Professional Documents
Culture Documents
QUIROGA VS. PARSONS HARDWARE CO. (F) Mr. Parsons binds himself not to sell any other
G.R. No. L-11491; August 23, 1918 kind except the "Quiroga" beds.
ART. 2. In compensation for the expenses of
TOPIC: Sales; Contract of Sale vs. Contract of advertisement which, for the benefit of both
Agency contracting parties, Mr. Parsons may find himself
NATURE: Appeal obliged to make, Mr. Quiroga assumes the
obligation to offer and give the preference to Mr.
FACTS: Parsons in case anyone should apply for the
On Jan. 24, 1911, in Manila, plaintiff Andres exclusive agency for any island not comprised
Quiroga and J. Parsons (to whose rights and with the Visayan group.
obligations the present defendant later
subrogated itself) entered into a contract with the ART. 3. Mr. Parsons may sell, or establish
ff. tenor: branches of his agency for the sale of "Quiroga"
CONTRACT EXECUTED BY AND BETWEEN beds in all the towns of the Archipelago where
ANDRES QUIROGA AND J. PARSONS, BOTH there are no exclusive agents, and shall
MERCHANTS ESTABLISHED IN MANILA, FOR immediately report such action to Mr. Quiroga for
THE EXCLUSIVE SALE OF "QUIROGA" BEDS IN his approval.
THE VISAYAN ISLANDS. xxx.
ARTICLE 1. Don Andres Quiroga grants the
exclusive right to sell his beds in the Visayan Quiroga, in his complaint, averred that defendant
Islands to J. Parsons under the following violated the ff. obligations, among others: not to
conditions: sell the beds at a higher price than those of the
(A) Mr. Quiroga shall furnish beds of his invoices, to have an open establishment in Iloilo;
manufacture to Mr. Parsons for the latter's itself to conduct the agency, and to order the beds
establishment in Iloilo, and shall invoice them at by the dozen in no other manner. He also alleged
the same price he has fixed for sales, in Manila, that defendant was his agent for the sale of the
and, in the invoices, shall make and allowance of beds in Iloilo, and that said obligations are
a discount of 25 per cent of the invoiced prices, as implied in a contract of commercial agency.
commission on the sale; and Mr. Parsons shall ISSUE:
order the beds by the dozen, whether of the same Whether the defendant, by reason of the contract
or of different styles. hereinbefore transcribed, was a purchaser or an
(B) Mr. Parsons binds himself to pay Mr. Quiroga agent of the plaintiff for the sale of his beds.
for the beds received, within a period of sixty days
from the date of their shipment. RULING:
xxx. In order to classify a contract, due regard must be
(D) If, before an invoice falls due, Mr. Quiroga given to its essential clauses. In the contract in
should request its payment, said payment when question, what was essential, as constituting its
made shall be considered as a prompt payment, cause and subject matter, is that the plaintiff was
and as such a deduction of 2 per cent shall be to furnish the defendant with the beds which the
made from the amount of the invoice. latter might order, at the price stipulated, and that
The same discount shall be made on the amount the defendant was to pay the price in the manner
of any invoice which Mr. Parsons may deem stipulated. The price agreed upon was the one
convenient to pay in cash. determined by the plaintiff for the sale of these
xxx. 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 the contract, the effect of its breach would only
plaintiff's request, or in cash, if the defendant so entitle the plaintiff to disregard the orders which
preferred, and in these last two cases an the defendant might place under other
additional discount was to be allowed for prompt conditions; but if the plaintiff consents to fill
payment. These are precisely the essential them, he waives his right and cannot complain for
features of a contract of purchase and sale. There having acted thus at his own free will.
was the obligation on the part of the plaintiff to
supply the beds, and, on the part of the defendant, For the foregoing reasons, we are of opinion that
to pay their price. These features exclude the legal the contract by and between the plaintiff and the
conception of an agency or order to sell whereby defendant was one of purchase and sale, and that
the mandatory or agent received the thing to sell the obligations the breach of which is alleged as a
it, and does not pay its price, but delivers to the cause of action are not imposed upon the
principal the price he obtains from the sale of the defendant, either by agreement or by law.
