SALES

CaseDigest
DEFINITIONOFCONTRACTOFSALE 1.) SPOUSES ONNIE SERRANO AND AMPARO HERRERA vs.
.R.No.139173,February28,2007 Facts: Petitioners are registered owners of a
. On March 23, 1900,respondentofferedtobuythelotandpetitionersagreedtoselli
ndentthengave 100,000aspartialpayment.Afew days after, respondent, through hi
itioners informing them ofhisreadinesstopaythebalanceofthecontractpriceandre
heDeedofSale. Petitioners, through counsel, informed respondent in a letter t
a would be leaving for abroad on or before April 15, 1990 and they are cance
atrespondentmayrecovertheearnestmoney ( 100,000) anytime. Petitioners also wrote
t they already delivered a managers check to his counsel in said amount. Resp
plaintforspecificperformanceanddamageswiththeRTCofMakati. Thetrialcourtrule
ectedcontractofsalebetween thepartiesandorderedthepetitionerstoexecuteafinal
ndent.TheCourtofappealsaffirmedsaiddecision. Issue: Whetherornottherewasa
etransactionwasacontracttosell. WhenpetitionersdeclaredintheReceiptforPar
R.GODOFREDOCAGUIATTHEAMOUNTOFONEHUNDRED THOUSANDPESOSASPARTIALPAYMENTOFOURLO
ATPROMISEDTOPAYTHEBALANCEOFTHEPURCHASEPRICEONOR BEFORE MARCH 23, 1990, AND
GN THE FINAL DEED OF SALE ON THIS DATE. there can be no other interpretation
nditionalcontractofsale,consummationofwhichissubject onlytothefullpaymentoft
cttosellisakintoaconditionalsalewheretheefficacyorobligatory force of the
fer title is subordinated to the happeningofafutureanduncertainevent,sothati
n doesnottakeplace,thepartieswouldstandasiftheconditionalobligationhad
e condition is commonly full payment of the purchaseprice. Inthiscase,the
sthatthetrueagreement betweenthepartiesisacontracttosell. First,ownership
etitionersandwasnotto pass to respondent until full payment of the purchase p
reement between the parties was not embodied in a deed of sale. The absence o
veyance isa strong indication thatthe parties did not intend immediate transfer
ut only a transfer after full payment of the purchase price. Third, petitioners
ssion of the certificateoftitleofthelot. ItistruethatArticle1482provides
nina contract of sale, it shall be considered as part of the price and proo
tract.However,thisarticlespeaksofearnestmoneygiven inacontractofsale.Inthis
eninacontractto sell. The earnest money forms part of the consideration only
ateduponfullpaymentofthepurchaseprice. Clearly, respondent cannot compel pet
r ownership of the propertytohim. 2.) JULIE NABUS, MICHELLE NABUS and BET
SON andJULIAPACSON,G.R.No.161318,November25,2009 3.)MILAA.REYESvs.VICTOR
e1,2011 Facts: Petitioner Mila Reyes owns a threestorey commercial building
espondent,VictoriaTuparanleasedaspaceonsaidbuildingforamonthly rental of P4,
a tenant, respondent also invested in petitioner s financing business. On June 2
tioner borrowed P2 Million from Farmers Savings and Loan Bank (FSL Bank) and m
dingandlot(subjectrealproperties).Reyesdecidedtosellthepropertyfor P6.5Millio
inanceherbusiness.Respondentoffered to conditionally buy the real properties for
on installment basis withoutinterestandtoassumethebankloan.Theconditionsareth
ecancelledifthepetitionercanfindabuyerofsaidpropertiesfor theamountofP6.5M
hs.Allpaymentsmadeby therespondenttothepetitionerandthebankwillberefundedto
onthlyinterest. 2. Petitioner Reyes will continue using the space occupied by
thoutrentalsforthedurationoftheinstallmentpayments. 3.Therewillbealeasefor
lyrentalofP8, 000afterfullpaymenthasbeenmadebythedefendant. 4.Thedefendan
ymentofthefireinsurance policiesofthe2buildings,followingtheexpirationofthec
imetherespondenthasfullypaidthepurchaseprice TheypresentedtheproposalforTu
SLBank. The bank approved on the condition that the petitioner would remain as
geobligation. Petitioner sContention: Under their Deed of Conditional Sale,the
ligedtopayalump sumofP1.2Millioninthreefixedinstallments.Respondent,howeverd
t of the installments. To compensate for her delayed payments, respondent agreed
oner monthly interest. But again, respondent failed to fulfill this obligation.
er further alleged that despite her successinfindinganotherbuyeraccordingtothe
greement, respondent refused to cancel their transaction. The respondent also neg
newthefireinsurancepolicyofthebuildings. Respondent sAnswer: Respondent alleg
Conditional Sale of Real Property with AssumptionofMortgagewasactuallyapureand
alewith a term period. It could not be considered a conditional sale because
he obligation therein did not depend upon a future and uncertain event. She al

e was able to fully pay the loan and secure the release of the mortgage. Sin
an the P4.2 Million purchase price, rescission could not be resorted to since
olongerberestoredtotheiroriginalpositions.

Issue: Is the conditional sale at bar a contract of sale or a contract to

n or obligation be rescinded given that the conditions were not satisfied? R
of conditional sale was a contract to sell. It was of the opinion that althou
itledtoarescissionofthecontract,itcouldnot be permitted because her nonpayme
se price may not be considered as substantial and fundamental breach of the c
heobjectofthepartiesinenteringintothecontract.TheRTCbelieved that respondent
nd willingness to settle her obligation. Hence, it would be more equitable to
chance to pay the balance plus interest within a given period of time. The co
ondenttopaythepetitionertheunpaidbalanceofthepurchaseprice. CA: The CA agr
emedy of rescission could not apply because the respondents failure to pay the
lance of the purchasepriceinthetotalamountof 805,000.00wasnotabreachofcontr
entedtheseller(petitioner)fromconveyingtitle tothepurchaser(respondent).Sincere
adypaidasubstantial amountofthepurchaseprice,itwasbutrightandjusttoallowhe
chasepriceplusinterest. SC: The SC agrees that the subject Deed of Condition
ion of Mortgageisacontracttosellandnotacontractofsale.Thesubjectcontract
contract to sell based on the following pertinent stipulations: 8.Thatthetitle
jectrealpropertiesshallremainwith theFirstPartyuntilthefullpaymentoftheSecon
rchase price and liquidation of the mortgage obligation of 2,000,000.00. Pending
e balance of the purchase price and liquidation of the mortgage obligation that
he Second Party, the Second Party shall not sell, transfer and convey and othe
e subject real propertieswithoutthewrittenconsentoftheFirstandThirdParty.
by the Second Party of the full balance of the purchase price and the assumed
n herein mentioned the ThirdPartyshallissuethecorrespondingDeedofCancellationo
stPartyshallexecutethecorrespondingDeedofAbsoluteSaleinfavorof theSecondPart
ip of the subject properties remains with the petitioner until the respondent f
lance of the purchase price and the assumedmortgageobligation.Withoutrespondent
ecanbe no breach of contract to speak of because petitioner has no obligation
e.Thecourtagreesthatasubstantialamountofthepurchase pricehasalreadybeenpaid.
uparantopaythe said unpaid balance of the purchase price to Reyes. Granting t
be permitted under Article 1191, the Court still cannot allow it for the reaso
ng the circumstances, there was only a slight or casual breach in the fulfillm
ion. The court considered fulfillment of 20% of the purchase price is NOT a s
Unless the parties stipulated it, rescission is allowed only when the breach of
substantial and fundamental to the fulfillment of the obligation. Whether the br
t or substantial is largely determined by the attendant circumstance.Asforthe6
nerfailedtosubstantiateherclaim thattherespondentcommittedtopayit.Petitionis
LTYCOMPANYandEDITHPEREZDETAGLEvs.BORMAHECO, INC., FRANCISCO N. CERVANTES and
S, 65 SCRA 352, G.R.No.L26872,July25,1975 Facts:

FranciscoCervantesofBormahecoInc.agreestoselltoVilloncoRealtyaparcel ofland
edinBuendia,Makati. BormahecomadethetermsandconditionforthesaleandVillonco
cations. The sale is for P400 per square meter but it is only to be consum
hall have also consummated purchase of a property in Sta. Ana, Manila. Bormahec
g for the Sta.Ana land and subsequently boughttheproperty. Villoncoissuedach
ingtoP100,000asearnestmoney. After 26 days from signing the contract of sale,
the P100,000toVilloncowith10%interestforthereasonthattheyarenotsureyet ift
erty. Villonco rejected the return of the check and demanded for specific perfo
WONBormahecoisboundtoperformthecontractwithVillonco. Ruling: The contract
d when Bormaheco accepted the offer by Villonco. The acceptance can be proven
cepted the check fromVilloncoandthenreturneditwith10%interestasstipulatedint
On the other hand, the fact that Villonco did not object when Bormaheco encash
titacceptedtheofferofBormaheco. Wheneverearnestmoneyisgiveninacontractofs
tofthepriceandasproofoftheperfectionofthecontract"(Art.1482,Civil Code).
IONGvs.THEHON.COURTOF APPEALSandBUENREALTYDEVELOPMENTCORPORATION,238SCRA602,
r2,1994 Facts: The plaintiffs were tenants or lessees of residential and c
dbydefendantsinBinondo,Manilasince1935religiouslypayingrent.On several conditi
r 9, 1986, defendants informed the plaintiffs thattheyareofferingtosellthepre
rioritytoacquire thesame.Duringnegotiations,BobbyCuUnjiengofferedapriceofP6
adeacounterofofferofP5million.Plaintiffthereafterasked thedefendantstoputth
efendantsacceded.In reply to defendants letter, plaintiffs wrote, asking that t

terms andconditionsoftheoffertosell.Whentheplaintiffsdidnotreceiveanyreply,
r with the same request. Since defendants failed to specifythetermsandconditio
ecauseofinformation received that the defendants were about to sell the propert
ere compelled to file the complaint to compel defendants to sell the property
missedthecomplaintonthegroundthatthepartiesdidnot agreeuponthetermsandcondi
ce,therewasno contractofsaleatall. On November 15, 1990, the Cu Unjieng
e transferring the property in question to Buen Realty and Development Corporati
ty, as the new owner of the subject property, wrote to thelesseesdemandingthe
ses.Initsreply,petitioner stated that Buen Realty and Development Corporation b
erty subjecttothenoticeoflispendens. TheRTCorderedtheCUUnjiengstoexecutet
perty in litigation favor of plaintiffs for the consideration of P15M in

