Professional Documents
Culture Documents
Held:
ZIGA) and SALVACION S. TRIA, petitioners,
vs. VICENTE RODRIGUEZ, respondent. Civil Code provides that By the contract of sale
one of the contracting parties obligates himself
G.R. No. 135634 May 31, 2000 to transfer the ownership of and to deliver a
determinate thing, and the other to pay therefor
Facts: a price certain in money or its equivalent.
Juan andres was the owner of the lot A contract of sale may be absolute or
situated in liboton, naga city. The sale was conditional.
evidenced by a deed of sale. Upon the death of
juan andres, ramon san andres was appointed As thus defined, the essential elements of sale
as administrator of the estate, and hired are the following:
geodetic engineer. Jose panero prepared a
consolidated plan of the estate and also a) Consent or meeting of the minds, that is,
prepared a sketch plan of the lot sold to consent to transfer ownership in exchange for
respondent. It was found out that respondent the price;
had enlarged the area which he purchased from
juan. The administrator sent a letter to the b) Determinate subject matter; and,
respoindent to vacate the said portion in which
the latter refused to do.
c) Price certain in money or its equivalent. 12
Respondent alleged that apart from the original
lot, which had been sold to him, the latter As shown in the receipt, dated September 29,
likewise sold to him the following day the 1964, the late Juan San Andres received
remaining portion of the lot. He alleged that the P500.00 from respondent as "advance payment
payment for such would be affected in 5 years for the residential lot adjoining his previously
from the eecution of the formal deed of sale after paid lot on three sides excepting on the
a survey is conducted. He also alleged that frontage; the agreed purchase price was P15.00
under the consent of juan, he took possession of per square meter; and the full amount of the
the same and introduced improvements thereon. 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.
Respondent deposited in court the balance of
the purchase price amounting to P7,035.00 for
the aforesaid 509-square meter lot. Petitioner's contention is without merit. There is
no dispute that respondent purchased a portion
of Lot 1914-B-2 consisting of 345 square
On September 20, 1994, the trial court rendered meters. This portion is located in the middle of
judgment in favor of petitioner. It ruled that there Lot 1914-B-2, which has a total area of 854
was no contract of sale to speak of for lack of a square meters, and is clearly what was referred
valid object because there was no sufficient to in the receipt as the "previously paid lot."
indication to identify the property subject of the Since the lot subsequently sold to respondent is
sale, hence, the need to execute a new contract. said to adjoin the "previously paid lot" on three
sides thereof, the subject lot is capable of being
Respondent appealed to the Court of Appeals, determined without the need of any new
which on April 21, 1998 rendered a decision contract. The fact that the exact area of these
reversing the decision of the trial court. The adjoining residential lots is subject to the result
appellate court held that the object of the of a survey does not detract from the fact that
contract was determinable, and that there was a they are determinate or determinable. As the
conditional sale with the balance of the purchase Court of Appeals explained: 15
price payable within five years from the
execution of the deed of sale. Concomitantly, the object of the sale is certain
and determinate. Under Article 1460 of the New
Issue: whether or not there was a valid sale. Civil Code, a thing sold is determinate if at the
time the contract is entered into, the thing is
Facts: Also worth noting is the fact that in the case filed
by Severino's tenant against Severino and
petitioner in 1989, assailing the validity of the
Severino sold his property to henry. Henry
sale made to petitioner, Severino explicitly
applied for a loan with philam life. As It was
asserted in his sworn answer to the complaint
already approved pending the submission of
that the sale was a legitimate transaction. He
certain documents such as the owners duplicate
further alleged that the ejectment case filed by
of transfer certificate of title which is in
petitioner against the tenant was a legitimate
possession of severino.
action by an owner against one who refuses to
turn over possession of his property.
Henry already took possession of the property in
question after ejectment of the lessees. He also
It should be emphasized that the non-
paid an ernest money of 300,000 under the
appearance of the parties before the notary
premise that it shall be forfeited in favor of
public who notarized the deed does not
severino in case of nonpayment.
necessarily nullify nor render the parties'
transaction void ab initio. We have held
Severino now claims ownership over the previously that the provision of Article 1358 of
property claiming that henry did not pay for the the New Civil Code on the necessity of a public
property, therefore there was no sale to speak document is only for convenience, not for validity
of. or enforceability. Failure to follow the proper
form does not invalidate a contract. Where a
Issue: whether or not there is a contract of sale contract is not in the form prescribed by law, the
perfected in this case. parties can merely compel each other to
observe that form, once the contract has been
Held: there was a perfected contract of sale due perfected.35 This is consistent with the basic
to the second deed of sale. principle that contracts are obligatory in
whatever form they may have been entered into,
The basic characteristic of an absolutely provided all essential requisites are present.3
simulated or fictitious contract is that the
apparent contract is not really desired or The elements of a valid contract of sale under
intended to produce legal effects or alter the Art. 1458 of the Civil Code are: (1) consent or
juridical situation of the parties in any way. 30 meeting of the minds; (2) determinate subject
However, in this case, the parties already matter; and (3) price certain in money or its
undertook certain acts which were directed equivalent.37 In the instant case, the second
towards fulfillment of their respective covenants deed reflects the presence of all these elements
under the second deed, indicating that they and as such, there is already a perfected
intended to give effect to their agreement. contract of sale.
Further, the fact that Severino executed the two The non-payment of the contract price merely
deeds in question, primarily so that petitioner results in a breach of contract for non-
could eject the tenant and enter into a performance and warrants an action for
loan/mortgage contract with Philam Life, is to rescission or specific performance under Article
our mind, a strong indication that he intended to 1191 of the Civil Code.
transfer ownership of the property to petitioner.
For why else would he authorize the latter to sue Be that as it may, we agree with petitioner that
the tenant for ejectment under a claim of although the law allows rescission as a remedy
ownership, if he truly did not intend to sell the for breach of contract, the same may not be
property to petitioner in the first place? Needless availed of by respondents in this case. To begin
to state, it does not make sense for Severino to with, it was Severino who prevented full
allow petitioner to pursue the ejectment case, in payment of the stipulated price when he refused
petitioner's own name, with petitioner arguing to deliver the owner's original duplicate title to
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Philam Life. His refusal to cooperate was
unjustified, because as Severino himself
admitted, he signed the deed precisely to enable
petitioner to acquire the loan. He also knew that
the property was to be given as security
therefor. Thus, it cannot be said that petitioner
breached his obligation towards Severino since
the former has always been willing to and could
comply with what was incumbent upon him.
PEOPLE OF THE PHILIPPINES v. ELIZABETH Whether the trial court erred in finding
GANGUSO that the prosecution has fully met the test of
moral certainty as to the guilt of the accused on
G.R. No. 115430 November 23, 1995 both charges of violation of section 15, Article III
of the Dangerous Drugs Act of 1972 and of
DAVIDE, JR., J.: illegal possession of firearms.
Facts: Decision:
Major Juvenile Sulapas, Officer-in- The instant appeal is partly granted, and
charge, Dangerous Drugs Enforcement Section, the challenged decision of the Regional Trial
Pasay City Police Station, received a Court of Pasay City is modified. As modified,
confidential report from an informant about the accused-appellant Beth is acquitted for the
rampant trafficking of drugs by Elizabeth charge of illegal possession of firearms on
Ganguso y Decena a.k.a. "Beth Tomboy". ground of reasonable doubt. The penalty
imposed on her for the violation of section 15,
A buy-bust operation was planned with Article III of the Dangerous Drugs Act of 1972 is
Dennis Vermug acting as poseur-buyer, backed- reduced to an indeterminate sentence of three
up by SPO1 Lumapat, SPO1 Gabutin, PO3s months of arresto mayor, as minimum, to three
Mendoza and Garcia with SPO3 Fucanan as years of prision correccional, as maximum.
team leader.
Ratio Decidendi:
The operation was carried out and they
were successful in arresting Beth for the Supreme Court held that the
violation of Dangerous Drugs Act of 1972. At elements of a contract of sale were present.
the same time, they were able to recover a .38 Beth is presumed to have given her consent
caliber Paltik revolver from the suspect. by not inquiring as to the meaning of “S”
when the officer posed to buy “Php 500
Several documentary exhibits were worth of S”. Therefore, there was a meeting
presented as evidence to the crime. Beth made of minds upon a definite object and upon the
statements in her testimony different to that of price.
the police’s: policemen barged into her house,
searched the premises and her person without a Though she was not in possession of
warrant and; denied the revolver recovered from the object of sale, Article 1459 merely
her. requires that the vendor must have the right
to transfer ownership of the object sold at
At the trial, defense presented two the time of delivery. In the case at bar,
witnesses who also claimed that no buy bust though Beth is not the owner, she had the
operation took place and no revolver was in the right to dispose of the prohibited drug.
possession of the suspect. Ownership was thereafter acquired upon her
delivery to the men in the alley after her
Nevertheless, the Regional Trial Court payment of the price.
of Pasay convicted her of both charges. She
was sentenced to suffer the penalty of life Supreme Court also held that failure to
imprisonment and to pay a fine plus costs for the conduct prior surveillance and absence of
crime involving drugs. She was also sentenced marked money does not affect the evidence of
to an indeterminate penalty of ten years and one the prosecution. It is sufficient that the members
day of prision mayor, as minimum, to twelve of the operation were accompanied by the
years and one day, as maximum, with fine and informant to the scene; the sale was adequately
costs for the crime of illegal possession of proven and; the drug subject was presented
firearms. before the court.
