Escueta vs. Lim (G.R. No.

137162 January 24, 2007) Was there a perfected contract of sale between Virginia (agent of Patricia Llamas, who is the agent of petitioner Rubio)? YES. [A]ll the elements of a valid contract of sale under Article 1458 of the Civil Code are present, such as: (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent.26 Ignacio Rubio, the Baloloys, and their co-heirs sold their hereditary shares for a price certain to which respondent agreed to buy and pay for the subject properties. The offer and the acceptance are concurrent, since the minds of the contracting parties meet in the terms of the agreement. In fact, earnest money has been given by respondent. [I]t shall be considered as part of the price and as proof of the perfection of the contract.28 It constitutes an advance payment to be deducted from the total price.29 Article 1477 of the same Code also states that [t]he ownership of the thing sold shall be transferred to the vendee upon actual or constructive delivery thereof.30 In the present case, there is actual delivery as manifested by acts simultaneous with and subsequent to the contract of sale when respondent not only took possession of the subject properties but also allowed their use as parking terminal for jeepneys and buses. Moreover, the execution itself of the contract of sale is constructive delivery. Consequently, Ignacio Rubio could no longer sell the subject properties to Corazon Escueta, after having sold them to respondent. [I]n a contract of sale, the vendor loses ownership over the property and cannot recover it until and unless the contract is resolved or rescinded x x x. On the authority of Virginia as sub-agent: By authorizing Virginia Lim to sell the subject properties, Patricia merely acted within the limits of the authority given by her father, but she will have to be responsible for the acts of the sub-agent, among which is precisely the sale of the subject properties in favor of respondent ROBERTS v PAPIO FACTS: The Spouses Papio were the owners of a 274 sq m residential lot located in Makati. In order to secure a59k loan from the Amparo Investments Corp, they executed a real estate mortgage on the property. Upon Papios failure to pay the loan, the corporation filed a petition for the extrajudicial foreclosure of the mortgage.* Since the couple needed money to redeem the property and to prevent the foreclosure of the real estate mortgage, they executed a Deed of Absolute Sale over the property in favor of Martin Papios

cousin,Amelia Roberts.* Of the 95k purchase price, 59k was paid to the Amparo Investments Corp, while the 26k difference was retained by the spouses. As soon as the spouses had settled their obligation, the corporation returned the owners duplicate TCT which was then delivered to Amelia Roberts. * The parties (A. Roberts as lessor and Martin Papio as lessee) executed a 2-year contract of lease. The contract was subject to renewal or extension for a like period at the option of the lessor, the lessee waiving thereby the benefits of an implied new lease. The lessee was obliged to pay monthly rentals of 800 to be deposited in the lessors account. * A new TCT was issued in the name of Amelia Roberts as owner. Martin Papio paid the rentals and thereafter for another year. He then failed to pay rentals, but he and his family nevertheless remained in possession of the property for almost 13 years.* A. Roberts reminded Papio that he failed to pay monthly rentals amounting to a total liability of 410k.She demanded that Papio vacate the property within 15days from receipt of the letter in case he failed to settle the amount.* A. Roberts filed a complaint for unlawful detainer and damages against Martin Papio ISSUE: W/N THE DEED OF ABSOLUTE SALE AND CONTRACT OF LEASE EXECUTED BY THE PARTIES IS AN EQUITABLE MORTGAGE OVER THE PROPERTY RULING: NO. An equitable mortgage is one that, although lacking in some formality, form or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge a real property as security for a debt and contain nothing impossible or contrary to law. A contract between the parties is an equitable mortgage if the following requisites are present: a. the parties entered into a contract denominated as a contract of sale and b. the intention was to secure an existing debt by way of mortgage. The decisive factor is the intention of the parties.In an equitable mortgage, the mortgagor retains ownership over the property but subject to foreclosure and sale at public auction upon failure of the mortgagor to pay his obligation.In contrast, in a pacto de retro sale, ownership of the property sold is immediately transferred to the vendee a retro subject only to the right of the vendor a retro to repurchase the property upon compliance with legal requirements for the repurchase. The failure of the vendor a retro to exercise the right to repurchase within the agreed time vests upon the vendee a retro, by operation of law, absolute title over the property.One repurchases only what one has previously sold.The right to repurchase presupposes a valid contract of sale between same parties. By insisting that he had repurchased the property, Papio thereby admitted that the deed of absolute sale executed by him and Roberts was in fact and in law a deed of absolute sale and not an equitable mortgage; he had acquired ownership over the property based on said deed.Respondent, is thus estopped from asserting that the contract under the deed of absolute sale is an equitable mortgage unless there is an allegation and evidence of palpable mistake

