MELLIZA vs CITY OF ILOILO (23 SCRA 477) Case Digest City had the right to donate Lot 1214-B
City had the right to donate Lot 1214-B to UP. Pio Sian Melliza appealed to the Court of
Facts: Juliana Melliza during her lifetime owned, among other properties, 3 parcels of
residential land in Iloilo City (OCT 3462).Said parcels of land were known as Lots Nos. 2,
5 and 1214. The total area of Lot 1214 was 29,073 sq. m. On 27 November 1931she
donated to the then Municipality of Iloilo, 9,000 sq. m. of Lot 1214, to serve as site for the
municipal hall. The donation was however revoked by the parties for the reason that the
area donated was found inadequate to meet the requirements of the development plan of
the municipality, the so-called “Arellano Plan.”
Subsequently, Lot 1214 was divided by Certeza Surveying Co., Inc. into Lots 1214-A and
1214-B. And still later, Lot 1214-B was further divided into Lots 1214-B-1, Lot 1214-B-2
and Lot1214-B-3. As approved by the Bureau of Lands, Lot 1214-B-1, with 4,562 sq. m.,
became known as Lot 1214-B; Lot 1214-B-2,with 6,653 sq. m., was designated as Lot
1214-C; and Lot 1214-B-3, with 4,135 sq. m., became Lot 1214-D. On 15 November1932,
Juliana Melliza executed an instrument without any caption providing for the absolute
sale involving all of lot 5, 7669 sq.m. of Lot 2 (sublots 2-B and 2-C), and a portion of
10,788 sq. m. of Lot 1214 (sublots 1214-B2 and 1214-B3) in favor of the Municipal
Government of Iloilo for the sum of P6,422; these lots and portions being the ones needed
by the municipal government for the construction of avenues, parks and City hall site
according the “Arellano plan.”
On 14 January 1938, Melliza sold her remaining interest in Lot 1214 to Remedios Sian
Villanueva (thereafter TCT 18178). Remedios in turn on 4 November1946 transferred her
rights to said portion of land to Pio Sian Melliza (thereafter TCT 2492). Annotated at the
back of Pio Sian Melliza’s title certificate was the following “that a portion of 10,788 sq.
m. of Lot 1214 now designated as Lots 1412-B-2 and1214-B-3 of the subdivision plan
belongs to the Municipality of Iloilo as per instrument dated 15 November 1932.” On 24
August 1949 the City of Iloilo, which succeeded to the Municipality of Iloilo, donated the
city hall site together with the building thereon, to the University of the Philippines (Iloilo
branch). The site donated consisted of Lots 1214-B, 1214-C and 1214-D, with a total area
of 15,350 sq. m., more or less. Sometime in 1952, the University of the Philippines
enclosed the site donated with a wire fence. Pio Sian Melliza thereupon made
representations, thru his lawyer, with the city authorities for payment of the value of the
lot (Lot 1214-B). No recovery was obtained, because as alleged by Pio Sian Melliza, the
City did not have funds. The University of the Philippines, meanwhile, obtained Transfer
Certificate of Title No. 7152 covering the three lots, Nos. 1214-B,1214-C and 1214-D.On
10 December 1955 Pio Sian Melizza filed an action in the CFI Iloilo against Iloilo City and
the University of the Philippines for recovery of Lot 1214-B or of its value. After
stipulation of facts and trial, the CFI rendered its decision on 15 August 1957, dismissing
the complaint. Said court ruled that the instrument executed by Juliana Melliza in favor
of Iloilo municipality included in the conveyance Lot 1214-B, and thus it held that Iloilo
Appeals. On 19 May 1965, the CA affirmed the interpretation of the CFI that the portion
of Lot 1214 sold by Juliana Melliza was not limited to the 10,788 square meters
specifically mentioned but included whatever was needed for the construction of avenues,
parks and the city hall site. Nonetheless, it ordered the remand of the case for reception
of evidence to determine the area actually taken by Iloilo City for the construction of
avenues, parks and for city hall site. Hence, the appeal by Pio San Melliza to the Supreme
Court.
One of his causes of action was that the contract of sale executed between Melliza and
the Mun. referred only to lots 1214-C and 1214-D and it is unwarranted to include lot
1214-B as being included under the description therein because that would mean that
the object of the contract of sale would be indeterminate. One of the essential
requirements for a contract of sale is that it should have for its object a determinate
thing.
HELD: The paramount intention of the parties was to provide Iloilo municipality with lots
sufficient or adequate in area for the construction of the Iloilo City hall site, with its
avenues and parks. For this matter, a previous donation for this purpose between the
same parties was revoked by them, because of inadequacy of the area of the lot donated.
Said instrument described 4parcels of land by their lot numbers and area; and then it
goes on to further describe, not only those lots already mentioned, but the lots object of
the sale, by stating that said lots were the ones needed for the construction of the city
hall site, avenues and parks according to the Arellano plan. If the parties intended merely
to cover the specified lots (Lots 2, 5, 1214-C and 1214-D), there would scarcely have been
any need for the next paragraph, since these lots were already plainly and very clearly
described by their respective lot number and areas. Said next paragraph does not really
add to the clear description that was already given to them in the previous one. It is
therefore the more reasonable interpretation to view it as describing those other portions
of land contiguous to the lots that, by reference to the Arellano plan, will be found needed
for the purpose at hand, the construction of the city hall site.
The requirement of the law that a sale must have for its object a determinate thing, is
fulfilled as long as, at the time the contract is entered into, the object of the sale is
capable of being made determinate without the necessity of a new or further agreement
between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code). The specific
mention of some of the lots plus the statement that the lots object of the sale are the ones
needed for city hall site; avenues and parks, according to the Arellano plan, sufficiently
provides a basis, as of the time of the execution of the contract, for rendering determinate
said lots without the need of a new and further agreement of the parties.
The Supreme Court affirmed the decision appealed from insofar as it affirms that of the
CFI, and dismissed the complaint; without costs
HEIRS OF JUAN SAN ANDRES (VICTOR S. ZIGA) and SALVACION S. TRIA,
petitioners, vs. VICENTE RODRIGUEZ, respondent.
G.R. No. 135634 May 31, 2000
Facts:
Juan andres was the owner of the lot situated in liboton, naga city. The sale was
evidenced by a deed of sale. Upon the death of juan andres, ramon san andres was
appointed as administrator of the estate, and hired geodetic engineer. Jose panero
prepared a consolidated plan of the estate and also prepared a sketch plan of the lot sold
to respondent. It was found out that respondent had enlarged the area which he
purchased from juan. The administrator sent a letter to the respoindent to vacate the
said portion in which the latter refused to do.
Respondent alleged that apart from the original lot, which had been sold to him, the
latter likewise sold to him the following day the remaining portion of the lot. He alleged
that the payment for such would be affected in 5 years from the eecution of the formal
deed of sale after a survey is conducted. He also alleged that under the consent of juan,
he took possession of the same and introduced improvements thereon.
Respondent deposited in court the balance of the purchase price amounting to P7,035.00
for the aforesaid 509-square meter lot.
On September 20, 1994, the trial court rendered judgment in favor of petitioner. It ruled
that there was no contract of sale to speak of for lack of a valid object because there was
no sufficient indication to identify the property subject of the sale, hence, the need to
execute a new contract.
Respondent appealed to the Court of Appeals, which on April 21, 1998 rendered a
decision reversing the decision of the trial court. The appellate court held that the object
of the contract was determinable, and that there was a conditional sale with the balance
of the purchase price payable within five years from the execution of the deed of sale.
Issue: whether or not there was a valid sale.
Held:
Civil Code provides that 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.
As thus defined, the essential elements of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership in exchange
for the price;
b) Determinate subject matter; and,
c) Price certain in money or its equivalent. 12
As shown in the receipt, dated September 29, 1964, the late Juan San Andres received
