SALES NOTES By: Allana Nacino
CHAPTER 1. NATURE AND FORM OF THE
CONTRACT
CONTRACT OF SALE CONCEPTS
A. CHARACTERISTICS
Article 1458. 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.
A contract of sale may be absolute or conditional.
Contract of Sale
Art. 1458. 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.
Sale, defined
A contract where one party (seller or vendor) obligates
himself to transfer the ownership of and to deliver a
determinate thing, while the other party (buyer or
vendee) obligates himself to pay for said thing a price
certain in money or its equivalent.
Note: Art. 1458 is taken from Art. 1445 of the
Spanish Civil Code, except that under the latter, the
obligation of the vendor was merely to deliver the
thing sold, ownership is not necessary.
Question: Suppose Art. 1458 did not specify that
the seller must transfer the ownership of the object,
does he still have this obligation?
Answer: Yes, for after all, this transfer of ownership
is the fundamental aim of the contract since a buyer
is after the transfer of ownership and not just merely
physical transfer.
Essential Characteristics of the Contract of Sale
1. Consensual – compared to real contracts,
consensual contracts are perfected by mere
consent and not by delivery.
2. Bilateral reciprocal – both parties are bound by
obligations dependent upon each other.
3. Onerous – valuable considerations must be given
to acquire rights.
4. Commutative – values exchanged are or are
almost equivalent to each other
(NOTE: by exception, some contracts of sale are
aleatory, not of equivalent values. Example: sale
of a genuine sweepstakes ticket)
5. Principal – there is no necessity for it to depend
upon the existence of another valid contracts,
unlike those of accessory contracts.
6. Nominate – referred to in the Code by a special
designation or name, unlike of those that are
innominate.
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B. ESSENTIAL REQUISITES
Elements of a Contract of Sale
1. Essential – those without which there can be no
valid sale.
a. Consent – aka meeting of the minds. Refers
to the consent on the part of the seller or
vendor to transfer and deliver, and on the part
of the buyer or vendee to pay.
(NOTE: As an exception to the rule of
consent, there may be sale against the will of
the owner in case of expropriation which is
governed by special laws.)
Elements of consent:
1. Subjects/contracting parties
2. Concurrence of offer and acceptance
3. Legal capacity of the contracting parties
4. Consent must be given:
a. Intelligently
b. Freely
c. spontaneously
b. Object – aka subject matter. Refers to the
determinate thing which is the object of a
contract.
c. Cause – aka consideration. Refers to the
price certain in money or its equivalent
(NOTE: The price need not be money)
Leabres v. CA
GR 41837, Dec. 12, 1986
Facts: Plaintiff purchased a portion of a subdivision
from the surviving husband of the deceased owner,
evidenced by a receipt. The Philippine Trust Co
relieved the surviving husband as administrator and
advertised the sale of the subdivision. Since no
adverse claim or interest over the subdivision or any
portion thereof was ever presented by any person,
the Philippine Trust Co. executed the Deed of
Absolute Sale of the subdivision in favor of the
SALES NOTES By: Allana Nacino

Manotok Realty, Inc.. The deed was judicially Barter

approved and recorded immediately in the Register By barter or exchange, one of the parties binds himself
of Deeds which issued the corresponding to give one thing in consideration of the other’s promise
Certificates of Title. to give another thing; whereas, by sale, one of the
Issue: Whether or not a receipt is a valid basis of a parties binds himself to deliver a thing in consideration
contract of sale of the other’s undertaking to pay the price in money or
its equivalent.
Held: No. An examination of the receipt reveals that
the same can neither be regarded as a contract of Sale Barter
sale or a promise to sell. There was merely an Nature
acknowledgment of the sum of One Thousand A thing is given in A thing is given in
Pesos (P1,000.00). The requisites of a valid exchange of a price exchange of another
Contract of Sale, namely 1) consent or meeting of certain in money or its thing. (Art. 1638)
the minds of the parties; 2) determinate subject equivalent. (Art. 1458)
matter; 3) price certain in money or its equivalent, Applicable Law
are lacking in the said receipt. Law on Barter or
Law on Sales Exchange. (Arts. 1638 –
2. Natural - those which are inherent in the contract, 1641)
and which in the absence of any contrary Applicability of Statute of Frauds
provision, are deemed to exist in the contract. The rule on the Statue of The rules on Statute of
Frauds, which apply to Frauds, which apply to
a. Warranty against eviction the sale of real property the sale of real property
b. Warranty against hidden defects and personal property and personal property
bought at P500 or more, bought at P500 or more,
3. Accidental - those which may be present or apply. do not apply.
absent in the stipulation, such as the place or time If the consideration is partly in money and
of payment, or the presence of conditions partly in another thing
1. The transaction is characterized by manifest
intention of the parties
Stages in the Contract of Sale 2. If there is no manifest intention:
a. Barter if the value of the thing is more
1. Generation or negotiation – period of bargaining valuable than money
which ends at the agreement of both parties b. Sale if the value of the thing is equal or less
than the amount of money
2. Perfection – meeting of the minds of the
contracting parties.
2. Sale v. Donation
3. Consummation – happens when the object is
delivered and the price is paid. Donation
Donation is an act of liberality whereby a person
___________________________________________ disposes gratuitously of a thing or right in favor of
another person, who accepts it.
C. Sales as distinguished from other contracts
Sale Donation
1. Sale v. Barter Nature
Essentially an onerous A gratuitous contract
Art. 1468. If the consideration of the contract
contract
consists partly in money, and partly in another
Validity
thing, the transaction shall be characterized by the
manifest intention of the parties. If such intention Perfected by mere As a solemn contract,
does not clearly appear, it shall be considered a consent although consent is also
barter if the value of the thing given as a part of the required, it must comply
consideration exceeds the amount of the money or with the formalities
its equivalent; otherwise, it is a sale. mandated by law for its
validity.
Art. 1638. By the contract of barter or exchange one Legal Effect
of the parties binds himself to give one thing in A valid sale for valuable Cannot have the legal
consideration of the other’s promise to give consideration does not affect of depriving the
another thing. diminish the estate of compulsory heirs of their
the seller. legitimes.
SALES NOTES By: Allana Nacino

3. Sale v. Contract for Piece of Work not engaged in manufacturing under sec 186, but
only in sales of services covered by sec 191. Having
Art. 1467. A contract for the delivery at a certain failed to convince BIR, petitioner went to the Court
price of an article which the vendor in the ordinary of Tax Appeal where it also failed. CTA, in its
course of his business manufactures or procures decision, holds that the “petitioner has chosen for its
for the general market, whether the same is on tradename and has offered itself to the public as a
hand at the time or not, is a contract of sale, but if “Factory”, which means it is out to do business, in its
the goods are to be manufactured specially for the chosen lines on a big scale. As a general rule, sash
customer and upon his special order, and not for factories receive orders for doors and windows of
the general market, it is a contract for a piece of special design only in particular cases but the bulk
work. of their sales is derived from a ready-made doors
and windows of standard sizes for the average
Contract for Piece of Work home.
By the contract for a piece of work the contractor binds
himself to execute a piece of work for the employer, in Issue: Whether the petitioner company provides
consideration of a certain price or compensation. The special services or is engaged in manufacturing.
contractor may either employ his labor or skill, or also
furnish the material. (Art. 1713.) Held: The Oriental Sash Factory is engaged in
manufacturing. The company habitually makes
Sale Contract for a Piece of sash, windows and doors as it has been
Work represented to the public.The fact that windows and
Risk of Loss doors are made by it only when customers place
Borne by the worker or their orders, does not alter the nature of the
Borne by the buyer contractor, not by the establishment, for it is obvious that it only accepted
employer (the person such orders as called for the employment of such
who ordered). material-moulding, frames, panels-as it ordinarily
Object of the Contract manufactured or was in a position habitually to
Sale of a manufactured The services dominate manufacture. The Oriental Sash Factory does
item; it is a sale of goods the contract even nothing more than sell the goods that it mass-
even though the item is though there is a sale of produces or habitually makes; sash, panels,
manufactured by labor goods involved. mouldings, frames, cutting them to such sizes and
furnished by the seller combining them in such forms as its customers may
and upon previous order desire.
of the customer.
Applicability of Statute of Frauds CIR v. Arnoldus Carpentry
Governed by the statute Not governed by the G.R. No. 71122; 25 March 1988
of frauds statute of frauds
Existence of Thing Facts: Arnoldus Carpentry Shop is a domestic
The thing transferred is The thing transferred is corporation whose second purpose is the
one which would have not in existence and “preparing, processing, buying, selling, exporting,
been the subject of ale would never have importing, manufacturing, trading and dealing in
to some other person, existed but for the order cabinet shop products, wood and metal home and
even if the other have of the party desiring to office furniture, cabinets, doors, windows, etc.,
not been given. acquire it. including their component parts and materials.”
