1.
DIONISIO FIESTAN VS CA
G.R. No. 81552 May 28, 1990
Petitioners: Dionisio Fiestan and Juanita
Arconado
Respondents: COURT OF APPEALS;
DEVELOPMENT BANK OF THE PHILIPPINES,
LAOAG CITY BRANCH; PHILIPPINE NATIONAL
BANK, VIGAN BRANCH, ILOCOS SUR,
FRANCISCO PERIA and REGISTER OF DEEDS
OF ILOCOS SUR
Ponente: CJ Fernan
This is a case to seek reversal of the dismissal of
the case of spouses Dionisio and Juanita against
DBP (Laoag City Branch) for the annulment of
sale, mortgage and cancellation of transfer
certificates of title of their parcel of land which
they mortgaged DBP as security for their
P22,400 loan.
The lot was extrajudicially foreclosed by the said
bank when petitioners failed to pay their
mortgaged indebtedness thereby Provincial
sheriff issued certificate of sale to DBP and
registered it to the Registry of deeds on Sept. 26.
1979 in which a deed of sale executed by
petitioners was also registered the same day.
Spouses failed to redeem the property within the
one year period thus a CTC was issued to DBP
upon presentation of a duly executed affidavit of
consolidation of ownership. On April 13, 1980,
Francisco Peria bought the land to DBP and
registered the TCT to Registry of Deeds and paid
the taxes due thereon. Peria mortgaged the land
to PNB (Vigan) as security for his P115,000 loan
and thereafter Provincial Sheriff ordered
petitioners to vacate the premises who was still in
possession of the lot.
Petitioners filed the said case in which the CA
affirmed the decision of the RTC in dismissal of
annulment of sale, mortgage and cancellation of
transfer certificates of title of their parcel of land
on the ground that it was conducted by the
Provincial Sheriff of Ilocos Sur without first
effecting a levy on said property before selling
the same at the public auction sale.
ISSUES:
Whether or not an extrajudicial sale of property is
null and void by virtue of lack of a valid levy
Whether or not DBP can acquire by purchase the
mortgaged property at the public auction sale
RULING:
1. No. The Supreme Court held that the
formalities of a levy, as an essential requisite of a
valid execution sale under Section 15 of Rule 39
and a valid attachment lien under Rule 57 of the
Rules of Court, are not basic requirements before
an extrajudicially foreclosed property can be sold
at public auction.
On the other hand, Act No. 3135, as amended by
Act No. 4118 otherwise known as "An Act to
Regulate the Sale of Property under Special
Powers Inserted in or Annexed to Real Estate
Mortgages" applies in cases of extrajudicial
foreclosure sale which is the case at bar.
2. The prohibition mandated by par. (2) of
Article 1491 in relation to Article 1409 of the Civil
Code does not apply in the instant case where
the sale of the property in dispute was made
under a special power inserted in or attached to
the real estate mortgage pursuant to Act No.
3135, as amended.
Spouses Fiestan insisted that what prevails over
the case are par. (2) of Article 1491 and par. (7)
of Article 1409 of the Civil Code which prohibits
agents from acquiring by purchase, even at a
public or judicial auction either in person or
through the mediation of another, the property
whose administration or sale may have been
entrusted to them unless the consent of the
principal has been given. However, the Supreme
Court ruled that the power to foreclose is not an
ordinary agency that contemplates exclusively
the representation of the principal by the agent
but is primarily an authority conferred upon the
mortgagee for the latter's own protection, as
provided under Section 5 of Act No 3135, as
amended, which is a special law that must prevail
over the Civil Code which is a general law. Even
in the absence of statutory provision, there is
authority to hold that a mortgagee, and in this
case the DBP, may purchase at a sale under his
mortgage to protect his own interest or to avoid a
loss to himself by a sale to a third person at a
price below the mortgage debt.
