpaid balance of the price of the thing purchased on
installment, the seller who assigns the notes or discounts them with a
financing company, and the financing company which is subrogated in the
place of the seller, as the creditor of the installment buyer. 24 Since B.A.

69 KASC

Finance did not approve Sosa's application, there was then no meeting of
minds on the sale on installment basis.
We are inclined to believe Toyota's version that B.A. Finance
disapproved Sosa's application for which reason it suggested to Sosa that he
pay the full purchase price. When the latter refused, Toyota cancelled the
VSP and returned to him his P100,000.00. Sosa's version that the VSP was
cancelled because, according to Bernardo, the vehicle was delivered to
another who was "mas malakas" does not inspire belief and was obviously a
delayed afterthought. It is claimed that Bernardo said, "Pasensiya kayo,
nasulot ang unit ng ibang malakas," while the Sosas had already been waiting
for an hour for the delivery of the vehicle in the afternoon of 17 June 1989.
However, in paragraph 7 of his complaint, Sosa solemnly states:
On June 17, 1989 at around 9:30 o'clock in the morning, defendant's
sales representative, Mr. Popong Bernardo, called plaintiff 's house and
informed the plaintiff 's son that the vehicle will not be ready for pick-up
at 10:00 a.m. of June 17, 1989 but at 2:00 p.m. of that day
instead. Plaintiff and his son went to defendant's office on June 17, 1989
at 2:00 p.m. in order to pick-up the vehicle but the defendant, for reasons
known only to its representatives, refused and/or failed to release the
vehicle to the plaintiff . Plaintiff demanded for an explanation, but nothing
was given; . . . (Emphasis supplied) 25
The VSP was a mere proposal which was aborted in lieu of subsequent
events. It follows that the VSP created no demandable right in favor of Sosa
for the delivery of the vehicle to him, and its non-delivery did not cause any
legally indemnifiable injury. Cdpr
The award then of moral and exemplary damages and attorney's fees
and costs of suit is without legal basis. Besides, the only ground upon which
Sosa claimed moral damages is that since it was known to his friends,
townmates, and relatives that he was buying a Toyota Lite Ace which they
expected to see on his birthday, he suffered humiliation, shame, and
sleepless nights when the van was not delivered. The van became the subject
matter of talks during his celebration that he may not have paid for it, and this
created an impression against his business standing and reputation. At the

70 KASC

bottom of this claim is nothing but misplaced pride and ego. He should not
have announced his plan to buy Toyota Lite Ace knowing that he might not be
able to pay the full purchase price. It was he who brought embarrassment
upon himself by bragging about a thing which he did not own yet.
Since Sosa is not entitled to moral damages and there being no award
for temperate, liquidated, or compensatory damages, he is likewise not
entitled to exemplary damages. Under Article 2229 of the Civil Code,
exemplary or corrective damages are imposed by way of example or
correction for the public good, in addition to moral, temperate, liquidated, or
compensatory damages.
Also, it is settled that for attorney's fees to be granted the court must
explicitly state in the body of the decision, and not only in the dispositive
portion thereof, the legal reason for the award of attorney's fees. 26 No such
explicit determination thereon was made in the body of the decision of the trial
court. No reason thus exists for such award.
WHEREFORE, the instant petition is GRANTED. The challenged
decision of the Court of Appeals in CA-G.R. CV No. 40043 as well as that of
Branch 38 of the Regional Trial Court of Marinduque in Civil Case No. 89-14
are REVERSED and SET ASIDE and the complaint in Civil Case No. 89-14 is
DISMISSED. The counterclaim therein is likewise DISMISSED. cdll
No pronouncement as to costs.
SO ORDERED.
Padilla, Bellosillo and Kapunan, JJ ., concur.
Quiason, J ., is on leave.
Footnotes
1.Annex "A" of Complainant in Civil Case No. 89-14 Branch 38 of the Regional Trial
Court of Marinduque; Rollo, 70.
2.Annex of Answer in Civil Case No. 89-14; Rollo, 82; Annex "E" of Petition; Rollo,
85.
3.Referring to B.A. Finance.
4.Exhibit "3," Annex "G" of Petition; Rollo, 8.

71 KASC

5.Exhibit "4," Annex "H" of Petition; Rollo, 87.
6.Annex "C" of Complaint in Civil Case No. 89-14; Id., 71-72. This downpayment had
already been refunded and received by Sosa himself as shown by the Check
Voucher, Exhibit "4."
7.Annex "C-1," Id.; Id., 73-74.
8.Annex "I" of Petition; Id., 88-89.
9.Annex "B," Id.; Id., 64-69.
10.Rollo, 67.
11.Id., 83-84.
12.Id., 90-108. Per Judge Romulo A. Lopez.
13.Rollo, 104.
14.Id.
15.Id.
16.Id., 107.
17.Annex "A" of Petition; Rollo, 45-62. Per Tayao-Jaguros, L., J., with Elbinias, J.
and Salas, B., JJ., concurring.
18.Velasco vs. Court of Appeals, 51 SCRA 439 [1973], citing Navarro vs. Sugar
Producers Cooperative Marketing Association, 1 SCRA 1180 [1961].
19.67 Am Jur 2d Sales 105 [1973].
20.See Harry Keeler Electric Co. vs. Rodriguez, 44 Phil. 19 [1922]; B.A. Finance
Corp. vs. Court of Appeals, 211 SCRA 112 [1992].
21.Cruz vs. Court of Appeals, 201 SCRA 495 [1991]; Pineda vs. Court of Appeals,
226 SCRA 754 [1993].
22.ARTURO M. TOLENTINO, Commentaries and Jurisprudence on the Civil Code
of the Philippines, Vol. 4, 1985 ed., 411; EDGARDO L. PARAS, Civil Code of
the Philippines Annotated, Vol. 4, 1989 ed., 490.
23.See Beltran vs. PAIC Finance Corp., 209 SCRA 105 [1992].

72 KASC

24.International Harvester Macleod, Inc. vs. Medina, 183 SCRA 485 [1990].
25.Rollo, 66.
26.See Central Azucarera de Bais vs. Court of Appeals, 188 SCRA 328 [1990]; Koa
vs. Court of Appeals, 219 SCRA 541 [1993]; Scott Consultants & Resource
Development Corp. vs. Court of Appeals, G.R. No. 112916, 16 March 1995.

||| (Toyota Shaw, Inc. v. Court of Appeals, G.R. No. 116650, May 23, 1995)

EN BANC
[G.R. No. 12342. August 3, 1918.]