Rules in Determining if the Contract is one of Thus, furniture, cabinets, and other woodwork were
Sale or a Piece of Work sold locally and exported abroad. Examiners of the
If ordered or If manufactured Commissioner of Internal Revenue (CIR) conducted
manufactured in the especially for the an investigation of the business tax liabilities of
ordinary course of customer upon his Arnoldus Carpentry. Based on such examination, a
business. special order and not for report was made to the Commissioner classifying
the general market. such as an “other independent contractor” under
Section 205 (16) [now Section 169 (9)] of the Tax
Code. The corporation renders service in the course
Celestino and co. vs. CIR
of an independent occupation representing the will
99 Phil 841
of his employer only as to the result of his work, and
not as to the means by which it is accomplished.
Facts: Celestino is the owner of Oriental Sash
Hence, it is recommended that 3% contractor’s tax
Factory. It paid 7% on the gross sales of their sales.
be imposed. A protest letter was made maintaining
In 1952, they began to pay only 3% tax. Petitioner
that the carpentry shop is a manufacturer and thus
claims that it does not manufacture ready-made
entitled to 7% tax exemption on export sales.
doors, sash and windows for the public, but only
upon special orders from the customers, hence, it is
Issue: Is Arnoldus Carpentry a manufacturer.
SALES NOTES By: Allana Nacino
Held: Yes. “Manufacturer” includes every person
who by physical or chemical process alters the
exterior texture or form or inner substance of any
raw material or manufactured or partially
manufactured product in such manner as to prepare
it for a special use. Based on Article 1467, what
determines whether the contract is one of work or
sale is whether the thing has been manufactured
specially for the customer and “upon his special
order.” Thus, if the thing is specially done at the
order of another, this is a contract for a piece of
work. If, on the other hand, the thing is
manufactured or procured for the general market in
the ordinary course of one’s business, it is a contract
of sale. The one who has ready for the sale to the
general public finished furniture is a manufacturer,
and the mere fact that he did not have on hand a
particular piece or pieces of furniture ordered does
not make him a contractor only. The facts show that
the company had a ready stock of its shop products
for sale to its foreign and local buyers. As a matter
of fact, the purchase orders from its foreign buyers
showed that they ordered by referring to the models
designated by petitioner. Even purchases by local
buyers for television cabinets were by orders for
existing models except only for some adjustments in
sizes and accessories utilized.
4. Sale v. Agency to sell
Art. 1466. In construing a contract containing
provisions characteristic of both the contract of
sale and of the contract of agency to sell, the
essential clauses of the whole instrument shall be
considered.
Agency of Sale
By the contract of agency, a person binds himself to
render some service or to do something in
representation or on behalf of another, with the consent
or authority of the latter. (Art. 1868.)
Sale Agency to Sell
Transfer of Ownership
Agent receives the
Buyer receives goods as goods as goods of the
owner. principal who retains his
ownership over them.
Obligation as Regards the Price
Agent delivers the price,
Buyer pays the price. which he got from his
buyer, to his principal.
Right to Return the Thing
Agent can return the
Buyer, as a general rule, goods in case he is
cannot return the object unable to sell the same
sold. to a third person.
Warranty as to the Object Sold
Agent makes no
Seller warrants the thing warranty for which he
sold. assumes personal
liability as long as he
acts within his authority
and in the name of the
seller.
Right over the thing
Agent in dealing with the
Buyer can deal with the thing received, must act
thing sold as he pleases according to the
being the owner. instructions of the
principal.
Revocability
Essentially revocable,
Contract of sale is not because it covers an
unilaterally revocable. underlying fiduciary
relationship between the
principal and the agent.
Quiroga vs. Parson
Hardware Co., 38 Phil. 501 [1918]
Facts: On January 24, 1911, plaintiff Andres
Quiroga and J. Parsons (to whose rights and
obligations the present defendant Parsons
Hardware Co. later subrogated itself) entered into a
contract, where it was stated among others that
Quiroga grants in favor of Parsons the exclusive
rights to sell his beds in the Visayan Islands under
some conditions. One of the said conditions
provided that “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”
while another one passed on to Parsons the
obligation to order by the dozen and in no other
manner the beds from Quiroga.
Alleging that the Parsons was his agent for the sale
of his beds in Iloilo, Quiroga filed a complaint against
the former for violating the following obligations
implied in what he contended to be a contract of
commercial agency: 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.
Issue: Whether or not the contract is that of an
agency to sell.
Held: No. The Supreme Court declared 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. 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
SALES NOTES By: Allana Nacino

defendant with the beds which the latter might order, the private arrangement it had with Starr Piano
at the price stipulated, and that the defendant was relative to the 25% discount. Being the exclusive
to pay the price in the manner stipulated. There was agent of Starr, Arco could not have secured this
the obligation on the part of the plaintiff to supply the discount with Starr and neither is GPS willing to
beds, and, on the part of the defendant, to pay their waive the discount for Arco. Thus, GPS is not bound
price. These features exclude the legal conception to reimburse Arco for any difference between the
of an agency or order to sell whereby the mandatory cost price and the sales price, which represents the
or agent received the thing to sell it, and does not profit realized by GPS out of the transaction.
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 5. Sale v. Lease
returns it.
Contract of Lease
In a contract of lease, the lessor binds himself to give
G. Puyat & Sons, Inc. vs. Arco Amusement to another (the lessee) the enjoyment or use of a thing
72 Phil. 402 [1941] for a price certain, and for a period which may be
definite or indefinite.
Facts: Arco Amusement was engaged in the
business of operating cinematographs. Gonzalo Sale Lease
Puyat & Sons Inc (GPS) was the exclusive agent in Transfer of Ownership
the Philippines for the Starr Piano Company. No transfer of ownership
Desiring to equip its cinematograph with sound Ownership is transferred because the rights of the
reproducing devices, Arco approached GPS. After upon delivery (Art. 1496) lessee are limited to the
some negotiations, it was agreed between the use and enjoyment of
parties that GPS would order sound reproducing the thing leased. (Art.
equipment from Starr Piano Company and that Arco 1643)
would pay GPS, in addition to the price of the Extent of Transfer
equipment, a 10% commission, plus all expenses
such as freight, insurance, etc. When GPS inquired Permanent, unless
Starr Piano the price (without discount) of the subject to a resolutory Temporary.
equipment, the latter quoted such at $1,700. Being condition (Art. 1465)
agreeable to the price (plus 10% commission plus
all other expenses), Arco formally authorized the Who may convey the property
order. The following year, both parties agreed for Seller must be the
another order of sound reproducing equipment on owner at the time the
the same terms as the first at $1,600 plus 10% plus property is delivered, or Lessor need not be the
all other expenses. at least authorized by owner.
the owner to transfer
Three years later, Arco discovered that the prices ownership.
quoted to them by GPS with regard to their first 2 Significance of Price of Object
orders mentioned were not the net prices, but rather Usually the selling price
the list price, and that it had obtained a discount is mentioned, as the The price of the object,
from Starr Piano. Moreover, Arco alleged that the parties involved can fix distinguished from the
equipments were overpriced. Thus, being its agent, it. However the fixing of rent, is usually not
GPS had to reimburse the excess amount it the price cannot be left mentioned.
received from Arco. to the discretion of one
of the contracting parties
Issue: Whether or not there was a contract of (Art. 1473)
agency, not of sale
Note: A conditional sale may be made in the form of
Held: The letters containing Arco's acceptance of
a “lease with option to buy” as a device to
the prices for the equipment are clear in their terms
circumvent the provisions of the Recto Law
and admit no other interpretation that the prices are
governing the sale of personal property on
fixed and determinate. While the letters state that
installments.152.
GPS was to receive a 10% commission, this does
not necessarily mean that it is an agent of Arco, as
this provision is only an additional price which it
bound itself to pay, and which stipulation is not
incompatible with the contract of sale. The facts and D. Kinds of Sale
circumstances show that Arco entered into a
contract of sale with GPS, the exclusive agent of Two Major Types of a Contract of Sale
Starr Piano. As such, it is not duty bound to reveal
SALES NOTES By: Allana Nacino
1. Absolute – no conditions attached; transfer of
ownership is vested upon delivery.
2. Conditional – contemplates a contingency.
Difference of Contract to sell and conditional sale
Conditional Sale Contract to Sell
Reservation of Title t the Subject Property
In both case the seller may reserve the title to
property until fulfillment of the suspensive condition.
Effect of Fulfillment of Suspensive Condition
The sale is perfected: if Ownership is not
there has been previous automatically
delivery of subject transferred to the buyer
property to the buyer, (even if there was a
ownership automatically previous delivery upon
transfers to the buyer by him) upon fulfillment of
operation of law without suspensive condition.
any further act on the
part of the seller.
Effect of sale of the subject property to third
persons
Upon the fulfillment of There is no double sale.
suspensive condition,
sale becomes absolute The third person is not a
which affects the seller’s buyer in bad faith.
title.
Prospective buyer
The third person cannot seek relief of
becomes a buyer in bad reconveyance of
faith if he possesses property.
constructive or actual
knowledge of defect in
seller’s title.
A subsequent buyer
cannot defeat the first
buyer’s title.
Dignos vs. CA
158 SCRA 378, February 1988
Facts: In July 1965, herein petitioners Silvestre T.
