SALES

DIEGO

ART 1526 (Right of Unpaid Seller)

7 Keppel Bank vs Adao.G.R. No. 158227 October 19, 2005
FACTS:
Project Movers Realty and Development Corporation (PMRDC) owed PETITIONER
Keppel Bank some debts. As partial settlement of the debt, the two executed a Compromise
Agreement where PMDRC by way of dacion en pago, transferred five properties
(townhouses,condominium units) to PETITIONER.
When PETITIONER inspected a townhouse, it found RESPONDENT Adao occupying it.
The latter refused to vacate property despite notice and demand so PETITIONER filed ejectment
case before MeTC. RESPONDENT argued that he and PMRDC has a Contract to Sell over the
townhouse (though RESPONDENT haven't paid). MeTC dismissed compaint.
RTC affirmed MeTC ruling. It held that, by virtue of the dacion en pago, petitioner merely
stepped into the shoes of PMRDC. Hence, petitioner must respect the contract to sell between
PMRDC and respondent. CA affirmed the ruling.

ISSUE: Does PETITIONER has the right to file ejectment against RESPONDENT?

RULING: YES. The contract to sell does not by itself give respondent the right to possess the
property. Unlike in a contract of sale, here in a contract to sell, there is yet no actual sale nor any
transfer of title, until and unless, full payment is made. The payment of the purchase price is a
positive suspensive condition, the failure of which is not a breach, casual or serious, but a situation
that prevents the obligation of the vendor to convey title from acquiring an obligatory force.
Respondent must have fully paid the price to acquire title over the property and the right to
retain possession thereof. In cases of non-payment, the unpaid seller (PETITIONER) can avail of
the remedy of ejectment since he retains ownership of the property.

NOTE: Though weird since in ART 1526, there was no mention of the right to ejectment. Siguro
implied na right na lang yun.
Art 1531 (When is Goods in Transit)

8 Saludo vs CA.G.R. No. 95536. March 23, 1992-MORBID CASE

FACTS: Plaintiff Aniceto Saludo's mother died in the USA so they made arrangements for the
delivery of her remains to the Philippines.
Pomierski & Son Funeral Home, the funeral home, booked the flight with RESPONDENT
PAL and TWA so that the remains would reach Manila on October 29, 1976. CMAS was the one
who brought the sealed casket to the airport.However, due to some mixed up in the remains where
it was brough to Mexico. It only arrived on October 30, 1976.
Plaintiff filed DAMAGE SUIT against RESPONDENTS PAL and TWA before CFI-
Leyte.CFI absolved the two airline companies. CA affirmed it hence this appeal.

ISSUE: When does extraordinary responsibility of common carrier over the goods begins?

RULING: Under Article 1736 of the Civil Code that the extraordinary responsibility of the
common carrier begins from the time the goods are delivered to the carrier. This responsibility
remains in full force and effect even when they are temporarily unloaded or stored in transit, unless
the shipper or owner exercises the right of stoppage in transitu, and terminates only after the lapse
of a reasonable time for the acceptance of the goods by the consignee or such other person entitled
to receive them. And, there is delivery to the carrier when the goods are ready for and have
been placed in the exclusive possession, custody and control of the carrier for the purpose of
their immediate transportation and the carrier has accepted them.

NOTE: TWA and PAL were absolved of liabilty (only paid nominal damages). Blame was put to
CMAS who delivered the remains. TWA would have no knowledge therefore that the remains of
Crispina Saludo were not the ones inside the casket that was being presented to it for shipment.
TWA would have to rely on the representations of C.M.A.S
ART 1544 (Double Sale)
9 Heirs of Cabigas vs Limbaco.G.R. No. 175291.July 27, 2011
FACTS: Ines Ouano (Original Seller) owned two lots in Cebu City. Allegedly, Cobarde claimed
that he purchased lots from Ouano in 1948.Cobarde then sold the lot to PETITIONER Spouses
Cabigas without registering it in 1980 (FIRST SALE).
Despite this, Ouano sold the same lots to National Airports Corporation in 1952 which it
then was TITLED (SECOND SALE). As airport expansio project failed, RESPONDENTS (heirs
of Ouano) reclaimed the lots. They then subdivided it and sold to numerous buyers. All the
buyers(also RESPONDENTS) registered the titles over their respective lots in their names.
PETITIONERS filed a complaint in 2003 to annul the titles in the name of PETITIONERS.
RTC Cebu City dismissed it. CA affirmed.

ISSUE: Who has the better title over the lots sold twice?

RULING: RESPONDENTS.
Article 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should be
movable property.
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.
Since the petitioners never alleged that the National Airports Corporation acted with bad
faith when it registered the lots in its name, the presumption of good faith prevails. Consequently,
the National Airports Corporation, being a registrant in good faith, is recognized as the
rightful owner of the lots in question, and the registration of the properties in its name cut off any
and all prior liens, interests and encumbrances, including the alleged prior sale to Cobarde, that
were not recorded on the titles. Cobarde, thus, had no legal rights over the property that he could
have transferred to the Cabigas spouses.

P.S. Cabigas spouses where also held to be not in good faith as they did not exercise due diligence
in inquiring the title of Cobarde (which was also unregistered).
10 Beatingo vs Gasis.G.R. No. 179641.February 9, 2011

FACTS: Flora Gasis owned a lot in Iloilo City. PETITIONER Dolorita Beatingo alleged that it
bought lot from Gasis as evidenced by a notarized Deed of Absolute Sale in 1998 (FIRST SALE).
She went to Register of Deeds to have it registered but failed as she had no Original Certificate of
Title (OCT).
PETITIONER filed petition for issuance of the owners duplicate certificate of title but was
opposed by RESPONDENT Lilia Gasis. RESPONDENT claimed that Gasis sold the lot to her in
1999 (SECOND SALE) and she has the OCT.
RESPONDENT also claimed she has the better right because she is an innocent purchaser
for value. Both parties DID NOT REGISTER THE SALE in the Registry of Deeds.
PETITIONER filed complaint to annull Title of Gasis. RTC denied it. CA affirmed the said
ruling.