73 KASC

A. A. ADDISON, plaintiff-appellant, vs. MARCIANA FELIX and
BALBINO TIOCO, defendants-appellees.
Thos. D. Aitken, for appellant
Modesto Reyes and Eliseo Ymzon, for appellees.
SYLLABUS
1.VENDOR AND PURCHASER; DELIVERY; EXECUTION OF PUBLIC
INSTRUMENT. It is the duty of the vendor to deliver the thing sold.
Symbolic delivery by the execution of a public Instrument is equivalent to
actual delivery only when the thing sold is subject to the control of the vendor.
2.ID.; ID.; RESCISSION. If the vendor fails to deliver the thing sold
the vendee may elect to rescind the contract.
D E C I S I O N
FISHER, J p:
By a public instrument dated June 11, 1914, the plaintiff sold to the
defendant Marciana Felix, with the consent of her husband, the defendant
Balbino Tioco, four parcels of land, described in the instrument. The
defendant Felix paid, at the time of the execution of the deed, the sum of
P3,000 on account of the purchase price, and bound herself to pay the
remainder in installments, the first of P2,000 on July 15, 1914, the second of
P5,000 thirty days after the issuance to her of a certificate of title under the
Land Registration Act, and further, within ten years from the date of such title,
P10 for each cocoanut tree in bearing and P5 for each such tree not in
bearing, that might be growing on said four parcels of land on the date of the
issuance of title to her, with the condition that the total price should not
exceed P85,000. It was further stipulated that the purchaser was to deliver to
the vendor 25 per centum of the value of the products that she might obtain

74 KASC

from the four parcels "from the moment she takes possession of them until the
Torrens certificate of title be issued in her favor.
It was also covenanted that "within one year from the date of the
certificate of title in favor of Marciana Felix, this latter may rescind the present
contract of purchase and sale, in which case Marciana Felix shall be obliged
to return to me, A. A. Addison, the net value of all the products of the four
parcels sold, and I shall be obliged to return to her, Marciana Felix, all the
sums that she may have paid me, together with interest at the rate of 10 per
cent per annum."
In January, 1915, the vendor, A. A. Addison, filed suit in the Court of
First Instance of Manila to compel Marciana Felix to make payment of the first
installment of P2,000, demandable, in accordance with the terms of the
contract of sale aforementioned, on July 15, 1914, and of the interest in
arrears, at the stipulated rate of 8 per cent per annum. The defendant, jointly
with her husband, answered the complaint and alleged by way of special
defense that the plaintiff had absolutely failed to deliver to the defendant the
lands that were the subject matter of the sale, notwithstanding the demands
made upon him for this purpose. She therefore asked that she be absolved
from the complaint, and that, after a declaration of the rescission of the
contract of the purchase and sale of said lands, the plaintiff be ordered to
refund the P3,000 that had been paid to him on account, together with the
interest agreed upon, and to pay an indemnity for the losses and damages
which the defendant alleged she had suffered through the plaintiff's
nonfulfilment of the contract.
The evidence adduced shows that after the execution of the deed of
sale the plaintiff, at the request of the purchaser, went to Lucena,
accompanied by a representative of the latter, for the purpose of designating
and delivering the lands sold. He was able to designate only two of the four
parcels, and more than two-thirds of these two were found to be in the
possession of one Juan Villafuerte, who claimed to be the owner of the parts
so occupied by him. The plaintiff admitted that the purchaser would have to
bring suit to obtain possession of the land (sten. notes, record, p. 5). In
August, 1914, the surveyor Santamaria went to Lucena, at the request of the
plaintiff and accompanied by him, in order to survey the land sold to the

75 KASC

defendant; but he surveyed 'only two parcels, which are those occupied
mainly by the brothers Leon and Julio Villafuerte. He did not survey the other
parcels, as they were not designated to him by the plaintiff. In order to make
this survey it was necessary to obtain from the Land Court a writ of injunction
against the occupants, and for the purpose of the issuance of this writ the
defendant, in June, 1914, filed an application with the Land Court for the
registration in her name of the four parcels of land described in the deed of
sale executed in her favor by the plaintiff. The proceedings in the matter of
this application were subsequently dismissed, for failure to present the
required plans within the period of the time allowed for the purpose.
The trial court rendered judgment in behalf of the defendant, holding the
contract of sale to be rescinded and ordering the return to the plaintiff of the
P3,000 paid on account of the price, together with interest thereon at the rate
of 10 per cent per annum. From this judgment the plaintiff appealed.
In decreeing the rescission of the contract, the trial judge rested his
conclusion solely on the indisputable fact that up to that time the lands sold
had not been registered in accordance with the Torrens system, and on the
terms of the second paragraph of clause (h) of the contract, whereby it is
stipulated that ". . . within one year from the date of the certificate of title in
favor of Marciana Felix, this latter may rescind the present contract of
purchase and sale . . . ."
The appellant objects, and rightly, that the cross complaint is not
founded on the hypothesis of the conventional rescission relied upon by the
court, but on the failure to deliver the land sold. He argues that the right to
rescind the contract by virtue of the special agreement not only did not exist
from the moment of the execution of the contract up to one year after the
registration of the land, but does not accrue until the land is registered. The
wording of the clause, in fact, substantiates the contention. The one year's
deliberation granted to the purchaser was to be counted "from the date of the
certificate of title . . .." Therefore the right to elect to rescind the contract was
subject to a condition, namely, the issuance of the title. The record shows that
up to the present time that condition has not been fulfilled; consequently the
defendant cannot be heard to invoke a right which depends on the existence
of that condition. If in-the cross-complaint it had been alleged that the

76 KASC

fulfillment of the condition was impossible for reasons imputable to the
plaintiff, and if this allegation had been proven, perhaps the condition would
have been considered as fulfilled (arts. 1117, 1118, and 1119, Civ. Code); but
this issue was not presented in the defendant's answer.
However, although we are not in agreement with the reasoning found in
the decision appealed from, we consider it to be correct in its result. The
record shows that the plaintiff did not deliver the thing sold. With respect to
two of the parcels of land, he was not even able to show them to the
purchaser; and as regards the other two, more than two-thirds of their area
was in the hostile and adverse possession of a third person.
The Code imposes upon the vendor the obligation to deliver the thing
sold. The thing is considered to be delivered when it is placed "in the hands
and possession of the vendee." (Civ. Code, art. 1462.) It is true that the same
article declares that the execution of a public instrument is equivalent to the
delivery of the thing which is the object of the contract, but, 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 that, at the moment of
the sale, its material delivery could have been made. It is not enough to confer
upon the purchaser the ownership and the right of possession. The thing sold
must be placed in hiscontrol. When there is no impediment whatever to
prevent the thing sold passing into the tenancy of the purchaser by the sole
will of the vendor, symbolic delivery through the execution of a public
instrument is sufficient. But if, notwithstanding the execution of the instrument,
the purchaser cannot have the enjoyment and material tenancy of the thing
and make use of it himself or through another in his name, because such
tenancy and enjoyment are opposed by the interposition of another will, then
fiction yields to reality the delivery has not been effected.
As Dalloz rightly says (Gen. Rep., vol. 43, p. 174) in his commentaries
on article 1604 of the French Civil Code, "the word 'delivery' expresses a
complex idea . . . the abandonment of the thing by the person who makes the
delivery and the taking control of it by the person to whom the delivery is
made."

77 KASC

The execution of a public instrument is sufficient for the purposes of the
abandonment made by the vendor, but it is not always sufficient to permit of
the apprehension of the thing by the purchaser.
The supreme court of Spain, interpreting article 1462 of the Civil Code,
held in its decision of November 10, 1903, (Civ. Rep., vol. 96, p. 560) that this
article "merely declares that when the sale is made through the means of a
public instrument, the execution of this latter is equivalent to the delivery of
the thing sold: which does not and cannot mean that this fictitious tradition
necessarily implies the real tradition of the thing sold, for it is incontrovertible
that, while its ownership still pertains to the vendor (and with greater reason if
it does not), a third person may be in possession of the same thing;
wherefore, though, as a general rule, he who purchases by means of a public
instrument should be deemed . . . to be the possessor in fact, yet this
presumption gives way before proof to the contrary."