Dignos and Isabela Lumungsod de Dignos
(spouses Digns) sold their parcel of land in Opon,
Lapu-Lapu to herein private respondent Antonio
Jabil for the sum of P28,000 payable for two
installments, with an assumption of indebtedness
with the First Insular Bank of Cebu in the sum of
P12,000 and the next installment of P4,000 to be
paid in September 1965. In November 1965, the
spouses Dignos sold the same parcel of land for
P35,000 to defendants Luciano Cabigas and Jovita
L. De Cabigas (spouses Cabigas) who were US
citizens, and executed in their favor an Absolute
Deed of Sale duly registered in the Office of the
Register of Deeds.
Upon discovery of the 2nd sale of the subject land,
Jabil filed the case at bar in the CFI of Cebu which
declared the second sale to the spouses Cabigas
null and void ab initio and the first sale to Jabil not
rescinded. The CFI of Cebu also ordered Jabil to
pay the remaining P16,000 to the spouses Dignos
and to reimburse the spouses Cabigas a reasonable
amount corresponding the expenses in construction
of hollow block fences in the said parcel of land. The
spouses Dignos were also ordered to return the P
35,000 to the spouses Cabigas.
Both Jabil and the spouses Dignos appealed to the
CA, which affirmed in July 1981 the CFI of Cebu’s
decision except for the part of Jabil paying the
expenses of the spouses Cabigas for building a
fence. The spouses Dignos contested that the
contract between them and Jabil was merely a
contract to sell and not a deed of sale.
Issue: Whether or not the contract between the
parties is a contract of sale/
Held: Yes. 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.
Such facts were admitted by petitioner spouses
Hulst vs. PR Builders
G.R. No. 156364; September 3, 2007
Facts: The Petitioner and his spouse, both Dutch
Nationals, entered into a Contract to Sell with PR
Builders, Inc. to purchase a 210-sq m residential unit
in the respondent's townhouse project in
Batanagas. When PR Builder's failed to comply with
their verbal promise to complete the project, the
spouses Hulst filed a complaint for recession of
SALES NOTES By: Allana Nacino

contract with interest, damages and attorney's fees

before the Housing and Land Regulatory Board
(HLURB), which then was granted. A Writ of
Execution was then addressed to the Ex-Officio
Sheriff of the RTC of Tanauan, Batangas, but upon
the complaint of the respondent, the levy was set
aside, leaving only the respondent's personal
properties to be levied first. The Sheriff set a public
auction of the said levied properties, however, the
respondent filed a motion to quash Writ of levy on
the ground that the sheriff made an over levy since
the aggregate appraised value of the properties at
P6,500 per sq m is P83,616,000. Instead of
resolving the objection of the respondent's
regarding the auction, the Sheriff proceeded with
the auction since there was no restraining order
from the HLURB. The 15 parcels of land was then
awarded to Holly Properties Realty at a bid of
P5,450,653. On the same day, the Sheriff remitted
the legal fees and submitted to contracts of sale to
HLURB, however, he then received orders to
suspend proceedings on the auction for the reason
that the market value of the properties was not fair.
There was disparity between the appraised value
and the value made by the petitioner and the Sheriff,
which should've been looked into by the Sheriff
before making the sale. While an inadequacy in
price is not a ground to annul such sale, the court is
justified to such intervention where the price shocks
the conscience.
Issue: whether or not the contract executed by the
parties is a contract to sell and not a contract of sale.
Held: Yes. A distinction between the two is material
in the determination of when ownership is deemed
to have been transferred to the buyer or vendee
and, ultimately, the resolution of the question on
whether the constitutional proscription has been
breached.
Since the contract involved here is a Contract to
Sell, ownership has not yet transferred to the
petitioner when he filed the suit for rescission. While
the intent to circumvent the constitutional
proscription on aliens owning real property was
evident by virtue of the execution of the Contract to
Sell, such violation of the law did not materialize
because petitioner caused the rescission of the
contract before the execution of the final deed
transferring ownership.
OBJECT OF SALE
A. Subject matter must be licit
Art. 1459. The thing must be licit and the vendor
must have a right to transfer the ownership thereof
at the time it is delivered.
Licit, defined
The word licit means lawful, i.e., within the commerce
of man
Requisites
1. It is not outside the Commerce of men
2. It is not Intransmissible
3. It does not contemplate a future Inheritance,
unless expressly authorized by law
Note: The thing must be licit and the vendor must
have a right to transfer the ownership thereof at the
time it is delivered.
Kinds of Illicit Things
1. Illicit per se (of its nature)

In a contract of sale, the title passes to the buyer Example: Sale of human flesh for human pleasure.
upon the delivery of the thing sold. The vendor has
lost and cannot recover the ownership of the
property until and unless the contract of sale is itself
resolved and set aside. On the other hand, a 2. Illicit per accidens (made illegal by provision of the
contract to sell is akin to a conditional sale where law)
the efficacy or obligatory force of the vendor's
obligation to transfer title is subordinated to the
happening of a future and uncertain event, so that if Example: Sale of human flesh for human pleasure.
the suspensive condition does not take place, the Sale of land to an alien after the effective date of the
parties would stand as if the conditional obligation Constitution; sale of illegal lottery tickets.
had never existed. In other words, in a contract to
sell, the prospective seller agrees to transfer
ownership of the property to the buyer upon the
happening of an event, which normally is the full
payment of the purchase price. But even upon the
fulfillment of the suspensive condition, ownership
does not automatically transfer to the buyer. The B. Subject matter must be determinate or at least
prospective seller still has to convey title to the determinable
prospective buyer by executing a contract of
absolute sale.
SALES NOTES By: Allana Nacino
Art. 1460. A thing is determinate when it is
particularly designated or physically segregated
from all others of the same class. The requisite that
a thing be determinate is satisfied if at the time the
contract is entered into, the thing is capable of
being made determinate without the necessity of a
new or further agreement between the parties.
Determinate, defined
A thing is determinate or specific when it is:
1. Particularly designated, or
2. Physically segregated from all others of the same
class.
Note: Art. 1458 is taken from Art. 1445 of the
Spanish Civil Code, except that under the latter, the
obligation of the vendor was merely to deliver the
thing sold, ownership is not necessary.
Determinable, defined
A generic object which has neither been physically
segregated nor particularly designate at the point of
perfection from the rest of its kind.
Requisites of Determinate and Determinable
A thing is determinable only when two (2) requisites are
present:
1. If at perfection of the sale, the subject matter is
capable of being made determinate (the “capacity
to segregate” test); and
2. Without the necessity of a new or further
agreement between the parties (the “no further
agreement” test).
Note: Art. 1165 provides that if the obligation is to
deliver a determinate thing, the creditor has the right
to compel specific performance and to recover
damages for breach of the obligation.
Note: A contract of sale is also perfected even when
the exact quantity or quality of the subject matter is
not known, so long as the source of the subject is
certain and fixed.
C. Sale of things having potential existence
Art. 1461. Things having a potential existence may
be the object of the contract of sale. The efficacy of
the sale of a mere hope or expectancy is deemed
subject to the condition that the thing will come
into existence. The sale of a vain hope or
expectancy is void.
Things having potential existence
This is a future thing that may be sold.
Example: “all my rice harvest next year.”
Potential Existence, defined
It is reasonably certain to come into existence as the
natural increment or usual incident of something in
existence already belonging to the seller, and the title
will vest in the buyer the moment the thing comes into
existence.
Note: Future inheritance cannot be sold, however.
(Art. 1347, par. 2, Civil Code).]
D. Sale of hope or expectancy
Art. 1461. Things having a potential existence may
be the object of the contract of sale. The efficacy of
the sale of a mere hope or expectancy is deemed
subject to the condition that the thing will come
into existence. The sale of a vain hope or
expectancy is void.
Efficacy of this sale
Subject to the condition that the thing contemplated or
expected will come into existence.
When void
The sale of a mere hope or expectancy is valid even if
the thing hoped or expected does not come into
existence, unless the hope or expectancy is vain in
which case, the sale is void.
Examples:
1. S binds himself to sell for a specified price to B
a parcel of land if he wins a case for the
recovery of said land pending in the Supreme
Court.
Here, the obligation of S to sell will arise, if the
“expected thing,’’ the land, will come into
existence, i.e., if he wins the case.
Before a decision is rendered, there is only “the
mere hope or expectancy’’ that the thing will
come into existence.
2. B buys a sweepstakes ticket in the hope of
winning a prize. Here, the object of the contract
is the hope itself. The sale is valid even if B
does not win a prize because it is not subject to
the condition that the hope will be fulfilled.
E. Sale of existing and future goods
Art. 1462. The goods which form the subject of a
contract of sale may be either existing goods,
owned or possessed by the seller, or goods to be
manufactured, raised, or acquired by the seller
after the perfection of the contract of sale, in this
Title called “future goods.” There may be a
contract of sale of goods, whose acquisition by the
seller depends upon a contingency which may or
may not happen.
SALES NOTES By: Allana Nacino
Goods
Include all but not the things in action or money of legal
tender in the Philippines.
Kinds of Goods
1. Existing – those that are owned or possessed by
the seller.
Note: the seller must have the right to transfer
ownership at the time the thing is delivered. Hence,
it is not required that the seller is the owner of the
thing at the moment of the perfection of the contract
of sale (Art. 1459)
2. Future – cover goods that are to be manufactured,
raised, or acquired by the seller after the
perfection of the contract of sale.