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 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.
xxx xxx xxx.
In respect to the defendant's obligation to order
by the dozen, the only one expressly imposed by
the offeree should decide to exercise his consideration, strongly suggests that the two (2)
option within the specified time. After provisions intended to enforce or implement the
accepting the promise and before he same principle.
exercises his option, the holder of the
option is not bound to buy. He is free either
to buy or not to buy later. In this case,
however, upon accepting herein
petitioner's offer a bilateral promise to sell
and to buy ensued, and the
respondent ipso facto assumed the
obligation of a purchaser. He did not just
get the right subsequently to buy or not to
buy. It was not a mere option then; it was
a bilateral contract of sale.
FIRST OPTIMA REALTY CORPORATION V. The check was eventually deposited with and
SECURITON SECURITY SERVICES, INC. credited to petitioner’s bank account. Thereafter,
G.R. No. 199648, January 28, 2015 respondent through counsel demanded in writing
that petitioner proceed with the sale of the
FACTS: property. In a March 3, 2006 Letter addressed to
Petitioner First Optima Realty Corporation is a respondent’s counsel, petitioner wrote back:
domestic corporation engaged in the real estate
business. It is the registered owner of a 256- Dear Atty. De Jesus:
square meter parcel of land located in Pasay City. Anent your letter dated January 16, 2006 received
Respondent Securitron Security Services, Inc., on on February 20, 2006, please be informed of the
the other hand, is a domestic corporation with following:
offices located beside the subject property. 1. It was your client SECURITRON SECURITY
Looking to expand its business and add to its SERVICES, INC. represented by Mr. Antonio Eleazar
existing offices, respondent – through its General who offered to buy our property located at corner
Manager, Antonio Eleazar – sent a Layug and Lim-An St., Pasay City;
letter addressed to petitioner – through its 2. It tendered an earnest money despite the fact
Executive Vice-President, Carolina T. Young – that we are still undecided to sell the said property;
offering to purchase the subject property 3. Our Board of Directors failed to pass a resolution
at P6,000.00 per square meter. Eleazar personally to date whether it agrees to sell the property;
negotiated with a certain Maria Remoso, who was 4. We have no Contract for the earnest money nor
an employee of petitioner. Contract to Sell the said property with your client;
Sometime thereafter, Eleazar personally went to Considering therefore the above as well as due to
petitioner’s office offering to pay for the subject haste and demands which we feel [are forms] of
property in cash. However, Young declined to intimidation and harassment, we regret to inform
accept payment. She likewise informed Eleazar you that we are now incline not to accept your offer
that prior approval of petitioner’s Board of to buy our property. Please inform your client to
Directors was required for the transaction, to coordinate with us for the refund of this (sic)
which remark Eleazar replied that respondent money.
shall instead await such approval. On February 4,
2005, respondent sent a Letter of which was ISSUE/S:
accompanied by PNB Check No. 24677, issued 1. Whether or not respondent’s offer to purchase
for P100,000.00 and made payable to petitioner. the subject property was accepted so as to
The letter states thus: conclude a sale
As agreed upon, we are making a deposit of ONE 2. Whether or not the money respondent
HUNDRED THOUSAND PESOS (Php 100,000.00) as delivered to petitioner was earnest money
earnest money for your property at the corner of thereby providing a perfected contract of sale
Layug St., & Lim-An St., Pasay City as per TCT No.
125318 with an area of 256 sq. m. at 6,000.00/ sq. RULING:
m. for a total of ONE MILLION FIVE HUNDRED 1. There is no sale to speak of. The lower courts
THIRTY SIX THOUSAND PESOS (Php 1,536,000.00). failed to appreciate that respondent’s offer to
Full payment upon clearing of the tenants at said purchase the subject property was never
property and signing of the Deed of Sale. accepted by the petitioner at any instance, even
after negotiations were held between them.