RULING:
Ruling:
1. The petitioneres had a cause of action to
institute an ejectment suit against the lessee
with the City Court thus the city court (now
MTC) has jurisdiction over it. The filing of
lessor of a suit with the RTC did not divest
the City Court of its jurisdiction to take Heirs of San Juan Andres vs. Rodriguez
cognizance over the ejectment case. G.R. 135634 332 SCRA 769
SECOND DIVISION
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 LAGRIMAS A. BOY, petitioner,
object is without merit. The receipt vs.
described the lot as “previously paid lot”. COURT OF APPEALS, ISAGANI P. RAMOS
Ruling:
AZCUNA, J.:
Facts:
“RECEIVED FROM MR. GODOFREDO PCI Leasing and Finance Inc. Vs. Giraffe- X
CAGUIAT THE AMOUNT OF ONE HUNDRED Creative Imaging, Inc.
THOUSAND PESOS AS PARTIAL PAYMENT July 12, 2007 GR 142618
OF OUR LOT SITUATED IN LAS PIÑAS… First Division
Garcia, J
MR. CAGUIAT PROMISED TO PAY
THE BALANCE OF THE PURCHASE PRICE Facts:
ON OR BEFORE MARCH 23, 1990, AND THAT -On December 4, 1996, petitioner PCI
WE WILL EXECUTE AND SIGN THE FINAL LEASING and respondent GIRAFFE entered
into a Lease Agreement, whereby the former
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leased out to the latter one (1) set of Silicon Whether the agreement between PCI Leasing
High Impact Graphics and accessories worth and GIRAFFE is governed by Articles 1484 and
P3,900,00.00 and one (1) unit of Oxberry 1485 of the Civil Code?
Cinescan 6400-10 worth P6,500,000.00.
- A year into the life of the Lease Agreement, Held:
GIRAFFE defaulted in its monthly rental-
payment obligations. And following a three- Petition denied. Trial Court’s decision affirmed
month default, PCI LEASING addressed a
formal pay-or-surrender-equipment type of Ratio:
demand letter dated February 24, 1998 to -The PCI LEASING- GIRAFFE lease agreement
GIRAFFE. is in reality a lease with an option to purchase
- The demand went unheeded. the equipment. This has been made manifest
- PCI Leasing instituted a case against by the actions of the petitioner itself, foremost of
GIRAFFE. PCI prayed for the issuance of a writ which is the declarations made in its demand
of replevin for the recovery of the leased letter to the respondent. There could be no other
property explanation than that if the respondent paid the
- Upon PCI LEASING’s posting of a replevin balance, then it could keep the equipment for its
bond, the trial court issued a writ of replevin, own; if not, then it should return them. This is
paving the way for PCI LEASING to secure the clearly an option to purchase given to the
seizure and delivery of the equipment covered respondent. Being so, Article 1485 of the Civil
by the basic lease agreement. Code should apply.
- Instead of an answer, GIRAFFE filed a Motion - The present case reflects a situation where the
to Dismiss,arguing that the seizure of the two (2) financing company can withhold and conceal -
leased equipment stripped PCI LEASING of its up to the last moment - its intention to sell the
cause of action. property subject of the finance lease, in order
-GIRAFFE argues that, pursuant to Article 1484 that the provisions of the Recto Law may be
of the Civil Code on installment sales of circumvented. It may be, as petitioner pointed
personal property, PCI LEASING is barred from out, that the basic “lease agreement” does not
further pursuing any claim arising from the lease contain a “purchase option” clause. The
agreement and the companion contract absence, however, does not necessarily argue
documents, adding that the agreement between against the idea that what the parties are into is
the parties is in reality a lease of movables with not a straight lease, but a lease with option to
option to buy. purchase. This Court has, to be sure, long been
-GIRAFFE asserts in its Motion to Dismiss that aware of the practice of vendors of personal
the civil complaint filed by PCI LEASING is property of denominating a contract of sale on
proscribed by the application to the case of installment as one of lease to prevent the
Articles 1484 and 1485, supra, of the Civil Code. ownership of the object of the sale from passing
- PCI Leasing on the other hand maintains that to the vendee until and unless the price is fully
its contract with GIRAFFE is a straight lease paid.
without an option to buy. -Being leases of personal property with option to
- petitioner contends that the financial leasing purchase as contemplated in the above article,
arrangement it concluded with the respondent the contracts in question are subject to the
represents a straight lease covered by R.A. No. provision that when the lessor in such case “has
5980, the Financing Company Act, as last chosen to deprive the lessee of the enjoyment of
amended by R.A. No. 8556, otherwise known as such personal property,” “he shall have no
Financing Company Act of 1998, and is outside further action” against the lessee “for the
the application and coverage of the Recto Law. recovery of any unpaid balance” owing by the
To the petitioner, R.A. No. 5980 defines and latter, “agreement to the contrary being null and
authorizes its existence and business. void.”
-the trial court granted GIRAFFE’s motion to -In choosing, through replevin, to deprive the
dismiss respondent of possession of the leased
- motion for reconsideration was denied, hence equipment, the petitioner waived its right to bring
this petition for review. an action to recover unpaid rentals on the said
leased items. Paragraph (3), Article 1484 in
Issue: relation to Article 1485 of the Civil Code, which
we are hereunder re-reproducing, cannot be any
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clearer. renege on its word. Yet more than that, the very
word “or” as used in the letter conveys distinctly
its intention not to claim both the unpaid balance
ART. 1484. In a contract of sale of personal and the equipment. It is not difficult to discern
property the price of which is payable in why: if we add up the amounts paid by the
installments, the vendor may exercise any of the respondent, the residual value of the property
following remedies: recovered, and the amount claimed by the
petitioner as sued upon herein (for a total of
xxx xxx xxx P21,779,029.47), then it would end up making
an instant killing out of the transaction at the
(3) Foreclose the chattel mortgage on the expense of its client, the respondent. The Recto
thing sold, if one has been constituted, should Law was precisely enacted to prevent this kind
the vendee's failure to pay cover two or more of aberration. Moreover, due to considerations
installments. In this case, he shall have no of equity, public policy and justice, we cannot
further action against the purchaser to recover allow this to happen. Not only to the respondent,
any unpaid balance of the price. Any agreement but those similarly situated who may fall prey to
to the contrary shall be void. a similar scheme.
The imperatives of honest dealings given Elisco Tool Manufacturing Corp. Vs. Court of
prominence in the Civil Code under the heading: Appeals et. al.
Human Relations, provide another reason why May 31, 1999 GR 109966
we must hold the petitioner to its word as Second Division
embodied in its demand letter. Else, we would Mendoza J.
witness a situation where even if the
respondent surrendered the equipment Facts:
voluntarily, the petitioner can still sue upon its -Private respondent Rolando Lantan was
claim. This would be most unfair for the employed at the Elisco Tool Manufacturing
respondent. We cannot allow the petitioner to Corporation as head of its cash department. On
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January 9, 1980, he entered into an agreement demands, private respondents failed to settle
with the company which provided as follows: their obligation thereby entitling petitioner to the
- that, Elisco Tool Manufacturing Corp is the possession of the car; that petitioner was ready
owner of a car which for and in consideration of to post a bond in an amount double the value of
a monthly rental of P 1010.65 will be leased to the car, which was P60,000; and that in case
Rolando Lantan for 5 years private respondents could not return the car,
- That, Rolando Lantan shall pay the lease thru they should be held liable for the amount of
salary deduction from his monthly remuneration P60,000 plus the accrued monthly rentals
in the amount as above specified for a period of thereof, with interest at the rate of 14% per
FIVE (5) years; annum, until fully paid.
- That, he shall for the duration of the lease - Upon the posting of the bond, the sheriff took
contract, shoulder all expenses and costs of possession of the car and after 5 days turned it
registration, insurance, repair and maintenance, over to the petitioner
gasoline, oil, part replacement inclusive of all - private respondents claim that their agreement
expenses necessary to maintain the vehicle in was to buy and sell and not lease with option to
top condition buy the car
-That, at the end of FIVE (5) year period or upon - in its reply, petitioner maintained that the
payment of the 60th monthly rental, Lantan may contract was one of lease with option to
exercise the option to purchase the motor purchase and that the promissory note was
vehicle from Elisco and all monthly rentals shall merely a “nominal security” for the agreement.
be applied to the payment of the full purchase - trial court rendered its decision in favor of the
price of the car and further, should Lantan desire private respondent
to exercise this option before the 5-year period - petitioner appealed to CA, petitioner filed
lapse, he may do so upon payment of the motion for execution pending appeal
remaining balance on the five year rental unto - CA affirmed in toto the decision of the trial
Elisco, it being understood however that the court, hence the petition for review on certiorari
option is limited to the EMPLOYEE;
-That, in case of default in payment THREE (3) Issue/s:
accumulated monthly rentals, Elisco shall have Whether the Court of Appeals erred
the full right to lease the vehicle to another (a) in disregarding the admission in the
EMPLOYEE; pleadings as to what documents contain the
-That, in the event of resignation and or terms of the parties’ agreement.
dismissal from the service, Lantan shall return (b) in holding that the interest stipulation in
the subject motor vehicle to the EMPLOYER in respondents’ Promissory Note was not valid and
good working and body condition. binding.