Note: property or goods which at the time of the sale
are not owned by the seller but which thereafter are
to be acquired by him, cannot be the subject of an
executed sale but may be the subject of a contract
for the future sale and delivery thereof.
Note: Art. 1462 requires that there be delivery of
goods, actual or constructive, to be applicable.
F. Sale of undivided interest
Art. 1463. The sole owner of a thing may sell an
undivided interest therein.
What can be sold by the sole owner of the thing
1. The entire thing, or
2. Only a specific portion thereof, or
3. An undivided interest therein
Undivided Interest
An aliquot part of the whole
Note: A co-owner may sell, but the sale is limited to
the portion which may be allotted to him in the
division of the thing upon the termination of the co-
ownership.
Example: S is the owner of a parcel of land with an
area of 1,000 square meters. As the sole owner, S
can sell to B the entire portion; or only 500 square
meters of the land by metes and bounds in which
case he becomes the sole owner of the remaining
500 meters and B the portion sold; or he may sell an
undivided half of the land without specially
designating or identifying the portion sold, in which
case they become co-owners. As a co-owner, S or
B can convey or transfer only the title pertaining to
the undivided half of the land, for vital to the validity
of a contract of sale is that the vendor be the owner
of the thing sold. (Art. 1459.)
G. Sale of fungible goods
Art 1464. In the case of fungible goods, there may
be a sale of an undivided share of a specific mass,
though the seller purports to sell and the buyer to
buy a definite number, weight or measure of the
goods in the mass, and though the number, weight
or measure of the goods in the mass is
undetermined. By such a sale the buyer becomes
owner in common of such a share of the mass as
the number, weight or measure bought bears to the
number, weight or measure of the mass. If the
mass contains less than the number, weight or
measure bought, the buyer becomes the owner of
the whole mass and the seller is bound to make
good the deficiency from goods of the same kind
and quality, unless a contrary intent appears.
Fungible Goods, defined
Goods of which any unit is, from its nature or by
mercantile usage, treated as the equivalent of any
other unit (Uniform Sales Act, Sec. 76.), such as grain,
oil, wine, gasoline, etc.
Effect of sale of Fungible Goods
The owner of a mass of goods may sell only an
undivided share thereof, provided the mass is specific
or capable of being made determinate. (Art. 1460.)
1. By such sale, the buyer becomes a co-owner with
the seller of the whole mass in the proportion in
which the definite share bought bears to the mass.
2. It must follow that the aliquot share of each owner
can be determined only by the measurement of
the entire mass. If later on it be discovered that the
mass of fungible goods contains less than what
was sold, the buyer becomes the owner of the
whole mass and furthermore, the seller shall
supply whatever is lacking from goods of the same
kind and quality, subject to any stipulation to the
contrary.
Note: In the sale of an undivided share, either of a
thing (Art. 1463.) or of that of mass of goods (Art.
1464.), the subject matter is an incorporeal right.
(Art. 1501.) Here, ownership passes to the buyer by
the intention of the parties.
Example: S owns 1,000 cavans of palay stored in
his warehouse. If S sells to B 250 cavans of such
palay which cavans are not segregated from the
whole mass, B becomes a co-owner of the said
mass to the extent of 1/4. If the warehouse happens
to contain only 200 cavans, S must deliver the whole
200 cavans and supply the deficiency of 50 cavans
of palay of the same kind and quality. In the same
example, the number of cavans in the warehouse
may be unknown or undetermined and S may sell
only 1/4 share of the contents. The legal effect of
such a sale is to make B a co-owner in that
proportion. It is obvious that in such case, the
obligation of the seller “to make good the deficiency”
will not arise.
SALES NOTES By: Allana Nacino

Price is simulated when neither party had any

Note: Art. 1464 also applies to goods not strictly intention that the amount will be paid.
fungible in nature (e.g. barrels of flour)
If Price is simulated
H. Sale of things subject to resolutory condition
General Rule: the sale is void
Art. 1465. Things subject to a resolutory condition
may be the object of the contract of sale. Exception: if it can be shown to be a donation or
another contract.
Resolutory Condition, defined
An uncertain event upon the happening of which the Requisites of Simulation
obligation (or right) subject to it is extinguished. Hence, 1. An outward declaration of will different from the will
the right acquired in virtue of the obligation is also of the parties;
extinguished. (see Arts. 1179, 1181.) 2. The false appearance must have been intended
by mutual agreement; and
Example: For failure to pay his debt, the land of S 3. The purpose is to deceive third persons.
(mortgagor) was sold to B, the highest bidder and
purchaser in an extrajudicial foreclosure of a real Note: When the price in a purported contract of sale
estate mortgage. Under the law (Act No. 3135, as is completely simulated, then pari delicto non oritur
amended.), the mortgagor may redeem the property actio shall apply, which denies all recovery to the
at any time within one year from and after the date guilty parties inter se.
of the registration of the sale. If S redeems the
property, then the sale made to B is extinguished. False Price Non-Payment of Price
___________________________________________ Definition
Price is false when there
PRICE is a real price not
declared, and what is Failure off the buyer to
A. Certainty of price stated in the sale is not pay the price.
the one intended to be
paid.
Art. 1469. In order that the price may be considered
Effect
certain, it shall be sufficient that it be so with
Does not make the
reference to another thing certain, or that the
contract null and void for
determination thereof be left to the judgment of a
lack of consideration,
specified person or persons.
but result in buyer’s
Renders the contract default.
Should such person or persons be unable or
void.
unwilling to fix it, the contract shall be
Reason: contract of sale
inefficacious, unless the parties subsequently
being consensual is
agree upon the price.
perfected by mere
consent (Art. 1475).
If the third person or persons acted in bad faith or
by mistake, the courts may fix the price.
2. Certain or ascertainable (Art. 1458)
Where such third person or persons are prevented
from fixing the price or terms by fault of the seller
A Price is certain when
or the buyer, the party not in fault may have such
a. The parties have fixed or agreed upon a
remedies against the party in fault as are allowed
the seller or the buyer, as the case may be. definite amount; or
b. It be certain with reference to another thing
certain, or
c. The determination of the price is left to the
Requisites for a valid price
1. Real (Art. 1471) judgment of a specified person or persons
and even before such determination.
Real, defined
Ascertainable, defined
Price is real when at the perfection of the contract,
It is sufficient that the price is with reference to
there is every intention on the part of the buyer to
another thing certain or that the determination
pay the price, and every intention on the part of the
thereof be left to the judgment of a specified
seller to receive such price.
person or persons:
Simulated, defined a. Fixed by a specified third person
b. Fixed by the courts
SALES NOTES By: Allana Nacino
c. Fixed by reference to a definite day, or in a
particular exchange or market
Question: If money paid is counterfeit, would sale
still be valid?
Answer: Yes, for we cannot say that the
consideration or cause of the contract is the illegal
currency. The real consideration or cause is still the
value or price agreed upon.
3. In money or the equivalent (Arts. 1458 and
1468)
Equivalent, defined
There is certainty to the price, but what is given as
payment is an object.
4. Manner of payment must be agreed upon (Art.
1458 and 1468)
General Rule: Before a valid and binding contract
of sale can exist, the manner of payment of the
purchase price must first be established since the
agreement on 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.
Toyota Shaw, Inc. v. CA
GR No. L-116650, May 23, 1995
Facts: Sometime in June 1989, Sosa and his son,
Gilbert, went to the Toyota Office to purchase a
Toyota Lite Ace which they will use in their provincial
visit in Marinduque. He was able to transact with a
certain Popong Bernardo who represented himself
as sales representative of Toyota. Then and there,
Bernardo was able to assure Sosa that a unit would
be ready for pick up which made the latter signed
the so-called “Agreements between Mr. Sosa and
Popong Bernardio of Toyota Shaw, Inc” (VSP) in
which a P100K downpayment was also made. 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. Come the agreed date and
time of pick up, the Toyota was not able to deliver
the said car due to some reasons that "nasulot ang
unit ng ibang malakas." With this, Sosa asked for a
refund of the downpayment he made but the Toyota
refused to accede to his demands. Trial Court and
CA ruled in favor of Sosa stating that the said
“Agreements between Mr. Sosa and Popong
Bernardio of Toyota Shaw, Inc” is a perfected
contract of sale and that the breach of which entitles
the Sosa payment for damages.
Issue: Whether the “Agreements between Mr. Sosa
and Popong Bernardio of Toyota Shaw, Inc” is a
perfected contract of sale.
Held: No. It is not a contract of sale. There is no
obligation on the part of Toyota to transfer
ownership of a determinate thing to Sosa. Likewise,
there is also no correlative obligation on the part of
the latter to pay therefor a price certain.
The provision on the down payment 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.
The 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.