"When there is merely an offer by one party Since there is no perfected sale between the
without acceptance of the other, there is no parties, respondent had no obligation to make
contract." To borrow a pronouncement in a payment through the check; nor did it possess the
previously decided case, right to deliver earnest money to petitioner in
order to bind the latter to a sale. As contemplated
The stages of a contract of sale are: (1) negotiation, under Art. 1482 of the Civil Code, "there must first
starting from the time the prospective contracting be a perfected contract of sale before we can speak
parties indicate interest in the contract to the time of earnest money." "Where the parties merely
the contract is perfected; (2) perfection, which exchanged offers and counter-offers, no contract
takes place upon the concurrence of the essential is perfected since they did not yet give their
elements of the sale; and (3) consummation, which consent to such offers. Earnest money applies to a
commences when the parties perform their perfected sale."
respective undertakings under the contract of sale,
culminating in the extinguishment of the contract. WHEREFORE, the Petition is GRANTED.
In the present case, the parties never got past the
negotiation stage.
Nothing shows that the parties had agreed on any
final arrangement containing the essential
elements of a contract of sale, namely, (1) consent
or the meeting of the minds of the parties; (2)
object or subject matter of the contract; and (3)
price or consideration of the sale.
2. No. Respondent’s subsequent sending of the
February 4, 2005 letter and check to petitioner –
without awaiting the approval of petitioner’s
board of directors and Young’s decision, or
without making a new offer – constitutes a mere
reiteration of its original offer which was already
rejected previously; thus, petitioner was under no
obligation to reply to the February 4, 2005 letter.
It would be absurd to require a party to reject the
very same offer each and every time it is made;
otherwise, a perfected contract of sale could
simply arise from the failure to reject the same
offer made for the hundredth time. Thus, said
letter cannot be considered as evidence of a
perfected sale, which does not exist in the first
place; no binding obligation on the part of the
petitioner to sell its property arose as a
consequence. The letter made no new offer
replacing the first which was rejected.
against the respondent municipal Mayor, who These stipulations were accepted by the
immediately elevated the injunction suit for petitioners-appellants in the same conveyance.
review to the Supreme Court, which dismissed
Mayor Zagad's petition on September 7, 1953. Before purchasing a parcel of land, it cannot be
With this dismissal order herein appellee spouses contended that the appellants who were the
proceeded to construct the dikes in the disputed vendees did not know exactly the condition of the
parcel of land. land that they were buying and the obstacles or
restrictions thereon that may be put up by the
Some four (4) years later, and while Civil Case No. government in connection with their project of
751 was still pending the Honorable Florencio converting Lot No. 2 in question into a fishpond.
Moreno, then Secretary of Public Works and Nevertheless, they willfully and voluntarily
Communications, ordered another investigation assumed the risks attendant to the sale of said lot.
of the said parcel of land, directing the appellees One who buys something with knowledge of
herein to remove the dikes they had constructed, defect or lack of title in his vendor cannot claim
on the strength of the authority vested in him by that he acquired it in good faith (Leung Lee v.
Republic Act No. 2056, approved on June 13, Strong Machinery Co., et al., 37 Phil. 664).
1958, entitled "An Act To Prohibit, Remove
and/or Demolish the Construction of Dams.
Dikes, Or Any Other Walls In Public Navigable
Waters, Or Waterways and In Communal Fishing
Grounds, To Regulate Works in Such Waters or
Waterways And In Communal Fishing Grounds,
And To Provide Penalties For Its Violation, And
For Other Purposes. The said order which gave
rise to the instant proceedings, embodied a threat
that the dikes would be demolished should the
herein appellees fail to comply therewith within
thirty (30) days.
ISSUE: Whether or not the Spouses Martinez are
purchasers for value and in good faith.
HELD:
There is no weight in the appellants' argument
that, being a purchaser for value and in good faith
of Lot No. 2, the nullification of its registration
would be contrary to the law and to the applicable
decisions of the Supreme Court as it would
destroy the stability of the title which is the core
of the system of registration. Appellants cannot
be deemed purchasers for value and in good faith
as in the deed of absolute conveyance executed in
their favour.