-On the same day, January 9, 1980, private (c) in holding that respondents had fully paid
respondent executed a promissory note which their obligations.
states his promise to pay P 1,010.65 without the Held:
necessity of notice or demand in accordance The decision of the Court of Appeals is
with the schedule of payment AFFIRMED with costs against petitioner.
- After taking possession of the car, Lantan
installed accessories worth P15,000.00 Ratio:
-In 1981, Elisco Tool ceased operations, as a First. Petitioner does not deny that private
result of which private respondent Rolando respondent Rolando Lantan acquired the vehicle
Lantan was laid off. Nonetheless, as of in question under a car plan for executives of the
December 4, 1984, private respondent was able Elizalde group of companies. Under a typical car
to make payments for the car in the total amount plan, the company advances the purchase price
of P61,070.94. of a car to be paid back by the employee
-On June 6, 1986, petitioner filed a complaint, through monthly deductions from his salary.
entitled “replevin plus sum of money,” against The company retains ownership of the motor
private respondent Rolando Lantan, his wife vehicle until it shall have been fully paid for.
Rina, and two other persons, identified only as However, retention of registration of the car in
John and Susan Doe, before the Regional Trial the company’s name is only a form of a lien on
Court of Pasig, Metro Manila. the vehicle in the event that the employee would
-Petitioner alleged that private respondents abscond before he has fully paid for it. There
failed to pay the monthly rentals that despite are also stipulations in car plan agreements to
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the effect that should the employment of the the delivery to it of the motor vehicle “complete
employee concerned be terminated before all with accessories and equipment.” In the event
installments are fully paid, the vehicle will be the car could not be delivered to petitioner, it
taken by the employer and all installments paid was prayed that private respondent Rolando
shall be considered rentals per agreement. Lantan be made to pay petitioner the amount of
This Court has long been aware of the practice P60,000.00, the “estimated actual value” of the
of vendors of personal property of denominating car, “plus accrued monthly rentals thereof with
a contract of sale on installment as one of lease interests at the rate of fourteen percent (14%)
to prevent the ownership of the object of the sale per annum until fully paid.” This prayer of
from passing to the vendee until and unless the course cannot be granted, even assuming that
price is fully paid. As this Court noted in Vda. private respondents have defaulted in the
de Jose v. Barrueco: payment of their obligation. This led the trial
Sellers desirous of making conditional sales of court to say that petitioner wanted to eat its cake
their goods, but who do not wish openly to make and have it too.
a bargain in that form, for one reason or another, Both the trial court and the Court of Appeals
have frequently resorted to the device of making correctly ruled that private respondents could no
contracts in the form of leases either with longer be held liable for the amounts of
options to the buyer to purchase for a small P39,054.86 or P60,000.00 because private
consideration at the end of term, provided the respondents had fulfilled their part of the
so-called rent has been duly paid, or with obligation. The agreement does not provide for
stipulations that if the rent throughout the term is the payment of interest on unpaid monthly
paid, title shall thereupon vest in the lessee. It is “rentals” or installments because it was entered
obvious that such transactions are leases only in into in pursuance of a car plan adopted by the
name. The so-called rent must necessarily be company for the benefit of its deserving
regarded as payment of the price in installments employees. As the trial court correctly noted,
since the due payment of the agreed amount the car plan was intended to give additional
results, by the terms of the bargain, in the benefits to executives of the Elizalde group of
transfer of title to the lessee. companies.
Second. The contract being one of sale on
installment, the Court of Appeals correctly Third. Private respondents presented evidence
applied to it the following provisions of the Civil that they “felt bad, were worried, embarrassed
Code: and mentally tortured” by the repossession of
the car. This has not been rebutted by
The remedies provided for in Art. 1484 are petitioner. There is thus a factual basis for the
alternative, not cumulative. The exercise of one award of moral damages. In addition, petitioner
bars the exercise of the others. This limitation acted in a wanton, fraudulent, reckless and
applies to contracts purporting to be leases of oppressive manner in filing the instant case,
personal property with option to buy by virtue of hence, the award of exemplary damages is
Art. 1485. The condition that the lessor has justified. The award of attorney’s fees is likewise
deprived the lessee of possession or enjoyment proper considering that private respondents
of the thing for the purpose of applying Art. 1485 were compelled to incur expenses to protect
was fulfilled in this case by the filing by petitioner their rights
of the complaint for replevin to recover
possession of movable property. By virtue of
the writ of seizure issued by the trial court, the
deputy sheriff seized the vehicle on August 6,
1986 and thereby deprived private respondents PEOPLE'S INDUSTRIAL AND COMMERCIAL
of its use. The car was not returned to private CORPORATION, petitioner, vs. COURT OF
respondent until April 16, 1989, after two (2) APPEALS and MAR-ICK INVESTMENT
years and eight (8) months, upon issuance by CORPORATION, respondents.
the Court of Appeals of a writ of execution.
Petitioner prayed that private respondents be G.R. No. 112733 October 24, 1997
made to pay the sum of P39,054.86, the amount
that they were supposed to pay as of May 1986, 281 SCRA 206
plus interest at the legal rate. At the same time,
it prayed for the issuance of a writ of replevin or Ponente: ROMERO, J. (THIRD DIVISION)
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Facts: the contract because private respondent never
encashed and benefited from those checks.
Private respondent Mar-ick Investment There was no meeting of the minds between the
Corporation is the exclusive and registered parties because Art. 475 of the Civil Code
owner of Mar-ick Subdivision in Barrio Buli, should be read with the Statute of Frauds that
Cainta, Rizal. On May 29, 1961, private requires the embodiment of the contract in a
respondent entered into 6 agreements with note or memorandum. What was clearly proven
petitioner People's Industrial and Commercial was that both parties negotiated a new contract
Corporation whereby it agreed to sell to after the termination of the first. Thus, the fact
petitioner 6 subdivision lots. that the parties tried to negotiate a new contract
indicated that they considered the first contract
Five of the agreements stipulate that the as already cancelled.
petitioner agreed to pay private respondent for Petitioner elevated the case to the Court
each lot, the amount of P7,333.20 with a down of Appeals which affirmed in toto the lower
payment of P480.00. The balance of P6,853.20 court's decision.
shall be payable in 120 equal monthly
installments of P57.11 every 30th of the month,
for a period of ten years. With respect to another
lot, the parties agreed to the purchase price of Issue:
P7,730.00 with a down payment of P506.00 and Whether or not there was a perfected
equal monthly installments of P60.20. After and enforceable contract of sale on October 11,
the lapse of ten years, petitioner still had not 1983 which modified the earlier contracts to sell
fully paid for the six lots. It had paid only the which had not been validly rescinded.
down payment and 8 installments.
Ruling:
After a series of negotiations between The contracts to sell of 1961 were
the parties, they agreed to enter into a new cancelled to which the parties voluntarily bound
contract to sell on October 11, 1983. The themselves. When petitioner failed to abide by
contract stipulates that the previous contracts its obligation to pay the installments provision
have been cancelled due to the failure of the No. 9 of the contract automatically took effect
purchaser to pay the stipulated installments. which states that “should the purchaser fail to
make the payment of any of the monthly
Neither of the parties signed the new
installments as agreed herein, this contract
contract. Siatianum issued checks in the total
shall, by the mere fact of nonpayment, expire by
amount of P37,642.72 to private respondent.
itself and become null and void.”
Private respondent received but did not
The 1961 agreements are contracts to
encash the checks. Instead, it filed in the
sell and not contracts of sale. The distinction
Regional Trial Court of Antipolo, Rizal, a
between these contracts is depicted in Adelfa
complaint for accion publiciana de posesion
Properties, Inc. v. Court of Appeals which states
against petitioner and Tomas Siatianum, as
that “the distinction between the two is important
president and majority stockholder of petitioner.
for in a contract of sale, the title passes to the
It prayed that petitioner surrender possession of
vendee upon the delivery of the thing sold;
the lots of Mar-ick Subdivision, and that
whereas in a contract to sell, by agreement the
petitioner and Tomas Siatianum be ordered to
ownership is reserved in the vendor and is not to
pay reasonable rentals for the use of the lots. In
pass until the full payment of the price. In a
the alternative, the complaint prayed that should
contract of sale, the vendor has lost and cannot
the agreements be deemed not automatically
recover ownership until and unless the contract
cancelled, the same agreements should be
is resolved or rescinded; whereas, in a contract
declared null and void.
to sell, title is retained by the vendor until the full
Lower court rendered a decision finding
payment of the price, such payment being a
that the original agreements of the parties were
positive suspensive condition and failure of
validly cancelled. The parties did not enter into a
which is not a breach but an event that prevents
new contract in accordance with Art. 1403 (2) of
the obligation of the vendor to convey title from
the Civil Code as the parties did not sign the
becoming effective. Thus, a deed of sale is
draft contract. Receipt by private respondent of
considered absolute in nature where there is
the five checks could not amount to perfection of
neither a stipulation in the deed that title to the
FACTS:
Under Article 1492, the prohibition Chua v. Court of Appeals and Valdes-Choy,
extends to sales in legal redemption.