recognition of petitioners right of first refusal and that a new Transfer Cert
uedinfavorofthebuyer.Thecourtsetasidethetitle issued to Buen Realty Corpora
uted in bad faith. The judgeissuedawritofexecution. The appellate court set
hout force and effect the above ordersofthecourtaquo. Issue: WONBuenReal
nbythevirtueofnotice oflispendens? Ruling: Inthelawofsales,thesocalled
dical relation. Needless to point out, it cannot be deemed a perfected contract
remisethatsuchrightoffirstrefusalhasbeendecreedunder finaljudgment,itsbreach
ndinglyanissuanceofwritof executionunderajudgmentthatmerelyrecognizesitsexist
ent in Civil Case No. 8741058, it must be stressed, has merely accorded a r
vor of petitioners. Petitioners are aggrievedbythefailureofprivaterespondentsto
strefusal, theremedyisnotthewritofexecutiononthejudgment,sincethereisnonet
esinaproperforumforthepurpose. Furthermore,BuenRealty,havingnotimpleadedin
annotbeheldsubjecttothewritofexecutionissuedbytherespondentjudge, let alone
ip and possession of the property, without firstbeingaffordedadayincourt.
tionsthatdealnotonlywiththetitleor possessionofapropertybutalsowiththeuse
sequentsalesortransfers,theRegisterofDeedsisdutyboundto carryoverthenoticeo
d. 6.) PERPETUA VDA. DE APE vs. THE HONORABLE COURT OF APPEALS and GENOROS
RA193,G.R.No.133638,April 15,2005 Facts: CleopasApewastheregisteredowner
s death, the property passed on to his wife, Maria Ondoy, and their eleven (
y: Fortunato, Cornelio, Bernalda, Bienvenido, Encarnacion, Loreta,Lourdes,Felicid
,Dominador,andAngelina,allsurnamedApe. On 15 March 1973, Generosa Cawit de
ndent herein), joinedbyherhusband,Braulio,institutedacasefor"SpecificPerformanc
amages"againstFortunatoandhiswifePerpetua(petitioner herein) before the then Co
tance of Negros Occidental. It was alleged in the complaint that on 11 April
ndent and Fortunato entered into a contract of sale of land under which for a
,000.00, Fortunato agreed to sell his share in the lot to private respondent.
contained in a receipt prepared by privaterespondent ssoninlaw,AndresFlores,at
o and petitioner denied the material allegations of the complaint and claimed t
ever sold his share in Lot to private respondent and that his signature appear
ed receipt was forged. By way of counterclaim,thedefendantsbelowmaintainedhav
ract of lease with respondent involving Fortunato s portion of the lot. Petition
hat the entire lot had not yet been formally subdivided; that on 11 April 197
went to private respondent s house to collect pastrentalsfortheirlandthenlease
r,theymanagedto collect only thirty pesos; that private respondent made her (p
bandsignareceiptacknowledgingthereceiptofsaidamountofmoney;and thattheconten
xplainedtothem.Shealsostated

in her testimony that her husband was an illiterate and only learned how to w
ployedinasugarcentral. Issue: Whetherornottherewasavalidcontractofsale?
the records of this case betray the stance of private respondentthatFortunatoA
greementwithher. Acontractofsaleisaconsensualcontract,thus,itisperfectedby
ornfromthemomentthereisameetingofmindsuponthe thingwhichistheobjectofthe
ion,the partiesmayreciprocallydemandperformance,thatis,thevendeemaycompel the
ership and to deliver the object of the sale while the vendor may demand the
g sold. For there to be a perfected contract of sale, however, the following
sent: consent,object,andpriceinmoneyoritsequivalent. InthecaseofLeonardov
nedtheelementof consent,towit: The essence of consent is the agreement of
f the contract, the acceptance by one of the offer made by the other. It i
inds of the parties on the object and the cause which constitutesthecontract.
xtendtoallpointsthat thepartiesdeemmaterialorthereisnoconsentatall. For
et the following requisites: (a) it should be intelligent,orwithanexactnotion
ers;(b)itshould befreeand(c)itshouldbespontaneous.Intelligenceinconsentisv
violence, intimidation or undue influence; spontaneity by fraud. As can be gle
s s testimony, while he was very much aware of Fortunato sinabilitytoreadandw
age,hedidnotbother tofullyexplaintothelatterthesubstanceofthereceipt.Heeve
ebodyelsetoassistFortunatoconsideringthatameaslysum of thirty pesos was invol
ls the contract of sale between Fortunatoandprivaterespondentonthegroundofvit
USESMARIOANDELIZABETHTORCUATORvs.SPOUSESREMEGIOAND GLORIA BERNABE and SPOUSES
DES SALVADOR, 459 SCRA439,G.R.No.134219,June8,2005 CHARACTERISTICS 1.) FER
ELO FONACIER, GEORGE KRAKOWER, LARAP MINES & SMELTING CO., INC., SEGUNDINA VIVAS

ANTE, PACIFICO ESCANDOR and FERNANDO TY, 2 SCRA 830, G.R. No. L11827, July 31
ntappellant Fonacier was the owner/holder of 11 iron lode mineral claims,known
ituatedinCamrinesNorte. By Deed of Assignment, Respondent constituted and ap
ppelleeGaiteasattorneyinfacttoenterintocontractfortheexplorationand developme
son.OnMarch1954,petitionerexecuted a general assignment conveying the claims i
Mines, which ownedsolelyandbelongingtohim.Thereafter,heunderwentdevelopmentand
ortheminingclaimswhichheestimatestobeapproximately 24metrictonsofironore.
o revoke the authority given to Gaite, whereas respondentassentedsubjecttocerta
nsequentlyarevocationof

Power of Attorney and Contract was executed transferring P20k plus royalties fro
laims, all rights and interest on the road and other developmentsdone,aswella
nessname,goodwill, records,documentsrelatedtothemines.Furthermore,includedinthe
rights and interest over the 24K+ tons of iron ore that had been extracted. L
P65K was to be paid for covering the first shipmentofironores. To secure
dent executed a surety bond with himself as principal, the Larap Mines and Sme
tockholder as sureties. Yet, this was refused by petitioner. Appelle further req
r bond underwritten by a bonding company to secure the payment of the balance.
d was produced with Far Eastern Surety as an additionalsurety,providedtheliabi
ldonlyprosperwhen there had been an actual sale of the iron ores of not les
65k,moreover,itsliabilitywastoautomaticallyexpireonDecember 1955. OnDecember
piredandnosaleamountingtothe stipulation as prior agreed nor had the balance
er by respondent.Thussuchfailure,promptedpetitionertofileacomplaintintheCFI
ebalanceandotherdamages. TheTrialCourtruledinfavorofplaintifforderingdefen
with interest. Afterwards an appeal was affected by the respondent where several
presented for resolution: a motion for contempt; twomotionstodismisstheappealf
ademic;motionfor a new trial, filed by appellee Gaite. The motion for contempt
rious,whiletherestofthemotionswereheldunnecessarytoresolve Issue: Whether
ed in holding the obligation of appellant FonaciertopayappelleGaitethebalance
rterm and not one with a suspensive condition; and that the term expired on
oerrorwasfound,affirmingthedecisionofthelowercourt.Gaiteactedwithin his righ
t and instituting this action one year from and after the contract was execute
the appellant debtors had impaired the securities originally given and thereby f
further time withinwhichtopay;orbecausethetermofpaymentwasoriginallyofnomor
fP65k,becamedueandpayablethereafter. TheLowerCourtwaslegallycorrectinholdi
oreisnotaconditionorsuspensivetothepaymentofthebalanceofP65k,but was only
What characterizes a conditional obligationisthefactthatitsefficacyorobligatory
shedfromits demandability, is subordinated to the happening of a future and un
atifthesuspensiveconditiondoesnottakeplace,thepartieswould standasifthecond
rexisted. ThesaleoftheoretoFonacierwasasaleoncredit,andnotanaleatoryco
uldassumetheriskofnotbeingpaidatall;and thattheprevioussaleorshipmentofth
r thepaymentofthebalanceoftheagreedprice,butwasintendedmerelytofix thefutu
ightofFonaciertoinsistthatGaiteshouldwaitforthesaleor shipment of the ore
or, in other words, whether or not they are entitled to take full advantage o
them for making the payment. The appellant had indeed have forfeited the right
o wait for the sale of the ore before receiving payment of the balance of P6
heir failure to renew the bond of the Far Eastern Surety Company or else repl
lent guarantee. The expiration of the bonding company s undertaking on December
antially reduced the security of the vendor s rights as creditor for the unpaid
ritythatGaiteconsideredessentialanduponwhichhe

had insisted when he executed the deed of sale of the ore to Fonacier (first
hs 2 and 3 of Article 1198 of the Civil Code of the Philippines: ART. 1198.
ery right to make use of the period: (2) Whenhedoesnotfurnishtothecreditor
chhe has promised. (3) When by his own acts he has impaired said guaranties
eir establishment, and when through fortuitous event they disappear,unlessheimme
ewonesequallysatisfactory. Appellants failure to renew or extend the surety
its expirationplainlyimpairedthesecuritiesgiventothecreditor(appelleeGaite), un
yrenewedorreplaced. Nevertheless,thereisnomeritinappellants argumentthatGai
urety company s bond with full knowledge that on its face it would automaticall
one year was a waiver of its renewal after the expiration date. No such waive
ended, for Gaite stood to loseandhadnothingtogainbarely;andiftherewasany,i
donlyiftheappellantshadagreedtoselltheoreandpayGaitebefore thesuretycompan
5.Butinthelattercase the defendantsappellants obligation to pay became absolu
romthetransferoftheoretoFonacierbyvirtueofthedeed,firstbond. STAGES 1
uted by her legal heirs, DR. NATIVIDAD A. TULIAO, CORAZON A. JALECO and LILIA
ES ANTONIO PADUAandEUGENIAPADUA,462SCRA614,G.R.No.165420,June30,2005 Facts
Ainza bought onehalf of an undivided portion of the propertyfromherdaughter,E
band,Antonio,forOne Hundred Thousand Pesos (P100, 000.00). No Deed of Absolute
d to evidence the transaction, but cash payment was received by the respondents

ical delivery of the land through Concepcions otherdaughter(Natividad)actingas

ionthereafterallowed Natividadandherhusbandoccupythepurchasedportionoftheland.
division of the lot into three, necessarily displacing Natividad. He also had e
n titled. Antonio requested Natividad to vacatethepremises.Antonioaverredthathi
dofselling1/3 of the property to Concepcion for which a receipt was issued s
he RTC ruled in favor of Concepcion that the sale was consummated when both c
complied with their respective obligations. Eugenia transferred possession by de
he property to Concepcion who in turn paid the purchase price. It also decla
r of the property did not violate the Statute of Frauds because a fully execu
t fall within its coverage. The CA reversed the RTC ruling. Issue: Whether
eenAinzaandEugeniaisvalid. Ruling: Yes. A contract of sale is perfected b
ting of the minds on the offer and the acceptance thereof based on subject ma
s of payment. In this case, there was a perfected contract of sale between Eu
n. The records show that Eugenia offered to sellaportionofthepropertytoCon
erandagreed to pay P100, 000.00 as consideration. The contract of sale was
parties fully complied with their respective obligations. Eugenia delivered the
Concepcion, who in turn, paid Eugenia the price of OneHundredThousandPesos(P10

