Sabio vs.

International Corporate Bank:

(Removal of squatters, Las Pinas, Ayala Southvale)
Under Article 1498 of the Civil Code, when the sale is made
through a public instrument, the execution thereof shall be equivalent to
the delivery of the object of the contract, if from the deed the contrary
does not appear or cannot be inferred. Possession is also transferred,
along with ownership thereof, to the petitioners by virtue of the deed of
conveyance.
Since the execution of the deed of conveyance is deemed
equivalent to delivery, prior physical delivery or possession is not legally
required.
Just as possession is not a definite proof of ownership, neither is
non-possession inconsistent with ownership.
The key word is control, not possession, of the subject property.
Javier vs. CA and Leonardo Tiro:
(Forest Concessions)
Construction of the Contract: The previous and simultaneous and
subsequent acts of the parties are properly cognizable indicia of their true
intention. Where the parties to a contract have given it a practical
construction by their conduct as by acts in partial performance, such
construction may be considered by the court in construing the contract,
determining its meaning and ascertaining the mutual intention of the
parties at the time of contracting.
Relative Simulation of the Contract: A relatively simulated contract
which states a false cause or consideration, or one where the parties
conceal their true agreement. A
contract with a false consideration is not null and void per se. Under Article
1346 of the Civil Code, a relatively simulated contract, when it does not
prejudice a third person and is not intended for any purpose contrary to
law, morals, good customs, public order or public policy binds the parties
to their real agreement.
Contract of Sale Subject to a Suspensive Condition: When a
contract is subject to a suspensive condition, its birth or effectivity can
take place only if and when the event which constitutes the condition
happens or is fulfilled. If the suspensive condition does not take place, the
parties would stand as if the conditional obligation had never existed.
A bilateral contract gives rise to reciprocal obligations. The
demandability of the obligation of one party depends upon the fulfillment
of the obligation of the other. Delivery and payment in a contract of sale,
are so interrelated and intertwined with each other that without delivery of
the goods there is no corresponding obligation to pay. The two complement
each other.
Industrial Textile vs. LPJ:

(Cement Bags)
Sale or Return or Sale on Approval: clearly requires an express
written agreement. Parol or extrinsic testimony could not be admitted for
the purpose of showing that an invoice or bill of sale that was complete in
every aspect and purporting to embody a sale without condition or
restriction constituted a contract of sale or return. If the purchaser desired
to incorporate a stipulation securing to him the right of return, he should
have done so at the time the contract was made. On the other hand, the
buyer cannot accept part and reject the rest of the goods since this falls
outside the normal intent of the parties in the "on approval" situation.
Onapal vs. CA:
(Commodity Futures Contract)
Futures - If a contract which purports to be for the delivery of
goods, securities or shares of stock is entered into with the intention that
the difference between the price stipulated and the exchange or market
price at the time of the pretended delivery shall be paid by the loser to the
winner, the transaction is null and void. The loser may recover what he has
paid. (Article 2018, NCC)
The parties never intended to make or accept delivery of any
particular commodity but the parties merely made a speculation on the
rise or fall in the market of the contract price of the commodity, subject of
the transaction, on the pretended date of delivery so that if the forecast
was correct, one party would make a profit, but if the forecast was wrong,
one party would lose money. It is illegal as it is against public policy.
The written trading contract in question is not illegal but the
transaction between the petitioner and the private respondent purportedly
to implement the contract is in the nature of a gambling agreement.
Applicability of Art. 1462: does not apply. The said article requires
that there be delivery of goods, actual or constructive, to be applicable.
Delivery: By delivery is meant the act by which the res or subject is
placed in the actual or constructive possession or control of another. It may
be actual as when physical possession is given to the vendee or his
representative; or constructive which takes place without actual transfer of
goods, but includes symbolic delivery or substituted delivery.
Perfecto Dy vs. CA:
(Tractor)
Chattel Mortgage Does Not Divest Ownership Upon the Mortgagor:
The mortgagor who gave the property as security under a chattel
mortgage did not part with the ownership over the same. He had the right
to sell it although he was under the obligation to secure the written
consent of the mortgagee or he lays himself open to criminal prosecution.
And even if no consent was obtained from the mortgagee, the validity of
the sale would still not be affected.

