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Coronel v.

CA to sell the said property exclusively to the prospective buyer upon The agreement could not have been a contract to sell because the sellers
fulfillment of the condition agreed upon, that is, full payment of the herein made no express reservation of ownership or title to the subject
Facts: purchase price. parcel of land. Furthermore, the circumstance which prevented the
parties from entering into an absolute contract of sale pertained to the
The case arose from a complaint for specific performance filed by private A contract to sell may not even be considered as a conditional contract sellers themselves (the certificate of title was not in their names) and not
respondent Alcaraz against petitioners to consummate the sale of a of sale where the seller may likewise reserve title to the property subject the full payment of the purchase price. Under the established facts and
parcel of land in Quezon City. of the sale until the fulfillment of a suspensive condition, because in a circumstances of the case, the Court may safely presume that, had the
conditional contract of sale, the first element of consent is present, certificate of title been in the names of petitioners-sellers at that time,
although it is conditioned upon the happening of a contingent event there would have been no reason why an absolute contract of sale could
On January 19, 1985, petitioners executed a “Receipt of Down Payment”
which may or may not occur. If the suspensive condition is not fulfilled, not have been executed and consummated right there and then.
of P50,000 in favor of plaintiff Ramona Alcaraz, binding themselves to
transfer the ownership of the land in their name from their deceased the perfection of the contract of sale is completely abated. However, if
the suspensive condition is fulfilled, the contract of sale is thereby What is clearly established by the plain language of the subject document
father, afterwhich the balance of P1,190,000 shall be paid in full by
perfected, such that if there had already been previous delivery of the is that when the said "Receipt of Down Payment" was prepared and
Alcaraz. On February 6, 1985, the property was transferred to
property subject of the sale to the buyer, ownership thereto signed by petitioners Romeo A. Coronel, et al., the parties had agreed to
petitioners. On February 18, 1985, petitioners sold the property to
automatically transfers to the buyer by operation of law without any a conditional contract of sale, consummation of which is subject only to
Mabanag. For this reason, Concepcion, Ramona’s mother, filed an action
further act having to be performed by the seller. In a contract to sell, the successful transfer of the certificate of title from the name of
for specific performance.
upon the fulfillment of the suspensive condition which is the full petitioners' father, Constancio P. Coronel, to their names.
payment of the purchase price, ownership will not automatically transfer
Issue:
to the buyer although the property may have been previously delivered The provision on double sale presumes title or ownership to pass to the
to him. The prospective seller still has to convey title to the prospective first buyer, the exceptions being: (a) when the second buyer, in good
Whether the contract between petitioners and private respondent was
buyer by entering into a contract of absolute sale. faith, registers the sale ahead of the first buyer, and (b) should there be
that of a conditional sale or a mere contract to sell
no inscription by either of the two buyers, when the second buyer, in
It is essential to distinguish between a contract to sell and a conditional good faith, acquires possession of the property ahead of the first buyer.
Held: Unless, the second buyer satisfies these requirements, title or ownership
contract of sale specially in cases where the subject property is sold by
the owner not to the party the seller contracted with, but to a third will not transfer to him to the prejudice of the first buyer. In a case of
Sale, by its very nature, is a consensual contract because it is perfected person, as in the case at bench. In a contract to sell, there being no double sale, what finds relevance and materiality is not whether or not
by mere consent. The essential elements of a contract of sale are the previous sale of the property, a third person buying such property the second buyer was a buyer in good faith but whether or not said
following: a) Consent or meeting of the minds, that is, consent to transfer despite the fulfillment of the suspensive condition such as the full second buyer registers such second sale in good faith, that is, without
ownership in exchange for the price; b) Determinate subject matter; and payment of the purchase price, for instance, cannot be deemed a buyer knowledge of any defect in the title of the property sold. If a vendee in a
c) Price certain in money or its equivalent. in bad faith and the prospective buyer cannot seek the relief of double sale registers that sale after he has acquired knowledge that
reconveyance of the property. There is no double sale in such case. Title there was a previous sale of the same property to a third party or that
Under this definition, a Contract to Sell may not be considered as a to the property will transfer to the buyer after registration because there another person claims said property in a pervious sale, the registration
Contract of Sale because the first essential element is lacking. In a is no defect in the owner-seller's title per se, but the latter, of course, will constitute a registration in bad faith and will not confer upon him any
contract to sell, the prospective seller explicity reserves the transfer of may be used for damages by the intending buyer. right.