Sps. Edrada v. Sps. Ramos
G.R. No. 154413, August 31, 2005
Facts: Respondent (Sps. Ramos) are the owners of
2 fishing vessels. On April 1, 1996, respondents and
petitioners (Sps. Edrada) executed an untitled
handwritten document which provides that the 2
vessels owned by respondents are now in the
possession and received in good running and
serviceable order by petitioners; that the documents
pertaining to the sale and agreement of payments
between them are to follow; and that the agreed
price for the vessel is P900,000. Upon the signing of
document, petitioners delivered to respondents 4
postdated checks payable to cash by petitioner
Rosella Edrada, in various amounts totaling
P140,000; 3 of the checks amounting to P40,000
were honored, while the check for the amount of
P100,000 was dishonored because of a “stop
payment” order. Thus, the respondent filed an
action against petitioners for specific performance
with damages, before the RTC, praying that
petitioners be obliged to execute the necessary
deed of sale of the two fishing vessels and to pay
the balance of the purchase price. RTC rendered
judgment in favor of herein respondents holding that
the document is a perfected contract of sale. CA
affirmed.
Issue: Whether or not the RTC and the CA were
correct in ruling that the document is a perfected
contract of sale thus creating an obligatory force
either for the transfer of the vessels, or the rendition
of payments as part of the purchase price.
SALES NOTES By: Allana Nacino
Held: No. The agreement may confirm the receipt
by respondents of the two vessels and their
purchase price. However, there is no equivocal
agreement to transfer ownership of the vessel, but
a mere commitment that "documents pertaining to
the sale and agreement of payments…[are] to
follow." Evidently, the document or documents
which would formalize the transfer of ownership and
contain the terms of payment of the purchase price,
or the period when such would become due and
demandable, have yet to be executed. But no such
document was executed and no such terms were
stipulated upon.
The fact that there is a stated total purchase price
should not lead to the conclusion that a contract of
sale had been perfected. We held that before a valid
and binding contract of sale can exist, the manner
of payment of the purchase price must first be
established, as such stands as essential to the
validity of the sale.
After all, such agreement on the terms of payment
is integral to the element of a price certain, such that
a disagreement on the manner of payment is
tantamount to a failure to agree on the price.
B. Who may determine price
Art. 1473. The fixing of the price can never be left
to the discretion of one of the contracting parties.
However, if the price fixed by one of the parties is
accepted by the other, the sale is perfected.
Reasons why price cannot be determined only by
one of the parties
1. A contract must be consensual
2. As a matter of fairness determination of price must
be made by both contracting parties or a specified
person/s.
Note: where the price fixed by one party is accepted
by the other, the contract is deemed perfected
because in this case, there exists a true meeting of
minds upon the price. (Art. 1475)
C. Effect of gross inadequacy of price
Art. 1470. Gross inadequacy of price does not
affect a contract of sale, except as it may indicate
a defect in the consent, or that the parties really
intended a donation or some other act or contract.
Effect of gross inadequacy of price
1. Voluntary Sales
General Rule: While a contract of sale is commutative,
mere inadequacy of the price or alleged hardness of
the bargain generally does not affect its validity when
both parties are in a position to form an independent
judgment concerning the transaction.
Exceptions:
1. Where low price indicates a vice of consent, sale
may be annulled, or the contract is presumed to
be an equitable mortgage.
2. Where the price is so low as to be shocking to the
conscience, sale may be set aside.
3. Where the price is simulated such as when the
parties intended a donation or some other act or
contract.
4. Where the parties did not intend to be bound at all,
the contract is simulated and void.
Note: In determining whether the price is adequate
or not, the price obtaining at the date of the
execution of the contract, not those obtaining a
number of years later, should be considered.
2. Involuntary or Forced Sales
General Rule: Mere inadequacy of the price is not a
sufficient ground for the cancellation of the sale of real
property.
Exceptions:
1. Where the price is low as to be shocking to the
moral conscience, judicial sale of personal
property will be set aside.
2. If in the event of a resale, a better price can be
obtained.
Note: the validity of the sale is not necessarily
affected where the law gives to the owner the right
to redeem, upon the theory that the lesser the price
the easier it is for the owner to effect redemption.
Hulst vs. PR Builders
G.R. No. 156364; September 3, 2007
Issue: Whether or not gross inadequacy of the price
affects the validity of an execution sale
Held: No. Gross inadequacy of price does not nullify
an execution sale. In an ordinary sale, for reason of
equity, a transaction may be invalidated on the
ground of inadequacy of price, or when such
inadequacy shocks one's conscience as to justify
the courts to interfere; such does not follow when
the law gives the owner the right to redeem as when
a sale is made at public auction, upon the theory that
the lesser the price, the easier it is for the owner to
effect redemption.
When there is a right to redeem, inadequacy of price
should not be material because the judgment debtor
may re-acquire the property or else sell his right to
redeem and thus recover any loss he claims to have
suffered by reason of the price obtained at the
execution sale.
In the present case, the Sheriff complied with the
mandate of Section 9, Rule 39 of the Revised Rules
SALES NOTES By: Allana Nacino

of Court, to "sell only a sufficient portion" of the E. Certainty of price of securities, grains,
levied properties "as is sufficient to satisfy the liquids, etc.
judgment and the lawful fees." Each of the 15 levied
properties was successively bidded upon and sold, Art. 1472. The price of securities, grain, liquids, and
one after the other until the judgment debt and the other things shall also be considered certain, when
lawful fees were fully satisfied. the price fixed is that which the thing sold would
have on a definite day, or in a particular exchange
The Rules of Court do not require that the value of or market, or when an amount is fixed above or
the property levied be exactly the same as the below the price on such day, or in such exchange
judgment debt; it can be less or more than the or market, provided said amount be certain.
amount of debt. This is the contingency addressed
by Section 9, Rule 39 of the Rules of Court. In the When is price certain?
levy of property, the Sheriff does not determine the 1. When the price fixed is that which the thing sold
exact valuation of the levied property. would have on a definite day.
2. When an amount is fixed above or below the
In determining what amount of property is sufficient price on a given day or in a particular exchange
out of which to secure satisfaction of the execution, or market.
the Sheriff is left to his own judgment.
F. Effect of failure to determine price
D. Effect where price is simulated
Art. 1474. Where the price cannot be determined in
accordance with the preceding articles, or in any
Art. 1471. If the price is simulated, the sale is void,
other manner, the contract is inefficacious.
but the act may be shown to have been in reality a
However, if the thing or any part thereof has been
donation, or some other act or contract.
delivered to and appropriated by the buyer, he
must pay a reasonable price therefor. What is a
Effect where price is simulated
reasonable price is a question of fact dependent on
1. If the price is simulated or false such as when the
the circumstances of each particular case.
vendor really intended to transfer the thing
gratuitously, then the sale is void but the contract
Effects of failure to determine price
shall be valid as a donation.
1. Where contract executory. — If the price cannot
Example: S sold to B a parcel of land worth
be determined in accordance with Articles 1469
P50,000.00 for only P30,000.00. This contract of
and 1472, or in any other manner, and the bargain
sale is valid although the price is grossly
is still executory, the contract is withouteffect.
inadequate. However, if it is shown that B induced S
Price certain is an essential element of the
to sell the land through fraud, mistake, or undue
contract of sale. (Art. 1458.) Consequently, there
influence, the contract may be annulled on that
is no obligation on the part of the vendor to deliver
ground.
the thing and on the part of the vendee to pay.
If the price is simulated, B may prove another
2. Where delivery has been made. — If the thing or
consideration like the liberality of S and if such
any part thereof has already been delivered and
liberality is proved, then the contract is valid as a
appropriated by the buyer, the latter must pay a
donation; or B may prove that the act is in reality
reasonable price therefor. This obligation of the
some other contract, like barter and, therefore, the
buyer is sometimes contractual (if the agreement
transfer of ownership is unaffected.
omits any reference to price), and sometimes,
quasi-contractual (if the agreement provides that
2. If the contract is not shown to be a donation or any
the parties are thereafter to agree on the price).
other act or contract transferring ownership
(see Art. 2142.)
because the parties do not intend to be bound at
all, the ownership of the thing is not transferred.
a. If a buyer, for example, orders a cavan of rice
The contract is void and inexistent. The action or
from a store, nothing being said as to the
defense for the declaration of the inexistence of a
price, the parties intend andunderstand that a
contract does not prescribe.
reasonable price shall be paid. The obligation
here is contractual. The law merely enforces
3. Simulation occurs when an apparent contract is a
the intention of the parties.
declaration of a fictitious will deliberately made by
agreement of the parties, in order to produce, for
b. Article 1474 applies only where the means
the purpose of deception, the appearance of a
contemplated by the parties for fixing the price
juridical act which does not exist or is different from
have, for any reason, proved ineffectual. In
that which was really executed.
this case, the obligation of the buyer to pay a
reasonable price is an obligation imposed by
SALES NOTES By: Allana Nacino
law as distinguished from a contractual
obligation. It is based on the fundamental
principle that no one should enrich himself at
the expense of another. (Ibid.) In case,
however, the parties do not intend to be
bound until after the price is settled, the buyer
must return any goods already received or if
unable to do so, must pay their reasonable
value at the time of delivery, and the seller
must return any portion of the amount
received.
G. Meeting of minds as to price
General Rule: The price must be formed by the
meeting of minds of both contracting parties.
Exception: Price may be set by one of the contracting
parties, provided that the other party approved of the
set price.