KUENZLE & STREIFF v. MACKE & CHANDLER delivered to the plaintiff under said sale but that
G.R. No. 5295. December 16, 1909, FIRST said property remained from the time of said sale
DIVISION, MORELAND, J. forward in the exclusive possession and control of
said Stanley & Krippendorf, and that they
FACTS: conducted the business subsequent to the
This is an action brought by the plaintiff to execution of said instrument exactly as they had
recover from the defendants the sum of 1,000 prior thereto — in their own name — purchasing
pesos, the value of certain personal property, goods and paying therefor without reference to
constituting a saloon bar, furniture, furnishings, the plaintiff in this case.
and fixtures.
ISSUE:
The plaintiff alleges that it was the owner of the WON defendant Macke & Chandler obtained a
Oregon Saloon consisting of bar, furniture, good title to the property in question as against
furnishings, and fixtures, of the value of 1,000 the plaintiff in this case?
pesos; that during January, 1907, the defendant
Jose Desiderio, as sheriff, levied upon such RULING:
property by virtue of an execution issued upon a YES.
judgment secured by the defendant Macke &
Chandler, against Stanley & Krippendorf; that The ownership of personal property cannot be
said plaintiff notified the sheriff, in the manner transferred to the prejudice of third persons
provided by law, that it was the owner of said except by delivery of the property itself; and that
goods and forbade the sale thereof under said a sale without delivery gives the would-be
execution; that, notwithstanding such claim upon purchaser no rights in said property except those
the part of the plaintiff, the said sheriff sold said of a creditor. The bill of sale in the case at bar
goods under said execution; that said firm of under the circumstances of this case, could have
Macke & Chandler was the purchaser of said no effect against a person dealing with the
goods and the same were delivered to it; the property upon the faith of appearances.
defendants Bachrach, Elser, and Gale, were the
sureties upon the bond given to the sheriff by The case of Kunzle & Streiff against A.S. Watson &
Macke & Chandler before said goods were sold. Co. cited by the appellant in its brief, does not
sustain its contention. That was a case of the sale
The defendants in this case allege that the of property upon the condition that the title
property described by the plaintiff and sold at the thereto should remain in the vendor until the
execution sale referred to was not the property of purchase price thereof should be fully paid, and
the plaintiff at the time of said levy and sale, but that, in case of nonpayment of the debt or of any
was the property of Stanley & Krippendorf, who installment thereof when due, the vendor would
were in possession of the same at the time of such have a right to take possession of the property
levy. They further allege that during the month of and deal with it as provided for in the contract.
January, 1907, the said Stanley & Krippendorf,
being indebted in a considerable sum to the In that case the court held that such a contract for
plaintiff in this case, attempted to sell to the said the conditional sale of goods was valid in these
plaintiff by an instrument in writing the property Islands between the parties thereto, and was
in question; that said instrument was never valid also as to third persons, provided
recorded; that said instrument was a private possession of the property therein described was
document; that the said property was not
SUN BROTHERS & COMPANY VS. VELASCO It is true that Lopez, the conditional vendee, never
54 O.G. 5143, January 13, 1958 had any title to the refrigerator in question
because Lopez failed to fully pay the purchase
FACTS: price. When Lopez, who has no title to the
Under a Conditional Sale Agreement refrigerator, sold it to Jose Velasco, the latter did
(“Agreement”), Sun Brothers & Company (“Sun not acquire any better right than what Lopez had
Brothers”) delivered to Francisco Lopez --- which is practically nothing. Velasco was not a
(“Lopez”) an Admiral refrigerator. Out of the purchaser in good faith and for value for the
stipulated price of P1,700, P500 was paid as down reason that since Lopez, being a private person
payment. It was stipulated under said Agreement who is not engaged in the business of selling
that (a) Lopez shall not remove the refrigerator refrigerators, Velasco must be reasonably
from his address nor part possession therewith expected to have inquired from Lopez whether or
without the express written consent of Sun not the refrigerator he was selling has been paid
Brothers; (b) it shall remain as the absolute in full. In this, Velasco has been negligent.