Consummation of the Contract of Sale: Article 1496 of the Civil

Code states that the ownership of the thing sold is acquired by the vendee
from the moment it is delivered to him in any of the ways specified in
Articles 1497 to 1501 or in any other manner signing an agreement that
the possession is transferred from the vendor to the vendee. There was
constructive delivery upon execution of the public instrument. The subject
tractor was no longer owned by Wilfredo Dy when it was levied upon by the
sheriff.
Fraudulent Sale: Relationship is not a badge of fraud. Fraud cannot
be presumed; it must be established by clear and convincing evidence.
Sps. Serrano and Herrera vs. Caguiat:
(Receipt of Partial Payment)
Stages of a Contract of Sale: (1)negotiation, covering the period
from the time the prospective contracting parties indicate interest in the
contract to the time the contract is perfected; (2) perfection, which takes
place upon the concurrence of the essential elements of the sale, which is
the meeting of the minds of the parties as to the object of the contract and
upon the price; and (3) consummation, which begins when the parties
perform their respective undertakings under the contract of sale,
culminating in the extinguishment thereof.
Contract to Sell: A contract to sell is akin to a conditional sale
where the efficacy or obligatory force of the vendor's obligation to transfer
title is subordinated to the happening of a future and uncertain event, so
that if the suspensive condition does not take place, the parties would
stand as if the conditional obligation had never existed. The suspensive
condition is commonly full payment of the purchase price.
Contract of Sale vs. Contract to Sell: In a contract of sale, title
passes to the buyer upon delivery of the thing sold. In a contract to sell,
ownership is reserved in the seller and is not to pass until the full payment,
of the purchase price is made. In the first case, non-payment of the price is
a negative resolutory condition; in the second case, full payment is a
positive suspensive condition. In the first case, the vendor has lost and
cannot recover the ownership of the land sold until and unless the contract
of sale is itself resolved and set aside. In the second case, however, the
title remains in the vendor if the vendee does not comply with the
condition precedent of making payment at the time specified in the
contract. In other words, in a contract to sell, ownership is retained by the
seller and is not to pass to the buyer until full payment of the price.
Indications of Contract to Sell: 1) Ownership was retained by
petitioners; 2) Agreement was not embodied in a Deed of Sale; and 3)
Petitioners retained possession.

Earnest Money as Part of the Purchase Price: If earnest money was

given in a contract to sell, it is not to be considered as part of the purchase
price if the sale was not consummated by the full payment of the purchase
price.
Deheza-Inamarga vs. Alano:
(Blank Deed of Sale)
Necessity of Presenting a Handwriting Expert: These are not
necessary. Their findings are not conclusive upon the courts. The document
can be examined by the judge and exercise independent judgment on the
issue.
Equitable Mortgage: one which, although lacking in some formality,
or form, or words, or other requisites demanded by a statute, nevertheless
reveals the intention of the parties to charge real property as security for a
debt, and contains nothing impossible or contrary to law. Instances of
equitable mortgage enumerated in Article 1602.
Prescription of Sale Based on a Void Deed of Sale: The action does
not prescribe.
Municipality of Victorias vs. CA
(Cemetery Land)
Delivery: The thing sold shall be understood as delivered, when it
is placed in the control and possession of the vendee. Where there is no
express provision that title shall not pass until payment of the price, and
the thing sold has been delivered, title passes from the moment the thing
sold is placed in the possession and control of the buyer.
When the sale is made through a public instrument, the execution
thereof shall be equivalent to the delivery of the thing which is the object
of the contract, if from the deed, the contrary does not appear or cannot
be clearly inferred. (Civil Code Art. 1498). The execution of the public
instrument operates as a formal or symbolic delivery of the property sold
and authorizes the buyer to use the document as proof of ownership.
Torrens System: When she inherited the land, she merely stepped
into the shoes of her grandmother and she cannot claim a better right than
her predecessor-in-interest. When she applied for registration of the
disputed land, she had no legal right to do so as she had no ownership of
the land since land registration is not a mode of acquiring ownership but
only of confirming ownership of the land. The Torrens System was not
established as a means for the acquisition of title to private land. It is
intended merely to confirm and register the title which one may already
have on the land.
Trustee of the Owner If the Title Has Been Obtained Through Fraud:
Art. 1456. If the property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust for