P500.00 from respondent as "advance payment for the residential lot adjoining his
previously paid lot on three sides excepting on the frontage; the agreed purchase price
was P15.00 per square meter; and the full amount of the purchase price was to be based
on the results of a survey and would be due and payable in five (5) years from the
execution of a deed of sale.
Petitioner's contention is without merit. There is no dispute that respondent purchased a
portion of Lot 1914-B-2 consisting of 345 square meters. This portion is located in the
middle of Lot 1914-B-2, which has a total area of 854 square meters, and is clearly what
was referred to in the receipt as the "previously paid lot." Since the lot subsequently sold
to respondent is said to adjoin the "previously paid lot" on three sides thereof, the subject
lot is capable of being determined without the need of any new contract. The fact that the
exact area of these adjoining residential lots is subject to the result of a survey does not
detract from the fact that they are determinate or determinable. As the Court of Appeals
explained: 15
Concomitantly, the object of the sale is certain and determinate. Under Article 1460 of
the New Civil Code, a thing sold is determinate if at the time the contract is entered into,
the thing is capable of being determinate without necessity of a new or further agreement
between the parties. Here, this definition finds realization.
Thus, all of the essential elements of a contract of sale are present, i.e., that there was a
meeting of the minds between the parties, by virtue of which the late Juan San Andres
undertook to transfer ownership of and to deliver a determinate thing for a price certain
in money. As Art. 1475 of the Civil Code provides:
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. . . .That the contract of sale
is perfected was confirmed by the former administrator of the estates, Ramon San
Andres, who wrote a letter to respondent on March 30, 1966 asking for P300.00 as
partial payment for the subject lot. As the Court of Appeals observed:
Without any doubt, the receipt profoundly speaks of a meeting of the mind between San
Andres and Rodriguez for the sale. Evidently, this is a perfected contract of sale on a
deferred payment of the purchase price. All the pre-requisite elements for a valid
purchase transaction are present.
There is a need, however, to clarify what the Court of Appeals said is a conditional
contract of sale. Apparently, the appellate court considered as a "condition" the
stipulation of the parties that the full consideration, based on a survey of the lot, would
be due and payable within five (5) years from the execution of a formal deed of sale. It is
evident from the stipulations in the receipt that the vendor Juan San Andres sold the
residential lot in question to respondent and undertook to transfer the ownership thereof
to respondent without any qualification, reservation or condition.
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. 20 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 stipulation that the "payment of the full consideration based on a survey shall be due
and payable in five (5) years from the execution of a formal deed of sale" is not a condition
which affects the efficacy of the contract of sale. It merely provides the manner by which
the full consideration is to be computed and the time within which the same is to be paid.
But it does not affect in any manner the effectivity of the contract. Consequently, the
contention that the absence of a formal deed of sale stipulated in the receipt prevents the
happening of a sale has no merit.
The claim of petitioners that the price of P7,035.00 is iniquitous is untenable. The
amount is based on the agreement of the parties as evidenced by the receipt (Exh. 2).
Time and again, we have stressed the rule that a contract is the law between the parties,
and courts have no choice but to enforce such contract so long as they are not contrary
to law, morals, good customs or public policy. Otherwise, court would be interfering with
the freedom of contract of the parties. Simply put, courts cannot stipulate for the parties
nor amend the latter's agreement, for to do so would be to alter the real intentions of the
contracting parties when the contrary function of courts is to give force and effect to the
intentions of the parties.
The decision of the Court of Appeals is AFFIRMED with the modification that respondent
is ORDERED to reimburse petitioners for the expenses of the survey.
Heirs of San Juan Andres vs. Rodriguez
G.R. 135634 332 SCRA 769
SECOND DIVISION
Ponente: Mendoza, J
Facts:
Juan San Andres sold a portion of his land to respondent Vicente Rodriguez evidenced by
a Deed of Sale. Upon the death of Juan, Ramon San Andres was appointed judicial
administrator of his estate. Ramon engaged the serviced of geodetic engineers to survey
the lot. From such survey, thtey discovered that the respondent had enlarged the area
which he purchased from the late Juan. Ramon then send a letter demanding the
respondent to vacate the portion allegedly encroached by him. However, respondent
refused to do so claiming that he purchased the same from the late Juan with both
parties treating the two lots as one who parcel of land. Respondent further alleged that
the full payment of the additional lot would be effected within five (5) years from the
execution of the deed of sale after a survey is conducted over said property. Respondent
attached to his answer a receipt signed by the late Juan as proof of the purchase.
Respondent thereafter deposited in the court the balance of the purchase price. While the
case is pending, Ramon died and was replaced by son Ricardo. Vicente also died and was
substituted by his heirs. The trial court rendered judgement in faovr of the petitioner and
ruled that there was no contract of sale because there is no valid object because there is
no sufficient indication. Respondent Court of Appeals reversed the decision rendered by
the Trial Court.
Issues:
Whether the Court erred in holding that there is a valid contract of sale?
Whether the Court erred in holding that the consignation is valid?
Whether the amount of consignation is untenable?
Whether the respondent is barred by prescription and laches from enforcing the contract?
Rulings:
1. There is a valid Contract of Sale because all the essential elements are present.
In herein case, petitioner’s contention that there is no determinate object is
without merit. The receipt described the lot as “previously paid lot”. Since the lot
subsequently sold to respondent is said to adjoin the “previously paid lot” on
three sides thereof, the subject lot is capable of being determined without the
need of any new contract. The contract of Sale can be gainsaid to be absolute
because there is no reservation of ownership. The stipulation “payment of full
consideration based on a survey shall be due and payable in five (5) years from
the execution of deed of sale” is not a condition which affects the efficacy of the
contract. It merely provides for the manner of computation of payment..
2. Consignation is proper only in cases where an existing obligation is due. In
herein case since there is no deed of sale yet thus the period when the purchase
price should be paid has not commenced yet which makes it not yet due and
demandable. The court is not erroneous because it thereafter ordered the
execution of deed and the acceptance of the deposit.
3. The amount is based on the agreement which is the law between the parties.
Thus, it is binding and the court can only give force and effect to the intentions of
the parties.
4. Since there was no Deed of Sale yet and the respondent wants to pay the
purchase price, he deemed it proper to deposit it in the Court. Thus, Prescription
does not apply.
DAVID vs. TIONGSON
G.R. No. 108169
August 25, 1999
FACTS:
Certain lots located in Cabalantian, Bacolor, Pampanga were sold to three sets of
plaintiffs, namely, spouses Feliciano and Macaria Ventura, spouses Venancio and
Patricia David and Florencia Ventura Vda. De Basco by respondents spouses Alejandro
and Guadalupe Tiongson. A parcel of residential land with more or less an area of 300
square meters for a total purchase price of P16,500.00 was sold to spouses Feliciano and
Macaria Ventura. Spouses Venancio and Patricia David bought a parcel of land consisting
of 308 square meters, more or less, for a total consideration of P15,000.00. Lastly, two
parcels of land with a total area of 169 square meters were sold to Florencia Ventura Vda.
De Basco for a total consideration of P10,400.00. The parties agreed that as soon as the
plaintiffs fully paid the purchase price, the respondents will execute an individual deed of