___________________________________________
PERFECTION OF CONTRACT OF SALE
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. From that moment, the parties may
reciprocally demand performance, subject to the
provisions of the law governing the form of
contracts.
Perfection of contract of sale
The contract of sale being consensual, it is perfected
at the moment of consent without the necessity of any
other circumstances. From the moment there is a
meeting of minds upon the thing which is the object of
the contract and upon the price (see Art. 1624.), the
reciprocal obligations of the parties arise even when
neither has been delivered.
When contract of sale is deemed perfected
1. Conduct of the parties. — Appropriate conduct by
the parties may be sufficient to establish an
agreement. There is, however, no perfected sale
where it is conditional.
2. Transfer of ownership. — The ownership is not
transferred until the delivery of the thing.
3. Form of contract. — Generally, a contract of sale
is binding regardless of its form. (Art. 1356.)
However, in case the contract of sale should fall
within the provisions of the Statute of Frauds (Art.
1403[2].) or of any other applicable statute which
requires a certain form for its enforceability or
validity (Art. 1356.), then that form must be
complied with.
4. Consent reluctantly given. — There is no
difference in law where a person gives his consent
reluctantly and even against his good sense and
judgment as when he acts voluntarily and freely.
5. Notarized deed of sale states receipt of price. —
The unsupported verbal claim of the seller that the
sale of a motor vehicle was not consummated for
failure of the purchaser to pay the purchase was
held insufficient to overthrow a notarized deed of
sale wherein it is recited that the seller “sold,
transferred and conveyed” the motor vehicle to the
purchaser “for and in consideration of the amount
of P10,000 and other valuable considerations,
receipt of which is hereby acknowledged.”
6. Applicant’s qualification to buy still subject for
investigation. — In a case, the agreement
denominated as “contract of sale” was considered
by the court as a mere application to buy the land
in question, and not a perfected contract of sale
7. Chattel mortgage of car by mortgagor-buyer prior
to transfer of title to his name. — The fact that the
chattel mortgage of a car by the buyers in favor of
the seller was executed on a date earlier than the
transfer of the registration certificate thereof in the
name of the buyers does not render the said
mortgage made by the buyers invalid, because the
mortgagors were already the owner of the car
when the mortgage was executed, inasmuch as at
the time of the sale wherein the parties agreed
over the car and the price, the contract became
perfected, and when part of the purchase price
was paid and the car was delivered, upon the
execution of the promissory note and the
mortgage by the mortgagors, the sale became
consummated.
8. Non-fulfillment by one party of his obligation. — In
case one of the contracting parties should not
comply with what is incumbent upon him, the
injured party may sue for fulfillment or rescission
with the payment of damages in either case.
Lloyd’s Enterprises and Credit Corp. vs.
Dolleton 555 SCRA 143
Facts: Respondents, spouses Dolleton, were the
registered owners of a parcel of land covered by
TCT No. 153554. On the property is a four-door
apartment building being leased by respondents to
various tenants. On 9 August 1990, respondents
mortgaged the property to Santos to secure a loan
in the amount of P100,000.00. Upon payment of the
loan, Santos executed a release and cancellation of
the mortgage. The same was annotated on the TCT.
On 15 September 1994, TCT No. 153554 in the
name of respondents was cancelled and a new TCT
No. 197220 was issued in the name of Gagan on
the basis of a Deed of Absolute Sale dated 5 August
1994 whereby respondents purportedly sold to
SALES NOTES By: Allana Nacino
Gagan the subject property for the sum of
P120,000.00.
On 19 September 1994, petitioner Lloyds
Enterprises and Credit Corporation lent to Gagan
and her live-in partner, Guevarra the sum of
P391,512.00 and was secured by a real estate
mortgage on the subject property, which was duly
annotated on TCT No. 197220. After payment of the
loan, petitioner executed a Cancellation of
Mortgage. On even date, petitioner granted another
loan to Gagan and Guevarra for a bigger sum of
P542,928.00 and a new real estate mortgage was
constituted over the property. This undated
mortgage deed appears to have been notarized in
1995. The second real estate mortgage was
likewise annotated on the TCT. However, Gagan
and Guevarra failed to pay the second loan upon its
maturity. Thus, petitioner instituted extrajudicial
foreclosure proceedings on the subject property. At
the auction sale, petitioners bid of P645,000.00 was
declared the highest. The property was not
redeemed within the one-year period, hence,
ownership was consolidated in favor of petitioner.
TCT No. 210363 was issued in the name of
petitioner.
Respondents filed a complaint, praying among
others for the nullification of the Deed of Absolute
Sale, the two real estate mortgage contracts and the
extrajudicial foreclosure proceedings; the
cancellation of TCT Nos. 197220 and 210363; and
the restoration of TCT No. 153554 in the name of
respondents.
Respondents denied having executed the Deed of
Absolute Sale and alleged that they had merely
offered to sell to defendant Gagan the subject
property for P900,000.00 on installment basis so
that they could pay their loan obligation to Santos.
They averred that after defendant Gagan had
initially paid P200,000.00, they entrusted the
owners copy of TCT No. 153554 to defendant
Gagan who however undertoon to effect the
cancellation of the mortgage in favor of Santos and
to prepare the contract of sale on installment basis.
Respondents further alleged that except for the
additional amount of P185,000.00, defendant
Gagan was unable to pay the balance of the
purchase price. They also accused Gagan of having
caused the fraudulent cancellation of TCT No.
153554 and the issuance of TCT No. 197220 in her
name, and of eventually using TCT No. 197220 to
secure the loans obtained from petitioner.
Issue: Whether or not petitioners as mortgagee-
purchaser in good faith took the necessary step
which an ordinary and prudent man would have
taken before buying the property in question
Held: No. The circumstance that the certificate of
title covering the property offered as security was
newly issued should have put petitioner on guard
and prompted it to conduct an investigation
surrounding the transfer of the property to defendant
Gagan. Had it inquired further, petitioner would have
discovered that the property was sold for an
unconscionably low consideration of only
P120,000.00 when it could have fetched as high as
P900,000.00. A purchaser cannot close his eyes to
facts which should put a reasonable man on his
guard and claim that he acted in good faith under
the belief that there was no defect in the title of the
vendor. His mere refusal to believe that such defect
exists or the willful closing of his eyes to the
possibility of the existence of a defect in his vendor's
title, will not make him an innocent purchaser for
value if it afterwards develops that the title was in
fact defective, and it appears that he had such
notice of the defect as would have led to its
discovery had he acted with that measure of
precaution which may reasonably be required of a
prudent man in a like situation.
Petitioner is engaged in the business of extending
credit to the public and is, thus, expected to exercise
due diligence in dealing with properties offered as
security. When the purchaser or mortgagee is a
financing institution, the general rule that a
purchaser or mortgagee of land is not required to
look further than what appears on the face of the title
does not apply. Petitioner must bear the loss of the
property because of its failure to ascertain the true
ownership of the subject property, notwithstanding
the fact that it is engaged in the business of offering
real estate loans to the public and is, therefore,
required to exercise a higher degree of diligence in
investigating the status and condition of the
properties offered as securities.
Heirs of Mascunana vs. CA
461 SCRA 186
Facts: Masunana bought a parcel of land from the
Wuthrich siblings. Part of which Mascunana, he
later sold to Sumilhig. The contract price is 4,690
with 3,690 as down payment. Their agreement says:
That the balance of ONE THOUSAND PESOS
(P1,000.00) shall be paid by the VENDEE unto the
VENDOR as soon as the above-portions of Lot 124
shall have been surveyed in the name of the
VENDEE and all papers pertinent and necessary to
the issuance of a separate Certificate of Title in the
name of the VENDEE shall have been prepared.
Sumilhig later sold the same lot to Layumas. Years
after, Layumas wrote to the heirs of Mascunana
(since Mascunana died already) offering to pay the
1,000 balance of the purchase price of the property.
The addressee, however, refused to receive the
mail matter. Heirs Mascunana then filed a complaint
for recovery of possession against Barte (an
SALES NOTES By: Allana Nacino
individual whom Layumas allowed to stay on the
subject property).
Issue: Whether or not the contract of sale was
perfected.
Held: Yes. In this case, there was a meeting of the
minds between the vendor and the vendee, when
the vendor undertook to deliver and transfer
ownership over the property covered by the deed of
absolute sale to the vendee for the price of
P4,690.00 of which P3,690.00 was paid by the
vendee to the vendor as down payment. The vendor
undertook to have the property sold, surveyed and
segregated and a separate title therefor issued in
the name of the vendee, upon which the latter would
be obliged to pay the balance of P1,000.00.
A deed of sale is considered absolute in nature
where there is neither a stipulation in the deed that
title to the property sold is reserved in the seller until
full payment of the price, nor one giving the vendor
the right to unilaterally resolve the contract the
moment the buyer fails to pay within a fixed period.
Applying these principles to this case, it cannot be
gainsaid that the contract of sale between the
parties is absolute, not conditional. There is no
reservation of ownership nor a stipulation providing
for a unilateral rescission by either party. In fact, the
sale was consummated upon the delivery of the lot
to respondent. Thus, Art. 1477 provides that the
ownership of the thing sold shall be transferred to
the vendee upon the actual or constructive delivery
thereof.