Since the land was undivided when it was sold, Concepcion is entitled to have
ALCONTRACTOFSALE 1.) PEOPLE S HOMESITE & HOUSING CORPORATION vs. COURT OF AP
DOZAandADELAIDAR.MENDOZA,133SCRA777,G.R.No.L 61623,December26,1984 Facts:
oard of directors passed Resolution No. 513 whereinitstatedthatsubjecttotheap
ouncilofthe Consolidation Subdivision Plan, Lot 4 containing 4,182.2 square mete
to Spouses Rizalino and Adelaida Mendoza, at a price of twentyone pesos (P21.0
r and that this award shall be subject to the approval of the OEC (PHHC) Val
igher authorities. However, the city council disapproved the proposed consolidatio
ision plan of which the spouses were advised through registered mail. Another s
n was prepared which included Lot 4, with a reduced area of 2,608.7, and was
ouncil on Feb. 25, 1964. On April 26, 1965, the PHHC board of directors, howe
tion recalling all awardsoflotstopersonswhofailedtopaythedepositordownpayme
heMendozasneverpaidthepriceofthelotnormade the20%initialdeposit.OnOctober1
rspassed Resolution No. 218, withdrawing the tentative award of Lot 4 to the
reawarding said lot jointly and in equal shares to Miguela Sto. Domingo, Enriq
lio Pinzon, Leonardo Redubloand Jose Fernandezwhowereabletomaketherequired20%
depositandthereafter,thecorrespondingdeedsofsalewereexecutedintheir favor.The
ivelotswasapprovedbythecitycounciland the Bureau of Lands. The Mendoza spous
ration of the withdrawal of the previous award to them of Lot4andforthecanc
aid lot to Sto. Domingo and four others. Before the request could be acted up
d the instant action for specific performance and damages. The trial court sust
rawal of the awardwhichwasappealedbytheMendozas.TheAppellateCourtreversedthat
ed void the reaward of Lot 4 and the deeds of sale and directedthePHHCtos
03.7square meters at P21 a square meter and pay to them P4,000 as attorney s
penses.ThePHHCappealedtothisCourt. Issue: Whetherornottherewasaperfected
a, to the Mendozas which they can enforce against the PHHC by an action for
Ruling: The SC hold that there was no pertected sale of Lot 4. It was cond
ly awarded to the Mendozas subject to the approval by the city councilofthep
ubdivisionplanandtheapprovalofthe awardbythevaluationcommitteeandhigherauthor
cil disapproved the subdivision plan, the Mendozas were advised through registere
964, when the revised plan was approved, the Mendozas should have manifested in
cceptance of the award for the purchase of Lot 4 just to show that they were
s purchase although the area was reduced and to obviate ally doubt on the mat
hePHHCboardofdirectorsactedwithinitsrightsinwithdrawing the tentative award.
is perfect at the moment there is meeting of the minds upon the thing which
tract, and upon the price. From that moment, the parties may reciprocally deman
subject to the law governing the form of contracts (Art. 1475, Civil).Underthe
notsaytherewasameetingofminds onthepurchaseofLot4withanareaof2,608.7squar

2.)Sps.ENRIQUEandCONSUELOLIMvs.THEHONORABLECOURTOFAPPEALS, Sps.TERESITAandOS
ndANITAORLINO,Sps. ROMULO and CONSUELO ORLINO and Sps. FELIX and DOLORES ORLIN
o.85733,February23,1990 Facts: The subject of this controversy is a parcel
ed by Felix, Manuel and Maria Concepcion Orlino, who mortgaged it to the Progr
lBankassecurityforaP100,000.00loanonJuly1,1965consistingof 1,101 square met
n, Quezon City. The loan not having beenpaid,themortgagewasforeclosedandtheb
s the highest bidder at the auction sale on March 28, 1969. The mortgagee the
d all its assets, including the said land, to the Pacific BankingCorporation(P
eOrlinos,andtheirrespectivespouses,whohadremained in possession of the land,
to PBC to repurchase the property.Inresponse,thebank,confirmstheagreementthrou
mber9,1977underthefollowingconditions: a) The cash consideration shall be P
full upon signing of theDeedofAbsoluteSale; b)Theadditionalconsiderationshall
sconveyancetousof their share of 2,901.15 square meters on the property situa
ocanCity. Oneyearlater,onNovember2,1978,PBCadvisedtheprivaterespondentsthat
nalizedwithin30days,itwouldconsidertheofferof otherbuyers.2Therecorddoesnot
ntilJune8, 1979, when the private respondents requested PBC to allow them to
rue copy of its Torrens certificate over the land for purposes of its survey
them preparatory to the actual transfer of title to them. 3 PBC granted the r
e condition that title would remainwithituntiltheexecutionofthenecessarydeed
80,ortwoyearslater,PBCremindedtheprivaterespondentsofits letter of November
tion was taken to deliver to it the stipulatedconsiderationforthesale.Finally,

teda deedofsaleoverthelandinfavorofthehereinpetitioners,thespousesEnrique
,000.00. On September 30, 1980, the private respondents filed a complaint in
Court of Quezon City against the petitioners and PBC for the annulment of the
round that the subject land had been earliersoldtothem.Initsjudgmentforthep
tboth PBCandthespousesLimhadactedinbadfaithwhentheyconcludedthesale knowin
fthepropertyinquestion."6The decisionwasaffirmedintotobytherespondentcourt,
foreus,urgingreversal. Issue: Whetherornottheexecutionofthedeedofsalein
. Ruling: In the case at bar, the private respondents obligated themselves
hesumofP160,000.00andtheirshareof2,901.15squaremetersona propertysituatedin
BCdatedNovember9,1977, they were requested to "expedite the loan (they were n
purpose)sowecanconsummatethetransactionassoonaspossible".Thatwas in 1977. In
ed of their obligation and asked to comply within thirty days. They did not.
y were reminded of that letterofNovember2,1978,andagainaskedtocomply;butaga
ank could not be required to wait for them forever, especially so since they
ion of the property and there is no record that they were paying rentals. Und
s, PBC had the right to

considerthecontracttosellbetweenthemterminatedfornonpaymentofthe stipulatedco
yconfirmthatrescission. Having arrived at these conclusions, the Court no lon
sary to determineifthepetitionersactedinbadfaithwhentheypurchasedthesubject
respondents lost all legal interest in the land when their contract to sell wa
for their noncompliance with its provisions.Asthatcontractwasnolongereffective
BC to the petitioners, the private respondents had no legal standing to assail
ansaction.ThedeedofsalebetweenPBCandthepetitioners mustthereforebesustained.
OURDESPINGOLvs.HON.COURTOFAPPEALSand HEIRS OF FRANCISCO N. DONASCO, namely: M
RIETTA D. SINGSON, MYRNA D. CUEVAS, NATIVIDAD D. PELAYO, YOLANDA D. CACERESand
A118,G.R.No.102909,September6, 1993 A vendee in an oral contract to convey
ment thereof,entereduponthelandandhadmadevaluableimprovementsthereon isentitle
stitleagainstthevendorwhohadrefusedto transfer the title to him. It is not
should have an absolutetitle,anequitabletitlebeingsufficienttoclothehimwithpe
tiontoquiettitle. Facts: In1969,Pingol,theownerofalot(LotNo.3223)inCal
UTE SALE OF ONEHALF OF AN UNDIVIDED PORTION OF [his] PARCELOFLANDinfavorof
),payablein6years. In 1984, Donasco died and was only able to pay P8,369
avingabalanceofP10,161.TheheirsofDonascoremainedin possession of such lot an
balance with Pingol. However, Pingol refused to accept the offer and demanded a
Thus, the heirsofDonascofiledanactionforspecificperformance(withPrayerforWrit
ction, because Pingol were encroaching upon Donascos lot). Pingol averred that
nsfer of title was conditional upon the full payment of Donasco (contract to s
of sale). With Donascos breach of the contract in 1976 and death in 1984, th
lled, and the heirs continuous occupancy was only being tolerated by Pingol.
rnotPingolcanrefusetotransfertitletoDonasco. (2)WhetherornotDonascohasthe
)No.ThecontractbetweenPingolandDonascoisacontractofsaleandnota contract to
s, contemporaneous and subsequent to the contract, clearly show that the parties
bsolute deed of sale; theownershipofthelotwastransferredtotheDonascouponits
ssionandconstructionofthehouse)andconstructivedelivery (upon execution of the
livery of the lot divested Pingol of his ownership and he cannot recover the
tract is resolved or rescindedunderArt.1592ofNCC.Itstatesthatthevendeemaypa
heperiodstipulatedaslongasnodemandforrescissionhas been made upon him either
ial act. Pingol neither did so. Hence,Donascohasequitabletitleovertheproperty.
omplaint filed by the Donascos was an action for specific performance, it was
n to quiet title. A cloud has been cast on the title, since despite the fact
transferred to them by theexecutionofthedeedofsaleandthedeliveryoftheobject
ntlyrefusedtoacceptthepaymentbyDonascosandinsistedthat theynolongerhadtheob
e.