By virtue of the special power inserted or
attached to the mortgage contract, the mortgagor
has authorized the mortgagee-creditor or any
other person authorized to act for him to sell said
property in accordance with the formalities
required under Act No. 3135, as amended.
The Court finds that the formalities prescribed
under Sections 2, 3 and 4 of Act No. 3135, as
amended, were substantially complied with in the
instant case
SPECIAL LAW CITED:
ACT NO. 3135 AN ACT TO REGULATE THE
SALE OF PROPERTY UNDER SPECIAL
POWERS INSERTED IN OR ANNEXED TO
REAL-ESTATE MORTGAGES
Section 1. When a sale is made under a special
power inserted in or attached to any real-estate
mortgage hereafter made as security for the
payment of money or the fulfillment of any other
obligation, the provisions of the following election
shall govern as to the manner in which the sale
and redemption shall be effected, whether or not
provision for the same is made in the power.
Sec. 2. Said sale cannot be made legally outside
of the province in which the property sold is
situated; and in case the place within said
province in which the sale is to be made is
subject to stipulation, such sale shall be made in
said place or in the municipal building of the
municipality in which the property or part thereof
is situated.
Sec. 3. Notice shall be given by posting notices
of the sale for not less than twenty days in at
least three public places of the municipality or city
where the property is situated, and if such
property is worth more than four hundred pesos,
such notice shall also be published once a week
for at least three consecutive weeks in a
newspaper of general circulation in the
municipality or city.
Sec. 4. The sale shall be made at public auction,
between the hours or nine in the morning and
four in the afternoon; and shall be under the
direction of the sheriff of the province, the justice
or auxiliary justice of the peace of the
municipality in which such sale has to be made,
or a notary public of said municipality, who shall
be entitled to collect a fee of five pesos each day
of actual work performed, in addition to his
expenses.
Sec. 5. At any sale, the creditor, trustee, or other
persons authorized to act for the creditor, may
participate in the bidding and purchase under the
same conditions as any other bidder, unless the
contrary has been expressly provided in the
mortgage or trust deed under which the sale is
made.
Art. 1491. The following persons cannot acquire
by purchase, even at a public or judicial auction,
either in person or through the mediation of
another:
(2) Agents, the property whose administration or
sale may have been entrusted to them, unless
the consent of the principal has been given;
2. DIONISIA DORADO VDA. DE DELFIN vs
SALVADOR D. DELLOTA
G.R. No. 143697 January 28, 2008
Petitioner: DIONISIA DORADO VDA. DE
DELFIN, represented in this act by her heirs,
Respondents.SALVADOR D. DELLOTA,
represented by his heirs, and THE INTESTATE
ESTATE OF THE LATE GUMERSINDO
DELEA,
PONENTE: SANDOVAL-GUTIERREZ
FACTS:
The late Dionisia Dorado Delfin and her heirs
sought to recover a certain parcel of land from
respondent Salvador D. Dellota. On June 16,
1929, Dionisia executed an "Escritura De Venta
Con Pacto de Retro" over a 50,000-square meter
portion of Lot No. 1213 in favor of spouses
Ildefonso Dellota and Patricia Delfin. However,
Dionisia failed to exercise her right of
redemption.
Petitioners contended that the Deed of Sale with
Right of entered into by Dionisia and respondent
Dellota is an equitable mortgage under Article
1602 of the Civil Code. They insist that the price
stipulated for a five-hectare portion of the subject
property is grossly inadequate. This readily
shows that the contract is an equitable mortgage,
not a sale with right of redemption. The trial court
rendered a judgment adverse to Dionisia while
the CA affirmed in toto the trial court decision.
 ISSUE:
Whether the Deed of Sale with Right of
Redemtion executed by Dionisia and Dellota is
an equitable mortgage under Article 1602 of the
Civil Code.