absolute sale and issue a certificate of title in favor of them.
The Venturas immediately took possessio9n of the lot, built a house and fenced
the perimeters. They were able to fully pay the price as of October 28, 1985 as evidenced
by a certification issued by Alejandro Tiongson. Sometime in November 1985, the
Venturas demanded the issuance certificate of title but the Tiongsons refused to do so.
Spouses David claimed that, as agreed by the parties, the P15,000.00 purchase
price would be paid as follows: 3800 as downpayment and a monthly amortization of 365
starting on March 8, 1983, until fully paid. By October 31, 1985, as evidenced by the
receipts issued by Alejandro Tiongson, the Davids paid a total of P15,050.00. The Davids
demanded the execution of a deed of sale and the issuance of a certificate of title on the
first week of November 1985 but the Tiongsons also refused. Unlike the Venturas, they
were not able to take possession of the land.
Florencia Ventura Vda. De Basco bought two parcels of land and had paid
P12,945.00 as of February 6, 1984 for the two lots, evidenced by the receipts issued by
Alejandro Tiongson. She demanded the execution of the deeds of sale and issuance of the
corresponding certificate of title over the lots but the respondents were not able to comply
with the said obligation.
The plaintiffs filed a complaint in the Regional Trial Court of San Fernando,
Pampanga for specific performance with damages. The Tiongsons were declared at default
for failure to file their answer, despite the fifteen days extension given by the trial court.
The Trial court made the decision that the respondents should execute the deeds of sale
and issue the certificate of title to the plaintiffs and pay P15,000.00 as moral damages to
the plaintiffs.
The Tiongsons then appealed the decision to the Court of Appeals alleging that
the plaintiffs are not yet fully paid. For this reason, they did not issue the deeds of sale
and the certificates of title. The Court of Appeals modified the decision of the Trial Court.
It held that there were no perfected contracts of sale entered into by the Davids and
Florencia Vda. de Basco with respondents. There was no agreement in the price as well
as the manner and time of payment thus there was no meeting in the minds regarding
the price. David and Basco filed a motion for reconsideration but it was denied.
ISSUES:
The issues in this case are (1) whether there was an agreed purchase price
agreed by the Davids and the Tiongsons, and (2) whether the lots purchased by Basco
was determinate.
DECISION:
In the issue regarding that of the Davids, there was indeed an agreed purchase
price but it was unknown if it was a total of P15,000.00 alleged by the Davids or 120 per
square meter as claimed by the respondents. Nevertheless, the sellers could not render
invalid a perfected contract of sale by merely contradicting the buyer’s allegation
regarding the price, and subsequently raising the lack of agreement as to the price. As to
the case of Basco, the lots purchased here was determinate since it was adequately
described in the receipts or at least easily determinable. The Supreme Court reversed and
set aside the decision of the Court of Appeals. They rendered judgment ordering the
Tiongsons to execute the deeds of sale to the 300 square metere lot sold to the Davids, as
well as the 109 square meters lot sold to Basco. With respect to the 60 square meters lot
purchased by Basco, Tiongson is ordered to segregate the lot and execute a deed of sale
thereafter and the issuance of the certificate of title. The court also deleted the award for
moral damages for lack of basis.
LAW:
Article 1460 provides the following:
“Art. 1460. A thing is determinate when it is particularly designated or physical
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.”
Also, Article 1469 further provides that in order that the price may be considered
certain, it shall be sufficient that it be so with reference to another thing certain, or that
the determination thereof be left to the judgment of a special person or persons. Should
such person or persons be unable or unwilling to fix it, the contract shall be inefficacious,
unless the parties subsequently agree upon the price. If the third person or persons acted
in bad faith or by mistake, the courts may fix the price. Where such third person or
persons are prevented from fixing the price or terms by fault of the seller or the buyer, the
party not in fault may have such remedies against the party in fault as are allowed the
seller or the buyer, as the case may be.
G.R. No. 190823 : April 4, 2011
DOMINGO CARABEO, Petitioner, v. SPOUSES NORBERTO and SUSAN DINGCO,
Respondents.
FACTS:
On July 10, 1990, Domingo Carabeo (petitioner) entered into a contract
denominated as “Kasunduan sa Bilihan ng Karapatan sa Lupa” (kasunduan) with
Spouses Norberto and Susan Dingco (respondents) whereby petitioner agreed to sell his
rights over a 648 square meter parcel of unregistered land situated in Purok III, Tugatog,
Orani, Bataan to respondents for P38,000.
Upon the signing of the contract, the respondents paid an initial amount of
P10,000 and the remaining balance would be paid on September 1990. However, when
the respondents were about to pay the balance, the petitioner refused to accept the
amount due to an on-going dispute over the land. Nevertheless, the respondents
occasionally gave the petitioner small sums of money which totaled P9,100. These
amounts were allegedly given due to the request of the petitioner.
Despite the respondents insistence of paying the remaining balance of P19,800,
the petitioner remained firm in his refusal. He reasoned that he would register the land
first. However, when the dispute was finally settled and the registration of the land was
made, the petitioner still declined to accept the payment. Thus, forcing the respondents
to file a complaint before the Katarungan Pambarangay. Nevertheless, the parties were
not able to reach a settlement. Hence, the filing of a complaint for specific performance
before the RTC.
In the petitioner’s Answer, he alleged that the sale was void for lack of object
certain. The kasunduannot having specified the metes and bounds of the land. In
addition to that, he alleged that assuming that the validity of the kasunduan is upheld,
the respondent failed to comply with their reciprocal obligation in paying the balance of
the P28,000 on September 1900. Thus, forcing him to accept the installment payments.
After the case was submitted for decision, the petitioner passed away. However,
the records do not show that petitioner’s counsel informed the lower court of his death
and that proper substitution was effected. The RTC ruled in favor of the respondents
ordering them to sell their rights over the land and to pay the costs of suit. The CA
affirmed the decision of the lower court.
ISSUES:
Whether or not the death of the petitioner causes dismissal of the action filed by
the respondents.
HELD:
When the wrong complained of affects property rights, the death of the petitioner
does not cause the dismissal of the case.
In Bonilla v. Barcena, it was held that the question as to whether an action
survives or not depends on the nature of the action and the damage sued for. In the
causes of action which survive, the wrong complained of affects primarily and principally
property and property rights, the injuries to the person being merely incidental, while in
the causes of action which do not survive, the injury complained of is to the person, the
property and rights of property affected being incidental.
Thus, in the present case, the respondents are pursuing a property right arising
from the kasunduan, whereas petitioner is invoking nullity of the kasunduan to protect
his proprietary interest. Since the action involves property rights, it survives. Assuming
arguendo, however, that the kasunduan is deemed void, there is a corollary obligation of
petitioner to return the money paid by respondents.
 It bears noting that trial on the merits was already concluded before petitioner
died. Since the trial court was not informed of petitioner’s death, it may not be faulted for
proceeding to render judgment without ordering his substitution. Its judgment is thus
valid and binding upon petitioner’s legal representatives or successors-in-interest, insofar
as his interest in the property subject of the action is concerned.
Atilano vs Atilano
expressed in the instrument purporting to embody the agreement by reason of mistake,
fraud, inequitable conduct or accident
In this case, the deed of sale executed in 1920 need no longer be reformed. The parties
have retained possession of their respective properties conformably to the real intention
of the parties to that sale, and all they should do is to execute mutual deed
ofconveyance.