401 SCRA 54, April 9, 2003
Maquera’s acts in Guam which resulted
in his two-year suspension from the practice of Carpio, G.R. No. 119255
law in that jurisdiction are also valid grounds for
his suspension from the practice of law in the
Philippines. Such acts are violative of lawyer’s
FACTS:
sworn duty to act with fidelity toward his clients.
Encarnacion Valdes-Choy advertised for
It is also violative of Canon 17 which
sale her paraphernal house and lot in Makati
states, “a lawyer owes fidelity to the cause of his
City which Chua responded to. They both
client and shall be mindful of the trust and
agreed on a purchased price of P100,000.00
confidence reposed in him.”
payable in cash.
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Chua gave P100,000.00 to Valdes-Choy
as an earnest money and another P485,000.00
for the payment of capital gains tax since
Valdes-Choy was not able to pay the said tax.
In their Answer with Counterclaim, VISAYAN The trial court ruled, however, and the public
SAWMILL insisted that the cancellation of the respondent was in agreement, that there had
contract was justified because of Hibionada’s been an implied delivery in this case of the
non-compliance with essential preconditions, subject scrap iron because on 17 May 1983,
among which is the opening of an irrevocable private respondent's men started digging up and
and unconditional letter of credit not later than gathering scrap iron within the petitioner's
15 May 1983. premises. The entry of these men was upon the
private respondent's request.
Issue:
Is there a contract of sale? This permission or consent can, by no stretch of
Is the object of sale delivered? the imagination, be construed as delivery of the
scrap iron in the sense that, as held by the
Held: public respondent, citing Article 1497 of the Civil
The nature of the transaction between the Code, petitioners placed the private respondent
petitioner corporation and the private respondent in control and possession thereof. In the first
is a mere contract to sell or promise to sell, and place, said Article 1491 falls under the Chapter
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15
Obligations of the Vendor, which is found in
Title VI (Sales), Book IV of the Civil Code. As
such, therefore, the obligation imposed therein is
premised on an existing obligation to deliver the
subject of the contract. In the instant case, in
view of the private respondent's failure to comply
within the positive suspensive condition earlier
discussed, such an obligation had not yet arisen.
In the second place, it was a mere
accommodation to expedite the weighing and
hauling of the iron in the event that the sale
would materialize. The private respondent was
not thereby placed in possession of and control
over the scrap iron. Thirdly, the conversion of
the initial contract or promise to sell into a
contract of sale by the petitioner corporation's
alleged implied delivery of the scrap iron
because its action and conduct in the premises
do not support this conclusion. Indeed,
petitioners demanded the fulfillment of the
suspensive condition and eventually cancelled
the contract.
PARAS, J.:
Facts:
Norma Leuenberger inherited the whole of Lot
No. 140 from her grandmother, Simeona J. Vda.
Held:
It is expressly provided by law that the thing sold
shall be understood as delivered, when it is
placed in the control and possession of the
vendee. Where there is no express provision
that title shall not pass until payment of the
price, and the thing gold has been delivered, title
passes from the moment the thing sold is placed SPOUSES CAMILO L. SABIO, and MA.
in the possession and control of the buyer. MARLENE A. LEDONIO-SABIO, petitioners,
Delivery produces its natural effects in law, the vs. THE INTERNATIONAL CORPORATE
principal and most important of which being the BANK, INC. (now UNION BANK OF THE
conveyance of ownership, without prejudice to PHILIPPINES), GOLDENROD, INC., PAL
the right of the vendor to payment of the price. EMPLOYEES SAVINGS AND LOAN
When the sale is made through a public ASSOCIATION, INC., AYALA CORPORATION,
instrument, the execution thereof shall be LAS PINAS VENTURES, INC., FILIPINAS LIFE
equivalent to the delivery of the thing which is ASSURANCE COMPANY(now AYALA LIFE
the object of the contract, if from the deed, the ASSURANCE, INC.), AYALA PROPERTY
contrary does not appear or cannot be clearly VENTURES CORPORATION, and AYALA
inferred. The execution of the public instrument LAND, INC., respondents.
operates as a formal or symbolic delivery of the
property sold and authorizes the buyer to use G.R. No. 132709. September 4, 2001.
the document as proof of ownership.
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YNARES-SANTIAGO, J.: also transferred, along with ownership thereof,
to the petitioners by virtue of the deed of
Facts: conveyance. Petitioner’s contention that
respondents “never acquired ownership over the
The object of the controversy is a subject property since the latter was never in
portion of a vast tract of land located at Tindig possession of the subject property nor was the
na Manga, Almanza, Las Pinas City. The property ever delivered” is totally without merit.
spouses Gerardo and Emma Ledonio, assigned The mere execution of the deed of conveyance
to the spouses Camilo and Ma. Marlene Sabio in a public document is equivalent to the delivery
(herein petitioners) all their rights, interests, title of the property. Since the execution of the deed
and participation over a contiguous portion of of conveyance is deemed equivalent to delivery,
the subject property measuring 119,429 square prior physical delivery or possession is not
meters. Similarly, while the subject property legally required. The deed operates as a formal
was still the object of several pending cases, the or symbolic delivery of the property sold and
International Corporate Bank, Inc. (or Interbank) authorizes the buyer or transferee to use the
acquired from the Trans-Resource Management document as proof of ownership. Nothing more
and Development Corporation all of the latter’s is required.
rights to the subject property by virtue of a deed
of assignment executed between them.
Issue:
Issue:
Held:
July 8, 1991
Third Division
Justice Gutierrez, Jr.
Facts:
Perfecto Dy and Wilfredo Dy are brothers.
Wilfredo Dy purchased a truck and a farm tractor
through financing extended by Libra Finance
and Investment Corporation. Both truck and
tractor were mortgaged to Libra as a security for
the loan.
Meanwhile a civil case entitled ‘”Gelac Trading, The sale of the object tractor was consummated
Inc v. Wilfredo Dy was pending in another court upon the execution of the public instrument. At
in Cebu regarding a collection case to recover a this time constructive delivery was already
sum. Through an alias writ of execution, the effected. Hence, the subject tractor was no
sheriff was able to seize and levy on the tractor longer owned by Wilfredo Dy when it was levied
which was in the premises of Libra in Carmen, upon by the sheriff(Dy, Jr. vs. Court of Appeals).
Cebu. The tractor was subsequently sold at
public auction. The property was sold to Antonio
Gonzales. It was only when the check was
cleared that Perfecto learned about Gelac
having already taken custody of the subject
tractor.
Issue:
Whether or not respondent may be held liable
for the plastic bags which were not actually
used for packaging cement as originally
intended.
Aerospace Chemical Industries, Inc vs. Court
Ruling: of Appeal, Philippine Phosphate Fertilizer
The decision appealed from is SET ASIDE and Corporation.
the decision of the trial court REINSTATED.
G.R. No. 108129. September 23, 1999.
Ratio: (Industrial Textile Manufacturing
Company of the Phils. v. LPJ Enterprises, Inc, QUISUMBING, J.:
pp 326-327)
FACTS: Petitioner Aerospace Industries
The provision in the Uniform Sales Act and the purchased five hundred (500) metric tons of
Uniform Commercial Code from which Article sulfuric acid from private respondent Philippine
1502 was taken, clearly requires an express Phosphate Fertilizer Corporation (Philphos).The
written agreement to make a sales contract agreement provided that the buyer shall pay its
either a “sale of return” or a “sale on approval”. purchases in Philippine Currency five days
Parol or extrinsic testimony could not be before the shipment date. Petitioner as buyer
admitted for the purpose of showing that an committed to secure the means of transport to
During the pendency of this case Nieves died Issue 3: Nonetheless while it is true that a
and her heirs substituted her. On September 30, Torrens title is indefeasible and imprescriptible,
1994, the trial court rendered its decision, ruling the registered owner may lose his right to
in favor of Isabela Colleges. On Appeal, its recover possession of his registered property by
decision was reversed. Hence, this petition. reason of laches.