HELD:
NO. The Supreme Court held that an equitable
mortgage is one which, although lacking in some
formality, or form, or words, or other requisites
demanded by a statute, nevertheless reveals the
intention of the parties to charge real property as
security for a debt, and contains nothing
impossible or contrary to law. The essential
requisites of an equitable mortgage are: (1) the
parties enter into what appears to be a contract
of sale, (2) but their intention is to secure an
existing debt by way of mortgage. Jurisprudence
recognizes that there is no conclusive test to
determine whether a deed purporting to be a sale
on its face is really a simple loan accommodation
secured by a mortgage. However, our case law
consistently shows that the presence of even one
of the circumstances enumerated in Article 1602
suffices to convert a purported contract of sale
into an equitable mortgage. In this case, what
should be determined is whether the
consideration of P5,300.00 paid
by Gumersindo to Dionisa for a five-hectare
portion of Lot No. 1213 on June 9, 1949 is
unusually inadequate. Following De
Ocampo and Buenaventura, this Court finds no
cogent reason to conclude that the 1949 price
of P5,300.00 as agreed upon by the parties was
unreasonable or unusually
inadequate. Moreover, under the rules of
evidence, it is presumed that a person takes
ordinary care of his concerns. In the present
case, there is no evidence herein whatsoever to
show that Dionisia did not understand the
ramifications of her signing the Deed of Sale
with Right of Redemption. Nor is there any
showing that she was threatened, forced or
defrauded into affixing her signature on the said
contract. If the terms of the pacto de retro sale
were unfavorable to Dionisia, this Court has no
business extricating her from that bad
bargain. Courts are not guardians of persons
who are not legally incompetent, like Dionisia.
3. Domingo Acasio vs. Corporacion De Los
PP. Dominicos De Filipinas
G.R. No. L-9428, December 21, 1956
Facts:
Corporacion De Los PP. Dominicos De Filipinas
(Corporation) is the owner of a house located in
Sta. Ana, Manila which was leased to a certain
Esteban Garcia for a monthly rent of P75. Two of
the rooms in the said house were in turn sub-
leased by Garcia to spouses Domingo R. Acasio
and Vicente TengcoAcasio, who were paying for
a monthly rent of P25. In 1950, Garcia gave
notice to the spousesAcacio to vacate the
premises and upon their refusal filed a complaint
for illegal detainer which was dismissed by the
court, after which, Garcia left the premises.
Mrs.Acasio thereafter went to the Bank of the
Philippine Island, the then administrator of the
properties of the Corporation, to ask that the
house be leased to her. The bank informed her
that the rent would be increased to P100 and it
might be given to someone else if she did not
immediately accept the terms. Hence, Mrs.Acasio
paid the one month rent, although with certain
degree of reluctance. The husband, Mr.
Domingo Acacio protested the increased rent
andbecause of their subsequent refusal to pay
the P100 rent, an action for ejectment was filed
by the Corporation. The lower court, citing Art.
1687, rendered judgement allowing the spouses
to continue the possession of the premises for
another year by paying the rental of P75, after
which they have to pay the increased rent of
P100.On appeal, the Court of Appeals reversed
the decision and held that the spouses violated
the terms of the lease as agreed by Mrs. Acasio
and gave the Corporation the right to eject.Mr.
Acacio now argues that his wifes payment did
not constitute consent for it was done with a
certain degree of reluctance.
Issue: Whether or not Mrs. Acacio gave a valid
consent.
Ruling: YES. The Supreme Court held that such
reluctance did not have the legal effect of
preventing the formation of a contract. There
must, then, be a distinction to be made between
a case where a person gives his consent
reluctantly and even against his good sense and
judgment, and where he, in reality, gives no
consent at all, as where he executes a contract
or performs an act against his will under a
pressure which he cannot resist. It is clear that
one acts as voluntarily and independently in the
eye of the law when he acts reluctantly and with
hesitation as when he acts spontaneously and
joyously. Legally speaking he acts as voluntarily
and freely when he acts wholly against his better
sense and judgment as when he acts in
conformity with them. Between the two acts there
is no difference in law. Her conformity gave rise
to a new contract of lease between the
corporation and the Acasios not a renewal of a
previous lease.