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on the part of respondent, or a fraud on the part of Roberts. In Zamora Realty Dev. Corp. v. Office of the President, et al., G.R. No. 165724, November 2, 2006, there was purchase of a subdivision property. The buyer notified the seller that it was suspending payment due to its failure to develop, hence, the seller sewed a notice of cancellation by notarial act. The buyer assailed the cancellation which was affirmed up to the CA. Before the SC, it raised the issue of whether the buyer violated the contract when he suspended the payment of the monthly amortizations due to the incomplete development. It was Held: No, there was no violation. Under PD 957, the seller is obliged to develop the subdivision, otherwise, the buyer has the right to suspend payment and the only requirement under the law is to give due notice to the owner or developer of the buyers intention to suspend payment. The contention that the written notice was belatedly sent is not correct since there was a verbal notice to suspend payment. The law does not specifically provide the form of notice to be given to the owner/developer. Considering the purpose of the law and the evil sought to be prevented, a verbal notice of the intention to suspend remittance of payment is sufficient. Such a holding is consistent with the ruling in Francel Realty Corp. v. Sycip, G.R. No. 154684, September 8, 2005, 469 SCRA 424, where the requirement of an HLURB clearance under Section 23, Rule VI of the Rules Implementing P.D. No. 957 before the buyer of a subdivision lot or a home could lawfully withhold monthly payments was declared void. It was explained: x x x To require clearance from the HLURB before stopping payment would not be in keeping with the intent of the law to protect innocent buyer of lots or homes from scheming subdivision developers. To give full effect to such intent, it would be fitting to treat the right to stop payment to be immediately effective upon giving due notice to the owner or developer or upon filing a complaint before the HLURB against the erring developer. Such course of action would be without prejudice to the subsequent determination of its propriety and consequences, should the suspension of payment subsequently be found improper. (Tamayo v. Huang, G.R. No. 164136, January 25, 2006, 480 SCRA 156; Francel Realty Corp. v. Sycip). PURPOSE OF PD 957. P.D. No. 957 was enacted with no other end in view than to provide a protective mantle over helpless citizens who may fall prey to the manipulations and machinations of unscrupulous subdivision and condominium sellers. (Eugenio v. Drilon, 322 Phil. 112 (1996)). It was issued in the wake of numerous reports that many real estate subdivision owners, developers,

operators and/or seller have reneged on their representations and obligations to provide and maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other basic requirements for the health and safety of home and lot buyers. (Casa Filipina Realty Corp. v. Office of the Pres., 311 Phil. 170 (1995)). The buyer justly withheld the payment of amortization of the subject lot, and sellers unilateral cancellation of the contract to sell cannot be sustained. Consequently, the contract to sell still subsisted. Case Name: Estelita Villamar vs. Balbino Mangaoil G.R. No.: G.R. No. 188661 Date: April 11, 2012 Petitioner: Estelita Villamar Respondent: Balbino Mangaoil FACTS: The petitioner Villamar, the registered owner of the property, entered into an agreement with the respondent Mangaoil to purchase and sale a parcel of land. The terms in their agreement includes the down payment of P 185,000 pesos, which will be for the payment of a loan secured from the Rural Bank of Cauayan so that it will be withdrawn and released from the bank and that a deed of absolute sale will be executed in favor of the respondent Mangaoil which was complied by the parties. Consequently, the respondent Mangaoil informed the petitioner that he will withdraw from the agreement for the land was not yet free from incumbrances as there were still tenants who were not willing to vacate the land without giving them back the amount that they mortgaged the land. Also, the petitioner failed and refused, despite repeated demands, to hand over the Certificate of Title. Then, the respondent Mangaoil demanded the refund of the down payment that he had secured with the petitioner and filed a complaint with the RTC to rescind the contract of sale. In the response of the petitioner, she averred that she had already complied with the obligations and caused the release of the mortgaged land and the delivery of the Certificate of Title will be facilitated by a certain Atty. Pedro C. Antonio. The respondent insisted that he can rescind the contract for the petitioner had failed to deliver the Certificate of Title. The RTC and the CA dismissed the complaints for upon the deed of absolute sale, there was already a valid and constructive delivery. ISSUE: 1) Whether or not the failure of delivery of the Certificate of Title will constitute rescission of the contract?