the benefit of the person from whom the property comes. The beneficiary
shall have the right to enforce the trust, notwithstanding the irrevocability
of the Torrens title and the trustee and his successors-in-interest are bound
to execute the deed of reconveyance.
Primary Structures vs. Sps. Valencia:
Legal Redemption: Whenever a piece of rural land not exceeding
one hectare is alienated, the law grants to the adjoining owners a right of
redemption except when the grantee or buyer does not own any other
rural land. The land to be redeemed and the adjacent land must both be
rural lands. The buyer must also be an owner of a rural land.
The right of legal pre-emption or redemption shall not be exercised
except within thirty days from notice in writing by the prospective vendor,
or by the vendor, as the case may be. The deed of sale shall not be
recorded in the Registry of Property unless the same is accompanied by an
affidavit of the vendor that he has given notice thereof to all possible
redemptioners.
The written notice of sale is mandatory. Notwithstanding actual
knowledge of a co-owner, the latter is still entitled to a written notice from
the selling co-owner in order to remove all uncertainties about the sale, its
terms and conditions, as well as its efficacy and status.
People vs. Ganguso:
(Buy-Bust Operation)
Perfection of Contract of Sale: When Vermug offered to buy
P500.00 worth of "S" and the appellant got the money without asking what
"S" meant, it was apparent that she already understood what "S" stood for.
There was, therefore, a meeting of minds upon a definite object and upon
the price. The appellant's acceptance of the payment was an indication
that she had given her consent to the contract of sale. It was a clear
evidence that the contract between her and Vermug was perfected and
was even partially fulfilled and executed.
Transfer of Ownership: The appellant did not, however, have in her
possession or disposition the object of the sale. Article 1459 of the Civil
Code provides in part that the vendor must have a right to transfer the
ownership of the subject sold at the time it is delivered. This means that
the seller must be the owner of the thing sold at the time of delivery. But,
he need not be the owner at the time of the perfection of the
contract. There is no doubt that the appellant had already a right to
dispose of the prohibited stuff at the time she delivered it to Vermug, for
ownership thereof was acquired by her from the moment it was delivered
to her by the man from the interior after her payment of the price therefor.
Two transactions were then consummated, viz., that between the appellant
and Vermug, with the appellant as the seller, and that between the
appellant and the man from the interior, with the former as the buyer.
The other interpretation is that the appellant was merely acting as
an agent of the supplier or seller of dangerous drugs.

San Andres vs. Rodriguez:

(Enlarged portion of a lot)
Subject of the Sale on Being Capable of Being Determined: Since
the lot subsequently sold to respondent is said to adjoin the "previously
paid lot" on three sides thereof, the subject lot is capable of being
determined without the need of any new contract. The fact that the exact
area of these adjoining residential lots is subject to the result of a survey
does not detract from the fact that they are determinate or determinable.
Conditional or Absolute Sale: Although denominated a "Deed of
Conditional Sale," a sale is still absolute where the contract is devoid of
any proviso that title is reserved or the right to unilaterally rescind is
stipulated. Ownership will then be transferred to the buyer upon actual or
constructive delivery of the property sold. Where the condition is imposed
upon the perfection of the contract itself, the failure of the condition would
prevent such perfection. If the condition is imposed on the obligation of a
party which is not fulfilled, the other party may either waive the condition
or refuse to proceed with the sale.
DOro vs. Calaunan
(Squatters)
Nature of Possession of Squatters: Squatters are trespassers who,
under the law, enjoy no possessory rights. This is notwithstanding the
length of time that they may have physically occupied the lots; they are
deemed to have entered the same in bad faith. They are merely tolerated
and cannot affect the owners possession. The squatter is necessarily
bound to an implied promise that he will vacate upon demand.
Laches: Laches has been defined as the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier. It is
negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it either has
abandoned or declined to assert it.
The elements of laches are: (1) conduct on the part of the
defendant, or one under whom he claims, giving rise to the situation that
led to the complaint and for which the complaint seeks a remedy; (2) delay
in asserting the complainants rights, having had knowledge or notice of
the defendants conduct and having been afforded an opportunity to
institute a suit; (3) lack of knowledge or notice on the part of the defendant
that the complainant would assert the right on which he bases his suit; and
(4) injury or prejudice to the defendant in the event relief is accorded to
the complainant, or the suit is not held barred.
Principle of Caveat Emptor: This rule simply requires the purchaser
of real property to be aware of the alleged title of the vendor such that one
who buys without checking the vendors title takes all the risks and losses
consequent to such failure. While a buyer of registered land need not go