4. Buenaventura vs Court of Appeals
G.R. No. 126376. November 20, 2003
Facts:
Spouses Leonardo Joaquin and Feliciana
Landrito executed six deeds of sale in favor of
their seven children (Fidel, Tomas, Artemio,
Clarita, Felicitas, Fe, and Gavino). However, their
other four children (Consolacion, Nora, Emma
and Natividad) filed a complaint seeking that
these deeds of sale be declared null and void ab
initio due to the following reasons: a) Firstly, there
was no actual valid consideration for the deeds of
sale over the properties in litis; b) Secondly,
assuming that there was consideration in the
sums reflected in the questioned deeds, the
properties are more than three-fold times more
valuable than the measly sums appearing
therein; c) Thirdly, the deeds of sale do not reflect
and express the true intent of the parties
(vendors and vendees); and d) Fourthly, the
purported sale of the properties in litis was the
result of a deliberate conspiracy designed to
unjustly deprive the rest of the compulsory heirs
(plaintiffs herein) of their legitime. The trial court
found, among others, that the deeds of sale were
executed for valuable consideration, hence,
dismissed the case. The Court of Appeals
affirmed the decision of the trial court.
Issue:
Whether or not the sale is void due to lack or
inadequacy of consideration.
Ruling:
NO. The sale is valid. Citing Article 1470, the
Supreme Court held that gross inadequacy of
price does not affect a contract of sale, except as
may indicate a defect in the consent, or that the
parties really intended a donation or some other
act or contract.A contract of sale, being a
consensual contract, becomes a binding and
valid contract upon the meeting of the minds as
to price. If there is a meeting of the minds of the
parties as to the price, the contract of sale is valid
despite the manner of payment, or even the
breach of that manner of payment.Indeed, there
is no requirement that the price be equal to the
exact value of the subject matter of sale. The
Supreme Court upheld the decision of the trial
court that the lots were sold for a valid
consideration.
5. OLEGARIO B. CLARIN VS. ALBERTO
RULONA
GR No. L-30786, February 20,1984
Facts:
OlegarioClarin (Petitioner) owned a ten
hectare land located in Carmen, Bohol. The
same property was said to be his share among
other co-owners. In 1959, the petitioner entered
into a contract of sale with Alberto Rulona
(Respondent) for the aforementioned property in
consideration of P 2,500.00. Subsequently, the
respondent paid a downpayment ofP1,000.00
and the firstinstallment of P 100.00 pesos agreed
upon them. But later on, the petitioner returned
the P 1,100.00 to the respondent contending that
the contract that they have entered was subject
to a condition that upon the refusal of his co-
owners for the said sale, the contract between
them would be discontinued and the payment
made by the latter would be returned. After the
respondent received the P 1,100.00, they filed a
complaint for specific performance and recovery
on the ground that the petitioner violated the
terms of the agreement.
The RTC rendered judgment in favor of
the respondent on the ground that the contract of
sale was pure sale and the same is not subject to
any condition nor it is vitiated by any flaw. The CA
affirmed the decision of the lower court.
Consequently, the petitioner does not only
question the existence of the perfected contract
but also its enforceability since it is not notarized.
Issue:Whether or not there was a perfected
contract of sale.
Held:Yes, the contract entered by the parties was
deemed perfected. A 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. Such contract is binding in
whatever form it may have entered into.
According to the given facts, it can be seen that
the petitioner agreed to sell and the respondent
agreed to buy the said property. The parties also
agreed upon on a definite price which is P
2,500.00. It is also apparent in the information
that the respondent has already paid P 1,100.00.
Its acceptance by the petitioner clearly showed
his consent to the contract thereby precluding
him from rejecting its binding effect. With the
contract being partially executed, the same is no
longer covered by the requirements of the
Statute of Frauds in order to be enforceable.
Therefore the contract is valid and enforceable.