ISSUE: Who has the better right over the lot since both did not register the sale in the Registry of
Deeds?

RULING: RESPONDENT Lilia Gasis.

The present controversy is a clear case of double sale, where the seller sold one property to
different buyers, first to petitioner and later to respondent. In determining who has a better right, the
guidelines set forth in Article 1544 of the Civil Code apply. Article 1544 states:
Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should be
movable property.
xxxxx
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.
Admittedly, the two sales were not registered with the Registry of Property. Since there was
no inscription, the next question is who, between petitioner and respondent, first took possession of
the subject property in good faith. As aptly held by the trial court, it was respondent who took
possession of the subject property and, therefore, has a better right. OCT was delivered to her. She
then took possession of the subject property and exercised acts of ownership by collecting rentals
from the tenants who were occupying it.
ART 1547 (Implied Warranty)
11 Luzon Development Bank vs Enriquez.G.R. No. 168646.January 12, 2011
FACTS:
DELTA, a domestic corporation engaged in real estate business obtained a P8 million
LOAN from Luzon Development Bank or the BANK. As security, Spouses De Leon,DELTA's
owner, executed a real estate mortgage over their properties, one of these is Lot 4 (subject
property), a subdivision lot.
DELTA obtained a certificate of registration and license to sell from Housing and Land Use
Regulatory Board (HLURB). It then executed a Contract to Sell with RESPONDENT Enriquez.
(HLURB license is needed).
When DELTA defaulted on the loan, the BANK agreed in DACION EN PAGO (instead of
foreclosure) where DELTA transfers some properties to the BANK as payment. One of this
properties is LOT 4.
RESPONDENT Enriquez filed complaint with HLURB asking for refund it already paid as
DELTA violated its license to sell by failing to get a clearance for the mortgage from the HLURB.
HLURB ordered DELTA to accept RESPONDENT's payment and deliver the title. Office fo
the President (OP) and CA affirmed the ruling.

ISSUE: Could the BANK claimed implied warranty against eviction on DELTA's property sold to
them?

RULING: No. (The Court is saying as a bank, they should exercise more diligence in inquiring
about the title of DELTA being a bank- imbued with public interest).
A dacion en pago is governed by the law of sales. Contracts of sale come with warranties,
either express (if explicitly stipulated by the parties) or implied (under Article 1547 et seq. of the
Civil Code). In this case, however, the BANK does not even point to any breach of warranty by
DELTA in connection with the Dation in Payment. To be sure, the Dation in Payment has no
express warranties relating to existing contracts to sell over the assigned properties.
As to the implied warranty in case of eviction, it is waivable and cannot be invoked if the
buyer knew of the risks or danger of eviction and assumed its consequences.As we have noted
earlier, the BANK, in accepting the assigned properties as full payment of DELTAs "total
obligation," has assumed the risk that some of the assigned properties are covered by contracts to
sell which must be honored under PD 957.
12 Daleon vs Tan.G.R. No. 186094.August 23, 2010
FACTS:
In 1997, the PETITIONERS (the Daleon) and RESPONDENTS (the Tans) executed a
CONTRACT TO SELL where the Daleons sold their land at Lucena City for P18.766 million to the
Tans. Paragraph 15-A of the Contract (FORFEITURE CLAUSE) provides that if check given by
RESPONDENTS bounced, the contract is rescinded and PETITIONER (seller) will forfeit the 50%
of amount paid y RESPONDENT (buyers).
RESPONDENT paid downpayment of P10.861 million and issued in their favor 12
postdated checks to cover the remaining balance. After they executed their agreement, one
Bartolome Sy caused to be annotated on the title to the property an adverse claim on the undivided
share of one of the Daleons. For this reason, the Tans placed a stop payment order on their first
postdated check and repeatedly wrote the Daleons that, until the adverse claim on the property was
canceled, they were stopping payment on their checks.
When PETITIONERS tried to deposit some checks, it bounced. This led them to file action
for RESCISSION of the Agreement which means the RESPONDENTS will forfeit half of what
they paid. RESPONDENTS filed a counterclaim for unrealized income as a result of their inability
to use their downpayment of P10.861 million. RTC granted the complaint and rescinded the
contract.
CA however REVERSED it. CA held that the Daleons can only cancel the contract to sell
but not rescind it. The Tans failure to pay the balance of the purchase price merely resulted in
setting aside the contract to sell, placing the parties in the same situation as they were before the
execution of the contract to sell. It ordered PETITIONER to return the money under the principle
of solutio indebitii.

ISSUE: Could the RESPONDENTS Tan stop the payment of lots in their contract to sell?

RULING: YES. The Tans had the right to hold the Daleons to their warranties as sellers under
Article 1547 of the Civil Code that the property was free from charges or encumbrances not
known to the buyers. Further, Article 1545 of the Code provides that "where the ownership in the
thing has not passed, the buyer may treat the fulfillment by the seller of his obligation to deliver the
same as described and as warranted expressly or by implication in the contract of sale as a condition
of the obligation of the buyer to perform his promise to accept and pay for the thing." The Daleons
deposited the initial checks issued to them before they filed a belated action to have the adverse
claim removed from their title. More, they ignored the Tans repeated demand to know what they
were doing regarding that claim