Issue: Whether the Court of Appeals erred in Laches means the failure or neglect for an
ruling that: unreasonable and unexplained length of time to
1.) the subject property is paraphernal despite do that which, by observance of due diligence,
Nieves’ admission that it was purchased from could or should have been done earlier. It is
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negligence or omission to assert a right within a
reasonable time, warranting the presumption
that the party entitled to assert his right either
has abandoned or declined to assert it.
“Art. 1544. If the same thing should have been G.R. No. 152407, 21 September 2007,
sold to different vendees, the ownership shall be SANDOVAL-GUTIERREZ, J.
transferred to the person who may have first
taken possession thereof in good faith, if it
should be movable property. Spouses Albert Oguis, Sr. and Florencia
HELD:
Issue: Which of the two contracts of sale is URACA, et al. vs CA and VELEZ, JR., et al.
valid?
G.R. No. 115158 September 5,
Held: Sale made by the heirs of Brigido 1997
Tonacao to the spouses Salera is valid. Sale
made by Catalino to spouses Rodaje is invalid. Ponente: Justice Panganiban, Third Division
The Court of Appeals is wrong. Article 1544 of Facts: The Velezes were the owners of the lot
the Civil Code contemplates a case of double and commercial building in question located at
sale or multiple sales by a single vendor. Progreso and M.C. Briones Streets in Cebu City.
More specifically, it covers a situation where a The petitioners were its lessees.
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perfected contract of sale of the property for
On July 8, 1985, the Velezes through Carmen P1,050,000.00 between the Velezes and herein
Velez Ting wrote a letter to petitioners offering to petitioners. It added, however, that such
sell the subject property for P1,050,000.00 and perfected contract of sale was subsequently
to reply within three days. Petitioners, through novated. However, it was mutually withdrawn,
counsel, accepted the offer. cancelled and rescinded by novation, and was
therefore abandoned by the parties when
When Uraca went to Ting, Ting told her that Carmen Velez Ting raised the consideration of
there was a mistake in the price. It should have the contract by P350,000.00, thus making the
been P1.4M, Uraca agreed to the new price to price P1.4M instead of the original price of
be payable in installments with a down payment P1,050,000.00. Since there was no agreement
of P1M and the balance of P400,000 to be paid as to the 'second' price offered, there was no
in 30 days. Carmen Velez Ting did not accept meeting of minds between the parties, hence, no
the said counter-offer of Emilia Uraca although contract of sale was perfected.
this fact is disputed by Uraca.
CA added that, even if there was agreement as
No payment was made by to the Velezes on to the price and a second contract was
July 12 and 13, 1985. On July 13, 1985, the perfected, the later contract would be
Velezes sold property to Avenue Merchandising unenforceable under the Statute of Frauds. It
Inc. for P1,050,000.00. The certificate of title of further held that such second agreement, if there
the said property was clean and free of any was one, constituted a mere promise to sell
annotation of adverse claims or lis pendens. which was not binding for lack of acceptance or
a separate consideration.
On July 31, 1985, petitioners filed the instant
complaint against the Velezes. On August 1, Issues:
1985, they also registered a notice of lis 1.) Was there novation of the first contract?
pendens over the property in question with the 2.) Was there a double sale of the real
Office of the Register of Deeds. property involved?
On Double Sale
G.R. No. 110295 October 18, 1993 Art. 1567. In the case of Articles 1561, 1562,
1564, 1565 and 1566, the vendee may elect
Davide, Jr., J, First Division between withdrawing from the contract and
demanding a proportionate reduction of the
price, with damages eithercase.
Facts: Lydia L. Geronimo was the proprietress of
Kindergarten Wonderland Canteen in Dagupan The vendee may also ask for the annulment of
City, an enterprise engaged in the sale of soft the contract upon proof of error or fraud, in
drinks (including Coke and Sprite) and other which case the ordinary rule on obligations shall
goods to the students of Kindergarten be applicable. Under the law on obligations,
Wonderland and to the public. On or about responsibility arising from fraud is demandable
August 12 1989, some parents of the students in all obligations and any waiver of an action for
complained to her that the Coke and Sprite soft future fraud is void. Responsibility arising from
drinks sold by her contained fiber-like matter and negligence is also demandable in any obligation,
other foreign substances or particles. She then but such liability may be regulated by the courts,
went over her stock of softdrinks and discovered according to the circumstances. Those guilty of
the presence of some fiber-like substances in fraud, negligence, or delay in the performance of
the contents of some unopened Coke bottles their obligations and those who in any manner
and a plastic matter in the contents of an contravene the tenor thereof are liable for
unopened Sprite bottle. She brought the said damages.
bottles to the Regional Health Office of the
Department of Health at San Fernando, La The vendor could likewise be liable for quasi-
Union, for examination. She received a letter delict under Article 2176 of the Civil Code, and
from the Department of Health informing her that an action based thereon may be brought by the
the samples she submitted "are adulterated;" as vendee. While it may be true that the pre-
a consequence of the discovery of the foreign existing contract between the parties may, as a
substances in the beverages, her sales of soft general rule, bar the applicability of the law on
drinks severely plummeted from the usual 10 quasi-delict, the liability may itself be deemed to
cases per day to as low as 2 to 3 cases per day arise from quasi-delict, i.e., the acts which
resulting in losses of from P200.00 to P300.00 breaks the contract may also be a quasi-delict.
per day, and not long after that she had to lose
shop on December 12 1989, she became
jobless and destitute. She demanded from the
petitioner the payment of damages but was
rebuffed by it.
359 SCRA 91
Puno, J.:
Subsequently, negotiations for the barter of the RTC, as affirmed by the Court of Appeals, held
jewelry and the Tanay property ensued. When the earrings uses as consideration for the sale
Dr. Cruz had later agreed to the proposal, was delivered by Dr. Cruz to the petitioner as
petitioner went to Prudential Bank once again to genuine.
take a look at the jewelry.
Hence this petition.
In the afternoon of October 23, 1984, petitioner
met Atty. Belarmino (Dr. Cruz’s lawyer) at the ISSUE
latter's residence to prepare the documents of
sale. The Attorney accordingly caused the Whether or not the deed of sale of the Tanay
preparation of a deed of absolute sale while property is null and void.
petitioner and Dr. Cruz attended to the
safekeeping of the jewelry.
RULING
Petitioner signed the deed. Since the jewelry The Civil Code provides that contracts are
was appraised only at P160,000.00, the parties
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perfected by mere consent. From this moment, contract which, without them, he would not have
the parties are bound not only to the fulfillment agreed to. The records, however, are bare of
of what has been expressly stipulated but also to any evidence manifesting that private
all the consequences which, according to their respondents employed such insidious words or
nature, may be in keeping with good faith, usage machinations to entice petitioner into entering
and law. A contract of sale is perfected at the the contract of barter. Neither is there any
moment there is a meeting of the minds upon evidence showing that Dr. Cruz induced
the thing which is the object of the contract and petitioner to sell his Tanay property or that she
upon the price. Being consensual, a contract of cajoled him to take the earrings in exchange for
sale has the force of law between the said property. On the contrary, Dr. Cruz did not
contracting parties and they are expected to initially accede to petitioner's proposal to buy the
abide in good faith by their respective said jewelry. Rather, it appears that it was
contractual commitments. Article 1358 of the petitioner, through his agents, who led Dr. Cruz
Civil Code which requires the embodiment of to believe that the Tanay property was worth
certain contracts in a public instrument, is only exchanging for her jewelry as he represented
for convenience, and registration of the that its value was P400,000.00 or more than
instrument only adversely affects third parties. double that of the jewelry which was valued only
Formal requirements are, therefore, for the at P160,000.00. If indeed petitioner's property
benefit of third parties. Non-compliance was truly worth that much, it was certainly
therewith does not adversely affect the validity of contrary to the nature of a businessman-banker
the contract nor the contractual rights and like him to have parted with his real estate for
obligations of the parties thereunder. half its price. In short, it was in fact petitioner
who resorted to machinations to convince Dr.
It is evident from the facts of the case that there Cruz to exchange her jewelry for the Tanay
was a meeting of the minds between petitioner property.
and Dr. Cruz. As such, they are bound by the
contract unless there are reasons or Moreover, petitioner did not clearly allege
circumstances that warrant its nullification. mistake as a ground for nullification of the
Hence, the problem that should be addressed in contract of sale. Even assuming that he did,
this case is whether or not under the facts duly petitioner cannot successfully invoke the same.
established herein, the contract can be voided in To invalidate a contract, mistake must "refer to
accordance with law so as to compel the parties the substance of the thing that is the object of
to restore to each other the things that have the contract, or to those conditions which have
been the subject of the contract with their fruits, principally moved one or both parties to enter
and the price with interest. into the contract." An example of mistake as to
the object of the contract is the substitution of a
Contracts that are voidable or annullable, even specific thing contemplated by the parties with
though there may have been no damage to the another. In his allegations in the complaint,
contracting parties are: (1) those where one of petitioner insinuated that an inferior one or one
the parties is incapable of giving consent to a that had only Russian diamonds was substituted
contract; and (2) those where the consent is for the jewelry he wanted to exchange with his
vitiated by mistake, violence, intimidation, undue 10-hectare land. He, however, failed to prove
influence or fraud. Accordingly, petitioner now the fact that prior to the delivery of the jewelry to
stresses before this Court that he entered into him, private respondents endeavored to make
the contract in the belief that the pair of emerald- such substitution.
cut diamond earrings was genuine. On the
pretext that those pieces of jewelry turned out to Likewise, the facts as proven do not support the
be counterfeit, however, petitioner subsequently allegation that petitioner himself could be
sought the nullification of said contract on the excused for the "mistake." On account of his
ground that it was, in fact, "tainted with fraud" work as a banker-jeweler, it can be rightfully
such that his consent was vitiated. assumed that he was an expert on matters
regarding gems. He had the intellectual capacity
There is fraud when, through the insidious words and the business acumen as a banker to take
or machinations of one of the contracting precautionary measures to avert such a mistake,
parties, the other is induced to enter into a considering the value of both the jewelry and his
Issues:
Issues:
vs.