Donasco, who had made partial payments and improvements upon the property,ise
oclearhistitleagainstPingolwhorefusedto transfer title to him. It is not ne
uld have an absolute title,anequitabletitlebeingsufficienttoclothehimwithpers
ontoquiettitle. PrescriptioncannotalsobeinvokedagainsttheDonascosbecauseana
ertyinONEsPOSSESSIONisimprescriptible. CONTRACTTOSELL 1.) EMILIO A. SA
. COURT OF APPEALS and JONETTEBORRES,G.R.No.118203,July5,1996 Facts: That
the owner of the two (2) parcels of land with improvementsthereonlocatedat291
ati,MetroManila and covered by Transfer Certificate of Title Nos. 31038 and 31
y of Deeds of Makati; that Dr. Salazar offered to sell his properties to Jone
npesos(P1,000,000.00).Theinitialproposaltook place at the Dimsum Restaurant, Ma
t was proposed that the payment of the consideration was to be made within si
bjectedtobyDr.Salazarandhereducedittoathree(3)monthsperiodthat sometime o
es together with a certain Emilio T. SalazarwenttoseeDr.Salazaratthelatter s
gacopy ofaDeedofAbsoluteSaleandDeedofWarrantybutDr.Salazarrefusedtosign
oneyreadythen.InsaidoccasionDr. Salazarfurtherreducedtheperiodwithinwhichplai
ts, toone(1)monthoruptoJune30,1989. Jonette Borres then met again Dr. Sa
oy InternationalAirportwhowasabouttoleavefortheUnitedStatesofAmerica wherehe
shadwithhertheDeedofAbsoluteSale and asked Dr. Salazar to sign said documen
ly agreed to sign the document provided that Jonette Borres pays one half (1/2
tion or P500,000.00 in "cash" by June 15, 1989 and the balance was payable on
during this occasion that Dr. Salazar again emphasizedtoJonetteBorresthathenee
ewasthen buyingapropertyintheUnitedStates. Plaintiff agreed to the above c

r constituted co defendantTeresaDizonascustodianattheDeedofAbsoluteSaletoget
e Land in question with the instruction to Teresa Dizon not to surrendersaidd
resuntiluponpaymentofthefullprice in"cash". OnJune14,1989JonetteBorresinf
llbeable topaythefullamountofP1,000,000.00onJune15,1989andonthenextday,
sa Dizon to see and get the documents entrustedtoherbyDr.Salazar.Thedocument
sion, theyagreedtomeetatMetroBankWestAvenueBranchtogetthedocuments andthen
ntiff sbusinesspartneracertain BalaowhoallegedlygaveplaintiffaFarEastBankand
eamountofP1,500,000.00withwhichtobuytheproperty.Forsomereason oranotherJone
nfailedtoproceedtoMakati. InthemeantimeoronJune16,1992,Dr.Salazarmadean
nquireifJonetteBorreshadalreadypaidthedownpayment ofP500,000.00andTeresaDizon
tJonetteBorreshad notpaidthedownpayment.Dr.SalazarthenorderedDizontostopthe
t the socalled Deed of Absolute Sale executed by petitioner Emilio A. Salazar
respondent Jonette Borres is a perfected contractofsaleoramerecontracttosell.

 Ruling: It is a contract to sell not contract of sale. The withholding by

f the Deed of Absolute Sale, the certificates of title, and all other document
nadditionalindubitableproofthatSalazardid nottransfertoBorreseitherbyactualor
ytheownershipof the two lots. While generally the execution of a deed of abs
sconstructivedeliveryofownership,thewithholdingbythevendorof that deed under
that it be delivered together with the certificates of titles to the vendee on
s full payment of the considerationamountstoasuspensionoftheeffectivityofthe
tract. Undoubtedly, Salazar and Borres mutually agreed that despite the Deed o
tletothetwolotsinquestionwasnottopasstothelatteruntil full payment of the
The form of the instrument cannotprevailoverthetrueintentofthepartiesasestab
cordingly, since Borres was unable to pay the consideration, which was a suspen
alazarcannotbecompelledtodelivertoherthedeedof sale,certificatesoftitle,and
gthetwolots.Inother words, no right in her favor and no corresponding obliga
zarwerecreated. 2.)SPOUSESNESTORCASTILLOandROSIEREYESCASTILLOvs.SPOUSESRUD
N REYES, 539 SCRA 193, G.R. No. 170917, November 28,2007 Facts: OnNovember
espondentsnegotiatedforthesale oftheformershouseandlotlocatedatPoblacion,New
atterfortheconsiderationofP165,000.00.Onthefollowingday,November 8,theysigned
inentlyreadsasfollows: We,theundersigned,agreetothefollowingtermsandconditio
hehouseandlotlocatedatPoblacion,NewWashington,Aklan: 1.Thatthetotalamountt
yFiveThousand Pesos(P165,000.00)tobepaidinfullonorbeforethe15thofDecember1
c)atotalamountofOneHundredThirtyThousand Pesos(P130,000.00)shallbemadetoday,
hattheremainingbalanceintheamount(sic)ofThirtyFiveThousandPesos (P35,000.00)s
4. That the buyers, represented by the Spouses Rudy and Consolacion Reyes (sic)
sible for all the legal and other related documents and proceduresregardingthis
ler,representedbyMs.EmmalizaM.Bohler,shallvacatethesaid houseandlotonor(sic
hat the tenants, represented by the Spouses Romeo and Epifania Vicente, shallva
orethe30thofApril,1998;and 7. That all parties concerned shall agree to all
s stipulatedherein.3 Uponthesigningofthesaidcontract,respondentshandedtoBohl
d allegedly a P110,000.00check. Bohler nonetheless insisted that the entireparti
ldbeincashassheneededittoredeemthesubject propertyfromthebankonthefollowi
payment up to midnight on that day otherwise she would cancel the sale. Becaus
failed to make good the P110,000.00. Bohler subsequentlysoldthepropertytothepe
earnedofthesubsequentsale,therespondentsimmediatelytendered the check, asked th
ification that it was funded and consulted theirlawyerwhosentanoticeoflispen
tion)tothe Register of Deeds and the Provincial Assessor. Civil Case No. 607
,specificperformanceanddamageswassubsequentlyfiledby

the respondents with the Regional Trial Court (RTC) of Kalibo, Aklan against Bo
oners. OnFebruary21,2003,theRTCrendereditsDecisiondeclaringtheNovember8, 19
t to sell. Considering that no actual sale happened betweenBohlerandtherespond
dvalidlyselltheproperty tothepetitioners.Thus,thetrialcourtdismissedthecompla
pondents appealed the case to the CA. In the challenged December6,2005Decision
eversedthetrialcourtsruling, declaredtheNovember8,1997Agreementacontractofsa
quent sale to the petitioners. The CA ruled, among others, that the wordings o
d the conduct of the parties suggest that they intendedtoenterintoacontracto
reserved by the vendor and nonpayment of the purchase pricewasnotmadeacondit
ivity. Petitioners,thus,filedtheinstantpetitionforreviewoncertiorariimputingth
otheCA: 1.TheappellatecourterredindeclaringthecontractstyledAGREEMENTdated 0
tofsale"andnotacontracttosell. 2.Theappellatecourterredindeclaringthepetit
ht the subject matter house and lot on 02 March 1998 from Emmaliza H. Bohler.
ansaction between Bohler and the respondents is a perfected contractofsaleora
uling: Sale is a consensual contract and is perfected by mere consent, which
ingofthemindsastotheofferandacceptancethereofon thesubjectmatter,priceandt
instant case, the November 8, 1997 Agreement clearly indicates that Bohlerandth
eetingofthemindsonthesubjectmatter ofthecontract,thehouseandlot;ontheprice
ayment,aninitialpaymentofP130,000.00onthedateofexecutionofthe agreementandth
oreDecember15,1997.Atthat precise moment when the consent of both parties was
of salewasperfected. Thesaidagreementcannotbeconsideredacontracttosell.Ina
o the property passes to the vendee upon the delivery of the thing sold. I
s,byagreement,reservedinthevendorandis not to pass to the vendee until full

rice. Otherwise stated,inacontractofsale,thevendorlosesownershipovertheproper

ntilandunlessthecontractisresolvedorrescinded;whereas, in a contract to sell,
the vendor until full payment of the price. In the latter contract, payment
ive suspensive condition, failureofwhichisnotabreachbutaneventthatpreventsth
oconveytitlefrombecomingeffective. TheNovember8,1997Agreementhereincannotbe
t tosellbecausethesellermadenoexpressreservationofownershiportitleto thesub
eAgreementcontainsalltherequisitesofa contractofsale. WHEREFORE, premises co
ion for review on certiorari is DENIEDDUECOURSE. 3.) UNITED MUSLIM AND CHR
CIATION, INC. represented by its President, MANUEL V. BUEN vs. BRYCV DEVELOPMEN

CORPORATION represented by its President, BENJAMIN QUIDILLA; and SEA FOODSCORPORA

sentedbyitsExecutiveVicePresident,VICENTET. HERNANDEZ,G.R.No.179653,July31,20
ion for review on certiorari seeks to set aside the Decision1 of the Court of
R. CV No. 62557 which affirmed in toto the Decision2oftheRegionalTrialCourt(
aCityinCivil CaseNo.467(4544). Respondent Sea Foods Corporation (SFC) is t
LotNo.300locatedinLowerCalainan,ZamboangaCityandcovered byTransferCertificate
6). PetitionerUnitedMuslimandChristianUrbanPoorAssociation,Inc. (UMCUPAI), an
squatters occupying Lot No. 300, through its President, Carmen T. Diola, initiat
ons with SFC for the purchase thereof. UMCUPAI expressed its intention to buy
rty using the proceeds of its pending loan application with National Home Mortg
poration (NHMF).Thereafter,thepartiesexecutedaLetterofIntenttoSellby [SFC]and
sebyUMCUPAI However,theintendedsalewasderailedduetoUMCUPAIsinability tosec
embersoccupyingLot No. 300 were willing to join the undertaking. Intent on buy
operty, UMCUPAI, in a series of conferences with SFC, proposed the subdivision
allow the squatter occupantstopurchaseasmallerportionthereof. Consequently, so
ber 1994, Lot No. 300 was subdividedintothree(3)partscoveredbyseparatetitles:
spectively. On January 11, 1995, UMCUPAI purchased Lot No. 300A for P4,350,80
0Bwasconstitutedasroadrightof wayanddonatedbySFCtothelocalgovernment. UM
ackoffunds.OnMarch 5, 1995, UMCUPAI negotiated anew with SFC and was given b
ree months to purchase Lot No. 300C. However, despite the extension, the three
d with the sale notconsummatedbecauseUMCUPAIstillfailedtoobtainaloanfrom NHM
5, SFC sold Lot No. 300C for P2,547,585.00 to respondent BRYCV Development Co
year later, UMCUPAI filed with the RTC a complaint against respondentsSFCandBR
aleofLotNo.300C, andthecancellationofTCTNo.T121,523.UMCUPAIallegedthatthe
s violated its valid and subsisting agreement with SFC embodied in the Letter
ing to UMCUPAI, the Letter of Intent granted it a prior, better, and preferred
chaseofLotNo.300C. SFCcounteredthattheLetterofIntentdatedOctober4,1991is
dandsubsistingcontractofsale.On the contrary, SFC averred that the document w
dmerelytoaccommodateUMCUPAIandenableittocomply with the loan documentation re
In all, SFC maintained that the Letter of Intent dated October 4, 1991 was su
i.e., payment of the acquisition price, which UMCUPAIfailedtodowhenitdidnoto
tertrial,theRTCdismissedUMCUPAIscomplaint.Thelowercourt found that the Letter
ed to facilitate the approvalofUMCUPAIsloanfromNHMFforitsintendedpurchaseof
o the RTC, the Letter of Intent was simply SFCs declaration of intention to
to sell, the subjectlot.Onthewhole,theRTCconcludedthattheLetterofIntent was
option contract, nor an offer contemplated under Article 1319 of the Civil Code
contracttosellandbuy. Issue:

WON the Letter of Intent to Sell and Letter of Intent to Buy is a bilateral
thin the meaning or contemplation of Article 1479 (1) of theCivilCodeofthePh
etitiondeservesscantconsideration. UMCUPAI appears to labor under a cloud of
rst paragraph of Article 1479 contemplates the bilateral relationship of a contr
distinguished from a contract of sale which may be absolute or conditional unde
amecode.Itreads: Art. 1479. A promise to buy and sell a determinate thing
iprocallydemandable. Anacceptedunilateralpromisetobuyortoselladeterminatethi
binding upon the promissor if the promise is supported by a considerationdistin
he case of Coronel v. Court of Appeals is illuminating and explains the distin
tionalcontractofsaleunderArticle1458oftheCivil Codeandabilateralcontracttos
ecode: A contract to sell may thus be defined as a bilateral contract where
ler, while expressly reserving the ownership of the subject propertydespitedeliv
eprospectivebuyer,bindshimselftosell the said property exclusively to the pros
n fulfillment of the conditionagreedupon,thatis,fullpaymentofthepurchaseprice
s defined hereinabove, may not even be considered as a conditional contract of
ller may likewise reserve title to the property subject of the sale until the
spensive condition, becauseinaconditionalcontractofsale,thefirstelementofconse
ughitisconditioneduponthehappeningofacontingenteventwhichmay or may not occ
dition is not fulfilled, the perfection of thecontractofsaleiscompletelyabated
nsivecondition is fulfilled, the contract of sale is thereby perfected, such th
lreadybeenpreviousdeliveryofthepropertysubjectofthesaletothebuyer, ownership
ly transfers to the buyer by operation of law withoutanyfurtheracthavingtobe

a contract to sell, upon the fulfillment of the suspensive condition which is

urchaseprice,ownershipwillnotautomaticallytransfer tothebuyeralthoughthepropert
ouslydeliveredtohim. The prospective seller still has to convey title to the
y enteringintoacontractofabsolutesale. Itisessentialtodistinguishbetweenac
alcontract ofsalespeciallyincaseswherethesubjectpropertyissoldbytheownernot
tracted with, but to a third person, as in the case at bench.Inacontractto
eoftheproperty,athird personbuyingsuchpropertydespitethefulfillmentofthesusp
hefullpaymentofthepurchaseprice,forinstance,cannotbedeemed a buyer in bad f
buyer cannot seek the relief of reconveyanceoftheproperty. There is no doub
tle to the property will transfer to the buyerafterregistrationbecausethereis
erstitleper se,butthelatter,ofcourse,maybesuedfordamagesbytheintendingbuy
e,however,uponthefulfillmentofthesuspensive condition, the sale becomes absolut
efinitely affect the sellers titlethereto.Infact,iftherehadbeenpreviousdelive
y, thesellersownershiportitletothepropertyisautomaticallytransferredtothe bu
lnolongerhaveanytitletotransfertoanythird person. Applying Article 1544 of
nd buyer of the propertywhomayhavehadactualorconstructiveknowledgeofsuchdefe
r at least was charged with the obligation to discover such defect, cannot be
d faith. Such second buyer cannot defeat

thefirstbuyerstitle.Incaseatitleisissuedtothesecondbuyer,thefirstbuyer ma
ubjectofthesale. In the instant case, however, the parties executed a Letter
eitheracontracttosellnoraconditionalcontractofsale.AsfoundbytheRTC, and up
Intent was executed to accommodate UMCUPAIandfacilitateitsloanapplicationwithNH
entto BuyandSellisjustthatamanifestationofSFCsintentiontoselltheproperty
me. TheLetterofIntent/AgreementbetweenSFCandUMCUPAIismerelyawritten prelimin
epartieswhereintheydeclaredtheirintention toenterintoacontractofsale.Itissu
UPAIwill "applywiththeHomeMortgageandFinanceCorporationforaloantopaythe acq
TheLetterofIntenttoSellfellshortofan"offer"contemplatedinArticle1319 of the
ot a certain and definite proposal to make a contract but merely a declaration
o enter into a contract. UMCUPAIsdeclarationofintentiontobuyisalsonotcertain
otheconditionthatUMCUPAIshallendeavortoraisefundstoacquire subjectland.Theac
bsolute;itmustbeplainand unconditional. Moreover, the Letter of Intent/Agreement
ain a promiseorcommitmenttoenterintoacontractofsaleasitmerelydeclaredthe i
nter into a contract of sale upon fulfillment of a conditionthatUMCUPAIcoulds
ceofaland. TheLetterofIntent/Agreementisnotan"optioncontract"becauseasidefro
larationofintentiontosellandtobuysubjectto theconditionthatUMCUPAIshallraise
riceof the land, and does not contain a binding promise to sell and buy, it
tinct consideration distinct from the price of the land intendedtobesoldandto
tedtoUMCUPAI undertheLetterofIntent/Agreementtobuysubjectlandtotheexclusiono
ed period nor was SFC bound under said Agreement to Sell exclusivelytoUMCUPAI
hefixedperiod. NeithercantheLetterofIntent/Agreementbeconsideredabilateralre
o sell and to buy contemplated under Article 1479 of the Civil Code which is
able. The Letter of Intent/Agreement does not containaPROMISEtosellandtobuys
snopromiseor commitmentonthepartofSFCtosellsubjectlandtoUMCUPAI,butmerely
n to buy the land, subject to the condition that UMCUPAI could raise the nece
re the same at the price of P105.00persquaremeterxxx WHEREFORE,premisesco
yDENIED.TheDecision oftheCourtofAppealsinCAG.R.CVNo.62557andtheRegionalTr
)areAFFIRMED.Costsagainstthepetitioner. 4.) E.C. MCCULLOUGH & CO. vs. S.
.R. No. 19009, September26,1922 Facts: In the month of February, 1918, pla
ntered into an agreementbywhichthedefendantwastodeliverplaintiff501balesofto
n good condition. That delivery was made and the plaintiff paid the full purch
on an examination later the tobacco was foundtobeinamustycondition,anditsv
havebeenifthetobaccohadbeenintheconditionwhichdefendantagreedthat it should
laintiff claims damages for $12,000, United Statescurrency,orP24,000,Philippinec
hentheconditionofthe tobaccowasdiscovered,plaintiffpromptlynotifiedthedefendant
otest.Wherefore,theplaintiffpraysjudgmentfortheamountofP24,000, Philippinecurre
neralrelief. The lower court rendered judgment against the defendant and in f
iff for the sum of P11,867.98 or P23,735.96 with legal interest from January 6
from which, after his motion for a new trial was overruled,thedefendantappeals
rterred:First,infinding

thatthetobaccowasnotingoodconditionwhenitarrivedinNewYork;second, in holdin
titled to maintain an action for breach of contract after having agreed with t
scind and to make restitution of the subjectmatter and the price after a viol
nt; third in holding that the plaintiff, having elected to rescind and notified
f such an election, may now refused it and affirm the sameandrecoverfromthe
ourth,inholdingthat this action should be maintained, no claim having been mad
reach of warranty of quality within the statutory period; and, fifth, in overru
t smotionforanewtrial. Issue: Isthedefendantliableforbreachofcontract?
antshoulderstheloss. Thedefectsinthetobaccowereinherentandcouldnotbeascerta
esandmakingaphysicalexamination.Whenthiswasdone,the plaintiffpromptlycabledth
ccowasnotsatisfactory.In the nature of things, the plaintiff could not then r
a statement of the amount of this claim. By the terms of the contract, the d
he arrival of the tobacco in New York "in good condition." The Although the
the written contract, the transaction showsthatthesalewasnotcompleteuntilthea
rk. The fair construction to be put upon the contract is, that on the arrival
ng the goods, the defendants should deliver them, and the plaintiffsshouldpayt
dtheauthoritiesholdthatthearrival of the goods, in such case, is a condition
be shown to havetakenplacebeforeeitherpartycanbringsuit. 5.)WELGODICHOSO,

OBORJAandNELIA ALANGUILAN,5SCRA781,G.R.No.L17441,July31,1962 Facts: On

as sold to Borja for the sum of P850.00 a parcelofunregisteredcoconutlandwit
rsand with393coconuttrees,situatedinBarrioSanDiego,SanPablo,Laguna,subject t
orcouldrepurchaseitforthesameamountwithin fiveyears,butnotearlierthanthreey
chwas evidencedbyapublicdocument. From November 26, 1955 to July 5, 1957,
ichoso severalsumsofmoneyamountingtoP770.00,theiragreementbeingthatafter Decem
s would sell the same property, by absolute sale, to Dichoso for the total su
foresaid sum of P770.00 to be consideredasinitialoradvancepaymentonthepurchas
ance of P1,230.00, Dichoso would use the sum of P850.00 to repurchase the prop
ter December 13, 1954 but within the fiveyearsstipulatedfortheexerciseofRoxas
n October 22, 1957, pursuant to Roxas request made on July 23, 1957, Dichoso
the sum of P320.00 "in full payment of the P2,000.00 consideration for the dee
" and thereafter they informedBorjaoftheirreadinesstorepurchasetheproperty.
ssentthembackthecheckjustreferredtowiththe requestthattheyendorsethesameto
e, becauseitappearedthat,asidefromtheP850.00considerationofthepactode retros
itionalsumsfromBorja. After December 13, 1957, Dichoso made representations t
ere ready to make the repurchase, as well as to Roxas for the latter to be
esponding deed of absolute sale in their favor after