It is evident, then, in the case at bar, that the mere execution of the
instrument was not a fulfillment of the vendor's obligation to deliver the thing
sold, and that from such nonfulfillment arises the purchaser's right to demand,
as she has demanded, the rescission of the sale and the return of the price.
(Civ. Code, arts. 1506 and 1124.)
Of course if the sale had been made under the express agreement of
imposing upon the purchaser the obligation to take the necessary steps to
obtain the material possession of the thing sold, and it were proven that she
knew that the thing was in the possession of a third person claiming to have
property rights therein, such agreement would be perfectly valid. But there is
nothing in the instrument which would indicate, even implicitly, that such was
the agreement. It is true, as the appellant argues, that the obligation was
incumbent upon the defendant Marciana Felix to apply for and obtain the
registration of the land in the new registry of property; but from this it cannot
be concluded that she had to await the final decision of the Court of Land
Registration, in order to be able to enjoy the property sold. On the contrary, it
was expressly stipulated in the contract that the purchaser should deliver to
the vendor one-fourth "of the products . . . of the aforesaid four parcels from
the moment when she takes possession of them until the Torrens certificate of

78 KASC

title be issued in her favor." This obviously shows that it was not foreseen that
the purchaser might be deprived of her possession during the course of the
registration proceedings, but that the transaction rested on the assumption
that she was to have, during said period, the material possession and
enjoyment of the four parcels of land.
Inasmuch as the rescission is made by virtue of the provisions of law
and not by contractual agreement, it is not the conventional but the legal
interest that is demandable
It is therefore held that the contract of purchase and sale entered into
by and between the plaintiff and the defendant on June 11, 1914, is
rescinded, and the plaintiff is ordered to make restitution of the sum of P3,000
received by him on account of the price of the sale, together with interest
thereon at the legal rate of 6 per cent per annum from the date of the filing of
the complaint until payment, with the costs of both instances against the
appellant. So ordered.
Torres, Johnson, Street, Malcolm and Avancea, JJ., concur.

||| (Addison v. Felix, G.R. No. 12342, August 03, 1918)

THIRD DIVISION

79 KASC

[G.R. No. 151212. September 10, 2003.]
TEN FORTY REALTY AND DEVELOPMENT CORP.,
Represented by its President, VERONICA G.
LORENZANA, petitioner, vs. MARINA CRUZ, respondent.
Oscar L. Karaan for petitioner.
Carmelino M. Roque for respondent.
SYNOPSIS
Galino allegedly sold the property in question to petitioner in 1996, then sold the
same property to respondent in, 1998. Petitioner argued that being the first
buyer, it has a better right to own the realty.
In denying the petition, the Supreme Court applied Article 1544 of the Civil Code.
In case of double sale of immovable property, the law gives preferential right to
the buyer who in good faith first recorded it in the registry of property. In the
absence of the required inscription, the person who in good faith was first in
possession has the better right to own the realty. Petitioner in this case admitted
that its Deed of Sale had not been recorded in the Registry of Deeds. Subject
property had also not been delivered to petitioner, hence, as between the two
buyers, respondent was first in actual possession of the property. aTEHIC
SYLLABUS
1.REMEDIAL LAW; SPECIAL CIVIL ACTIONS; UNLAWFUL DETAINER;
OWNER'S PERMISSION OR TOLERANCE MUST HAVE BEEN PRESENT AT
THE BEGINNING OF INTRUDER'S OCCUPATION OF THE PREMISES; CASE
AT BAR. In its Complaint, petitioner alleged that, having acquired the subject
property from Barbara Galino on December 5, 1996, it was the true and absolute
owner thereof; that Galino had sold the property to Respondent Cruz on April 24,
1998; that after the sale, the latter immediately occupied the property, an action
that was merely tolerated by petitioner; and that, in a letter given to respondent

80 KASC

on April 12, 1999, petitioner had demanded that the former vacate the property,
but that she refused to do so. Petitioner thereupon prayed for judgment ordering
her to vacate the property and to pay reasonable rentals for the use of the
premises, attorney's fees and the costs of the suit. The above allegations
appeared to show the elements of unlawful detainer. They also conferred
initiatory jurisdiction on the MTCC, because the case was filed a month after the
last demand to vacate hence, within the one-year prescriptive period. . . To
justify an action for unlawful detainer, the permission or tolerance must have
been present at the beginning of the possession. However, what was actually
proven by petitioner was that possession by respondent had been illegal from the
beginning. While the Complaint was crafted to be an unlawful detainer suit,
petitioner's real cause of action was for forcible entry, which had already
prescribed. Consequently, the MTCC had no more jurisdiction over the action. TcEaDS
2.CIVIL LAW; SPECIAL CONTRACTUAL; SALES, BUYER ACQUIRES THE
THING UPON ITS DELIVERY; PETITIONER DID NOT GAIN CONTROL AND
POSSESSION OF PROPERTY IN CASE AT BAR. In a contract of sale, the
buyer acquires the thing sold only upon its delivery "in any of the ways specified
in Articles 1497 to 1501, or in any other manner signifying an agreement that the
possession is transferred from the vendor to the vendee." With respect to
incorporeal property, Article 1498 lays down the general rule: the execution of a
public instrument shall be equivalent to the delivery of the thing that is the object
of the contract if, from the deed, the contrary does not appear or cannot be
clearly inferred. However, ownership is transferred not by contract but by tradition
or delivery. Nowhere in the Civil Code is it provided that the execution of a Deed
of Sale is a conclusive presumption of delivery of possession of a piece of real
estate. This Court has held that the execution of a public instrument gives rise
only to a prima facie presumption of delivery. Such presumption is destroyed
when the delivery is not effected because of a legal impediment. . . In the case at
bar it is undisputed that petitioner did not occupy the property from the time it
was allegedly sold to it on December 5, 1996 or at any time thereafter. SHECcT
3.ID.; ID.; ID.; DOUBLE SALE OF IMMOVABLE PROPERTY; ORDER OF
PREFERENCE; CASE AT BAR. The ownership of immovable property sold to
two different buyers at different times is governed by Article 1544 of the Civil
Code. . . Galino allegedly sold the property in question to petitioner on December

81 KASC

5, 1996 and, subsequently, to respondent on April 24, 1998. Petitioner thus
argues that being the first buyer, it has a better right to own the realty. However,
it has not been able to establish that its Deed of Sale was recorded in the
Registry of Deeds of Olongapo City. Its claim of an unattested and unverified
notation on its Deed of Absolute Sale is not equivalent to registration. It admits
that, indeed, the sale has not been recorded in the Registry of Deeds. In the
absence of the required inscription, the law gives preferential right to the buyer
who in good faith is first in possession. . . Earlier, we ruled that the subject
property had not been delivered to petitioner; hence, it did not acquire
possession either materially or symbolically. As between the two buyers,
therefore, respondent was first in actual possession of the property.
D E C I S I O N
PANGANIBAN, J p:
In an ejectment suit, the question of ownership may be provisionally ruled upon
for the sole purpose of determining who is entitled to possession de facto. In the
present case, both parties base their alleged right to possess on their right to
own. Hence, the Court of Appeals did not err in passing upon the question of
ownership to be able to decide who was entitled to physical possession of the
disputed land.
The Case
Before us is a Petition for Review 1 under Rule 45 of the Rules of Court, seeking
to nullify the August 31, 2001 Decision 2 and December 19, 2001 Resolution 3 of
the Court of Appeals (CA) in CA-G.R. SP No. 64861. The dispositive portion of
the assailed Decision is as follows:
"WHEREFORE, premises considered, the petition is hereby DISMISSED
and the Decision dated May 4, 2001 is hereby AFFIRMED." 4
The assailed Resolution denied petitioner's Motion for Reconsideration.
The Facts