The condition in the deed that the balance of
P1,000.00 shall be paid to the vendor by the vendee
as soon as the property sold shall have been
surveyed in the name of the vendee and all papers
pertinent and necessary to the issuance of a
separate certificate of title in the name of the vendee
shall have been prepared is not a condition which
prevented the efficacy of the contract of sale. It
merely provides the manner by which the total
purchase price of the property is to be paid. The
condition did not prevent the contract from being in
full force and effect.
A. Option Contract
Art. 1479. A promise to buy and sell a determinate
thing for a price certain is reciprocally
demandable.
An accepted unilateral promise to buy or to sell a
determinate thing for a price certain is binding
upon the promissor if the promise is supported by
a consideration distinct from the price.
Kinds of promise treated in Article 1479
1. An accepted unilateral promise to sell in which the
promise (acceptor) elects to buy;
2. An accepted unilateral promise to buy in which the
promise (acceptor) elects to sell; and
3. A mutual promise to buy and sell reciprocally
accepted in which either of the parties chooses to
exact fulfillment.
Note: A unilateral promise or offer to sell or to buy
a thing which is not accepted creates no juridical
effect or legal bond.
Option, defined
A privilege existing in one person for which he has paid
a consideration which gives him the right to buy/sell, for
example, certain merchandise or certain specified
property, from/to another person, if he chooses, at any
time within the agreed period at a fixed price, or under,
or in compliance with certain terms and conditions.
Nature of Option Contract
1. An option is a contract. It is a preparatory contract,
separate and distinct from the main contract itself
(subject matter of the option) which the parties
may enter into upon the consummation of the
option.
2. It gives the party granted the option the right to
decide, whether or not to enter into a principal
contract, while it binds the party who has given the
option, not to enter into the principal contract with
any other person during the agreed time and
within that period, to enter into such contract with
the one to whom the option was granted if the
latter should decide to use the option.
3. An option must be supported by a consideration
distinct from the price.
4. A consideration of an option contract is just as
important as the consideration for any other kind
of contract.
Requisites of valid option contract
1. Consent
2. Subject Matter: an option right or accepted
unilateral offer to buy, or an option right or
accepted unilateral offer to sell:
a. A determinate or determinable object
b. For a price certain, including the manner
of payment thereof
3. Prestation: a consideration separate and distinct
from the purchase price for the option given.
Note: Full payment of price not necessary for
exercise of option to buy.
Sanchez vs. Rigos
G.R. No. L-25494, June 14, 1972
Facts: Nicolas Sanchez and Severina Rigos
executed an instrument entitled “Option to
SALES NOTES By: Allana Nacino
Purchase” wherein Mrs. Rigos agreed, promised
and committed to sell to Mr. Sanchez a parcel of
land for the amount of P1,510 within two years from
the date of the instrument, with the understanding
that the said option shall be deemed terminated and
elapsed if Mr. Sanchez shall fail to exercise his right
to buy the property within the stipulated period.
Mrs. Rigos agreed and committed to sell and Mr.
Sanchez agreed and committed to buy. But there is
nothing in the contract to indicate that her
agreement, promise and undertaking is supported
by a consideration distinct from the price stipulated
for the sale of the land.
Mr. Sanchez has made several tenders of payment
in the said amount within the period before any
withdrawal from the contract has been made by Mrs.
Rigos, but were rejected nevertheless.
Issue: Can an accepted unilateral promise to sell
without consideration distinct from the price be
withdrawn arbitrarily
Held: No. An accepted promise to sell is an offer to
sell when accepted becomes a contract of sale.
Since there may be no valid contract without a
cause or consideration, the promisor is not bound
by his promise and may, accordingly, withdraw it.
Pending notice of its withdrawal, his accepted
promise partakes, however, of the nature of an offer
to sell which, if accepted, results in a perfected
contract of sale.
This view has the advantage of avoiding a conflict
between Articles 1324 – on the general principles on
contracts – and 1479 – on sales – of the Civil Code.
Article 1324. When the offeror has allowed
the offeree a certain period to accept, the
offer may be withdrawn at any time before
acceptance by communicating such
withdrawal, except when the option is
founded upon consideration, as something
paid or promised.
Article 1479. A promise to buy and sell a
determinate thing for a price certain is
reciprocally demandable.
An accepted unilateral promise to buy or to
sell a determinate thing for a price certain
is binding upon the promissory if the
promise is supported by a consideration
distinct from the price.
B. Mutual Promise to buy and sell
Art. 1479 par. 1. A promise to buy and sell a
determinate thing for a price certain is reciprocally
demandable.
Mutual Promise to buy and sell
The promise to sell a determinate thing coupled with a
correlative promise to buy at a specified price is binding
as an executory agreement.
Note: Even in this case the certainty of the
price must also exist, otherwise, there is no valid
and enforceable
contract to sell.
C. Status of advertisements
Art. 1325. “Unless it appears otherwise,” business
advertisements of things for sale are not definite
offers, but “mere invitations to make an offer.”
Question: Whether or not these rules are correct:
General Rule: Advertisements are less than offers,
and constitute merely invitations to make an offer,
or mere proposals; the direct acceptance of such
advertisements thereof do not give rise to a valid
and binding sale.
Exception: when the advertisement specifies a
determinate subject matter, the price and terms of
payment, as to be equivalent to an offer certain, then
it constitute an offer covered by the phrase “unless
it appears otherwise,” and not a mere invitation to
make an offer, and once absolutely accepted would
give rise to a valid and binding contract to sell.
Answer: No. If that be the case, the general rule
would be meaningless, since always lacking any of
the three (3) requisites to constitute a certain offer,
it could never be accepted to give rise to a valid and
binding sale.
The better view to the author is that even when the
advertisement contains a certain offer, it remains
legally a mere invitation so long as it is addressed to
the public at large, and the exception comes in
whenever it expressly provides that the first
absolute acceptance shall be binding, or when it is
addressed to a particular offeree.
D. Acceptance by letter or telegram
Art. 1319 par.2. Acceptance made by letter or
telegram does not bind the offerer except from the
time it came to his knowledge. The contract, in
such case, is presumed to have been entered into
in the place where the offer was made.
General Rule: Acceptance made by letter or telegram
does not bind the offeror except from the time it came
to his knowledge. Therefore, even if an acceptance has
been mailed or sent to the offeror, the offeror may still
withdraw his offer anytime before he has knowledge of
the acceptance.
SALES NOTES By: Allana Nacino

E. Perfection of sale by auction 5. Advertisements for bidders. — They are simply

invitations to make proposals, and the advertiser
Art. 1476. In the case of a sale by auction: is not bound to accept the highest or lowest bidder,
unless the contrary appears.
1. Where goods are put up for sale by auction in
lots, each lot is the subject of a separate F. Earnest Money
contract of sale.
Art. 1482. Whenever earnest money is given in a
2. A sale by auction is perfected when the contract of sale, it shall be considered as part of
auctioneer announces its perfection by the fall the price and as proof of the perfection of the
of the hammer, or in other customary manner. contract.
Until such announcement is made, any bidder
may retract his bid; and the auctioneer may Earnest Money, defined
withdraw the goods from the sale unless the Something of value given by the buyer to the seller to
auction has been announced to be without show that the buyer is really in earnest, and to bind the
reserve. bargain. It is actually a partial payment of the purchase
price and is considered as proof of the perfection of the
3. A right to bid may be reserved expressly by or contract.
on behalf of the seller, unless otherwise
provided by law or by stipulation. Earnest Money Option Money
Transfer of Ownership
4. Where notice has not been given that a sale by Title passes to the buyer Ownership is reserved
auction is subject to a right to bid on behalf of upon delivery of the to the seller and is not to
the seller, it shall not be lawful for the seller to thing sold. pass until full payment.
bid himself or to employ or induce any person Effect of Non-payment
to bid at such sale on his behalf or for the In case of non-payment, In case of non-payment,
auctioneer, to employ or induce any person to an action for specific there can be an action
bid at such sale on behalf of the seller or performance or for for specific
knowingly to take any bid from the seller or any rescission can be filed performance.
person employed by him. Any sale by the injured party.
contravening this rule may be treated as Consideration
fraudulent by the buyer. It Is part of the purchase Money is given as a
price. distinct consideration for
Rules governing contract of sale an option contract.
1. Sales of separate lots by auction are separate Obligation of the buyer upon payment of
sales. — Where separate lots are the subject of consideration
separate biddings and are separately knocked When given, the buyer is The would be buyer is
down, there is a separate contract in regard to bound to pay the not required to buy.
each lot.
balance.
Perfection of Sale
2. Sale perfected by the fall of the hammer. — In
There is already a sale. Applies to a sale not yet
putting up the goods for sale, the seller is merely
perfected.
making an invitation to those present to make
offers which they do by making bids (Art. 1326.),
one of which is ultimately accepted. Note: Option money may become earnest money if
the parties agreed.