they had made the repurchase; that notwithstanding these demand and representatio
nd Borja had deliberately failed to execute the correspondingdeedofabsolutesale
eadymentioned. On January 8, 1958 Borja filed a motion to dismiss the compla
atDichosohadnocauseofactionagainstthembecausetheircontract wasnotthembutwit
emotionanddismissed thecomplaintbecause,accordingtothesame,"thereexistsnowrit
nment of rights executed by Laura A. Roxas in favor of the herein plaintiffs
y which said Laura A. Roxas sold to her co defendants under a deed of pacto
he purpose of the present action is precisely to compel Laura A. Roxas to exe
ingdeedofassignment." Issue: Whether or not Dichoso can repurchase the coc
d to BorjabyLauraRoxas. Ruling: No. It is obvious that in deciding the
o give due weight to the deed of absolute sale executed by Laura A. Roxas in
cember8,1957ineffectsupersedingthepactoderetrosale mentioned heretofore for
f P1,684.00, of which the amount of P850.00 paid as consideration for the pact
considered as a part. There is no dispute at all as to the genuineness of th
esalenorastoitsexecutiononDecember8,1957.that is, five days prior to Decem
g to appellees themselves,theymadethefirstattempttorepurchasethepropertyinque
ccasion appellants refused to allow the repurchase "because Laura A. Roxas was
according to the lower court. After December 8, 1957,appellants rights were no
n the superseded pacto de retro sale but on the aforesaid deed of absolute sa
lyvalidcontractasbetweentheparties. In plain words, after that date Laura A
y right to repurchasetheproperty.Moreover,BorjahadnoknowledgeuntilDecember13,
gnedherrighttorepurchasetoDichoso. Suchbeingitscondition,itcouldnotpossibly
samepropertyhavingbeensoldtotwodifferentpurchasers.Thesaltinfavor of appell
tself, while the one in favor of appellees, if notamerepromisetoassign,wasa
erightto repurchase the same property. The provisions of paragraph 3, Article
eofthePhilippineswhichreadasfollows:Ifthesamethingshould havebeensoldtodi
allbetransferredtothe personwhomayhavefirsttakenpossessionthereofingoodfaith
erty.Shouldtherebenoinscription,theownershipshallpertainto the person who in
n the possession; and, in the absence thereof, to the person who presents the
ided there is good faith.(Emphasissupplied)donot,therefore,apply. Havingarrive
ons,weareconstrainedtoholdthat,upon the facts of the case, appellees are not
s sought in their amendedcomplaintandthatwhateverremedytheyhaveisexclusivelya
s to recover from her, among other things, what they paid as considerationfor
atedocumentExhibitI. WHEREFORE, the decision appealed from is reversed, with th
is caseisdismissed,withcosts,reservingtoappellees,however,therighttofilea se
Laura A. Roxas to enforce whatever rights they may haveagainstherinconsonance
) LUZON BROKERAGE CO., INC. vs. MARITIME BUILDING CO., INC., and MYERS BUILDING
TIME BUILDING CO., INC., 43 SCRA 93, G.R. No.L25885,January31,1972 7.)Sp
.ANASTACIACRISTOBAL,456SCRA 577,G.R.No.156171,April22,2005

Facts: In1968,spousesPorticacquiredaparceloflandwitha3doorapartmentfrom
heyre aware that the land was mortgaged to the SSS. Portic defaulted in payin
en executed a contract with Cristobal and the latter agreed to buy the said p
ristobals downpaymentwasP45kandshealsoagreedtopaySSS.Thecontractbetween the
eofP155,000.00hasnotyetbeenfullypaid the FIRST PARTYOWNERS shall retain the
escribed parcel of land together with its improvements but the SECOND PARTY BUY
ghttocollectthemonthlyrentalsdueonthefirstdoor(13A)of thesaidapartment;(pa
alwillnotbeableto pay Portic will reimburse) A transfer certificate was execu
obal.Cristobalwasnotabletopayontheduedate.Asuitensuedtoliftthe cloudonth
eroftheparcelofland? Ruling: The Portics insofar asthere was nocontract
en thepartieswasacontracttosell.Theprovisionofthecontractcharacterizesthe ag
rties as a contract to sell, not a contract of sale. Ownership is retained by
tics; it will not be passed to the vendee, the Cristobals, until the full pay
price. Such paymentisapositivesuspensivecondition,andfailuretocomplywithitis
on; it is merely an event that prevents the effectivity of the obligationofth
e.Inshort,untilthefullpriceispaid, the vendor retains ownership. The mere is
ate of Title in favor of Cristobal did not vest ownership in her. Neither did
ged absolute purchase of the lot. Registration does not vest, but merely serves
title. Our land registration laws do not give the holders any better title tha
ctually have prior to registration. Under Article1544oftheCivilCode,mereregist

cquireanew title. Good faith must concur. Clearly, Cristobal has not yet fully
rice.Hence,aslongasitremainsunpaid,shecannotfeigngoodfaith. She is also pre
nership against the Portics. The CAs findingthatshehadavalidtitletotheprope
S OF JESUS M. MASCUANA, represented by JOSE MA. R. MASCUANA vs. COURT OF AP
nd SPOUSES RODOLFOandCORAZONLAYUMAS,461SCRA186,G.R.No.158646,June23, 2005
parcel of land from the Wuthrich siblings. Part of which Mascunana,helatersold
actpriceis4,690with3,690as down payment. Their agreement says: That the balan
SOS(P1,000.00)shallbepaidbytheVENDEEuntotheVENDORassoonasthe aboveportionso
dinthenameoftheVENDEE andallpaperspertinentandnecessarytotheissuanceofasep
enameoftheVENDEEshallhavebeenprepared.Sumilhiglatersold the same lot to Layum
umas wrote to the heirs of Mascunana(sinceMascunanadiedalready)offeringtopayth
urchasepriceoftheproperty.Theaddressee,however,refusedtoreceive the mail matter
na then filed a complaint for recovery of possession against Barte ( an indivi
allowed to stay on the subjectproperty). Issue: WON the contract of alienat
t in favor of Sumilhig was a contracttoselloracontractofsale. Ruling:

 Sale. Article1458oftheNewCivilCodeprovides: By the contract of sale, one o

s obligates himself to transfertheownershipofandtodeliveradeterminatething,an
rapricecertaininmoneyoritsequivalent. Acontractofsalemaybeabsoluteorcondit
entialelementsofsale,towit: a) Consent or meeting of the minds, that is, con
ship in exchangefortheprice; b)Determinatesubjectmatter;and c)Pricecertainin
n this case, there was a meeting of the minds between the vendor and the ven
ooktodeliverandtransferownershipoverthe property covered by the deed of absol
e for the price of P4,690.00 of which P3,690.00 was paid by the vendee to th
t. The vendor undertook to have the property sold, surveyed and segregatedanda
forissuedinthenameofthevendee,upon whichthelatterwouldbeobligedtopaytheba
pulationinthedeedthatthetitletothepropertyremainedwiththevendor, orthatthe
hecontractuponthebuyersfailureto pay within a fixed period was given to suc
ontract executedbythepartiesisadeedofsaleandnotacontracttosell.AstheCourt
os v. Court of Appeals (158 SCRA 375), we have said that, although denominated
al Sale, a sale is still absolutewherethecontractisdevoidofanyprovisothatt
nilaterally rescind is stipulated, e.g., until or unless the price is paid. Own
n be transferred to the buyer upon actual or constructive delivery (e.g. by th
blic document) of the property sold. Wheretheconditionisimposedupontheperfecti
lf,the failure of the condition would prevent such perfection. If the condition
ligationofapartywhichisnotfulfilled,theotherpartymay either waive the condit
d with the sale. (Art. 1545, Civil Code). Thus, in one case, when the sellers
of Down Payment that they received an amount as purchase price for a house a
ationoftitleuntilfullpaymentoftheentirepurchaseprice, the implication was tha
perty. In Peoples Industrial and Commercial Corporation v. Court of Appeals, it
ed of sale is considered absolute in nature where there is neither a stipulati
itletothepropertysoldisreservedintheselleruntilfullpaymentofthe price,noro
laterallyresolvethecontractthe momentthebuyerfailstopaywithinafixedperiod.Ap
o thiscase,itcannotbegainsaidthatthecontractofsalebetweenthepartiesis absol
snoreservationofownershipnorastipulation providing for a unilateral rescission
In fact, the sale was consummated upon the delivery of the lot to respondent.
videsthattheownershipofthethingsoldshallbetransferredtothevendee upontheact
ythereof.Theconditioninthedeedthat thebalanceofP1,000.00shallbepaidtotheve
perty sold shall have been surveyed in the name of the vendee and all papers
otheissuanceofaseparatecertificateoftitle in the name of the vendee shall h
condition which preventedtheefficacyofthecontractofsale.Itmerelyprovidesthema
rchasepriceofthepropertyistobepaid.Theconditiondid notpreventthecontractfro
hestipulationthat the payment of the full consideration based on a survey sha
in five (5) years from the execution of a formal deed of sale is not a con
ficacy of the contract of sale. It merely provides the manner by which the fu
to be computed and the time within which the same is to be paid. But it doe
the effectivityofthecontract.Inacontracttosell,ownershipisretainedbyaseller
evendeeuntilfullpaymentoftheprice.Such paymentisapositivesuspensivecondition,
each of contract but simply an event that prevented the obligation from acquiri
e. It bears stressing that in a contract of sale, the nonpayment of theprice
ichextinguishesthetransactionthat,fora time, existed and discharges the obligat
er the transaction. A seller cannot unilaterally and extrajudicially rescind a c
le unless

thereisanexpressstipulationauthorizingit.Insuchcase,thevendormayfilean actio
ance or judicial rescission. Article 1169 of the New CivilCodeprovidesthatinr
ns,neitherpartyincursindelayif the other does not comply or is not ready to
with what is incumbent upon him; from the moment one of the parties fulfill h
ytheotherbegins.Inthiscase,thevendor(JesusMascuana) failed to comply with h
ting Lot No. 124B and the issuance of a Torrens title over the property in
e latters successorsininterest, the respondents herein. Worse, petitioner Jose
e to secure title over the property under the name of his deceasedfather.
COURT OF APPEALS, THE RURAL BANK OF LARENA (SIQUIJOR), INC. and SPOUSES JESUS
ITA MONESET, 473 SCRA52,G.R.No.142411,October14,2005 Facts: Monesets enter
ll with Ursal. Ursal stopped paying the installment (as stated in the contract)
t failed to deliver the transfer certificate of title of the property as per