The Supreme Court dismissed the petition for
lack of merit. Cost against the petitioner.
6. PARAGAS v. HEIRS OF DOMINADOR
BALACANO
FACTS:
Gregorio Balacano, married to Lorenza, owned 2
parcels of land. He was already 81 years old,
very weak,could barely talk, and had been
battling w/ liver disease for over a month. On his
deathbed, barely aweek before he died, he
allegedly signed a Deed of Absolute Sale over
the lots in favor of the ParagasSpouses,
accompanied by Atty. De Guzman who
proceeded to notarize the same, alleging that it
was amere confirmation of a previous sale and
that Gregorio had already paid a P
50,000.00 deposit. TheParagas driver was also
there to take a picture of Gregorio signing the
said deed, w/ a ballpen in hishand. There was
nothing to show that the contents of the deed
were explained to Gregorio. Paragasthen sold a
portion of the disputed lot to Catalino. The
grandson of Gregorio, Domingo, sought to
annulthe sale and partition. There was no
sufficient evidence to support any prior
agreement or partialexecution thereof.
ISSUE:
W/N Balacano is incapacitated to enter into a
contract of sale
HELD:
A person is not rendered incompetent merely
because of old age; however, when such age has
impairedthe mental faculties as to prevent a
person from protecting his rights, then he is
undeniablyincapacitated. He is clearly at a
disadvantage, and the courts must be vigilant for
his protection. In thiscase,Gregorios consent
was clearly absent hence the sale was null and
void. The dubiouscircumstances raise serious
doubts on his capacity to
render consent.Considering that the Paragas
Spouses are not owners of the said properties,
it only follows that thesubsequent sale thereof to
Catalino who was not in good faith is likewise
void. Further, the lotspertained to the conjugal
partnership having been inherited by Gregorio
during his marriage toLorenza. It cannot thus be
sold w/o the latters consent.

7. PIO BARRETTO SONS INC. VS COMPANIA
MARITIMA
FACTS:
Pio Barretto Sons Inc. filed a complaint for
collection of a sum of money against Compania
Maritima, alleging that during the months of October
and November, 1941, Compania Maritima purchased
on credit and received from Pio Barretto Sons Inc. a
lumber worth P5,300.55 and again purchased on
credit and received from the plaintiff-petitioner, lumber
worth P453.81, thereby incurring a total indebtedness
of P6,054.36 with stipulated interest of 12% per
annum, plus attorney's fees. Compania Maritima filed
its answer denying all the material allegations of the
complaint and, by way of counterclaim, prayed that
Pio Barretto Sons Inc. be ordered to pay the sums of
P500.00 as expenses of litigation and P1,500.90 as
Attorney's fees, plus costs. Trial court rendered
judgment in favor of Pio Barretto Sons Inc. Both
parties appealed to the Court of Appeals. The Court of
Appeals reversed the judgment of the trial court and
order the dismissal of the case on the ground that the
delivery of lumber was not duly proved. Petitioner's
motion for reconsideration of the decision of the Court
of Appeals was denied again on the ground of lack of
sufficient showing of a valid delivery of the lumber in
question by the Barretto Sons, Inc. to the Compaia
Maritima. Hence this petition for review on certiorari.
ISSUE:Whether or not delivery and payment can be
treated as two separate issues
RULING:No. The court ruled that the issue of delivery
on which the Court of Appeals based its decision
reversing that of the trial court is no new issue at all.
For delivery and payment in a contract of sale, or for
that matter in quasi-contracts, are so interrelated and
intertwined with each other that without delivery of the
goods there is no corresponding obligation to pay.
The two complement each other. Thus, "by the
contract of sale one of the contracting parties
obligates himself to transfer the ownership of and to
deliver a determinate thing, and the other to pay
therefor a price certain in money or its
equivalent."(Art.1458 of the Civil Code). It is clear that
the two elements cannot be dissociated, for the
contract of purchase and sale is, essentially, a
bilateral contract, as it gives rise to reciprocal
obligations; to wit, on the part of the seller, to deliver a
determinate thing, and on the part of the buyer, to pay
a certain price therefor in money or in something
representing it.