Therefore, the judgment appealed from is reversed. The plaintiffs are ordered to execute a
Facts: In 1916, Atilano I acquired lot No. 535 by purchase. In 1920, he had the land deed of conveyance of lot No. 535-E in favor of the defendants, and the latter, in turn, are
subdivided into five parts, identified as lots Nos. 535-A, 535-B, 535-C, 535-D and 535-E, ordered to execute a similar document, covering lot No. 535-A, in favor of the
respectively. After the subdivision had been effected, Atilano I executed a deed of plaintiffs. Costs against the latter.
salecovering lot No. 535-E in favor of his brother Atilano II. Three other portions, namely,
lots Nos. 535-B, 535-C, and 535-D, were likewise sold to other persons. Atilano I retained
for himself the remaining portions of the land, presumably covered by the title to lot No.
535-A. upon his death, the title to this lot passed to Ladislao, in whose name the CORTES vs. Court of Appeals
corresponding certificate was issued.
494 SCRA 570 (Art. 1169)
On 1959, Atilano II and his children had the land resurveyed so that it could be properly
subdivided. However, they discovered that the land they were actually occupying on the
strength of the deed of sale was lot No. 353-A and not lot 535-E, while the land which Facts:
remained in the possession of Atilano I, and which was passed to Ladislao was lot No.
353-E and not lot No. 535-A. For the purchase price of 3.7M, Villa Esperanza Development Corporation (vendee) and