3. Right of seller to bid in the auction. — The seller
or his agent may bid in an auction sale provided: Effect of rescission on Earnest Money received
(a) such right was reserved; (b) notice was given In the absence of an express stipulation, the seller
that the sale is subject to a right to bid on behalf of cannot keep the earnest money received to answer for
the seller; and (c) the right to bid by the seller is the damages sustained in the event the sale fails due
not prohibited by law or by stipulation. to the fault of the prospective buyer.

4. Contract not to bid. — A sale may be fraudulent G. Form of Sales

not only because of conduct of the seller, but
because of conduct of the buyer. It is not
permissible for intending buyers at auction or other
competitive sales to make an agreement for a
consideration that only one of them shall bid, in
order that the property may be knocked down at a
low price.
Art. 1483. Subject to the provisions of the Statute
of Frauds and of any other applicable statute, a
contract of sale may be made in writing, or by word
of mouth, or partly in writing and partly by word of
mouth, or may be inferred from the conduct of the
parties.
SALES NOTES By: Allana Nacino
Form, defined
The form of a contract refers to the manner in which it
is executed or manifested.
General Rule: As a general rule, a contract may be
entered into in any form provided all the essential
requisites for its validity are present. (Art. 1356.)
Exception: Where form is required in order that a
contract may be enforceable or valid
Where form is required for a contract to be
enforceable
Under the Statute of Frauds (Art. 1403[2, a, d, e].) of
the Civil Code, the following contracts must be in
writing; otherwise, they shall be unenforceable by
action:
1. Sale of personal property at a price not less than
P500.00;
2. Sale of real property or an interest therein
regardless of the price involved; and
3. Sale of property not to be performed within a year
from the date thereof regardless of the nature of
the property and the price involved.
Note: Statute of Frauds is applicable only to
executory contracts.
Examples of where form is required:
1. A sale of a piece of land or interest therein when
made through an agent is void unless the
agent’s authority is in writing. (Art. 1874)
2. The form of sale of large cattle shall be
governed by special laws (Art. 1581)
H. Right of first refusal
Guzman Bocaling & Co. v. Bonnevie
G.R. No. 86150, March 2, 1992
Facts: Africa Valdez de Reynoso leased a parcel of
land to Raoul S. Bonnevie and Christopher
Bonnevie for a period of one year beginning August
8, 1976. Reynoso alleged that on November 3, 1976
she notified respondents by registered mail that she
was selling the leased premises for P600,000 and
that she was giving respondents 30 days from
receipt of the letter to exercise their right of first
priority to purchase the subject property as
stipulated in their Contract of Lease. On January 20,
1977, Reynoso sent another letter to the
respondents informing them that the property had
been sold. Respondents wrote back to Reynoso that
they did not receive her first letter and that they had
already signified their interest to purchase the
property beforehand to Reynoso’s agent and thus
were constrained to refuse Reynoso’s request to
terminate the lease. Reynoso went on with the sale
in favor of Guzman, Bocaling & Co. for a lesser
price, and filed an ejectment case against the
Bonnevies. Respondents filed an action for
annulment of the sale. The Court of First Instance
ruled in favor of the respondents, declaring the deed
of sale executed by Reynoso in favor of Guzman,
Bocaling & Co. null and void. The Court of Appeals
affirmed the lower court’s decision but held that the
Contract of Sale was not voidable but was
instead rescissible.
Issue: Did the Court of Appeals err in holding that
the Contract of Sale was not voidable but was
instead rescissible?
Held: No. Under Article 1380 to 1381 (3) of the Civil
Code, a contract otherwise valid may nonetheless
be subsequently rescinded by reason of injury to
third persons, like creditors. The status of creditors
could be validly accorded the Bonnevies for they
had substantial interests that were prejudiced by the
sale of the subject property to the petitioner without
recognizing their right of first priority under the
Contract of Lease. Rescission is a remedy granted
by law to the contracting parties and even to third
persons, to secure reparation for damages caused
to them by a contract, even if this should be valid,
by means of the restoration of things to their
condition at the moment prior to the celebration of
said contract. It is a relief allowed for the protection
of one of the contracting parties and even third
persons from all injury and damage the contract may
cause, or to protect some incompatible and
preferent right created by the contract. Recission
implies a contract which, even if initially valid,
produces a lesion or pecuniary damage to someone
that justifies its invalidation for reasons of equity.
Riviera Filipina, Inc. v. CA et. al.
GR No. 117355, April 5, 2002
Facts: Respondent Reyes executed a ten year
renewable Contract of Lease with Riviera involving
a 1,018 square meter parcel of land which was a
subject of a Real Estate Mortgage executed by
Reyes in favor of Prudential Bank. But the loan with
Prudential Bank remained unpaid upon maturity so
the bank foreclosed the mortgage thereon and
emerged as the highest bidder at the public auction
sale. Reyes decided to sell the property offered it to
Reviera. After seven months, Riviera offered to buy
the property but Reyes denied it and increased the
price of the property. Reyes’ counsel informed
Riviera that he is selling the property for P6,000 per
square meter and to confirm their conversation,
Riviera sent a letter stating his interest in buying the
property for the fixed and final price of P5,000 per
square meters but Reyes did not accede to said
price.
Then Reyes confided to Traballo and the latter
expressed interest in buying the said property for
P5,300 per square meter but he did not have
enough amount so he looked for a partner. Despite
of the impending expiration of the redemption period
SALES NOTES By: Allana Nacino
of the foreclosed mortgaged property and the deal
between Reyes and Traballo was not yet formally
concluded, Reyes decided to approach Riviera and
requested Atty. Alinea to approach Angeles and find
out if the latter was still interested in buying the
subject property and ask him to raise his offer for the
purchase of the said property a little higher but
Riviera said that his offer is P5,000 per square meter
so Reyes did not agree.
Cypress and Trading Corporation, were able to
come up with the amount sufficient to cover the
redemption money, with which Reyes paid to the
Prudential Bank to redeem the subject property and
Reyes executed a Deed of Absolute Sale covering
the subject property. Cypress and Cornhill
mortgaged the subject property to Urban
Development Bank. Riviera sought from Reyes,
Cypress and Cornhill a resale of the subject property
to it claiming that its right of first refusal under the
lease contract was violated but his attempts were
unsuccessful. Riviera filed the suit to compel Reyes,
Cypress, Cornhill and Urban Development Bank to
transfer the disputed title to the land in favor of
Riviera upon its payment of the price paid by
Cypress and Cornhill.
Issue: Whether or not petitioner can still exercise
his “right of first refusal”.
Held: No. The held that in order to have full
compliance with the contractual right granting
petitioner the first option to purchase, the sale of the
properties for the price for which they were finally
sold to a third person should have likewise been first
offered to the former. Further, there should be
identity of terms and conditions to be offered to the
buyer holding a right of first refusal if such right is
not to be rendered illusory. Lastly, the basis of the
right of first refusal must be the current offer to sell
of the seller or offer to purchase of any prospective
buyer. Thus, the prevailing doctrine is that a right of
first refusal means identity of terms and conditions
to be offered to the lessee and all other prospective
buyers and a contract of sale entered into in
violation of a right of first refusal of another person,
while valid, is rescissible.
Paranaque Kings Enterprises, Inc. v. CA.
GR No. 111538, February 26, 1997
Facts: Catalina L. Santos owns 8 parcels of land
which she leased to Frederick Chua who then later
assigned all his rights and interest and participation
in the leased property to Lee Ching Bing with the
conformity of Santos. Lee Ching Bing also assigned
all his rights and interest in the leased property to
Paranaque Kings Enterprises, Inc. On September
21, 1988, Santos sold the property to defendant
David Raymundo which was opposed by Paranque
King since the said sale is in contravention of the
lease contract, for the first option or priority to buy
was not offered to them. Subsequently, the property
was offered to them for 15M which was way higher
than the 5M selling price with Raymundo. Santos, in
a second deed of sale, finally sold the property to
Raymundo for 9M, thus petitioner filed a complaint.
Instead of filing their respective answers,
respondents filed motions to dismiss which the trial
court had granted.
Issue: Whether or not the complaint filed by
Paranaque Kings states a valid cause of action
Held: Yes. The basis of the right of the first
refusal* must be the current offer to sell of the seller
or offer to purchase of any prospective buyer. Only
after the grantee** fails to exercise its right of first
priority under the same terms and within the period
contemplated, could the owner validly offer to sell
the property to a third person, again, under the same
terms as offered to the grantee***.
Under paragraph 9 of the contract of lease between
respondent Santos and petitioner, the latter was
granted the "first option or priority" to purchase the
leased properties in case Santos decided to sell. If
Santos never decided to sell at all, there can never
be a breach, much less an enforcement of such
"right."
But on September 21, 1988, Santos sold said
properties to Respondent Raymundo without first
offering these to petitioner. Santos indeed realized
her error, since she repurchased the properties after
petitioner complained. Thereafter, she offered to sell
the properties to petitioner for P15 million, which
petitioner, however, rejected because of the
"ridiculous" price. But Santos again appeared to
have violated the same provision of the lease
contract when she finally resold the properties to
respondent Raymundo for only P9 million without
first offering them to petitioner at such price.
Whether there was actual breach which entitled
petitioner to damages and/or other just or equitable
relief, is a question which can better be resolved
after trial on the merits where each party can
present evidence to prove their respective
allegations and defenses.