Court of Appeals, Tenth Division, Mariano B. 1. Whether the sale made to Amores by
Nemenio and Felisa V. Nemenio, Constantino Galeos is valid?
M. Galeos and Eugenio V. Amores
2. Whether the Nemenio spouses are
purchasers in good faith?
February 9, 2000 G.R. No. 105902
FACTS: Issue 1
Baricuatro bought two lots, part of the Victoria Amores was in good faith when he bought the
Village, on installments basis from Galeos on subdivision, however, when he registered his
October 16, 1968. title he already had knowledge of the previous
sale. Such knowledge tainted his registration
with bad faith. In addition, the agreement to
collect the balance of the purchase price of the
Two months from the date of the previous sale, disputed lots from Baricuatro which presupposes
Galeos sold the entire subdivision, including the knowledge of the previous sale by Amores.
two lots, to Amores. Baricuatro was informed by
Galeos about the sale and was advised to pay
the balance of the purchase price of the two lots
directly to Amores. Under Art. 1544, the ownership of an immovable
property shall belong to the purchaser who in
good faith registers it first in the registry of
property.
Amores took possession of the subdivision and
developed the same for residential purposes. He
secured the transfer of the title to the same in
his name. Afterwards, he sold the two lots of the (Uraca vs Ca) “The second buyer must show
spouses Mariano and Felisa Nemenio. Prior to continuing good faith and innocence or lack of
the sale, Baricuatro was informed through a knowledge of the first sale until his contract
letter by Amores about the impending sale of the ripens into full ownership through prior
two lots but the former failed to respond. registration as provided by law.” This means that
Nemenio spouses demanded from Baricuatro to the good faith of the purchaser should be from
vacate the said lots but the latter refused to do the time of the perfection of the sale until up to
so. the time that he be declared the sole and true
owner of the property.
Decision of CA is REVERSED.
Nachura, J.:
RULING:
FACTS:
Art. 1544 provides:
In 1964, the Amodias allegedly conveyed the If the land is registered under Torrens Title, and
property to Aznar and was registered under Act it is sold and the sale is registered no under the
344 as there was no title. Land Registration Act but under Act 3344, such
sale is not considered registered.
Court of Appeals affirmed the ruling. Conchita Nool, et al. vs. Court of Appeals, et
al.
ISSUE:
RULING:
Sps. Carlos and Eulalia Raymundo, et al. vs.
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Sps. Dominador and Rosalia Bandung
Third Division
Petition is denied.
YNARES-SANTIAGO, J.:
Issue:
QUISUMBING, J.,
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existence and genuineness of the letter was
FACTS: Spouses Hilario filed an action for never rebutted. Note that in said letter Leonisa
Declaration of Nulity against Spouses Gonzales used the term "Kasulatan ng Bilihan" (Deed of
involving 3 parcels of lands which were the Sale). She likewise made mention about capital
subject of 2 Deeds of Sale executed Leonisa gains tax and registration fees, which can only
Hilario in favor of the latter spouses. One lot was find relevance and necessity in a contract of sale
priced at P50, 000 and the other at P240,000. and not in a contract of mortgage. Petitioners
Spouses Hilario claimed that the contract cannot feign ignorance and illiteracy as to its
between them and Spouses Gonzalez were not contents. Said letter is written not in English but
of sale but loans for P260,000. However, it in Filipino in which petitioners are conversant.
turned out that Spouses Gonzalez registered the Thus, the true intent of the parties involves a
disputed lots in their names through the use of contract of sale. It is not merely a loan, much
fraud, misrepresentation and falsification, using less an equitable mortgage
the fictitious contracts of sale.
CA: REVERSED.
HELD: AFFIRMED.
Lastly, Leonisa Hilario sent a note to Mrs. Oscar Fernandez vs. Spouses Carlos and
Gonzales requesting them to execute another Narcisa Tarun G.R. No. 143868
antedated deed of sale, providing for a
decreased selling price, so as to reduce November 14, 2002 Third Division
petitioners' taxes, e.g. capital gains tax. The
CA: REVERSED.
HELD: AFFIRMED.
Petition DENIED.
Petition DENIED.
GONZAGA-REYES, J.:
Facts:
• Dissatisfied, both parties appealed to • The two (2) courts below unanimously
the CA. Unfortunately, for failure of the found that the subject Deed of Sale with
plaintiff heirs to submit their appeal brief, Pacto De Retro, while purporting to be a
their appeal was dismissed, leaving that sale, is in truth and in fact an equitable
of the defendant spouses mortgage. Such factual finding, more so
when supported by the evidence, as
here commands is binding upon the
• As stated at the threshold hereof, the
court.
appellate court, affirmed that of the trial
court but with the modification that the
mortgaged properties are subject to • An equitable mortgage has been
foreclosure should the respondents fail defined “as one which although lacking
to redeem the same within thirty (30) in some formality, or form or words, or
days from finality of the decision. other requisites demanded by a statute,
nevertheless reveals the intention of the
parties to charge real property as
• Hence this appeal...
security for a debt, and contains nothing
impossible or contrary to law.”
Issue:
• Article 1604 of the Civil Code provides
Whether or not the transaction between the
that the provisions of Article 1602 shall
parties was not a sale but an equitable
also apply to a contract purporting to be
mortgage?
an absolute sale, and, in case of doubt,
a contract purporting to be a sale with
right to repurchase shall be construed
Ruling: as an equitable mortgage.
FIRST DIVISION
Third Division
There is gross inadequacy in price if a
reasonable man will not agree to dispose of his Reyes, R.T., J.:
property. The court finds no cogent reason to
conclude that the 1949 price of P5,300.00 as
agreed upon by the parties was unreasonable. FACTS:
THIRD DIVISION
FRANCISCO, J.:
Aggrieved, petitioner filed an action for
cancellation of liens, quieting of title, recovery of
possession and damages against Parangan and
FACTS PNB in the Regional Trial Court of Iloilo City.
The RTC ordered the cancellation by the
Register of Deeds of the Province of lloilo, of the
unauthorized loans, the liens and encumbrances
Petitioner Adoracion Lustan is the registered appearing in the Transfer Certificate of the land.
owner of a parcel of land. On February 25, 1969, Declaring the Deed of Pacto de Retro Sale
petitioner leased the land to private respondent dated April 25, 1978 and the Deed of Definite
Nicolas Parangan for a term of ten (10) years Sale dated May 6, 1979, both documents
and an annual rent of One Thousand executed by Adoracion Lustan in favor of
(P1,000.00) Pesos. During the period of lease, Nicolas Parangan over Lot 8069 in TCT No. T-
Parangan was regularly extending loans in small 561 of the Register of Deeds of lloilo, as null and
amounts to petitioner to defray her daily void, declaring the same to be Deeds of
expenses and to finance her daughter's Equitable Mortgage. It also ordered defendant
education. On July 29, 1970, petitioner Nicolas Parangan to pay all the loans he
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secured from defendant PNB using thereto as as an issue the fact that the document does not
security TCT No. T-561 of plaintiff and express the true intent of the parties. In this
defendant PNB to return TCT No. T-561 to case, parol evidence then becomes competent
plaintiff. Also, Ordering defendant Nicolas and admissible to prove that the instrument was
Parangan to return possession of the land in in truth and in fact given merely as a security for
question to the plaintiff upon payment of the sum the repayment of a loan. And upon proof of the
of P75,000.00 by plaintiff to defendant Parangan truth of such allegations, the court will enforce
which payment by plaintiff must be made within the agreement or understanding in consonance
ninety (90) days from receipt of this decision; with the true intent of the parties at the time of
otherwise, sale of the land will be ordered by the the execution of the contract.
court to satisfy payment of the amount;
SECOND DIVISION
QUISUMBING, J.:
These circumstances, peculiar to the On April 13, 1988, Diosdada Nueva, with marital
case at bar, make this case fall squarely within consent, sold under a pacto de retro, a parcel of
the situation contemplated in the above-quoted land (2,033 sq.m.) situated in Cagayan de Oro
doctrine – that there was a belief on the part of City to Agan for P21k.The property is covered by
the vendor a retro, founded on facts attendant TCT No. 25370 and registered in the name of
upon the execution of the sale with pacto de Spouses Andres and Diosdada Nueva.