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2) Whether or not the execution of the deed of sale of real property is equivalent to a valid and constructive delivery? HELD: 1) No, the Court held that the failure of the petitioner to comply with the obligation to deliver to the respondent the possession of the property and the certificate of the title. Based on Article 1191 of the New Civil Code of the Philippines, it is clear that the power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The respondent cannot be deprived of his right to demand for rescission in view of the petitioners failure to abide with item nos. 2 and 3 of the agreement. This remains true notwithstanding the absence of express stipulations in the agreement indicating the consequences of breaches which the parties may commit. To hold otherwise would render Article 1191 of the NCC as useless. 2) The execution of the deed of absolute sale does not constitute a constructive delivery for this case falls under to the exception since a mere presumption and not conclusive delivery was created as the respondent failed to take material possession of the subject property. A person who does not have actual possession of the thing sold cannot transfer constructive possession by the execution and delivery of a public instrument. Thus, the respondent can rescind the contract. The petition was denied and the petitioner is bound return the down payment plus interest to the respondent. Contracts; perfection For a contract to be perfected, three elements are needed to create a perfected contract: 1) the consent of the contracting parties; (2) an object certain which is the subject matter of the contract; and (3) the cause of the obligation which is established. Under the law on sales, a contract of sale is perfected when the seller, obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to the buyer, over which the latter agrees. From that moment, the parties may demand reciprocal performance. Starbright Sales Eterprises, Inc. vs. Philippine Realty Corporation, Msgr. Domingo A. Cirilos, et al., G.R. No. 177936. January 18, 2012.

Respondent: Regino Pante

FACTS: The Roman Catholic Church, represented by the Archbishop of Caceres sold a 32-square meter lot to the respondent Regino Pante, who in the belief of the Church as an actual occupant of the lot. Terms fixed at a purchase price of P 11,200, a down payment P 1,120 and a balance payable in three years. Subsequently, the Church sold a lot to the spouses Rubi, which included the lot that was previously sold to the respondent Pante. Then, the spouses Rubi erected a fence along the lot, including the lot of Pante, which blocked the access of Pante from their family home to the municipal road. Pante instituted an action before the RTC to annul the sale between the Church and spouses Rubi.

The Church contended that Pante misrepresented that they were the actual occupant of the said lot. Also, the sale was a mistake that would constitute a voidable contract because Pante made them believe that he was a qualified occupant and Pante was aware that they sell lots only to those occupants and residents. Pante averred that they were using it as passageway from his family home to the road, which signifies that he is really using the actual lot.

The RTC ruled in favor to the Church, for it was a misrepresentation of Pante and he delayed in the payment of the lot for he only consigned the balance with the RTC after the church refused to accept the payments.

Then, the respondent Pante appealed to the appellate court, which reversed the decision of the RTC and granted the annulment of the sale. Thus, a petition by the Church was brought before the certiorari.

ISSUE: Whether or not the sale was a voidable contract?

CASE NAME: The Roman Catholic Church vs. Regino Pante G.R. No.: G.R. No. 174118 Date: April 11, 2012 Petitioner: The Roman Catholic Church, represented by the Archbishop of Caceres

HELD: No, the Supreme Court ruled that there were no misrepresentation made that would vitiate the consent and render the contract as voidable. As consent as one of the essential requisites of a valid contract and such consent should be free, voluntary, willful and a reasonable understanding of the various obligations that the parties have assumed for