neset executedanabsolutedeedofsaletoDr.RafaelCanora,Jr.Monesetsexecuted anoth

th pacto de retro with Restituto Bundalo.7 On the sameday,Bundalo,asattorneyi
cutedarealestate mortgageoversaidpropertywithRuralBankofLarena An action f
ctivity of mortgage and damages against theMonesets,BundaloandtheBankbyUrsal.
t:theBankfailedtolookbeyondthetransfercertificateof titleofthepropertyforwh
ondent answered: its interest in the property was only that of mortgagee and n
s its interest is limited only to ascertaining that the mortgagoristheregister
eeffectivityofthemortgage. Ruling: The court agreed that banks cannot merel
es of title in ascertainingthestatusofmortgagedproperties;astheirbusinessisim
interest, they are expected to exercise more care and prudence in their dealing
ndividuals.31 Indeed, the rule that persons dealing withregisteredlandscanrelys
icateoftitledoesnotapplyto banks. But,thecontractwasacontracttosell,Ursal
e property.Thus,theMonesetshastherighttodisposetheproperty. Inacontractto
ftheproperty,athirdperson buyingsuchpropertydespitethefulfillmentofthesuspens
efullpaymentofthepurchaseprice,forinstance,cannotbedeemedabuyer inbadfaith
tseekthereliefofreconveyanceof theproperty. Petitionersrecourseshouldbe:
dtoaskingforspecificperformanceanddamages fromtheMonesets. AdditionalNotes:
hecontracttosellisabout: A contract to sell is a bilateral contract whereby
r, while expressly reserving the ownership of the subject property despite deliv
o the prospective buyer, binds himself to sell the said property

exclusively to the prospective buyer upon fulfillment of the condition agreed up

aymentofthepurchaseprice. 10.) FERNANDO CARRASCOSO, JR. vs. THE HONORABLE C
ROLEVISTE,asDirectorandMinorityStockholderandOnBehalfofOther StockholdersofEl
.andELDORADOPLANTATION,INC., represented by one of its minority stockholders,
477 SCRA 666,G.R.No.123672,December14,2005 Facts: Once upon a sunny morni
al Mindoro, El Dorado PlantationInc.,throughaboardmemberFelicianoLeviste,thenP
o Inc., executed a Deed of Sale with Fernando O. Carrascoso Jr. The subjectof
fland. It was stipulated in the provisions of the Deed of Sale of Real Pr
ythefollowing: (1)OfthesaidsumofP1.8Mconstitutinghefullconsiderationofthe
scosotoPNBtosettlethemortgageplacedonthesaid land. (2)P210kwouldbepaiddir
eofP1.3Mplus10%interestwouldbepaidoverthenext3years atP519kevery25thofMa
ave Carrascoso the assurance that there were no tenantsonthesubjectland.Ergo,
rtheLandReform Code.LevisteallowedCarrascosotomortgagetheland,whichthelatter
ned a total of P1.07M as mortgage and used the same to pay thedownpaymentas
ultedfromhisobligation,whichwassupposedtobesettledon March25,1975. Leviste
Carrascoso asking him to comply with his obligationtopay,otherwisetheformerwil
stthelatter.But Carrascosomadenoreply.DuetoCarrascososfailuretoperformandre
Inc, pursued to file a complaint to rescind the Deed of Sale conveyedtoformer
scosoexecutedaBuyandSellContractwithPLDTonthe 1977. The subject of the sale
of the land sold to Carrascoso by Leviste. The land is to be sold at P3M. P
tions agreed upon was that Carrascoso is to remove all tenants from the landw
edofAbsoluteSale,conveyedtheaforesaid 1,000hectareportiontoitssubsidiaryPLDTAC
eedingagainstCarrascoso,PLDTintervenedaverringthatit wasabuyeringoodfaith.The
coso.CAreversedthe RTCruling. Issue: (1)Whatisthenatureofthecontractbet
hatisthenatureofthecontractbetweenCarrascosoandPLDT? Ruling: (1)Thecontra
ndCarrascosowasacontractof sale.Itwasperfectedbytheirmeetingofthemindsandw
fthepropertytoCarrascoso.ThefailureofCarrascosotodeliver theamountagreedupon
atessuchcontractofsale. Acontractofsaleisareciprocalobligation.Thesellero
eownershipofanddeliveradeterminatething,andthebuyerobligatesitself topayther
ritsequivalent.Thenonpaymentof the price by the buyer is a resolutory condit
s the

transaction that for a time existed, and discharges the obligations created ther
failure to pay the price in the manner prescribed by the contractofsaleentitl
orcollectionortorescindthe contract. (2) The contract between Carrascoso and
o sell. This is evidenced by the terms and conditions that they have agreed u
llment of Carrascosos obligation PLDT has to notify Carrascoso of its decision
zethesale. Beingacontracttosell,whatwasvestedbytheJuly11,1975Agreementt
cialtitletothe1,000hectareportionof theproperty. *Notes(CopyandPastedfrom
ct of sale, the title passes to the vendee upon the delivery of the thing so
ct to sell, ownership is not transferred upon delivery of the property but upo
he purchase price. In the former,thevendorhaslostandcannotrecoverownershipunt
ctisresolvedorrescinded;whereasinthelatter,titleisretainedbythe vendor until
price, such payment being a positive suspensive condition and failure of which
ut an event that preventstheobligationofthevendortoconveytitlefrombecomingef
alcontractofsale,ifthesuspensiveconditionisfulfilled,the contract of sale is
uch that if there had already been previous delivery of the property subject o
yer, ownership thereto automatically transfers to the buyer by operation of law
rtheracthavingtobeperformedbytheseller.Whereasinacontracttosell, upon fulfi
condition, ownership will not automatically transfertothebuyeralthoughthepropert
viouslydelivered tohim.Theprospectivesellerstillhastoconveytitletotheprospec
oacontractofabsolutesale. A perusal of the contract adverted to in Coronel
ces fromtheAgreementtoBuyandSellinthecaseatbar.IntheCoronelcontract, ther
inpetitionerssellerstotransfer title to the therein respondentbuyer. In the
ent to Buy and Sell, PLDT still had to definitely inform Carrascoso of its d
ot to finalize the deed of absolute sale for the 1,000 hectare portion of the
n the April 6, 1977 Deed of Absolute Sale subsequently executed, the parties d
re now decided to executesuchdeed,indicatingthattheAgreementtoBuyandSellwas
erelyapreparatorycontractinthenatureofacontract tosell.Infact,thepartiesev
menttoBuy andSellthatCarrascoso,duringtheexistenceoftheAgreement,shallnotse

sfertheparcelofland,whichprovisionthisCourthas heldtobeatypicalcharacterist
COBIA HILLS DEVELOPMENT CORPORATION and JAIME C. KOA vs. ALLANU.TY,470SCRA395
ber20,2005 Facts: Petitioner is the developer of True North Gold and Cou
assured its shareholders that the development was proceeding on schedule and tha
rse would be playable by October1999. Respondentwrotetopetitioneraletterex
uire one (1) Class A share of True North and accordingly paid the reservation
vedthepurchaseapplicationforP600,000.00subject tocertaintermsandconditions,inte
al of an application to purchase golf/country club shares is subjectedtotheful
rchaseprice.Shouldthe buyer opt for the deferred payment scheme, approval is s
ipt of a down payment of at least 30% and the balance payableininstallmentso
nthsfrom thedateofapplication,andcoveredbypostdatedcheques.

Your reserved share shall be considered withdrawn and may be deemed cancelled s
o settle your obligation within fifteen(15)daysfromduedate,orfailuretocovert
heques upon their maturity, or your failure to issue the requiredpostdatedchequ
hallreservetheright toofferthesaidsharestootherinterestedparties.Thisalsomea
talamountyouhavealreadypaid. o 3. We shall undertake to execute the correspond
ts/DeedofAbsoluteSalecoveringthereservedsharesupon full payment of the total
Certificate of Membershipshallbeissuedthereafter. One June 1999, respondent noti
ner that he is rescinding the contract due to the latters failure to complete
nd soughtforrefundofhispaymentwhichamountedtoP409,090.02.Byway ofreply,peti
tthatithadnorefundpolicy. Respondent filed a complaint for rescission and dam
udgmentinfavorofthepetitioner.Thetrialcourtfoundthatthecontract between the
t that the golf course and clubhouse wouldbecompletedwithinacertainperiodoft
torescind. CourtofAppealsreversedthedecisionofRTC.Itdirectedthepetitionerto
egalinterestof12%perannumfromthedate of the filing of the complaint. It sta
d properly rescind the contract, or demand specific performance with damages due
ersdelayintheperformanceofitsobligations. Petitioner filed a petition for rev
fore the Supreme Court. Sacobia contends that it was not in breach of the con
o Purchase, the Contract of Purchase,andtheNoticeofApproval to Purchase Shares
ot contain any specific date as to whenthegolfcourseandcountryclubwouldbeco
ondent should have known the risks involved in this kind of project; theconstr
gentontheissuanceoftheECCbytheDENR and the payment of the buyers of their
pondent claims that Sacobias arguments raise new matters which would warrant th
e decision rendered by the Court of Appeals. He insists that Sacobia failed to
ect on time whichentitleshimtorescindthecontractinaccordancewithArticle1191
rguesthatthedelayinthecompletionofthe projectisclearlyestablishedbythefactt
al workdoneonthesite,particularlyontheclubhouse,despitethelapseof nearly4ye
arch5,1998. o

Issue: Whether the contract entered into by petitioner and respondent a cont
acttosell. Ruling: It was a contract to sell. In the notice of approval,
nd conditions of the agreement, petitioner signified its intent to retain the o
pertyuntilsuchtimethattherespondenthasfullypaidthe purchase price. In a Cont
nt of the purchase price is a positive suspensive condition, the failure of wh
, casual or serious,butasituationthatpreventstheobligationofthevendortoconve
n obligatory force. As shown, respondent did not pay the full purchase price w
tion under the contract to sell, therefore, it cannot be said that petitionerb
ion.Noobligationsarose on its part because respondents nonfulfillment of the
on renderedthecontracttosellineffectiveandunperfected. PetitionisGRANTED.Deci
dSETASIDE.Respondentis ORDERED to PAY to Sacobia Hills Development Corporation
s: One Hundred Ninety Thousand Nine Hundred Nine and Eight Centavos (P190,909.08
erest within thirty (30) days from finality of the decision;otherwise,fiftyperc
lpaymentsshallbeforfeited. 12.)KEPPELBANKPHILIPPINES,INC.vs.PHILIPADAO,473
tober19,2005