beyond its certificate of title, the buyer is obliged to investigate or inspect

the property sold to him when there are circumstances that would put him
on guard, such as the presence of occupants other than the registered
owner. The buyer cannot claim ignorance of any defect in the vendors title
if, in neglecting to verify the nature of the occupants possession, the latter
should turn out to have a better right to the property than the registered
owner.
Indefeasibility of Torrens Title: It should be emphasized that a
certificate of title cannot be defeated by adverse, open and notorious
possession by third persons. The title, once registered, is notice to the
whole world and no one can plead ignorance of the registration.
Tating vs. Marcella
(Affidavit is Hearsay Evidence)
Simulated Contracts: A contract is simulated if the parties do not
intend to be bound at all (absolutely simulated) or if the parties conceal
their true agreement (relatively simulated). The primary consideration in
determining the true nature of a contract is the intention of the
parties. Such intention is determined from the express terms of their
agreement as well as from their contemporaneous and subsequent acts.
The most protuberant index of simulation is the complete absence,
on the part of the vendee, of any attempt in any manner to assert his
rights of ownership over the disputed property
The legal presumption is in favor of the validity of contracts and
the party who impugns its regularity has the burden of proving its
simulation.
Tax Declarations are Not Evidence of Ownership, But At Least Proof
of Ownership: While tax receipts and declarations and receipts and
declarations of ownership for taxation purposes are not, in themselves,
incontrovertible evidence of ownership, they constitute at least proof that
the holder has a claim of title over the property. 31 The voluntary declaration
of a piece of property for taxation purposes manifests not only ones
sincere and honest desire to obtain title to the property and announces his
adverse claim against the State and all other interested parties, but also
the intention to contribute needed revenues to the Government. Such an
act strengthens ones bona fide claim of acquisition of ownership.
The Concept of Ownership and Possession: It is well-established
that ownership and possession are two entirely different legal concepts.
Just as possession is not a definite proof of ownership, neither is nonpossession inconsistent with ownership. The first paragraph of Article 1498
of the Civil Code states that when the sale is made through a public
instrument, the execution thereof shall be equivalent to the delivery of the
thing which is the object of the contract, if from the deed the contrary does
not appear or cannot clearly be inferred.
Vidad vs. Tayamen

(Memorandum of Agreement)
Contract OF Sale vs. Contract TO Sell: The following are the
differences between a Contract OF Sale and a Contract TO Sell: (a) In a
Contract OF Sale, the non-payment of the price is a resolutory condition
which extinguishes the transaction that, for a time, existed and discharges
the obligations created thereunder; in a Contract TO Sell, full payment of
the purchase price is a positive suspensive condition, failure of which is not
a breach but an event that prevents the obligation of the vendor to convey
title from becoming effective; (b) In the first, title over the property
generally passes to the buyer upon delivery; in the second, ownership is
retained by the seller, regardless of delivery and is not to pass until full
payment of the price; and (c) In the first, after delivery has been made, the
seller has lost ownership and cannot recover it unless the contract is
resolved or rescinded; in the second, since the seller retains ownership,
despite delivery, he is enforcing and not rescinding the contract if he seeks
to oust the buyer for failure to pay.
Panganiban vs. Oamil
(21st or Canda St.)
Rights of the Vendee in a Sale of a Property Owned in Common: As
Partenios successor-in-interest to the property, respondent could not
acquire any superior right in the property than what Partenio is entitled to
or could transfer or alienate after partition. In a contract of sale of coowned property, what the vendee obtains by virtue of such a sale are the
same rights as the vendor had as co-owner, and the vendee merely steps
into the shoes of the vendor as co-owner.
Lumbres vs. Tablada
(Double Sale/Pag-Ibig)
Double Sale: Art. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry of
Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession, and, in the absence
thereof, to the person who presents the oldest title, provided there is good
faith.
Petitioners are in bad faith. They were indisputably and reasonably
informed that the subject lot was previously sold to the respondents. In
fact, they were already aware that the respondents had constructed a
house thereon and are presently in possession of the same.
Knowledge gained by the second buyer of the first sale defeats his
rights even if he is the first to register the second sale because such

knowledge taints his prior registration with bad faith. For the second buyer
to displace the first, he must show that he acted in good faith throughout
(i.e. in ignorance of the first sale and of the first buyer's rights) from the
time of acquisition until the title is transferred to him by registration.
The prevailing doctrine is that as between the buyer who is in
possession of a Torrens title but who has acquired it in bad faith and the
first buyer who failed to have his title recorded in the Registry of Property,
the first buyer must prevail.
Abilla vs. Gobonseng:
(Pacto de Retro or Equitable Mortgage)
Exception to 3 Paragraph of Article 1606: If it should appear that
the parties agreement was really one of sale transferring ownership to
the vendee, but accompanied by a reservation to the vendor of the right to
repurchase the property and there are no circumstances that may
reasonably be accepted as generating some honest doubt as to the
parties' intention, the proviso is inapplicable. . If the rule were otherwise, it
would be within the power of every vendor a retro to set at naught
a pacto de retro, or resurrect an expired right of repurchase, by simply
instituting an action to reform the contract known to him to be in truth a
sale with pacto de retro into an equitable mortgage. It would in effect
alter or modify the stipulation in the contract as to the definite and specific
limitation of the period for repurchase thereby not simply increasing but in
reality resuscitating the expired right to repurchase
To be able to avail of the 30-day period provided in Article 1606, it
must appear that there was a belief on his part, founded on facts attendant
upon the execution of the sale with pacto de retro, honestly and sincerely
entertained, that the agreement was in reality a mortgage, one not
intended to affect the title to the property ostensibly sold, but merely to
give it as security for a loan or other obligation.
Agan vs. Heirs of Sps. Nueva
(Petition for Relief)
rd