On 1960, the heirs of Atilano II alleging, inter alia, that they offered to surrender to the Antonio Cortes (vendor) entered into a contract of sale over the lots located at Baclaran,
possession of lot No. 535-A and demanded in return the possession of lot No. 535-E, but Parañaque, Metro Manila. The Corporation advanced to Cortes the total sum of
the defendants refused to accept the exchange. The plaintiffs' insistence is quite
understandable, since lot No. 535-E has an area of 2,612 square meters as compared to P1,213,000.00. In September 1983, the parties executed a deed of absolute sale on the
the 1,808 square-meter area of lot No. 535-A.
following terms:
In their answer to the complaint, the defendants alleged that the reference to lot No. 535-
The Corporation shall advance 2.2 M as downpayment, and Cortes shall likewise deliver
E in the deed of sale was an involuntary error; that the intention of the parties to that
sale was to convey the lot correctly identified as lot No. 535-A. On the basis of the the TCT for the 3 lots.
foregoing allegations the defendants interposed a counterclaim, praying that the plaintiffs
be ordered to execute in their favor the corresponding deed of transfer with respect to Lot The balance of 1.5M shall be payable within a year from the date of the execution.
No. 535-E.

The trial court rendered judgment in favor of the plaintiffs. The Corporation filed the instant case for specific performance seeking to compel Cortes