Facts: Project Movers Realty and Development Corporation (PMRDC) owe P200M to
y way of dacion en pago, PMRDC transferred and conveyed to thebank25ofitspr
housesandcondominiums.One oftheunitstransferredwasoccupiedbyAdao.InFeb2000,t
ate.Adaorefused.Anejectmentcasewasfiled.Adaoaverredthat hehadaContracttoSel
idavitshowingthat he made full payment thereof. The MeTC, RTC and CA ruled in
ercourtsorderedKeppeltorespectthecontracttosellbetweenAdao andPMRDCforwhent
redbywayofdacionenpago, thebankmerelysteppedontheshoesofPMRDC. Issue:
acttosell. Ruling: No. Though Keppel is not a purchaser in good faith for

erty (checkingif it was infirm and free from other claims), the bank is not b
elldoesnotbyitselfgiveAdaotherighttopossess theproperty.Unlikeinacontracto
reisyet noactualsaleoranytransferoftitle,untilandunless,fullpaymentismade.
sapositivesuspensivecondition,thefailureof which is not a breach, casual or
on that prevents the obligationofthevendortoconveytitlefromacquiringanobligat
efullypaidthepricetoacquiretitleoverthepropertyandtherightto retainpossessi
nt,theunpaidsellercanavail of the remedy of ejectment since he retains owners
Adao must also, aside from showing an affidavit, show other proof of full paym
Considering that Adao failed to discharge the burden of provingpayment,hecannot
hepropertyandhispossession thereofwasbymeretolerance.Hiscontinuedpossessionbec
eownersdemandtovacatetheproperty. 13.) SPS. ALFREDO R. EDRADA and ROSELLA
RAMOS, SPS. EDUARDO RAMOS, 468 SCRA 597, G.R. No. 154413, August 31, 2005 Fa
uses Eduardo and Carmencita Ramos (respondents) are the owners of 2 fishing ves
Lalaine" and the "Lady Theresa." On 1 April 1996, respondents and petitioners e
tled handwritten document which lies at the center of the present controversy.
reproducedbelow: 1stApril1996 ThisistoacknowledgethatFishingVesselsLadyLa
ardoO.Ramosarenowinmypossessionandreceivedingood running and serviceable ord
s are now my responsibility. Documentspertainingtothesaleandagreementofpayme
erofthevesseltofollow.TheagreedpriceforthevesselisNine HundredThousandOnly

Upon the signing of the document, petitioners delivered to respondents 4 postdat

nk and Trust Company (FEBTC) checks payable to cash drawn by petitioner Rosella
ous amounts totaling P140,000.00. The first 3 checks were honored upon presentme
ee bank while thefourthcheckforP100,000.00wasdishonoredbecauseofa"stoppayment
6, respondents filed an action against petitioners for specific performancewithd
heRTC,prayingthatpetitionersbeobliged toexecutethenecessarydeedofsaleofthet
balance of the purchase price. In their Complaint, respondents alleged that peti
racted to buy the two fishing vessels for the agreed purchase price of P900,00
d by the abovequoted document, which accordingtothemevincedacontracttobuy.Ho
fsaid vessels and repeated oral demands, petitioners failed to pay the balance,
urtheraverred. Petitioners averred that the document sued upon merely embodies
oughtaboutbytheloanstheyextendedtorespondents.According to petitioners, respond
em to manage or administer the fishing vessels as a business on the understand
ey find the business profitable,thevesselswouldbesoldtothemforNineHundredTho
0.Butpetitioners"decidedtocallitquits"afterspendingaheftysum fortherepairan
ichwerealreadyindilapidated condition. The RTC ruled in favor of the plainti
inst the defendants (Ramos) and the latter (Ramos) are ordered to pay to the
mount of P860,000.00 with legal interests thereon from June 30, 1996 until full
20,000.00asattorneysfeesandthecostofsuit.The counterclaim of the defendants
y damages and for attorneysfeesisdismissedforlackofmerit. The RTC treated
ction of a sum of money and for damages and considered the document as a per
e. PetitionersfiledaMotionforReconsiderationwhichtheRTCdenied. Bothpartiesap
.TheCourtofAppealsaffirmedtheRTCs decisionanddismissedbothappeals.Onlypetiti
versy tothisCourt. Issue: WONtherewasaperfectedcontractofsale. Ruling:
the Court of Appeals that the document is a perfected contract of sale. A con
ned as an agreement whereby one of the contracting parties obligates himself to
nershipofandtodeliveradeterminatething,andtheothertopaytherefore apricecert
tmustevincetheconsentonthepart ofthesellertotransferanddeliverandonthepar
hedocumentrevealsthatthereisnoperfectedcontractof sale.Theagreementmayconfirm
tsofthetwovessels andtheirpurchaseprice.However,thereisnoequivocalagreementt
evessel,butamerecommitmentthat"documentspertainingto thesaleandagreementofpa
idently,thedocument ordocumentswhichwouldformalizethetransferofownershipandcon
entofthepurchaseprice,ortheperiodwhensuchwouldbecome due and demandable, hav
t no such document was executedandnosuchtermswerestipulatedupon. The fact
al purchase price should not lead to the conclusion that a contract of sale h
n numerous cases, the most recent of which is Swedish Match, AB v. Court of
eforeavalidandbindingcontractofsalecanexist,themannerofpaymentof thepurchas
ed,assuchstandsasessentialtothe validityofthesale.Afterall,suchagreementon

to the element of a price certain, such that a disagreement on the manner of

ailuretoagreeontheprice. Assumingarguendothatthedocumentevincesaperfectedco
e of definite terms of payment therein would preclude its enforcement by the r
gh the instant Complaint. A requisite for the judicial enforcement of an obliga
same is due and demandable. The absence of a stipulated period by which the p
d be paid indicatesthatatthetimeofthefilingofthecomplaint,theobligationtop
Respondents, during trial, did claim the existence of a period. Respondent Carme
during crossexamination, claimed that the supposed balanceshallbepaidon30June
ntsexplainwhythe Complaintwasfiledon3June1996?Assumingthatthe30June1996per
e parties, the filing of the Complaint was evidently premature, as no cause of
d yet. There could not have been any breach of obligation because on the date
, the alleged maturitydateforthepaymentofthebalancehadnotyetarrived. Inor
alidcauseofaction,itisessentialthat theremusthavebeenastipulatedperiodwithin
become due and demandable. If the parties themselves could not come into agreem
may be asked to fix the period of the obligation, under Article1197oftheCivi
otavailofsuchreliefprior to the filing of the instant Complaint; thus, the a
g to its obviousprematurity. Returningtothetruenatureofthedocument,weneithe
tracttosell"hadbeenestablished.Acontracttosellisdefinedasabilateral contract
ve seller, while expressly reserving the ownership of the subject property despi
hereof to the prospective buyer, binds himself to sell the said property exclus
spective buyeruponfulfillmentoftheconditionagreedupon,thatis,fullpaymentofthe

ractisperfectedwhenthereisconcurrenceofthewillsofthecontracting partieswithr
useofthecontract.Inthiscase,the agreementmerelyacknowledgesthatapurchaseprice
ties.Therewasnomutualpromisetobuyonthepartofpetitionersand to sell on the
the aforestated proviso in the agreement that documents pertaining to the sale
f payments betweenthepartieswillfollowclearlymanifestslackofagreementbetweenth
softhecontracttosell,particularlytheobjectandcause ofthecontract. The agre
t create any obligatory force either for the transfer of title of the vessels,
f payments as part of the purchaseprice.Atmost,thisagreementbaresonlytheirin
eracontracttoselloracontractofsale. Consequently,thecourtsbelowerredinord
ct of sale that had yet to come into existence. Instead, the instant Complaint
ed. It prays for three reliefs arising from the enforcement of thedocument:exe
nersofthenecessarydeedofsaleover the vessels, the payment of the balance of
damages. The lower courts have already ruled that damages are unavailing. Our f
eisnoperfectedcontractofsaleprecludesthefindingofanycauseof action that wou
f the first two reliefs. No cause of action arises until there is a breach o
either party.24 Consideringthatthedocumentscreatenoobligationtoexecuteorevenpu
e,butonlymanifestanintentiontoeventuallycontractone,we findnorightsbreachedo
ntanyofthereliefssought intheComplaint. The petition is GRANTED. The assail
tion of the Court of AppealsareREVERSEDandSETASIDE.ThecasebeforetheRegional
ssed.Nopronouncementastocosts.SOORDERED.

CONTRACTFORAPIECEOFWORK 1.)CELESTINOCO&COMPANYvs.COLLECTOROFINTERNALREVENU
gust31,1956 Facts: Celestino Co & Company is a duly registered general cop
nessunderthetradenameof"OrientalSashFactory".From1946to1951it paidpercentage
eiptsofitssash,doorand window factory, in accordance with section one hundred
ional Revenue Code imposing taxes on sale of manufactured articles. Howeverin19
abilityonlytothecontractor s3percenttax (insteadof7percent)undersection191
o convincetheBureauofInternalRevenue,itbroughtthemattertotheCourtof TaxAppe
e: Whetherornotpetitioneriscoverunder186ofNRCnationalrevenuecodeor under1
at once apparent that the Oriental Sash Factory did not merely sell its servic
eodoro & Co. (To take one instance) because it also sold the materials. The t
that it sold materials ordinarily manufacturedbyitsash,panels,mouldingstoTe
rmorcombinationassuitedthefancyofthepurchaser.Suchnewform does not divest t
of its character as manufacturer. Neither does it take the transaction out of
les under Article 1467 above quoted, because although the Factory does not, in
rseofitsbusiness,manufactureandkeeponstockdoorsofthekindsoldto Teodoro, it
bly had in stock the sash, mouldings and panelsitusedtherefor(someofthematl
n this Factory accepts a job that requires the use of extraordinary or additio
involves services not generally performedbyitittherebycontractsforapieceofwor
thinthemeaningofArticle1467.Theordershereinexhibitedwerenotshown tobespecial
orknothingisshowntocallthem specialrequiringextraordinaryserviceofthefactory
tif,asallegedalltheworkofappellantisonlytofill orders previously made, such
ed special work, but regular work. Would a factory do business performing only
rdinaryorpeculiarmerchandise? Anyway, supposing for the moment that the transa
sales, they wereneitherleaseofservicesnorcontractjobsbyacontractor.Butasthe
ittedly"manufactured"bytheOrientalSashFactory, such transactions could be, and
as "transfers" thereof under section186oftheNationalRevenueCode. Theappealed
tlyaffirmed.Soordered.