82 KASC

The facts of the case are narrated by the CA as follows:
"A complaint for ejectment was filed by [Petitioner Ten Forty Realty and
Development Corporation] against . . . [Respondent Marina Cruz] before
the Municipal Trial Court in Cities (MTCC) of Olongapo City, docketed as
Civil Case 4269, which alleged that: petitioner is the true and absolute
owner of a parcel of lot and residential house situated in #71 18th Street,
E.B.B. Olongapo City, particularly described as:
'A parcel of residential house and lot situated in the above-
mentioned address containing an area of 324 square meters
more or less bounded on the Northeast by 041 (Lot 255, Ts-308);
on the Southeast by 044 (Lot 255, Ts-308); on the Southwest by
043 (Lot 226-A & 18th street) and on the Northwest by 045 (Lot
227, Ts-308) and declared for taxation purposes in the name of
[petitioner] under T.D. No. 002-4595-R and 002-4596. ISDCaT
having acquired the same on December 5, 1996 from Barbara Galino by
virtue of a Deed of Absolute Sale; the sale was acknowledged by said
Barbara Galino through a 'Katunayan'; payment of the capital gains tax
for the transfer of the property was evidenced by a Certification
Authorizing Registration issued by the Bureau of Internal Revenue;
petitioner came to know that Barbara Galino sold the same property on
April 24, 1998 to Cruz, who immediately occupied the property and
which occupation was merely tolerated by petitioner; on October 16,
1998, a complaint for ejectment was filed with the Barangay East Bajac-
Bajac, Olongapo City but for failure to arrive at an amicable settlement, a
Certificate to File Action was issued; on April 12, 1999 a demand letter
was sent to [respondent] to vacate and pay reasonable amount for the
use and occupation of the same, but was ignored by the latter; and due
to the refusal of [respondent] to vacate the premises, petitioner was
constrained to secure the services of a counsel for an agreed fee of
P5,000.00 as attorney's fee and P500.00 as appearance fee and
incurred an expense of P5,000.00 for litigation.
"In respondent's Answer with Counterclaim, it was alleged that: petitioner
is not qualified to own the residential lot in dispute, being a public land;

83 KASC

according to Barbara Galino, she did not sell her house and lot to
petitioner but merely obtained a loan from Veronica Lorenzana; the
payment of the capital gains tax does not necessarily show that the
Deed of Absolute Sale was at that time already in existence; the court
has no jurisdiction over the subject matter because the complaint was
filed beyond the one (1) year period after the alleged unlawful
deprivation of possession; there is no allegation that petitioner had been
in prior possession of the premises and the same was lost thru force,
stealth or violence; evidence will show that it was Barbara Galino who
was in possession at the time of the sale and vacated the property in
favor of respondent; never was there an occasion when petitioner
occupied a portion of the premises, before respondent occupied the lot
in April 1998, she caused the cancellation of the tax declaration in the
name of Barbara Galino and a new one issued in respondent's name;
petitioner obtained its tax declaration over the same property on
November 3, 1998, seven (7) months [after] the respondent [obtained
hers]; at the time the house and lot [were] bought by respondent, the
house was not habitable, the power and water connections were
disconnected; being a public land, respondent filed a miscellaneous
sales application with the Community Environment and Natural
Resources Office in Olongapo City; and the action for ejectment cannot
succeed where it appears that respondent had been in possession of the
property prior to the petitioner." 5
In a Decision 6 dated October 30, 2000, the Municipal Trial Court in Cities
(MTCC) ordered respondent to vacate the property and surrender to petitioner
possession thereof. It also directed her to pay, as damages for its continued
unlawful use, P500 a month from April 24, 1999 until the property was vacated,
P5,000 as attorney's fees, and the costs of the suit.

On appeal, the Regional Trial Court 7 (RTC) of Olongapo City (Branch 72)
reversed the MTCC. The RTC ruled as follows: 1) respondents entry into the
property was not by mere tolerance of petitioner, but by virtue of a Waiver and
Transfer of Possessory Rights and Deed of Sale in her favor; 2) the execution of

84 KASC

the Deed of Sale without actual transfer of the physical possession did not have
the effect of making petitioner the owner of the property, because there was no
delivery of the object of the sale as provided for in Article 1428 of the Civil Code;
and 3) being a corporation, petitioner was disqualified from acquiring the
property, which was public land.
Ruling of the Court of Appeals
Sustaining the RTC, the CA held that petitioner had failed to make a case for
unlawful detainer, because no contract express or implied had been
entered into by the parties with regard to possession of the property. It ruled that
the action should have been for forcible entry, in which prior physical possession
was indispensable a circumstance petitioner had not shown either.
The appellate court also held that petitioner had challenged the RTC's ruling on
the question of ownership for the purpose of compensating for the latter's failure
to counter such ruling. The RTC had held that, as a corporation, petitioner had no
right to acquire the property which was alienable public land.
Hence, this Petition. 8
Issues
Petitioner submits the following issues for our consideration:
"1.The Honorable Court of Appeals had clearly erred in not holding that
[r]espondent's occupation or possession of the property in
question was merely through the tolerance or permission of the
herein [p]etitioner;
"[2.]The Honorable Court of Appeals had likewise erred in holding that
the ejectment case should have been a forcible entry case where
prior physical possession is indispensable; and
"[3.]The Honorable Court of Appeals had also erred when it ruled that
the herein [r]espondent's possession or occupation of the said
property is in the nature of an exercise of ownership which should
put the herein [p]etitioner on guard." 9
The Court's Ruling
The Petition has no merit.

85 KASC

First Issue:
Alleged Occupation by Tolerance
Petitioner faults the CA for not holding that the former merely tolerated
respondent's occupation of the subject property. By raising this issue, petitioner
is in effect asking this Court to reassess factual findings. As a general rule, this
kind of reassessment cannot be done through a petition for review
on certiorari under Rule 45 of the Rules of Court, because this Court is not a trier
of facts; it reviews only questions of law. 10 Petitioner has not given us ample
reasons to depart from the general rule.
On the basis of the facts found by the CA and the RTC, we find that petitioner
failed to substantiate its case for unlawful detainer. Admittedly, no express
contract existed between the parties. Not shown either was the corporation's
alleged tolerance of respondent's possession.
While possession by tolerance may initially be lawful, it ceases to be so upon the
owner's demand that the possessor by tolerance vacate the property.11 To justify
an action for unlawful detainer, the permission or tolerance must have been
present at the beginning of the possession. 12 Otherwise, if the possession was
unlawful from the start, an action for unlawful detainer would be an improper
remedy. Sarona v. Villegas 13 elucidates thus:
"A close assessment of the law and the concept of the word 'tolerance'
confirms our view heretofore expressed that such tolerance must be
present right from the start of possession sought to be recovered, to
categorize a cause of as one of unlawful detainer not of forcible entry.
Indeed, to hold otherwise would espouse a dangerous doctrine. And for
two reasons. First. Forcible entry into the land is an open challenge to
the right of the possessor. Violation of that right authorizes the speedy
redress in the inferior court provided for in the rules. If one year
from the forcible entry is allowed to lapse before suit is filed, then the
remedy ceases to be speedy; and the possessor is deemed to have
waived his right to seek relief in the inferior court. Second, if a forcible
entry action in the inferior court is allowed after the lapse of a number of
years, then the result may well be that no action for forcible entry can
really prescribe. No matter how long such defendant is in physical