On the basis of the foregoing facts, the RTC The result is that the property remains to be in a
rendered a decision in favor of private condition of co-ownership. While a vendee a
respondents. retro, under Article 1613 of the Code, "may not
be compelled to consent to a partial
The RTC held that the land was conjugal redemption," the redemption by one co-heir or
property since the evidence presented by private co-owner of the property in its totality does not
respondents disclosed that the same was vest in him ownership over it. Failure on the part
acquired during the marriage of the spouses and of all the co-owners to redeem it entitles the
that Adriano contributed money for the purchase vendee a retro to retain the property and
of the property. Thus, the court concluded, consolidate title thereto in his name (Supra, art.
Gertrudes could only sell to petitioner spouses 1607). But the provision does not give to the
her one-half share in the property. redeeming co-owner the right to the entire
property. It does not provide for a mode of
Petitioners appealed to the Court of Appeals in terminating a co-ownership.
vain. The Court of Appeals affirmed the decision
of the Regional Trial Court, holding that since It is conceded that, as a rule, a co-owner such
the property was acquired during the marriage of as Gertrudes could only dispose of her share in
Gertrudes to Adriano, the same was presumed the property owned in common.
to be conjugal property under Article 160 of the
Civil Code. The appellate court, like the trial Unfortunately for private respondents, however,
court, also noted that petitioner did not comply the property was registered in TCT No. 43100
with the provisions of Article 1607 of the Civil solely in the name of "Gertrudes Isidro, widow."
Code. Where a parcel of land, forming past of the
Being so, they filed with the RTC of The appealed decision of the Court of
Quezon City, a complaint for annulment of Appeals is hereby REVERSED and SET ASIDE.
foreclosure and thereafter were ordered by the The complaint filed by respondent spouses is
latter to deposit with the clerk of court the sum of hereby dismissed.
P1,500,000 representing the redemption price.
Ratio Decidendi:
Despite the opposition of petitioner, the
trial court ordered the release to the
respondents of P1,400,000 of the consigned The Supreme Court found no reason to
amount. The balance of P100,000 is to take the question the validity of the extra-judicial
place of the injunction bond to answer for foreclosure. In a real estate mortgage, when the
whatever damages petitioner might suffer principal obligation is not paid when due, the
because of the issuance of the preliminary mortgagee has the right to foreclose on the
injunction previously issued by a different branch mortgage and have the property seized and sold
of RTC and then later lifted. to apply the proceeds to the obligation.
Therefore, due to the default of the respondents
to pay their obligation, foreclosure was proper.
The trial court rendered a decision
declaring the validity of the extra-judicial
foreclosure of the mortgaged properties of As regards the second issue, the
respondents but allowed the redemption of the general rule on redemption is that the statement
same at a redemption price of P2,140,000. of intention to exercise the right to repurchase
must be accompanied by an actual and
simultaneous tender of payment, otherwise, the
Upon appeal by the petitioner, the Court offer to redeem is ineffectual. A bona fide
of Appeals affirmed the trial court’s decision redemption necessarily implies a reasonable
subject to the modification declaring and valid tender of the entire repurchase price,
P2,678,639.80 as the redemption price. otherwise the rule on the redemption period
fixed by law can easily be circumvented.
FACTS:
The law grants the right of redemption.
But in so granting, the law intended that the offer
A piece of land is disputed by Lee Chuy Corp.
to redeem be valid and effective, accompanied
and Marc Realty. Originally the property was co-
by an actual tender of the redemption price. The
owned by Ruben Jacinto to the extent of one-
fixing of a definite term within which the property
sixth and the Bascara’s and Ernesto Jacinto who
should be redeemed is meant to avoid
collectively owned the remaining five-sixths.
prolonged economic uncertainty over the
ownership of the thing sold.
On April 30, 1981, sale bet. Ruben Jacinto, of
RULING:
Petition Granted. Primary Structures Corp. vs. Sps. Anthony
and Susan T. Valencia
SC sustains LEE CHUY REALTY. Arts. 1620
and 1623 of the Civil Code on legal redemption
provide:
August 19, 2003 GR No.150060
Art. 1620. A co-owner of a thing may
exercise the right of redemption in First Division
case the shares of all the other co-
Ponente: Vitug, J.
owners or of any of them are sold to a
third person. If the price of the
alienation is grossly excessive, the
redemptioner shall pay only a Facts: Petitioner is a private corporation based
reasonable one. in Cebu City and the registered owner of Lot
4523 situated in Liloan, Cebu, with an area of
Facts:
Sofia P. Martinez was the registered owner of
two (2) parcels of land in Tacloban City. On
1961, she leased the lots to Yu Siong, father of
petitioner for a period of ten (10) years. The
contract required the lessee to construct a
commercial building on the property which shall
become the property of Sofia upoon expiration
of the lease. On 1973, the contract was renewed
with explicit stipulation that the new owner of the
building is Sofia. Sofia then sold the lot and
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2A SY 2009-2010
building to her daughter, private respondent of Sofia executed a “Confirmation of
Teodora P. Martinez. After the new lease Sale of Land and Improvements”. Thus,
contract expired, it was no longer renewed by the sale is considered valid and binding.
the party. Petitioner continued posession and
regulary paid monthly rentals to Sofia until her 2. The Petitioner does not have a right of
death. After her death the rentals were paid to first refusal to assert against the private
Teodora. On 1989, private respondent sent a respondents. Neither any law nor any
letter to petitioner informing him of her intention contract grants it preference in the
to sell the premises to one Mrs. Petilla which the purchase of leased premises.
petitioner only received a month after. The Such grant of right of first refusal must
petitioner sought to purchase the property. be clearly embodied in a written
Petitioner filed a verified complaint against contract, but there is none in the present
Teodora for the annulment of the Deed of Sale case.
by her mother in her favor stating that they have
preferential right over the land. However,
Teodora sold the property to respondent Tiu
Uyping. Petitioner prays for the nullity of the
second sale. Trial court rendered decision in
favor of the petitioner. Court of Appeals
rendered a decision reversing the trial court.
HTP.
Issues:
On even date, Saturnina and her four (4) -in their answer, respondents-spouses
children Bonifacio, Albino, Francisco and maintained that petitioners were estopped from
Leonora sold the subject parcel of land to claiming any right over subject property
respondents-spouses Jesus and Anunciacion considering that (1) petitioner Rito had already
Feliano for P8,000.00. The Deed of Sale received the amount corresponding to his share
provided in its last paragraph, thus: of the proceeds of the sale of subject property,
and (2) that petitioner Nelson failed to consign to
It is hereby declared and the court the total amount of the redemption
understood that the amount of price necessary for legal redemption. They
TWO THOUSAND TWO prayed for the dismissal of the case on the
HUNDRED EIGHTY SIX PESOS grounds of laches and prescription.
(P2,286.00) corresponding and
belonging to the Heirs of Alberto No amicable settlement was reached at pre-
Cabales and to Rito Cabales who trial. Trial ensued and on August 11, 2000, the
are still minors upon the execution trial court ruled against petitioners
of this instrument are held in trust
by the VENDEE and to be paid On appeal, CA modified tha decision of the trial
and delivered only to them upon court
reaching the age of 21.
Issue:
- On December 17, 1985, the Register of Deeds Whether CA erred in
of Southern Leyte issued Original Certificate of (1) recognizing petitioner Nelson Cabales
Title No. 17035 over the purchased land in the as co-owner of subject land but denied
names of respondents-spouses. him the right of legal redemption, and
(2) not recognizing petitioner Rito Cabales
-On December 30, 1985, Saturnina and her four as co-owner of subject land with similar
(4) children executed an affidavit to the effect right of legal redemption.
that petitioner Nelson would only receive the
amount of P176.34 from respondents-spouses Held:
when he reaches the age of 21 considering that Petition denied, CA decision affirmed with
Saturnina paid Dr. Corrompido P966.66 for the modification.
obligation of petitioner Nelson’s late father
Alberto, i.e., P666.66 for his share in the Ratio:
redemption of the sale with pacto de retro as -When Rufino Cabales died intestate, his wife
well as his “vale” of P300.00. Saturnina and his six (6) children survived and
succeeded him. Article 996 of the New Civil
- On July 24, 1986, 24-year old petitioner Rito Code provides that “[i]f a widow or widower and
Cabales acknowledged receipt of the sum of legitimate children or descendants are left, the
P1,143.00 from respondent Jesus Feliano, surviving spouse has in the succession the
representing the former’s share in the proceeds same share as that of each of the children.”
of the sale of subject property.