8. Salonga vs Farreles
Facts: Appellant Salonga and her husband
together with four other families are lessees of
the defendant Farrales. Because of non-payment
of rentals, the defendant filed an ejectment case
against them and received a favorable decision.
Such decision was elevated on appeal, but
before the decision for such appeal came out, by
common consent among them, the defendant
sold to three families included in the ejectment
case the areas occupied by them. Because of
this, the appellant offered to buy the area which
she and her husband is situated but Farrales
persistently refused such offer, and instead
insisted to execute the judgment rendered in the
ejectment case. Salonga then filed an action for
preliminary injunction against the judgment and
specific performance against Farrales.
Issue:
WON there exists a legally enforceable
agreement upon which defendant Farrales can
be compelled to sell the land.
Ruling: The Supreme Court held that there is no
agreement between the parties which could
compel Farrales to sell the land. There is no
meeting of minds because Farrales never
accepted the offer of Salonga, and therefore
constitutes that there is no consent on the part of
Farrales which is an essential element of a
contract of sale. Since contracts are enforceable
from the moment of perfection and there is no
perfected contract, plaintiff has absolutely nothing
to enforce against defendant Farrales.
9. Sanchez vsMapalad co.
Facts:
After the February EDSA People power, one Jose
Y. Campos executed an affidavit that he held,
Mapalad realty Corp, in trust for Pres. F. Marcos.
All assets of Mapalad were surrendered to the
Aquino Administration.
The Presidential Commission on good
Governance issued a writ of sequestration for the
Mapalad and all of their properties. One Rolando
Josef was appointed by the PCGG as
VP/treasurer and GM of Mapalad, he conducted
an inventory of the assets of the said corp. and
later discovered there were 4 missing transfer
certificate of titles (tct). Joseffound out that the
former GM OF Mapalad ,FilicianoManalili, took
the missing titles. Manalili promised to return but
never did.
One, FilemonOliquiano Jr., the president of
Nordalek Corp. claimed that such parcels of land
covered by the missing titles were theirs as
evidenced by a deed of absolute sale dated Nov.
2, 1989 by the former president and chairman of
the board, Miguel Magsaysay.
Upon verification by Mapalad with the records of
the registry of deed, 4 TCT were issued in the
name of Nordalek by another deed of sale also
dated NOV. 2, 1989 purportedly signed the same
Miguel Magsaysay.
Now records will show that there are 2 deed of
Absolute sale, bearing the same date,, parties,
parcels of land and notarized by the same Notary
Public but different in amount.
Mapalad filed an action for annulment of the
deed of absolute sale and re conveyance of the
title with damages against Nordalek. Mapalad
claimed that the DAS is falsified and forged, GM
Manaliliconspired the Nordalek to defraud them
and that the said 2 sales were fictitious and
usedto transfer the titles in favor of Nordalek. A
notice of lispendens was annotated on the
Nordalek TCTs.
Nordalek on the hand denied it ever transacted
with GM Manalili and they are a buyer in good
faith.
During the pendency of the case, Nordalek sold
the subject property for 50 000 000 to the now
Petitioner Luis Sanchez.
The RTC ruled against Mapalad due to the
failure to adduce positive proof of forgery and
upheld the validity of the DAS based on the
notarial documents and that the annotation of
adverse claim and lispendens be cancelled.
Mapalad elevated the case to the Court of
Appeals which reversed and set aside the
decision of the RTC. It declared as null and void
the DAS between Mapalad and Nordalek and
Nordalek and Sanchez; ordered the registry of
deeds to issue new TCT for the subject
properties in the name of Mapalad.
Nordalek appealed to the Supreme Court.