Issue: Whether or not there has been a valid sale in view of the real intention of the to deliver the TCTs and the original copy of the Deed of Absolute Sale. According to the
parties.
Corporation, despite its readiness and ability to pay the purchase price, Cortes refused
Held: From the facts and circumstances, the object is lot No. 535-A and its designation delivery of the sought documents. It prayed for damages, attorney’s fees and litigation
as lot No. 535-E in the deed of sale was a simple mistake in the drafting of the document.
The mistake did not vitiate the consent of the parties, or affect the validity and expenses. Cortes claimed that the owner’s duplicate copy of the three TCTs were
binding effect of the contract between them. The new Civil Code provides a remedy by
means of reformation of the instrument. This remedy is available when, there having
been a meeting of the minds of the parties to a contract, their true intention is not
surrendered to the Corporation and it is the latter which refused to pay in full the agreed Considering that their obligation was reciprocal, performance thereof must be

down payment. simultaneous. The mutual inaction of Cortes and the Corporation therefore gave rise to a
compensation morae or default on the part of both parties because neither has completed

RTC rendered a decision rescinding the sale and directed Cortes to return to the their part in their reciprocal obligation. Cortes is yet to deliver the original copy of the

Corporation the amount of P1,213,000.00, plus interest. CA reversed the decision and notarized Deed and the TCTs, while the Corporation is yet to pay in full the agreed down

directed Cortes to execute a Deed of Absolute Sale conveying the properties and to deliver payment of P2,200,000.00. This mutual delay of the parties cancels out the effects of

the same to the Corporation together with the TCTs, simultaneous with the Corporation’s default, such that it is as if no one is guilty of delay.

payment of the balance of the purchase price of P2,487,000.00.

Under Article 1169 of the Civil Code, from the moment one of the parties fulfills his

Issue: obligation, delay by the other begins. Since Cortes did not perform his part, the provision

WON Cortes delivered the TCTs and the original Deed to the Corporation? NO. of the contract requiring the Corporation to pay in full the down payment never acquired

WON there is delay in the performance of the parties’ obligation that would justify the obligatory force.

rescission of the contract of sale? THERE IS DELAY IN BOTH PARTIES (compensation

morae)
NATIONAL GRAINS AUTHORITY VS. IAC
G.R. No. 74470 (171 SCRA 131)
Held: March 8, 1989
Cortes avers that he delivered the TCT’s through the broker’s son. He further avers that
Ponente: Medialdea, J.:
the broker’s son delivered it to the broker, who in turn delivered them to the Corporation.
Topic: Quantity being indeterminate does not affect perfection of contract; No need
to create new contract
Marcosa Sanchez’s unrebutted testimony is that, she did not receive the TCTs. She also Parties of the case:
Petitioners: National Grains Authority and William Cabal
denied knowledge of delivery thereof to her son, Manny.
Respondents: The Intermediate Appellate Court and Leon Soriano

What further strengthened the findings of the Court of Appeals that Cortes did not Petition: This is a petition for review of the decisionof the Intermediate Appellate Court
(now Court of Appeals) dated December 23, 1985.
surrender the subject documents was the offer of Cortes’ counsel at the pre-trial to

deliver the TCTs and the Deed of Absolute Sale if the Corporation will pay the balance of
Facts:
the down payment. Indeed, if the said documents were already in the hands of the