property of Sun Brothers until Lopez has paid in
full the purchase price; and (3) in the event of In the case of Co Kang Chui, since he purchased
violation of the terms of the Agreement, Sun the refrigerator from J.V. Trading, a merchant
Brothers may rescind the sale, recover possession store, paragraph 3 of Article 1505 shall apply. Co
of the refrigerator and any amount paid shall be Kang Chui should be declared as having acquired
forfeited. a valid title to the refrigerator, although his
predecessors in interest did not have any right of
Without the knowledge of Sun Brothers, Lopez, ownership over it. This is a case of imperfect or
misrepresenting himself as the owner, sold the void title ripening into a valid one, as a result of
refrigerator to J.V. Trading. This is a business some intervening causes. The policy of the law
store owned by Jose Velasco (“Velasco”). The has always been that where the rights and
latter, in turn, displayed the refrigerator in his interests of a vendor come into clash with that of
store and sold the same to Co Kang Chui. This was an innocent buyer for value, the latter must be
delivered to the latter’s residence. protected.
The remedy under Article 559 may not also apply
ISSUE: to Sun Brothers (i.e., to obtain its return provided
Who has the better right, Co Kang Chiu, an he reimburses the one in possession thereof)
innocent buyer from a store, or Sun Brothers, the because it neither lost the property nor was it
conditional vendor? unlawfully deprived of such. The proper remedy
is for Sun Brothers to claim for indemnity against
RULING: Lopez.
Co Kang Chiu has a better right.
Under paragraph 3, Article 1505 of the Civil Code,
sale of goods by one who is not an owner thereof
does not vest a better title to the buyer. However,
where purchases were made in a merchant’s
store, or in fairs, or markets, such rule does not
apply.
LAWYERS COOPERATIVE PUBLISHING In the instant case, the obligor bound himself to
COMPANY VS TABORA assume the loss after the delivery of the goods to
G.R. No. L-21263, April 30, 1965; J. Bautista him. In other words, the obligor agreed to assume
Angelo any risk concerning the goods from the time of
their delivery, which is an exception to the rule
FACTS: provided for in Article 1262 of our Civil Code.
Perfecto Tabora bought from Lawyers
Cooperative Publishing Company one set of
American Jurisprudence, including one set of
general index, payable on installment plan. It was
provided in the contract that "title to and
ownership of the books shall remain with the
seller until the purchase price shall have been
fully paid. Loss or damage to the books after
delivery to the buyer shall be borne by the buyer."
Tabora paid only a down payment of P300.00,
leaving a balance of P1,382.40. The books were
duly delivered to his law office in Naga City.
However, in the midnight of the same day, a big
fire broke out which destroyed and burned all the
buildings including the books delivered. Despite
demands made, Tabora failed to pay the monthly
installments. Hence, the company filed an action
for the recovery of the balance of the obligation.
ISSUE:
Whether or not Tabora is liable to pay the
obligation even if the loss occurs thru a fortuitous
event without fault on his part.
RULING:
Yes. Tabora is liable to pay the obligation even if
the loss occurs thru a fortuitous event without
fault on his part.
Article 1504 of our Civil Code, in part provides:
" (1) Where delivery of the goods has been made
to the buyer or to a bailee for the buyer, in
pursuance of the contract and the ownership in
the goods has been retained by the seller merely
to secure performance by the buyer of his
obligations under the contract, the goods are at
the buyer's risk from the time of such delivery."
CARUMBA VS CA
G.R. No. L-27587, February 18, 1970
FACTS: Canuto sold a parcel of land to Carumba
by virtue of a Deed of Sale of Unregistered Land.
The sale was never registered. Thereafter, Canuto
was sued for collection of money, and the said
land was levied upon and sold to Balbuena, who
registered it.
ISSUE: Who has a better right, Carumba or
Balbuena?
HELD: CARUMBA. Art. 1544 does not apply in this
case. Instead, the Rules of Court are applicable.