Issue: WON there is a valid sale between
Mapalad and Nordalek and Nordalek and
Sanchez
Ruling:
There is no valid sale between Mapalad and
Nordalek.
In a contract of sale with a corporation, the
consent of the corporation can only be granted
through its officers who have been duly
authorized by its board of directors. Miguel
Magsaysay, president and chairman of the board
of Mapalad was no longer in position to give
consent as he was already separated from the
company. His signature purportedly on the DAS
were not his and it was never contradicted.
Therefore the element of consent is lacking.
Also DAS dated Nov. 2, 1989 had no
consideration. There was no payment effected by
Nordalek, no funds were infused to Mapalads
account and this was never controverted.
Therefore the element of consideration is also
lacking. The transaction between Mapalad and
Nordalek not only lacks consent but also lacks
consideration which renders if void ab initio.
There is no valid sale between Nordalek and
Sanchez because In the first place the former did
acquire ownership or title over the four
properties, Nordalek had nothing to transfer to
petitioner Sanchez. Nemodat non habet.
10. Fernando A. Gaite vs.IsabeloFonacier
G.R. No. L-11827 July 31, 1961
Facts: Fonacier, owner of 11 iron lode
mineral claims (Dawahan Group) in
Camarines Norte, constituted a "Deed of
Assignment, and appointed Gaite as his true
and lawful attorney-in-fact to enter into a contract
for its exploration and development on a royalty
basis.
Gaite executed a general assignment to the
Larap Iron Mines owned solely by him. However,
Fonacier decided to revoke the authority granted
which he assented. Said revocation included the
transfer to Fonacier the rights and interests over
the "24,000 tons of iron ore, more or less"
already extracted for a certain consideration.
A balance has to be paid. To secure it, Fonacier
delivered to Gaite a surety bond. When it
expired, no payment had been made by Fonacier
on the theory that they had lost right to make use
of the period when their bond expired.
Gaite filed a complaint in court for its payment.
The lower court ruled the obligation was one with
a term and that the obligation became due and
demandable under Article 1198 of the New Civil
Code.
Hence, the defendants jointly filed an appeal.
Issues:
1. Whether or not the lower court erred in
holding that the obligation of Fonacier to pay
Gaite is one with a period or term and that the
term has already expired.
2. Whether or not the lower court erred in not
holding that there were lesser tons of iron ore in
the stockpiles sold to Fonacier.
Held:
On Issue No. 1 No. If the suspensive condition
does not take place, the parties would stand as if
the conditional obligation had never existed. The
parties did not intend such state. The words of
the contract expressed that obligation to pay and
intended Gaite to be paid
The sale of the ore to Fonacier was a sale on
credit, not an aleatory contract. For their failure to
renew the bond, the appellant have forfeited the
right to compel Gaite to wait for the sale of the
ore before receiving payment of the balance.
Under paragraphs 2 and 3 of Article 1198 of the
Civil Code of the Philippines, the debtor shall
lose every right to make use of the period:
When he does not furnish to the creditor
the guaranties or securities which he has
promised
When by his own acts he has
impaired said guaranties or securities
after their establishment, and when
through fortuitous event they disappear,
unless he immediately gives new ones
equally satisfactory.
Gaite's acceptance of the surety company's bond
with full knowledge it would automatically expire
within a year was not a waiver of its renewal after
the expiration date. The balance became due
and payable thereafter.
On Issue No. 2No.This is a case of a sale of a
specific mass of fungible goods for a single price
or a lump sum. Thequantity of "24,000 tons of
iron ore, more or less," stated in the contract is a
mere estimate by theparties. A reasonable
percentage of error should be allowed because
neither of the parties hadactually measured of
weighed the mass.
In addition, no provision was made in their
contract for the measuring or weighing of the
oresold in order to complete or perfect the sale,
nor was the price agreed upon by the parties
basedupon any such measurement. When Gaite
complied with his promise to deliver, the
appellants, inturn, are bound to pay the lump
price.