Corporation, there was no need for Cortes’ counsel to make such offer.
 Petitioner National Grains Authority (now National Food Authority or NFA) is a
government agency created under PD No. 4. One of its incidental functions is the
buying of palay grains from qualified farmers.
On August 23, 1979, private respondent Leon Soriano offered to sell palay grains
to the NFA, through William Cabal, the Provincial Manager of NFA stationed at
Tuguegarao, Cagayan. He submitted the documents required by the NFA for pre-
qualifying as a seller. Private respondent Soriano's documents were processed and
accordingly, he was given a maximum quota of 2,640 cavans of palay that he may sell to
the NFA.
In the afternoon of August 23, 1979 and on the following day, August 24, 1979,
Soriano delivered 630 cavans of palay. The palay delivered during these two days were
not rebagged, classified and weighed. When Soriano demanded payment of the 630
cavans of palay, he was informed that its payment will be held in abeyance since Mr.
Cabal was still investigating on an information he received that Soriano was not a bona
fide farmer. On August 28, 1979, Cabal wrote Soriano advising him to withdraw from the
NFA warehouse the 630 cavans Soriano delivered stating that NFA cannot legally accept
the said delivery on the basis of the subsequent certification of the BAEX technician,
Napoleon Callangan that Soriano is not a bona fide farmer.
Petitioner contended that when the 630 cavans of palay were brought by Soriano
to the Carig warehouse of NFA they were only offered for sale. Since the same were not
rebagged, classified and weighed in accordance with the palay procurement program of
NFA, there was no acceptance of the offer which, to petitioners' mind is a clear case of
solicitation or an unaccepted offer to sell.
On September 30, 1982, the trial court rendered judgment ordering petitioner
National Food Authority, its officer and agents to pay respondent Soriano.
Petitioners' appealed the trial court's decision to the Intermediate Appellate
Court. The IAC affirmed the decision of the lower court.
Issue:
Whether or not there is a contract of sale.
Held:
Yes.
Article 1458 of the Civil Code of the Philippines defines sale as “a contract
whereby one of the contracting parties obligates himself to transfer the ownership of and
to deliver a determinate thing, and the other party to pay therefore a price certain in
money or its equivalent.”
Article 147 of NCC provides that “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.”
The acceptance referred to which determines consent is the acceptance of the
offer of one party by the other and not of the goods delivered as contended by petitioners.
The reason why NFA initially refused acceptance of the 630 cavans of palay
delivered by Soriano is that it (NFA) cannot legally accept the said delivery because
Soriano is allegedly not a bona fide farmer. The trial court and the appellate court found
that Soriano was a bona fide farmer and therefore, he was qualified to sell palay grains to
NFA.
The fact that the exact number of cavans of palay to be delivered has not been
determined does not affect the perfection of the contract. Article 1349 of the New Civil
Code provides: ". . .. The fact that the quantity is not determinate shall not be an
obstacle to the existence of the contract, provided it is possible to determine the
same, without the need of a new contract between the parties." In this case, there
was no need for NFA and Soriano to enter into a new contract to determine the exact
number of cavans of palay to be sold. Soriano can deliver so much of his produce as long
as it does not exceed 2,640 cavans.
Both courts likewise agree that NFA's refusal to accept was without just
cause.ACCORDINGLY, the instant petition for review is DISMISSED.
Case Brief: Schuback & Sons Philippine Trading Corporation vs. CA
DECEMBER 14, 2017 JEFF REY
JOHANNES SCHUBACK & SONS PHILIPPINE TRADING CORPORATION,petitioner, no meeting of the minds as to the price between the last week of December 1981 and the
vs. first week of January 1982.
THE HON. COURT OF APPEALS, RAMON SAN JOSE, JR., doing business under the
name and style “PHILIPPINE SJ INDUSTRIAL TRADING,” respondents. Issue:
G.R. No. 105387 November 11, 1993 Whether or not a contract of sale has been perfected between the parties
FACTS:
Sometime in 1981, the defendant established a contract with plaintiff through the
Held:
Philippine Consulate General in Hamburg, West Germany, because he wanted to
The Supreme Court reversed the decision of the Court of Appeals and reinstated the
purchase MAN bus spare parts from Germany. Plaintiff communicated with its trading
decision of the trial court. It bears emphasizing that a “contract of sale is perfected at the
partner, JOHANNES SCHUBACK & SONS PHILIPPINE TRADING CORPORATION
moment there is a meeting of minds upon the thing which is the object of the contract
(Schuback Hamburg) regarding the spare parts defendant wanted to order. Defendant
and upon the price.”
submitted to plaintiff a list of the parts he wanted to purchase with specific part numbers
and description. Plaintiff sent to defendant a letter dated 25 November, 1981, enclosing
its offer on the items listed by defendant. Article 1319 of the Civil Code states: “Consent is manifested by the meeting of the offer
and acceptance upon the thing and the cause which are to constitute the contract. The
offer must be certain and the acceptance absolute. A qualified acceptance constitutes a
Plaintiff submitted its formal offer containing the item number, quantity, part number,
counter offer.” The facts presented to us indicate that consent on both sides has been
description, unit price and total to defendant. On December, 24, 1981, defendant
manifested.
informed plaintiff of his desire to avail of the prices of the parts at that time.

The offer by petitioner was manifested on December 17, 1981 when petitioner submitted
Plaintiff immediately ordered the items needed by defendant from Schuback Hamburg to
its proposal containing the item number, quantity, part number, description, the unit
enable defendant to avail of the old prices. Schuback Hamburg in turn ordered the items
price and total to private respondent. On December 24, 1981, private respondent
from NDK, a supplier of MAN spare parts in West Germany. On January 4, 1982,
informed petitioner of his desire to avail of the prices of the parts at that time and
Schuback Hamburg sent plaintiff a proforma invoice to be used by defendant in applying
simultaneously enclosed its Purchase Order No. 0l01 dated December 14, 1981. At this
for a letter of credit. Said invoice required that the letter of credit be opened in favor of
stage, a meeting of the minds between vendor and vendee has occurred, the object of the
Schuback Hamburg.
contract: being the spare parts and the consideration, the price stated in petitioner’s offer
dated December 17, 1981 and accepted by the respondent on December 24,1981.
On October 18, 1982, Plaintiff again reminded defendant of his order and advised that
the case may be endorsed to its lawyers. Defendant replied that he did not make any
When petitioner forwarded its purchase order to NDK, the price was still pegged at the old
valid Purchase Order and that there was no definite contract between him and plaintiff.
one. Thus, the pronouncement of the Court Appeals that there as no confirmed price on
Plaintiff sent a rejoinder explaining that there is a valid Purchase Order and suggesting
or about the last week of December 1981 and/or the first week of January 1982 was
that defendant either proceed with the order and open a letter of credit or cancel the
erroneous.
order and pay the cancellation fee of 30% of F.O.B. value, or plaintiff will endorse the
case to its lawyers.
On the part of the buyer, the situation reveals that private respondent failed to open an
irrevocable letter of credit without recourse in favor of Johannes Schuback of Hamburg,
Consequently, petitioner filed a complaint for recovery of actual or compensatory
Germany. This omission, however, does not prevent the perfection of the contract
damages, unearned profits, interest, attorney’s fees and costs against private respondent.
between the parties.