Balbuena, the later vendee, merely steps into the
shoes of the judgment debtor and acquires all the
rights and interests of the latter. By the time the
lot was sold through the foreclosure proceedings,
it was no longer owned by Canuto by virtue of a
prior sale to Carumba—who has a better right.
Carumba dealt with a double sale of the same
unregistered land. The first sale was made by the
original owners and was unrecorded while the
second was an execution sale that resulted from a
complaint for a sum of money filed against the
said original owners. Applying Section 35, Rule 39
of the Revised Rules of Court, 7 this Court held that
Article 1544 of the Civil Code cannot be invoked
to benefit the purchaser at the execution sale
though the latter was a buyer in good faith and
even if this second sale was registered. It was
explained that this is because the purchaser of
unregistered land at a sheriffs execution sale only
steps into the shoes of the judgment debtor, and
merely acquires the latter's interest in the
property sold as of the time the property was
levied upon.
SONG FO VS HAWAIIAN PHIL CO. (2) With reference to the second question, doubt
GR. No. 23769 September 16, 1925 has risen as to when Song Fo & Co. was supposed
to make the payments for the delivery of molasses
FACTS: as shown in the documents presented by the
Hawaiian-Philippine Co. got into a contract with parties.
Song Fo & Co. where it would deliver molasses to The Supreme Court said that Hawaiian-Philippine
the latter. Co. does not have the right to rescind the contract.
It should be noted that the time of payment
Hawaiian-Philippine Co. was able to deliver stipulated for in the contract should be treated as
55,006 gallons ofmolasses before the breach of of the presence of the contract. There was only a
contract. slight breach of contract when the payment was
delayed for 20 days after which Hawaiian-
SFC filed a complaint for breach of contract Philippine Co. accepted the payment of the
against Hawaiian-Philippine Co. and asked overdue accounts and continued with the
P70,369.50. Hawaiian-Philippine Co. answered contract, waiving its right to rescind the contract.
that there was a delay in the payment from Song The delay in the payment of Song Fo & Co. was not
Fo & Co. and that Hawaiian-Philippine Co. has the such a violation for the contract.
right to rescind the contract due to that and
claims it as a special defense. (3) With regard to the third question, the first
The judgment of the trial court condemned cause of action of Song Fo & Co. is based on the
Hawaiian-Philippine Co. to pay Song Fo & Co. a greater expense to which it was put in being
total of P35,317.93, with legal interest from the compelled to secure molasses from other sources
date of the presentation of the complaint, and to which Supreme Court ruled that P3,000 should
with costs. be paid by Hawaiian-Philippine Co. with legal
interest from October 2, 1923 until payment.
ISSUE:
(1) Did Hawaiian-Philippine Co. agree to sell The second cause of action was based on the lost
400,000 gallons ofmolasses or 300,000 gallons of profits on account of the breach of contract.
molasses? Supreme Court said that Song Fo & Co. is not
(2) Had Hawaiian-Philippine Co. the right to entitled to recover anything under the second
rescind the contract of sale made with Song Fo & cause of action because the testimony of Mr. Song
Co.? Heng will follow the same line of thought as that
(3) On the basis first, of a contract for 300,000 of the trial court which in unsustainable and there
gallons of molasses, and second, of a contract was no means for the court to find out what items
imprudently breached by Hawaiian-Philippine make up the P14,000 of alleged lost profits.
Co., what is the measure of damages?
RULING:
(1) Only 300,000 gallons of molasses was agreed
to by Hawaiian-Philippine Co. as seen in the
documents presented in court. The language used
with reference to the additional 100,000 gallons
was not a definite promise.
DOROMAL VS CA
G.R. No. L-36083 September 5, 1975
The respondent should also pay only the 30K
FACTS: A parcel of land in Iloilo were co-owned stipulated in the deed of sale because a
by 7 siblings all surnamed Horilleno. 5 of the redemptioner’s right is to be subrogated by the
siblings gave a SPA to their niece Mary Jimenez, same terms and conditions stipulated in the
who succeeded her father as a co-owner, for the contract.
sale of the land to father and son Doromal. One of
the co-owner, herein petitioner, Filomena
Javellana however did not gave her consent to the
sale even though her siblings executed a SPA for
her signature. The co-owners went on with the
sale of 6/7 part of the land and a new title for the
Doromals were issued.