86 KASC

possession, plaintiff will merely make a demand, bring suit in the inferior
court upon a plea of tolerance to prevent prescription to set in and
summarily throw him out of the land. Such a conclusion is unreasonable.
Especially if we bear in mind the postulates that proceedings of forcible
entry and unlawful detainer are summary in nature, and that the one
year time bar to suit is but in pursuance of the summary nature of the
action." 14
In this case, the Complaint and the other pleadings do not recite any, averment
of fact that would substantiate the claim of petitioner that it permitted or tolerated
the occupation of the property by Respondent Cruz. The Complaint contains only
bare allegations that 1) respondent immediately occupied the subject property
after its sale to her, an action merely tolerated by petitioner; 15 and 2) her
allegedly illegal occupation of the premises was by mere tolerance. 16
These allegations contradict, rather than support, petitioner's theory that its
cause of action is for unlawful detainer. First, these arguments advance the view
that respondent's occupation of the property was unlawful at its
inception. Second, they counter the essential requirement in unlawful detainer
cases that petitioner's supposed act of sufferance or tolerance must be present
right from the start of a possession that is later sought to be recovered. 17
As the bare allegation of petitioner's tolerance of respondent's occupation of the
premises has not been proven, the possession should be deemed illegal from the
beginning. Thus, the CA correctly ruled that the ejectment case should have
been for forcible entry an action that had already prescribed, however, when
the Complaint was filed on May 12, 1999. The prescriptive period of one year for
forcible entry cases is reckoned from the date of respondent's actual entry into
the land, which in this case was on April 24, 1998.
Second Issue:
Nature of the Case
Much of the difficulty in the present controversy stems from the legal
characterization of the ejectment Complaint filed by petitioner. Specifically, was it
for unlawful detainer or for forcible entry?

87 KASC

The answer is given in Section 1 of Rule 70 of the Rules of Court, which we
reproduce as follows:
"SECTION 1.Who may institute proceedings, and when. Subject to
the provisions of the next succeeding section, a person deprived of the
possession of any land or building by force, intimidation, threat, strategy,
or stealth, or a vendor, vendee, or other person against whom the
possession of any land or building is unlawfully withheld after expiration
or termination of the right to hold possession, by virtue of any contract,
express or implied, or the legal representatives or assigns of any such
lessor, vendor, vendee, or other person, may, at any time within one (1)
year after such unlawful deprivation or withholding of possession, bring
an action in the proper Municipal Trial Court against the person or
persons unlawfully withholding or depriving of possession, or any person
or persons claiming under them, for the restitution of such possession,
together with damages and costs.''
While both causes of action deal only with the sole issue of physical or de
facto possession, 18 the two cases are really separate and distinct, as explained
below:
". . . . In forcible entry, one is deprived of physical possession of land or
building by means of force, intimidation, threat, strategy, or stealth. In
unlawful detainer, one unlawfully withholds possession thereof after the
expiration or termination of his right to hold possession under any
contract, express or implied. In forcible entry, the possession is illegal
from the beginning and the basic inquiry centers on who has the prior
possession de facto. In unlawful detainer, the possession was originally
lawful but became unlawful by the expiration or termination of the right to
possess, hence the issue of rightful possession is decisive for, in such
action, the defendant is in actual possession and the plaintiff's cause of
action is the termination of the defendant's right to continue in
possession.
"What determines the cause of action is the nature of defendant's entry
into the land. If the entry is illegal, then the action which may be filed
against the intruder within one year therefrom is forcible entry. If, on the

88 KASC

other hand, the entry is legal but the possession thereafter became
illegal, the case is one of unlawful detainer which must be filed within
one year from the date of the last demand." 19
It is axiomatic that what determines the nature of an action as well as which court
has jurisdiction over it are the allegations in the complaint 20 and the character of
the relief sought. 21
In its Complaint, petitioner alleged that, having acquired the subject property from
Barbara Galino on December 5 1996, 22 it was the true and absolute
owner 23 thereof; that Galino had sold the property to Respondent Cruz on April
24, 1998; 24 that after the sale, the latter immediately occupied the property, an
action that was merely tolerated by petitioner; 25 and that, in a letter given to
respondent on April 12, 1999, 26 petitioner had demanded that the former vacate
the property, but that she refused to do so. 27 Petitioner thereupon prayed for
judgment ordering her to vacate the property and to pay reasonable rentals for
the use of the premises, attorney's fees and the costs of the suit. 28
The above allegations appeared to show the elements of unlawful detainer. They
also conferred initiatory jurisdiction on the MTCC, because the case was filed a
month after the last demand to vacate hence, within the one-year prescriptive
period.

However, what was actually proven by petitioner was that possession by
respondent had been illegal from the beginning. While the Complaint was crafted
to be an unlawful detainer suit, petitioner's real cause of action was for forcible
entry, which had already prescribed. Consequently, the MTCC had no more
jurisdiction over the action.
The appellate court, therefore, did not err when it ruled that petitioner's Complaint
for unlawful detainer was a mere subterfuge or a disguised substitute action for
forcible entry, which had already prescribed. To repeat, to maintain a viable
action for forcible entry, plaintiff must have been in prior physical possession of
the property; this is an essential element of the suit. 29
Third Issue:
Alleged Acts of Ownership

89 KASC

Petitioner next questions the CA's pronouncement that respondent's occupation
of the property was an exercise of a right flowing from a claim of ownership. It
submits that the appellate court should not have passed upon the issue of
ownership, because the only question for resolution in an ejectment suit is that of
possession de facto.
Clearly, each of the parties claimed the right to possess the disputed property
because of alleged ownership of it. Hence, no error could have been imputed to
the appellate court when it passed upon the issue of ownership only for the
purpose of resolving the issue of possession de facto. 30 The CA's holding is
moreover in accord with jurisprudence and the law.
Execution of a Deed of Sale Not Sufficient as Delivery
In a contract of sale, the buyer acquires the thing sold only upon its delivery "in
any of the ways specified in Articles 1497 to 1501, or any other manner signifying
an agreement that the possession is transferred from the vendor to the
vendee." 31 With respect to incorporeal property, Article 1498 lays down the
general rule: the execution of a public instrument shall be equivalent to the
delivery of the thing that is the object of the contract if, from the deed, the
contrary does not appear or cannot be clearly inferred. ASETHC
However, ownership is transferred not by contract but by tradition or
delivery. 32 Nowhere in the Civil Code is it provided that the execution of a Deed
of Sale is a conclusive presumption of delivery of possession of a piece of real
estate. 33
This Court has held that the execution of a public instrument gives rises only to
a prima facie presumption of delivery. Such presumption is destroyed when the
delivery is not effected because of a legal impediment. 34 Pasagui v.
Villablanca 35 had earlier ruled that such constructive or symbolic delivery, being
merely presumptive, was deemed negated by the failure of the vendee to take
actual possession of the land sold.
It is undisputed that petitioner did not occupy the property from the time it was
allegedly sold to it on December 5, 1996 or at any time thereafter.Nonetheless, it
maintains that Galino's continued stay in the premises from the time of the sale

90 KASC

up to the time respondent's occupation of the same on April 24, 1998, was
possessions held on its behalf and had the effect of delivery under the law. 36
Both the RTC and the CA disagreed. According to the RTC, petitioner did not
gain control and possession of the property, because Galino had continued to
exercise ownership rights over the realty. That is, she had remained in
possession, continued to declare it as her property for tax purposes and sold it to
respondent in 1998.
For its part, the CA found it highly unbelievable that petitioner which claims to
be the owner of the disputed property would tolerate possession of the
property by respondent from April 24, 1998 up to October 16, 1998. How could it
have been so tolerant despite its knowledge that the property had been sold to
her, and that it was by virtue of that sale that she had undertaken major repairs
and improvements on it?
Petitioner should have likewise been put on guard by respondent's declaration of
the property for tax purposes on April 23, 1998, 37 as annotated in the tax
certificate filed seven months later. 38 Verily, the tax declaration represented an
adverse claim over the unregistered property and was inimical to the right of
petitioner.
Indeed, the above circumstances derogated its claim of control and possession
of the property.
Order of Preference in Double Sale of Immovable Property
The ownership of immovable property sold to two different buyers at different
times is governed by Article 1544 of the Civil Code, which reads as follows:
"Article 1544.. . .
"Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry of
Property.
"Should there be no inscription, the ownership shall pertain to the person
who in good faith was first in possession; and, in the absence thereof, to
the person who presents the oldest title, provided there is good faith."