In its decision dated June 13, 1988, the trial court ruled in favor of petitioner by ordering
The opening of a letter of credit in favor of a vendor is only a mode of payment. It is not
private respondent to pay petitioner, among others, actual compensatory damages in the
among the essential requirements of a contract of sale enumerated in Article 1305 and
amount of DM 51,917.81, unearned profits in the amount of DM 14,061.07, or their peso
1474 of the Civil Code, the absence of any of which will prevent the perfection of the
equivalent.
contract from taking place.

Thereafter, private respondent elevated his case before the Court of Appeals. On February
To adopt the Court of Appeals’ ruling that the contract of sale was dependent on the
18, 1992, the appellate court reversed the decision of the trial court and dismissed the
opening of a letter of credit would be untenable from a pragmatic point of view because
complaint of petitioner. It ruled that there was no perfection of contract since there was
private respondent would not be able to avail of the old prices which were open to him
only for a limited period of time.
WHEREFORE, the petition is GRANTED and the decision of the trial court dated June 13,
1988 is REINSTATED with modification.
1. YU TEK vs GONZALES (29 Phil 384)
FACTS: A written contract was executed between Basilio Gonzalez and Yu Tek and Co.,
where Gonzales was obligated to deliver600 piculs of sugar of the 1st and 2nd grade to
Yu Tek, within the period of 3 months (1 January-31 March 1912) at any place within the
municipality of Sta. Rosa, which Yu Tek & Co. or its representative may designate; and in
case, Gonzales does not deliver, the contract will be rescinded and Gonzales shall be
obligated to return the P3,000 received and also the sum of P1,200by way of indemnity
for loss and damages. No sugar had been delivered to Yu Tek & Co. under this contract
nor had it been able to recover the P3,000. Yu Tek & Co. filed a complaint against
Gonzales, and prayed for judgment for the P3,000 and the additional P1,200. Judgment
was rendered for P3,000 only, and from this judgment both parties appealed.
Defendant alleges that the court erred in refusing to permit parol evidence showing that
the parties intended that the sugar was to be secured from the crop which the defendant
raised on his plantation, and that he was unable to fulfill the contract by reason of the
almost total failure of his crop.
The second contention of the defendant arises from the first. He assumes that the
contract was limited to the sugar he might raise upon his own plantation; that the
contract represented a perfected sale; and that by failure of his crop he was relieved from
complying with his undertaking by loss of the thing due. (Arts. 1452, 1096, and 1182,
Civil Code.)
ISSUES: 1) Whether compliance of the obligation to deliver depends upon the production
in defendant’s plantation
2) Whether there is a perfected sale
3) Whether liquidated damages of P1,200 should be awarded to the plaintiff
HELD: 1) The case appears to be one to which the rule which excludes parol evidence to
add to or vary the terms of a written contract is decidedly applicable. There is not the
slightest intimation in the contract that the sugar was to be raised by the defendant.
Parties are presumed to have reduced to writing all the essential conditions of their
contract. While parol evidence is admissible in a variety of ways to explain the meaning of
written contracts, it cannot serve the purpose of incorporating into the contract
additional contemporaneous conditions which are not mentioned at all in the writing,
unless there has been fraud or mistake. It may be true that defendant owned a plantation
and expected to raise the sugar himself, but he did not limit his obligation to his own
crop of sugar. Our conclusion is that the condition which the defendant seeks to add to
the contract by parol evidence cannot be considered. The rights of the parties must be
determined by the writing itself.
2) Article 1450 defines a perfected sale as follows: “The sale shall be perfected between
vendor and vendee and shall be binding on both of them, if they have agreed upon the
thing which is the object of the contract and upon the price, even when neither has been
delivered.” Article 1452 provides that “the injury to or the profit of the thing sold shall,
after the contract has been perfected, be governed by the provisions of articles 1096 and
1182.” There is a perfected sale with regard to the “thing” whenever the article of sale has
been physically segregated from all other articles
In McCullough vs. Aenlle & Co. (3 Phil 285), a particular tobacco factory with its contents
was held sold under a contract which did not provide for either delivery of the price or of
the thing until a future time. In Barretto vs. Santa Marina (26 Phil 200),specified shares
of stock in a tobacco factory were held sold by a contract which deferred delivery of both
the price and the stock until the latter had been appraised by an inventory of the entire
assets of the company. In Borromeo vs. Franco (5 Phil.Rep., 49) a sale of a specific house
was held perfected between the vendor and vendee, although the delivery of the price was
withheld until the necessary documents of ownership were prepared by the vendee. In
Tan Leonco vs. Go Inqui (8 Phil. Rep.,531) the plaintiff had delivered a quantity of hemp
into the warehouse of the defendant. The defendant drew a bill of exchange in the sum of
P800, representing the price which had been agreed upon for the hemp thus delivered.
Prior to the presentation of the bill for payment, in said case, the hemp was destroyed.
Whereupon, the defendant suspended payment of the bill. It was held that the hemp
having been already delivered, the title had passed and the loss was the vendee’s. It is
our purpose to distinguish the case at bar from all these cases.
The contract in the present case was merely an executory agreement; a promise of sale
and not a sale. As there was no perfected sale, it is clear that articles 1452, 1096, and
1182 are not applicable. The agreement upon the “thing” which was the object of the
contract was not within the meaning of article 1450. Sugar is one of the staple
commodities of this country. For the purpose of sale its bulk is weighed, the customary
unit of weight being denominated a ‘’picul.'’ There was no delivery under the contract. If
called upon to designate the article sold, it is clear that Gonzales could only say that it
was “sugar.” He could only use this generic name for the thing sold. There was no
“appropriation” of any particular lot of sugar. Neither party could point to any specific
quantity of sugar.
The contract in the present case is different from the contracts discussed in the cases
referred to. In the McCullough case, for instance, the tobacco factory which the parties
dealt with was specifically pointed out and distinguished from all other tobacco factories.
So, in the Barretto case, the particular shares of stock which the parties desired to
transfer were capable of designation. In the Tan Leonco case, where a quantity of hemp
was the subject of the contract, it was shown that quantity had been deposited in a
specific warehouse, and thus set apart and distinguished from all other hemp
The Supreme Court affirmed the judgment appealed from with the modification allowing
the recovery of P1,200 under paragraph 4 of the contract, without costs
19. GaitevsFonacier 2SCRA 830 (1961)
FERNANDO A. GAITE
vs.
ISABELO FONACIER, GEORGE KRAKOWER, LARAP MINES & SMELTING CO., INC.,
SEGUNDINA VIVAS, FRNACISCO DANTE, PACIFICO ESCANDOR and FERNANDO TY
G.R. No. L-11827 July 31, 1961 REYES, J.B.L., J.:
FACTS:
Fonacier was the owner and/or holder of 11 iron lode mineral claims, known as
the Dawahan Group. By a "Deed of Assignment" dated September 29, 1952, Fonacier
constituted and appointed Gaite as his true and lawful attorney-in-fact to enter into a
contract with any individual or juridical person for the exploration and development of
the mining claims. On March 19, 1954, Gaite in turn executed a general assignment
conveying the development and exploitation of said mining claims into the Larap Iron
Mines, a single proprietorship owned solely by and belonging to him, on the same royalty
basis provided by the “Deed of Assignment".
For some reason or another, Fonacier decided to revoke the authority granted by
him to Gaite to exploit and develop the mining claims in question, and Gaite assented
thereto subject to certain conditions. As a result, a "Revocation of Power of Attorney and
Contract" was executed on December 8, 1954, wherein Gaite transferred to Fonacier, all
his rights and interests on development and exploitation of said mining claims, in
consideration of the sum of P75,000.00, P10,000.00 of which was paid upon the signing
of the agreement, and the balance of P65,000.00 will be paid from and out of the first
letter of credit covering the first shipment of iron ores and of the first amount derived
from the local sale of iron ore made by the Larap Mines & Smelting Co. Inc., its assigns,
administrators, or successors in interests.
To secure the payment of P65k, Fonacier executed a surety bondwith himself as
principal, the Larap Mines and Smelting Co. and its stockholder as sureties. Yet, this was
refused by Gaite. He further required another bond underwritten by a bonding company
to secure the payment of the balance. Hence a second bond was produced with Far
Eastern Surety as an additional surety, provided the liability of Far Eastern would only
prosper when there had been an actual sale of the iron ores of not less than the agreed
amount of P65k, moreover, its liability was to automatically expire on December 1955.
On December 1955, the second bond had expired and no sale amounting to the
stipulation as prior agreed nor had the balance been paid to Gaite by Fonacier. Thus
such failure, prompted Gaiteto file a complaint in the CFI of Manila for the payment of
the balance and other damages.
The lower court ruled the obligation was one with a term and that the obligation
became due and demandable under Article 1198 of the New Civil Code.
Hence, the defendants jointly filed an appeal.
ISSUE: Whether or not the Lower Court erred in holding the obligation of appellant
Fonacier to pay appelleGaite the balance of P65,000, as one with a period or term and not
one with a suspensive condition; and that the term expired on December 1955
RULING: No error was found, affirming the decision of the lower court.
Gaite acted within his rights in demanding payment and instituting this action
one year from and after the contract was executed, either because the appellant debtors
had impaired the securities originally given and thereby forfeited any further time within
which to pay; or because the term of payment was originally of no more than one year,
and the balance of P65,000, became due and payable thereafter.
The Lower Court was legally correct in holding the shipment or sale of the iron
ore is not a condition or suspensive to the payment of the balance of P65,000, but was
only a suspensive period or term. What characterizes a conditional obligation is the fact
that its efficacy or obligatory force as distinguished from its demandability, is
subordinated to the happening of a future and uncertain event; so that if the suspensive
condition does not take place, the parties would stand as if the conditional obligation had
never existed.
The sale of the ore to Fonacier was a sale on credit, and not an aleatory contract
where the transferor, Gaite, would assume the risk of not being paid at all; and that the
previous sale or shipment of the ore was not a suspensive condition for the payment of
the balance of the agreed price, but was intended merely to fix the future date of the
payment.
While as to the right of Fonacier to insist that Gaite should wait for the sale or
shipment of the ore before receiving payment; or, in other words, whether or not they are
entitled to take full advantage of the period granted them for making the payment. The
appellant had indeed have forfeited the right to compel Gaite to wait for the sale of the ore
before receiving payment of the balance of P65,000.00, because of their failure to
renew the bond of the Far Eastern Surety Company or else replace it with an equivalent
guarantee. The expiration of the bonding company's undertaking on December 8, 1955
substantially reduced the security of the vendor's rights as creditor for the unpaid
P65,000.00, a security that Gaite considered essential and upon which he had insisted
when he executed thedeed of sale of the ore to Fonacier (first bond).

Under paragraphs 2 and 3 of Article 1198 of the Civil Code of the Philippines:
ART. 1198. The debtor shall lose every right to make use of the period: “(2) When he does
not furnish to the creditor the guaranties or securities which he has promised. (3) When
by his own acts he has impaired said guaranties or securities after their establishment,
and when through fortuitous event they disappear, unless he immediately gives new ones
equally satisfactory.”

Appellants' failure to renew or extend the surety company's bondupon its

expiration plainly impaired the securities given to the creditor (appellee Gaite), unless
immediately renewed or replaced.

Nevertheless, there is no merit in appellants' argument that Gaite's acceptance of

the surety company's bond with full knowledge that on its face it would automatically
expire within one year was a waiver of its renewal after the expiration date. No such
waiver could have been intended, for Gaite stood to lose and had nothing to gain barely;
and if there was any, it could be rationally explained only if the appellants had agreed to
sell the ore and pay Gaite before the surety company's bond expired on December 8,
1955. But in the latter case the defendants-appellants' obligation to pay became absolute
after one year from the transfer of the ore to Fonacier by virtue of the deed, first bond.