Respondent offered to repurchase the land for
30K as stated in the deed of sale but petitioners
declined invoking lapse in time for the right of
repurchase. Petitioner also contend that the 30K
price was only placed in the deed of sale to
minimize payment of fees and taxes and as such,
respondent should pay the real price paid which
was P115, 250.
ISSUE: WON the period to repurchase of
petitioner has already lapsed.
HELD: Period of repurchase has not yet lapsed
because the respondent was not notified of the
sale. The 30-day period for the right of repurchase
starts only after actual notice not only of a
perfected sale but of actual execution and
delivery of the deed of sale.
The letter sent to the respondent by the other co-
owners cannot be considered as actual notice
because the letter was only to inform her of the
intention to sell the property but not its actual
sale. As such, the 30-day period has not yet
commenced and the respondent can still exercise
his right to repurchase.
HEIRS OF JOSE REYES VS AMANDA REYES survived by his wife, Amanda Reyes and her
G.R. No. 158377, March 13, 2010 children.
FACTS: Antonio Reyes and his wife, Leoncia ISSUE: Whether or not the CA erred in finding
Reyes (Leoncia) were owners of a parcel that petitioners were already barred from
residential land with an area of 442 square claiming that the transaction entered into by their
meters in Pulilan, Bulacan, where they predecessors-in-interest was an equitable
constructed their dwelling. The couple hadfour mortgage and not a pacto de retro sale.
children: Jose, Sr., Teofilo, Jose, Jr., and
HELD: Yes. While the CA correctly concluded that
Potenciana. Antonio Reyes died intestate, and was
the true agreement ofthe party vis-à-vis the
survived by Leoncia and their three sons and
Kasulatan ng Biling Mabibiling Muli was
Potenciana. Potenciana having predeceased her
anequitable mortgage not a pacto de retro sale, it
father also died intestate, survived by her
erred when it concluded that petitioners are
children. On July 9, 1955, Leoncia and her three
barred from claiming the transaction as such by
sons executed a deed denominated Kasulatan ng
their failure to redeem the property for a long
Biling Mabibiling Muli, whereby they sold the
period of time. It was undisputed that the
land and its existing improvements to the Sps.
purported vendors had continued in possession
Francia for theamount of P500.00, subject to the
of the property even after the execution of an
vendor’s right to repurchase for the same amount
agreement, and that said property remained
once they benefited from it.
declared for taxation purposes under Leoncia’s
Potenciana’s heirs did not assent to that deed, and name, with the real taxes due paid by her.
Teofilo and Jose, Jr. and their respective families Paragraphs, 2 and 5 of Article 1602 of the Civil
remained in possession of the property and paid Code states that, “The contract shall bepresumed
real property taxes thereon. The Sps. Francia both to be an equitable mortgage, in any of the
died intestate, without Leoncia and herchildren following cases: (2)When the vendor remains in
paying the amount of P500.00. Alejandro, son of possession as lessee or otherwise; (5) When the
Jose, Sr., paid said amount to Sps. Francia. The vendor binds himself to pay the taxes on the thing
heirs of Sps. Francia then, transferred and sold.
conveyed to Alejandro all the rights and interests
The existence of any one of the conditions under
to Alejandro.On August 21, 1970, Alejandro
Article 1602, not the concurrence of all or of a
executed a Kasulatan ng Pagmeme-ari declaring
majority thereof suffices to the presumption itis
that he had acquired all the rights and interestsof
an equitable mortgage. Petitioners in this case are
the heirs of the Sps. Francia after the vendors
not barred from claiming that the transaction
failed to repurchasewithin the given period, and
under the Kasulatan ng Biling Mabibiling Muli
paid realty property taxes from then on.On
was an equitable mortgage by their failure to
October 17, 1970, Alejandro, Leoncia and Jose, Sr.