91 KASC

Galino allegedly sold the property in question to petitioner on December 5, 1996
and, subsequently, to respondent on April 24, 1998. Petitioner thus argues that
being the first buyer, it has a better right to own the realty. However, it has not
been able to establish that its Deed of Sale was recorded in the Registry of
Deeds of Olongapo City. 39 Its claim of an unattested and unverified notation on
its Deed of Absolute Sale 40 is not equivalent to registration. It admits that,
indeed, the sale has not been recorded in the Registry of Deeds. 41
In the absence of the required inscription, the law gives preferential right to the
buyer who in good faith is first in possession. In determining the question of who
is first in possession, certain basic parameters have been established by
jurisprudence.
First, the possession mentioned in Article 1544 includes not only material but
also symbolic possession. 42 Second, possessors in good faith are those who are
not aware of any flaw in their title or mode of acquisition. 43 Third, buyers of real
property that is in the possession of persons other than the seller must be wary
they must investigate the rights of the possessors. 44 Fourth, good faith is
always presumed; upon those who allege bad faith on the part of the possessors
rests the burden of proof. 45
Earlier, we ruled that the subject property had not been delivered to petitioner;
hence, it did not acquire possession either materially or symbolically. As between
the two buyers, therefore, respondent was first in actual possession of the
property.
Petitioner has not proven that respondent was aware that her mode of acquiring
the property was defective at the time she acquired it from Galino. At the time,
the property which was public land had not been registered in the name of
Galino; thus, respondent relied on the tax declarations thereon. As shown, the
former's name appeared on the tax declarations for the property until its sale to
the latter in 1998. Galino was in fact occupying the realty when respondent took
over possession. Thus, there was no circumstance that could have placed the
latter upon inquiry or required her to further investigate petitioner's right of
ownership.
Disqualification from Ownership of Alienable Public Land

92 KASC

Private corporations are disqualified from acquiring lands of the public domain,
as provided under Section 3 of Article XII of the Constitution, which we quote:
"Sec. 3.Lands of the public domain are classified into agricultural, forest
or timber, mineral lands, and national parks. Agricultural lands of the
public domain may be further classified by law according to the uses to
which they may be devoted. Alienable lands of the public domain shall
be limited to agricultural lands. Private corporations or associations may
not hold such alienable lands of the public domain except by lease, for a
period not exceeding twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may not lease not more than
five hundred hectares, or acquire not more than twelve hectares thereof
by purchase, homestead, or grant. . . ." (Italics supplied)
While corporations cannot acquire land of the public domain, they can however
acquire private land. 46 Hence, the next issue that needs to be resolved is the
determination of whether the disputed property is private land or of the public
domain.
According to the certification by the City Planning and Development Office of
Olongapo City, the contested property in this case is alienable and disposable
public land. 47 It was for this reason that respondent filed a miscellaneous sales
application to acquire it. 48
On the other hand, petitioner has not presented proof that, at the time it
purchased the property from Galino, the property had ceased to be of the public
domain and was already private land. The established rule is that alienable and
disposable land of the public domain held and occupied by a possessor
personally or through predecessors-in-interest, openly, continuously, and
exclusively for 30 years is ipso jure converted to private property by the mere
lapse of time. 49
In view of the foregoing, we affirm the appellate court's ruling that respondent is
entitled to possession de facto. This determination, however, is only provisional
in nature. 50 Well-settled is the rule that an award of possession de facto over a
piece of property does not constitute res judicata as to the issue of its
ownership. 51

93 KASC

WHEREFORE, this Petition is DENIED and the assailed Decision AFFIRMED.
Costs against petitioner.
SO ORDERED.
Sandoval-Gutierrez, Corona and Carpio Morales, JJ., concur.
Puno, J., is on official leave.
Footnotes
1.Rollo, pp. 8-19.
2.Penned by Justice Remedios A. Salazar-Fernando and concurred in by Justices
Romeo A. Brawner (Division chairman) and Rebecca de Guia-Salvador
(member); id., pp. 139-147.
3.Rollo, p. 162.
4.CA Decision, p. 8; rollo, p. 146.
5.Id., pp. 1-3 & 139-141.
6.Penned by Judge Eduardo D. Alfonso Jr.
7.The RTC Decision dated May 4, 2001 was penned by Judge Eliodoro G. Ubiadas.

8.The case was deemed submitted for decision on August 9, 2002, upon the Court's'
receipt of respondent's Memorandum signed by Atty. Carmelino M. Roque.
Petitioner's Memorandum, filed on July 23, 2002, was signed by Atty. Oscar L.
Karaan.
9.Petitioner's Memorandum, p. 8; rollo, p. 199.
10.Alfaro v. Court of Appeals, 416 Phil. 310, August 28, 2001; Villalon v. Court of
Appeals, 377 Phil. 556, December 2, 1999; Cebu Shipyard and Engineering
Works v. William Lines, 366 Phil. 439, May 5, 1999.
11.Arcal v. CA, 348 Phil. 813, January 26, 1998; Hilario v. CA, 329 Phil. 202, August
7, 1996, citing Odsigue v. CA, 233 SCRA 626, July 4, 1994.
12.Go. Jr. v. CA, supra.
13.131 Phil. 365, March 27, 1968.

94 KASC

14.Id., p. 373, per Sanchez, J.
15.Complaint, par. 7, p. 3; rollo, p. 22.
16.Position Paper of petitioner, p. 2; rollo, p. 50.
17.Go Jr. v. CA, supra.
18.Amagan v. Marayag, 383 Phil. 486, February 28, 2000.
19.Go v. CA, supra, p. 184, per Gonzaga-Reyes, J., citing Sarmiento v. CA, 320 Phil.
146, 153-154, November 16, 1995, per Regalado J.
20.Ibid.; Isidro v. Court of Appeals, 228 SCRA 503, December 15, 1993; 33(2) of
Batas Pambansa (BP) Blg. 129, as amended by Republic Act (RA) No. 7691.
21.Chico v. CA, 348 Phil. 37, January 5, 1998, citing several cases; Caiza v. CA, 335
Phil. 1107, February 24, 1997.
22.Id., par. 3, pp. 2 &. 21.
23.Complaint, par. 2, p. 1; rollo, p. 20.
24.Id., par. 6, p. 2; ibid.
25.Id., par. 7, p. 3; id, p. 22.
26.Id., par. 10, p. 3; ibid.
27.Id., par. 11, p. 3; ibid.
28.Id., p. 4; id, p. 23.
29.Gener v. De Leon, 367 SCRA 631, October 19, 2001; Tirona v. Alejo, 367 SCRA
17, October 10, 2001. The other essential element of forcible entry is
deprivation of possession by force, intimidation, threats, strategy, or stealth.
30.16 of Rule 70 of the Rules of Court.
31.Article 1496 of the Civil Code.
32.Equatorial Realty Development Inc. v. Mayfair Theater, Inc., 370 SCRA 56,
November 21, 2001; Ocejo, Perez & Co. v. International Bank, 37 Phil. 631,
February 14, 1918; Roman v. Grimlt; 6 Phil. 96, April 11, 1906.
33.Santos v. Santos, 366 SCRA 395, October 2, 2001.