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themselves. However if consent is given through mistake, violence, intimidation, undue influence and fraud, it would render a contract voidable. On Article 1331 of the Civil Code, mistake could only render a contract voidable if the following requisites concur: 1. the mistake must be either with regard to the identity or with regard to the qualification of one of the contracting parties; and 2. the identity or qualification must have been the principal consideration for the celebration of the contract. In this case, there is no mistake as to the qualifications as to the policy of the Church on selling only for those who are occupants and residents, for neither Pante nor spouses Rubi would qualify as residents of the said 32-square meter lot, as none of them had occupied or resided on the lot. The lot is a passageway for the respondent Pante, thus it is considered as his RIGHT OF WAY. Also, records show that the Parish Priest was aware that Parte was not an actual occupant and still he allowed the sale to Pante. So, the Church cannot by any means contend that the Church was misled by the act of Pante, that there was vitiation of consent on the said sale. In Article 1390 of the Civil Code declares that voidable contracts are binding, unless annulled by a proper court action. From the time the sale to Pante was made and up until it sold the subject property to the spouses Rubi, the Church made no move to reject the contract with Pante; it did not even return the down payment he paid. The Churchs bad faith in selling the lot to Rubi without annulling its contract with Pante negates its claim for damages. There was no vitiation of consent; therefore, the contract between the Church and Pante stands valid and existing. The delay of Pante in paying the full price could not nullify the contract, since it was a contract of sale (as correctly observed by the CA). In the terms of the contract, it did not stipulate that the Church will retain ownership until full payment of the price. The right to repurchase given to the Church if ever Pante fails to pay within the grace period provided would have been unnecessary had ownership not already passed to Pante. Prior registration of the subject property does not by itself confer ownership or a better right over the property. Article 1544 requires that before the second buyer can obtain priority over the first, he must show that he acted in good faith throughout (i.e., in ignorance of the first sale and of the first buyers rights) from the time of acquisition until the title is transferred to him by registration or failing registration, by delivery of possession. (Uraca vs. CA, 344 Phil 253; Consolidated Rural Bank (Cagayan Valley) Inc. vs. CA, et al, G.R. No. 132161, January 17, 2005).

Malayan Realty Inc v. Uy Han Yong Facts: Malayan Realty here is the owner of an apartment unit leased to Uy Han over a monthly rental fee. Such rental fee is increased yearly. o Malayan sent Uy a written notice informing him that the lease contract would no longer be renewed or extended upon its expiration and asked him to vacate and turn over the possession of the property. o Uy refused to vacate said property prompting Malayan to file before the MTC a complaint for ejectment. The trial court dismissed the complaint of Malayan and on appeal, the RTC extended the lease contract for a period of 5 years. In the CA, Malayan Realty alleges that there was an error on the part of the RTC to grant the extension period seeing as Uy did not plead for this in his appeal. Hence, the CA modified the RTC ruling and reduced the extension period to a year. Unsatisfied with this decision, he appealed to the SC. Issue: Whether or not the Ca erred in shortening the period to a year. Ratio: In this case, the lease period was not agreed upon by the parties and rentals were paid monthly and respondent has been occupying said property since 1958. The power of the courts to grant a grace period is potestative or discretionary depending on the particular circumstance of the case. A longer term may be granted when equities come into play and may be deemed where it appears, always with due deference to the parties' freedom to contract. In this case, the petitioner has already been deprived of his property for so long as it was shown that he was unable to have full use and enjoyment of the considerable portion of his property. Such militates against further deprivation by fixing a period of extension. However, the court finds that the increase of rental fees per annum was just and fair and is a reasonable valuation of the compensation due petitioner for the use and occupation of the property from the expiration of the contract of the lease until the turn over by the respondent. In conclusion, the respondent was to vacate the premises immediately without period for extension and was to pay the increased monthly rental fees to the petitioner. 21. CONSOLIDATED RURAL BANK INC v CA FACTS: The Madrid Brothers owned a parcel of land, which was later subdivided. Rizal Madrid sold his share to Gamaio and Dayag; the other brothers offered no objection. The sale was not registered under the Torrens System. Gamaio and Dayag sold the southern

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half to Teodoro, and the northern half to Hernandez, who thereafter donated the same to his daughter. Theyall maintained possession of the properties. Later on,the brothers all sold their shared to Marquez whofurther subdivided the same, registered the lands, andmortgaged portions thereof to Consolidated Bank and Bank of Cauayan. For failure to settle his debt, CB foreclosed the property. The successors-in-interest of Gamiao and Dayag sought reconveyance. CB interposedthat the mortgage must be respected. ISSUE: Who has a better title, Marquez or the successors-in-interest of Gamiao and Dayag HELD: The successors-in-interest of Gamiao and Dayag.While Marquez was the 1st to register the lands under the Torrens System, Art. 1544 does not apply as the double-multiple sales were not done by the single vendorin this case by the brothers on the one side and Gamiao and Dayag on the other. That being the case,the simple rule on priority in time, priority in right would apply. As such, the successors-in-interest of Gamiao and Dayag would have a better right as the sale in their favor came ahead of time. Further, Marquez was not in good faith. He knew that the property was being claimed by other parties who were in possession thereof instead, he willfully closed his eyes to the possibility of the flaws

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