Application of Art. 1606, 3rd Paragraph: (Same as Abilla case) The

law presumes good faith and, in the absence of a contrary finding by the
RTC in its Decision, respondents are entitled to the right to redeem the
property pursuant to the third paragraph of Article 1606 of the New Civil
Code.
Article 1606 grants the vendor a retro thirty (30) days from the
time final judgment was rendered, not from the defendants receipt of the
judgment.
Boy vs. CA
(Kasunduan)
Constructive Delivery: Under Article 1477 of the Civil Code, the
ownership of the thing sold shall be transferred to the vendee upon the
actual or constructive delivery thereof. In addition, Article 1498 of the Civil
Code provides that when the sale is made through a public instrument, as

in this case, the execution thereof shall be equivalent to the delivery of the
thing which is the object of the contract, if from the deed the contrary does
not appear or cannot clearly be inferred.
Possession: A person who occupies the land of another at the
latters tolerance or permission, without any contract between them, is
bound by an implied promise that he will vacate the same upon demand,
failing which a summary action for ejectment is the proper remedy against
him.
Daroy vs. Abecia:
(Malpractice Case)
Application of Art. 1491 (Exception Property To Satisfy Execution
Judgment: The prohibition in Art. 1491 does not apply to the sale of a
parcel of land, acquired by a client to satisfy a judgment in his favor, to his
attorney as long as the property was not the subject of the litigation. The
prohibition with respect to attorneys in the case extends only to property
and rights which may be the object of any litigation in which they may take
part by virtue of their profession.
In Re Maquera
(Disbarred in Guam)
Application of Article 1492 Property Itself Was the Subject of
Litigation): Article 1492 in relation to Article 1491, paragraph 5 of the Civil
Code of the Philippines. Paragraph 5 of Article 1491 prohibits the lawyers
acquisition by assignment of the clients property which is the subject of
the litigation handled by the lawyer. Under Article 1492, the prohibition
extends to sales in legal redemption. This is founded on public policy
because, by virtue of his office, an attorney may easily take advantage of
the credulity and ignorance of his client and unduly enrich himself at the
expense of his client.
Integrated Packaging vs. CA
(Paper)
Article 1583: The order agreement gives rise to a reciprocal
obligations such that the obligation of one is dependent upon the obligation
of the other. Reciprocal obligations are to be performed simultaneously, so
that the performance of one is conditioned upon the simultaneous
fulfillment of the other.
"When there is a contract of sale of goods to be delivered by stated
installments, which are to be separately paid for, and the seller makes
defective deliveries in respect of one or more installments, or the buyer
neglects or refuses without just cause to take delivery of or pay for one or
more installments, it depends in each case on the terms of the contract
and the circumstances of the case, whether the breach of contract is so
material as to justify the injured party in refusing to proceed further and

suing for damages for breach of the entire contract, or whether the breach
is severable, giving rise to a claim for compensation but not to a right to
treat the whole contract as broken."
Relativity of Contracts: Contracts can only bind the parties who
entered into it, and it cannot favor or prejudice a third person, even if he is
aware of such contract and has acted with knowledge thereof.
Sps. Payongayong vs. CA
(Mendoza-MESALA)
Indefeasibility of Torrens Title: Every registered owner and every
subsequent purchaser for value in good faith holds the title to the property
free from all encumbrances except those noted in the certificate. Hence, a
purchaser is not required to explore further what the Torrens title on its
face indicates in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto.
Double Sale of An Immovable: There being double sale of an
immovable property, as the above-quoted provision instructs, ownership

shall be transferred (1) to the person acquiring it who in good faith first
recorded it in the Registry of Property; (2) in default thereof, to the person
who in good faith was first in possession; and (3) in default thereof, to the
person who presents the oldest title, provided there is good faith.
Simulation: Simulation occurs when an apparent contract is a
declaration of a fictitious will, deliberately made by agreement of the
parties, in order to produce, for the purpose of deception, the appearance
of a juridical act which does not exist or is different from that which was
really executed. Its requisites are: a) an outward declaration of will
different from the will of the parties; b) the false appearance must have
been intended by mutual agreement; and c) the purpose is to deceive third
persons.
The basic characteristic then of a simulated contract is that it is not
really desired or intended to produce legal effects or does not in any way
alter the juridical situation of the parties.