95 KASC

34.Equatorial Realty Development Inc. v. Mayfair Theater, Inc., supra.
35.Supra.
36.Article 1497 of the Civil Code provides that the "thing sold shall be understood as
delivered, when it is placed in the control and possession of the vendee."
37.Annex "I", Declaration of Real Property; rollo, p. 41.
38.Annexes "A" and "B" of Complaint; rollo, pp. 25-26.
39.Under Section 113 of Presidential Decree (PD) No. 1529, to constitute constructive
notice to the whole world, instruments of conveyance over unregistered lands
must be registered in the office of the Register of Deeds for the province or city
where the land lies.
40.Annex "C" of Complaint; rollo, p. 27.
41.Petitioner's Memorandum, p. 10; rollo, p. 201.
42.Navera v. CA, 184 SCRA 585, April 26, 1990.
43.Article 526 of the Civil Code.
44.Cardente v. Intermediate Appellate Court, 155 SCRA 685, November 27,
1987; Conspecto v. Fruto, 31 Phil. 144, July 23, 1915, cited in Bautista v. CA,
230 SCRA 446, February 28, 1994.
45.Development Bank of the Philippines v. CA, 375 Phil. 114, October 13,
1999; Ballatan v. CA, 363 Phil. 408, March 2, 1999.
46.See Section 7 of Article XII of the Constitution; Bernas, The 1987 Constitution of
the Republic of the Philippines: a Commentary, 1996 ed., p. 1020.
47.Rollo, p. 48.
48.Under the Public Land Act (Commonwealth Act No. 141, as amended), alienable
public land may be acquired by the filing of an application for a sales, a
homestead, a free or a special patent.
49.Republic v. CA, 374 Phil. 209, September 30, 1999; Natividad v. CA, 202 SCRA
493, October 4, 1991; Republic v. Intermediate Appellate Court; 168 SCRA

96 KASC

165, November 29, 1988; Director of Lands v. Intermediate Appellate Court,
146 SCRA 509, December 29, 1986.
50.Amagan v. Marayag, supra.
51.Javelosa v. CA, 333 Phil. 331, December 10, 1996.
||| (Ten Forty Realty and Development Corp. v. Cruz, G.R. No. 151212,
September 10, 2003)

FIRST DIVISION
[G.R. No. L-43059. October 11, 1979.]
SAMPAGUITA PICTURES, INC., plaintiff-
appellant, vs. JALWINDOR MANUFACTURERS, INC., defendant-
appellee.
D E C I S I O N
DE CASTRO, J p:
This case was certified to this Court by the Court of Appeals
pursuant to the provisions of Section 17, paragraph (6) in relation to
Section 31 of the Judiciary Act of 1948. cdrep
Plaintiff-appellant Sampaguita Pictures, Inc. (hereinafter referred to
as Sampaguita) is the owner of the Sampaguita Pictures Building located
at the corner of General Araneta and General Roxas Streets, Cubao,
Quezon City. The roofdeck of the building and all existing improvements
thereon were leased by Sampaguita to Capitol "300" Inc. (Capitol for
short), and it was agreed, among other things, that the premises shall be
used by said club for social purposes exclusively for its members and

97 KASC

guests; that all permanent improvements made by the lessee on the
leased premises shall belong to the lessor without any obligation on the
part of the lessor to reimburse the lessee for the sum spent for said
improvements; that the improvements made by lessee have been
considered as part of the consideration of the monthly rental and said
improvements belong to the lessor; that any remodelling, alterations
and/or addition to the premises shall be at the expense of the lessee and
such improvements belong to the lessor, without any obligation to
reimburse the lessee of any sum spent for said improvements. (pp. 29-
32, Record on Appeal)
Capitol "300" purchased on credit from defendant-appellee
Jalwindor Manufacturers, Inc. (hereinafter referred to as Jalwindor) glass
and wooden jalousies which were delivered and installed in the leased
premises by Jalwindor, replacing the existing windows. On June 1, 1964,
Jalwindor filed with the Court of First Instance of Rizal, Quezon City, an
action for collection of a sum of money with a petition for preliminary
attachment against Capitol for its failure to pay its purchases. The parties
submitted to the trial court a Compromise Agreement wherein Capitol
acknowledged its indebtedness to Jalwindor in the amount of P9,531.09,
exclusive of attorney's fees and interest, payable in monthly installments
of at least P300.00 a month beginning December 15, 1964; and pending
liquidation of the said obligation, all the materials purchased by Capitol
will be considered as security for such undertaking. (p. 13, Record on
Appeal)
In the meantime, Capitol "300" was not able to pay rentals to
Sampaguita from March 1, 1964 to April 30, 1965, water, electric and
telephone services. Sampaguita filed a complaint for ejectment and for
collection of a sum of money against Capitol and on June 8, 1965, the
City Court of Quezon City rendered judgment ordering Capitol to vacate
the premises and to pay Sampaguita. LibLex

98 KASC

On the other hand, Capitol likewise failed to comply with the terms
of the Compromise Agreement, and on July 31, 1965, the Sheriff of
Quezon City made levy on the glass and wooden jalousies in question.
Sampaguita filed a third-party claim alleging that it is the owner of said
materials and not Capitol. Jalwindor, however, filed an indemnity bond in
favor of the Sheriff and the items were sold at public auction on August
30, 1965 with Jalwindor as the highest bidder for P6,000.00.
Sampaguita filed with the Court of First Instance of Rizal, Branch
IV of Quezon City, an action to nullify the Sheriff's Sale and for the
issuance of a writ of preliminary injunction against Jalwindor from
detaching the glass and wooden jalousies. Jalwindor was ordered to
maintain the status quo pending final determination of the case. No
actual hearing was held and the parties submitted the following
stipulation of facts for the consideration of the court.
"1. That plaintiff and defendant are both domestic
corporations duly organized and existing by and under the laws of
the Philippines;
"2. That plaintiff leased to the CAPITOL "300", Inc. the
roofdeck of the Sampaguita building and all the existing
improvements thereon for a monthly rental of P650.00; that the
parties to the lease contract agreed that all permanent
improvements made by the lessee on the leased premises shall
belong to the lessor without any obligation on the part of the lessor
to reimburse the lessee for the sum spent for said improvements;
that it was agreed upon by the parties that the improvements made
by the lessee have been considered as part of the consideration of
the monthly rental;
"3. That CAPITOL "300", Inc. made alterations on the leased
premises; that it removed the then existing windows and replaced
them with the following items bought on credit from the