-Verily, the seven (7) heirs inherited equally on
-In 1988, Saturnina died. Petitioner Nelson, subject property. Petitioner Rito and Alberto,
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2A SY 2009-2010
petitioner Nelson’s father, inherited in their own only, as the case may be. The
rights and with equal shares as the others. guardian of the estate of a
nonresident shall have the
-But before partition of subject land was management of all the estate of
effected, Alberto died. By operation of law, his the ward within the Philippines,
rights and obligations to one-seventh of subject and no court other than that in
land were transferred to his legal heirs – his wife which such guardian was
and his son petitioner Nelson. appointed shall have jurisdiction
over the guardianship
-The first sale with pacto de retro to Dr.
Corrompido by the brothers and co-owners Indeed, the legal guardian only has the plenary
Bonifacio, Albino and Alberto was valid but only power of administration of the minor’s property.
as to their pro-indiviso shares to the land. When It does not include the power of alienation which
Alberto died prior to repurchasing his share, his needs judicial authority. Thus, when Saturnina,
rights and obligations were transferred to and as legal guardian of petitioner Rito, sold the
assumed by his heirs, namely his wife and his latter’s pro-indiviso share in subject land, she did
son, petitioner Nelson. But the records show not have the legal authority to do so.
that it was Saturnina, Alberto’s mother, and not
his heirs, who repurchased for him. As correctly Accordingly, the contract of sale as to the pro-
ruled by the Court of Appeals, Saturnina was not indiviso share of petitioner Rito was
subrogated to Alberto’s or his heirs’ rights to the unenforceable. However, when he
property when she repurchased the share. acknowledged receipt of the proceeds of the
-Upon redemption from Dr. Corrompido, the sale on July 24, 1986, petitioner Rito effectively
subject property was resold to respondents- ratified it. This act of ratification rendered the
spouses by the co-owners. Petitioners Rito and sale valid and binding as to him.
Nelson were then minors and as indicated in the
Deed of Sale, their shares in the proceeds were With respect to petitioner Nelson, on the other
held in trust by respondents-spouses to be paid hand, the contract of sale was void. He was a
and delivered to them upon reaching the age of minor at the time of the sale. Saturnina or any
majority. and all the other co-owners were not his legal
-the father, or, in his absence, the mother, is guardians with judicial authority to alienate or
considered legal administrator of the property encumber his property. It was his mother who
pertaining to the child under his or her parental was his legal guardian and, if duly authorized by
authority without need of giving a bond in case the courts, could validly sell his undivided share
the amount of the property of the child does not to the property. She did not. Necessarily, when
exceed two thousand pesos. Corollary to this, Saturnina and the others sold the subject
Rule 93, Section 7 of the Revised Rules of Court property in its entirety to respondents-spouses,
of 1964, applicable to this case, automatically they only sold and transferred title to their pro-
designates the parent as legal guardian of the indiviso shares and not that part which pertained
child without need of any judicial appointment in to petitioner Nelson and his mother.
case the latter’s property does not exceed two Consequently, petitioner Nelson and his mother
thousand pesos retained ownership over their undivided share of
Saturnina was clearly petitioner Rito’s legal subject property.
guardian without necessity of court appointment
considering that the amount of his property or -As to whether the petitioners can redeem the
one-seventh of subject property was P1,143.00, land from respondent spouses, it is clear that
which is less than two thousand pesos. legal redemption may only be exercised by the
However, Rule 96, Sec. 1 provides that: co-owner or co-owners who did not part with his
or their pro-indiviso share in the property held in
Section 1. To what common. As demonstrated, the sale as to the
guardianship shall extend. – A undivided share of petitioner Rito became valid
guardian appointed shall have and binding upon his ratification on July 24,
the care and custody of the 1986. As a result, he lost his right to redeem
person of his ward, and the subject property.
management of his estate, or
the management of the estate -In the face of the established facts, petitioner
Facts:
Petitioner is a private corporation in
Issue:
Whether or not petitioner Primary
Structures Corporation has the right of
redemption over the three parcels of land.
Ruling:
Article 1621 of the Civil Code expresses
that the right of redemption it grants to an
adjoining owner of the property conveyed may
be defeated if it can be shown that the buyer
does not own any other rural land. The appellate
court, sustaining the trial court, has said that
there has been no evidence to show that Ledonio v. Capitol Development Corporation
respondents are not themselves owners of rural
lands for the exclusionary clause of the law to Chico-Nazario,
apply.
Article 1623 of the Civil Code provides G.R. No. 149040 July 4, 2007
that the right of legal pre-emption or redemption
shall not be exercised except within thirty days
from notice in writing by the prospective vendor, Facts:
or by the vendor, as the case may be. In
stressing the mandatory character of the Edgar Ledonio obtained from Patrocinio
requirement, the law states that the deed of sale S. Picache two loans with the amount of
shall not be recorded in the Registry of Property P60,000.00, and covered by promissory notes
unless it is accompanied by an affidavit of the duly signed by him.
vendor that he has given notice to all possible
redemptioners. Later on, Picache transferred his due
Issue:
whether or not Caltex Philippines has a better
right over the Certificate of time deposits?
Held:
Security Bank has a better right because the
assignment of the CTDs made by Angel de la
Cruz in favor of respondent bank was embodied
in a public instrument. Art. 1625. An assignment
of credit, right or action shall produce no effect
as against third persons, unless it appears in a Lo vs. KJS Eco-Formwork System Phil., Inc.
public instrument, or the instrument is recorded
in the Registry of Property in case the October 8, 2003
assignment involves real property. First Division
Justice Ynares-Santiago
Respondent bank duly complied with this
statutory requirement. Contrarily, petitioner, Facts:
whether as purchaser, assignee or lien holder of Respondent KJS ECO_FORMWORK System
the CTDs, neither proved the amount of its credit Phil., Inc. is a corporation engaged in the sale of
or the extent of its lien nor the execution of any steel scaffoldings. Sonny Lo, on the other hand
public instrument which could affect or bind is a building contractor.
private respondent. Necessarily, therefore, as
between petitioner and respondent bank, the The petitioner ordered scaffolding equipments
latter has definitely the better right over the worth P540, 425.80 from respondent and paid a
CTDs in question. downpayment of P150,000. The balance was
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2A SY 2009-2010
made payable in ten monthly installments. payment, the debtor offers another thing to the
creditor who accepts it as equivalent of payment
The respondent delivered the equipments to of an outstanding debt.
petitioner but Sonny Lo was only able to pay the
first two monthly installments because his Hence, it may be well settled that the
business encountered financial difficulties. assignment of credit, which is in the nature of a
sale of personal property, produced the effects
Despite the situation, the petitioner and of a dation in payment which may extinguish the
respondent executed a Deed of Assignment obligation. However, as in any other contract of
whereby the petitioner assigned to respondent sale, the vendor is bound by certain
his receivables in the amount of P335, 462.80 warranties.
from Jomero Realty Corporation.
From the provision of the civil code(Article
When the respondent tried to collect the said 1628), petitioner, as vendor or assignor, is
credit from the corporation. Jomero Realty bound to warrant the existence and legality of
Corporation refused to honor the Deed of the credit at the time of the sale or assignment.
Assignment because it claimed that petitioner When Jomero claimed that it was no longer
was also indebted to it. indebted to petitioner since the latter also had
an unpaid obligation to it, it essentially meant
The respondent filed an action for recovery of a that its obligation to petitioner has been
sum of money before the RTC of Makati.The extinguished by compensation. In other words,
trial court dismissed the complaint on the ground respondent alleged the non-existence of the
that the assignment of credit extinguished the credit and asserted its claim to petitioner’s
obligation when they executed the Deed of warranty under assignment. Therefore, it
Assignment. behooved on petitioner to make good its
warranty and paid the obligation.
The respondent appealed the decision to the
Court of Appeals and the said court reverses the Indeed by warranting the existence of the credit,
appealed decision. petitioner should be deemed to have ensured
the performance thereof in case the same is
Issue: later found to be inexistent. He should be held
Whether or not the Deed of Assignment that was liable to pay to respondent the amount of his
executed extinguished the obligation of the indebtedness(Lo vs. KJS Eco-Formwork System
petitioner. Phil., Inc., pp 186-188).
Ruling:
The decision of the Court of Appeals ordering
petitioner to pay the respondent the sum of
P335, 462.14 is AFFIRMED with
MODIFICATION.
Ratio: (Lo vs. KJS Eco-Formwork System Phil., ATOK FINANCE CORPORATION,
Inc., pp 186-188) petitioner vs. COURT OF APPEALS, SANYU
CHEMICAL CORPORATION, DANILO E.
An Assignment of Credit is an agreement by ARRIETA, NENITA B. ARRIETA, PABLITO
virtue of which the owner of a credit, known as BERMUNDO and LEOPOLDO HALILI,
the assignor, by a legal cause, such as sale, respondents.
dacion en pago, exchange or donation, and
without the consent of the debtor , transfers his G.R. No. 80078 May 18, 1993
credit and accessory rights to another, known as
the assignee, who acquires the power to enforce
it to the same extent as the assignor could FELICIANO, J.:
enforce it against the debtor.
FACTS: Private respondents Sanyu Chemical
In dacion en Pago, as a special mode of corporation ("Sanyu Chemical") as principal and