redeem the property for a longperiod of time.
executed a Magkalakip na Salaysay,
Considering the period of redemption stated in
acknowledging the right of Leoncia, Jose, Jr.and
the Kasulatan ng Biling Mabibiling Muli, which is
Jose, Sr. to repurchase the property at any time for
“sa oras na sila’y makinabang,” signified that no
the sameamount. Leoncia died intestate and was
definite period had been stated pursuant to
survived by Jose, Sr., Teofilo,Jose, Jr. and the heirs
Articles 1142 and 1144 of the Civil Code. The full
of Potenciana. Alejandro likewise died intestate
redemption price should have been paid by July
ARELLANO UNIVERSITY SCHOOL OF LAW Page 24
CIVIL LAW REVIEW II BATCH 2017 CASE DIGEST
SPEACIAL CONTRACTS (SALES)
CEBU STATES COLLEGE VS MISTERIO ISSUE: Whether the vendor a retro repurchase
G.R. No. 179025, June 17, 2015 the property even beyond the four year period
prescribed by law?
FACTS: In 1956, the late Asuncion Sadaya, mother
of herein respondents, executed a Deed of Sale HELD: NO. In cases of conventional redemption
covering Lot 1064 in favor of Sudlon Agricultural when the vendor a retro reserves the right to
High School (SAHS). The sale was subject to the repurchase the property sold, the parties to the
right of the vendor to repurchase the property sale must observe the parameters set forth by
after SAHS shall have ceased to exist, or shall have Article 1606 of the New Civil Code, which states:
transferred its school site elsewhere.
Art. 1606. The right referred to in Article 1601, in
When Batas Pambansa (BP) Blg. 412 [enacted on the absence of an express agreement, shall last
June 10, 1983], entitled "An Act Converting the four years from the date of the contract.
Cebu School of Arts and Trades in Cebu City into a
Should there be an agreement, the period cannot
Chartered College to be Known as the Cebu State
exceed ten years.
College of Science and Technology, it
incorporated and consolidated several schools in However, the vendor may still exercise the right
Cebu, including the SAHS. The law also to repurchase within thirty days from the time
transferred all personnel, properties, including final judgment was rendered in a civil action on
buildings, sites, and improvements, records, the basis that the contract was a true sale with
obligations, monies and appropriations of SAHS right to repurchase.
to Cebu State College.
Thus, depending on whether the parties have
Herein respondents as heirs of the seller agreed upon a specific period within which the
Asuncion Sadaya, informed the Governor of Cebu vendor a retro may exercise his right to
of their intention to repurchase the subject repurchase, the property subject of the sale may
property as stipulated in the Deed of Sale on the be redeemed only within the limits prescribed by
ground that SAHS had ceased to exist. When the the aforequoted provision.
claim to repurchase was refused, respondents
Petitioner and respondents in this case did not
filed a Complaint for Nullity of Sale and/or
agree on any period for the exercise of the right to
Redemption against Cebu State College. The RTC
repurchase the property herein, respondents may
declared that the Deed of Sale entered into by and
use said right within four (4) years from the
between Asuncion Sadaya and SAHS as null and
happening of the allocated conditions contained
void for the latter's lack of juridical personality.
in their Deed of Sale: (a) the cessation of the
The CA reversed the latter decision and
existence of the SAHS, or (b) the transfer of the
ratiocinated that while it agrees with the trial
school to other site. However, due to respondents'
court's finding that the SAHS had ceased to exist
failure to exercise their right to redeem the
when BP Blg. 412 took effect, respondents are
property within the required four (4) years from
barred by prescription from exercising their right
the time when SAHS had ceased to exist, or from
to repurchase the subject property, which expired
June 10, 1983, the date of effectivity of BP Blg.
in June 1987, or four years from the effectivity of
412, this Court held that respondents are barred
BP Blg. 412 on June 10, 1983.
by prescription.