99 KASC

JALWINDOR MANUFACTURERS, INC., valued at P9,531.09, to
wit:
'J-21 (lever-type) Solex Bluepane
Glass Jalousies
11 Sets 15'-1 3/4" x 47-7/8" (5 units)
4 Sets 13'-5 3/4" x 47-7/8" (5 units)
3 Sets 10'-9 3/4" x 47-7/7" (4 units)
2 Sets 18'-1 3/4" x 65-3/8" (6 units)
1 Set 9'-1 3/4" x 65-3/8" (3 units)
1 Set 3'-0"x 65-3/8" (1 unit)
115 Pcs. Roto Operators for J-21
MODEL J-21 (Roto-type) Glass
and Wood Jalousies
8 Sets 32-1/2" x 60" Solex Bluepane
19 Sets 31-l/4" x 48" Solex Bluepane
18 Sets 34"x 48" Wood'
"4. That after the CAPITOL "300 ", Inc. failed to pay the price
of the items mentioned in the preceding paragraph, JALWINDOR
MANUFACTURERS, Inc. filed a case for collection of a sum of
money against CAPITOL "300", Inc. with the Court of First Instance
of Rizal (Branch IV, Quezon City), Civil Case No. Q-8040; that by
virtue of a Compromise Agreement, CAPITOL "300", Inc.
acknowledged indebtedness in favor of JALWINDOR In the amount
of P9,531.09, with a stipulation in the said Compromise Agreement,
that the items forming part of the improvements will form as
security for such an undertaking;
"5. That due to non-compliance by CAPITOL "300", Inc.,
JALWINDOR executed judgment; that the Sheriff of Quezon City
made levy on the items above-stated in paragraph 3 hereof and
sold them at a public auction to JALWINDOR MANUFACTURERS,

100 KASC

INC. as the highest bidder, on August 30, 1965, for the total
amount of P6,000.00;
"6. That after CAPITOL "300", Inc. failed to pay the rentals in
arrears from March 1, 1964 to April 30, 1965, water, electric and
telephone services amounting to P10,772.90, the plaintiff
SAMPAGUITA PICTURES, INC. filed with the City Court of Quezon
City, Civil Case No. 11-13161 for ejectment and collection of a sum
of money against the CAPITOL "300", Inc.; that the City Court
rendered judgment in favor of the Sampaguita Pictures, Inc., on
June 8, 1965, ordering the CAPITOL "300", Inc. to vacate the
premises located at the Sampaguita Building and to pay the
Sampaguita Pictures, Inc.;
"7. That after the Sheriff of Quezon City made levy on the
items above-stated in paragraph 3 hereof situated on the roofdeck
of the Sampaguita Building, plaintiff filed a Third Party Claim stated
in its affidavit on the ground of its right and title to the possession of
the items and that CAPITOL "300", Inc. has no right or title
whatsoever to the possession over said items; that defendant filed
a bond to indemnify the Sheriff against the claim, and the Sheriff
sold the items to the defendant; that the JALWINDOR
MANUFACTURERS, Inc., being the highest bidder and the
execution creditor, considered itself paid to the amount of
P6,000.00;
"8. That the parties herein agree that the matter of attorney's
fees be left to the sound discretion of the Court, which shall not be
less than P500.00." (Record on Appeal, pp. 11-14)."
On October 20, 1967, based on said Stipulation of Facts, the lower
court dismissed the complaint and ordered Sampaguita to pay Jalwindor
the amount of P500.00 as attorney's fees. Sampaguita filed a motion for
reconsideration which was likewise denied, hence, the instant appeal.

101 KASC

Petitioner-appellant raised the following assignment of errors;
I
"The lower court erred in holding that Capitol "300" Inc.
could not legally transfer or assign the glass and wooden jalousies
in question to the plaintiff-appellant.
II
"The lower court erred in not holding that plaintiff-appellant
was the rightful owner of the glass and wooden jalousies when they
were sold by the Sheriff at the public auction.
III
"The lower court erred in not declaring as null and void the
levy on execution and the Sheriff's sale at public auction of the
glass and wooden jalousies.
IV
"The lower court erred in holding that defendant-appellee
became the rightful owner of the glass and wooden jalousies."
When the glass and wooden jalousies in question were delivered
and installed in the leased premises, Capitol became the owner thereof.
Ownership is not transferred by perfection of the contract but by delivery,
either actual or constructive. This is true even if the purchase has been
made on credit, as in the case at bar. Payment of the purchase price is
not essential to the transfer of ownership as long as the property sold
has been delivered. Ownership is acquired from the moment the thing
sold was delivered to vendee, as when it is placed in his control and
possession. (Arts. 1477, 1496 and 1497, Civil Code of the Phil.)
Capitol entered into a lease contract with Sampaguita in 1964, and
the latter became the owner of the items in question by virtue of the
agreement in said contract "that all permanent improvements made by
lessee shall belong to the lessor and that said improvements have been

102 KASC

considered as part of the monthly rentals." When levy or said items was
made on July 31, 1965, Capitol, the judgment debtor, was no longer the
owner thereof. prLL
The action taken by Sampaguita to protect its interest is
sanctioned by Section 17, Rule 39 of the Rules of Court, which reads:
"Section 17. Proceedings where property claimed by third
person.
'. . . The officer is not liable for damages for the taking
or keeping of the property to any third-party claimant unless a
claim is made by the latter and unless an action for damages
is brought by him against the officer within one hundred
twenty (120) days from the date of the filing of the bond. But
nothing herein contained shall prevent claimant or any third
person from vindicating his claim to the property by any
action.'"

It is, likewise, recognized in the case of Bayer Phil., Inc. vs. Agana, et al.,
63 SCRA 358, wherein the Court declared, "that the rights of third party
claimants over certain properties levied upon by the Sheriff to satisfy the
judgment, may not be taken up in the case where such claims are
presented but in a separate and independent action instituted by
claimants . . . and should a third-party appear to claim the property levied
upon by the Sheriff and the claim is denied, the remedy contemplated by
the rules is the filing by said party of a reivindicatory action against the
execution creditor or the purchaser of the property after the sale is
completed or that a complaint for damages to be charged against the
bond filed by the creditor in favor of the sheriff . . . Thus, when a property
levied upon by the sheriff pursuant to a writ of execution is claimed by a
third person in a sworn statement of ownership thereof, as prescribed by

103 KASC

the rules, an entirely different matter calling for a new adjudication
arises."
The items in question were illegally levied upon since they do not
belong to the judgment debtor. The power of the Court in execution of
judgment extends only to properties unquestionably belonging to the
judgment debtor. The fact that Capitol failed to pay Jalwindor the
purchase price of the items levied upon did not prevent the transfer of
ownership to Capitol. The complaint of Sampaguita to nullify the Sheriff's
sale is well-founded, and should prosper. Execution sales affect the
rights of judgment debtor only, and the purchaser in the auction sale
acquires only the right as the debtor has at the time of sale. Since the
items already belong to Sampaguita and not to Capitol, the judgment
debtor, the levy and auction sale are, accordingly, null and void. It is well-
settled in this jurisdiction that the sheriff is not authorized to attach
property not belonging to the judgment debtor. (Arabay, Inc. vs.
Salvador, et al., 3 PHILAJUR, 413 [1978], Herald Publishing vs. Ramos,
88 Phil. 94, 100)
WHEREFORE, the decision appealed from is hereby reversed,
and plaintiff-appellant Sampaguita is declared the lawful owner of the
disputed glass and wooden jalousies. Defendant-appellee Jalwindor is
permanently enjoined from detaching said items from the roofdeck of the
Sampaguita Pictures Building, and is also ordered to pay plaintiff-
appellant the sum of P1,000.00 for and as attorney's fees, and costs. Cdpr
SO ORDERED.
Teehankee, Acting C.J. (Chairman), Makasiar, Fernandez,
Guerrero and Melencio Herrera, JJ., concur.

||| (Sampaguita Pictures, Inc. v. Jalwindor Manufacturers, Inc., G.R. No. L-43059,
October 11, 1979)

Sales Batch 1 of Assigned Cases

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Sales Batch 1 of Assigned Cases

Uploaded by

Copyright:

Available Formats

SALES AND LEASE FULL TEXT CASES (1ST SET) 2014

You might also like