title to the prospective buyer, meaning, the prospective seller does not In a conditional contract of sale, however, upon the fulfillment of the
as yet agree or consent to transfer ownership of the property subject of suspensive condition, the sale becomes absolute and this will definitely
the contract to sell until the happening of an event, which for present affect the seller's title thereto. In fact, if there had been previous delivery Dizon vs CA
purposes we shall take as the full payment of the purchase price. What of the subject property, the seller's ownership or title to the property is FACTS:1. Respondent Overland Express Lines, Inc.entered into a contract of lease
the seller agrees or obliges himself to do is to fulfill his promise to sell the automatically transferred to the buyer such that, the seller will no longer with an optionto buy with the petitioners involving 1,755.80square meter parcel
subject property when the entire amount of the purchase price is have any title to transfer to any third person. Such second buyer of the of land situated in Diliman,Quezon City. The term of the lease was for
delivered to him. In other words the full payment of the purchase price property who may have had actual or constructive knowledge of such 1year. Respondent was granted an option topurchase for the amount of 3,000
partakes of a suspensive condition, the non-fulfillment of which prevents defect in the seller's title, or at least was charged with the obligation to per squaremeter.2. respondent failed to pay the increased rentaland petitioners
the obligation to sell from arising and thus, ownership is retained by the discover such defect, cannot be a registrant in good faith. Such second filed an action for ejectment.3. MTC ordered respondent to vacate
prospective seller without further remedies by the prospective buyer. A buyer cannot defeat the first buyer's title. In case a title is issued to the theleased premises and pay representing rentalsand or damages for
contract to sell may thus be defined as a bilateral contract whereby the second buyer, the first buyer may seek reconveyance of the property reasonable compensationfor the use and occupation of the premisesduring the
prospective seller, while expressly reserving the ownership of the subject subject of the sale. illegal detainer.4. Respondent filed for a petition praying forthe issuance of
property despite delivery thereof to the prospective buyer, binds himself
a restraining order enjoining theenforcement of the judgement and lack valid title to the property because the foreclosure sale, by virtue of
of its jurisdiction.5. RTC rendered to dismissed the case while CAuphold the which, the property had been awarded to CDB as highest bidder, is
jurisdiction in the ejectment case. Itwas also concluded that there was a likewise void since the mortgagor was not the owner of the property Spouses Buenaventura v. Court of Appeals
perfectedcontract of sale between the parties on theleased premises and the foreclosed. G.R. No. 126376. November 20, 2003
pursuant to the optionto buy agreement. respondent acquired therights
Petitioners do not have any legal interest over the properties subject of
of a vendee in contract of sale. A foreclosure sale, though essentially a "forced sale," is still a sale in
accordance with Art. 1458 of the Civil Code, under which the mortgagor the Deeds of Sale. As the appellate court stated, petitioners’ right to their
Issue:Whether or not there is a perfected contract ofsale between the parties. in default, the forced seller, becomes obliged to transfer the ownership parents’ properties is merely inchoate and vests only upon their parents’
of the thing sold to the highest bidder who, in turn, is obliged to pay death. While still living, the parents of petitioners are free to dispose of
Held:The contract of sale is perfected at the momentthere is a meeting of minds therefor the bid price in money or its equivalent. Being a sale, the rule their properties. In their overzealousness to safeguard their future
upon the thingwhich is the object of the contract and upon theprice. From that the seller must be the owner of the thing sold also applies in a legitime, petitioners forget that theoretically, the sale of the lots to their
that moment, parties reciprocallydemand performance. Thus, the elements of acontract foreclosure sale. This is the reason Art. 2085 of the Civil Code, in siblings does not affect the value of their parents’ estate. While the sale
are consent, object, and price inmoney or its equivalent. It bears stressing providing for the essential requisites of the contract of mortgage and of the lots reduced the estate, cash of equivalent value replaced the
thatthe absence of any these elements negates theexistence of a pledge, requires, among other things, that the mortgagor or pledgor be lots taken from the estate.
perfected contract of sale. Sale isa consensual contract who alleges it must the absolute owner of the thing pledged or mortgaged, in anticipation of
showits existence by competent proof.Respodent gave 300,000 to petitioners on a possible foreclosure sale should the mortgagor default in the payment Fule v. CA
theerroneous presumption that he said amountperfected a contract of sale pursuant to of the loan.
thecontract of lease with option to buy. There wasno valid consent by the Facts:
petitioners on thesupposed sale entered by Dizon, as petitionersagent. As provided There is, however, a situation where, despite the fact that the mortgagor
in New civil code, there wasno showing that petitioners consented to theact of Dizon nor is not the owner of the mortgaged property, his title being fraudulent, Gregorio Fule, a banker and a jeweller, offered to sell his parcel of land
authoried her to act on theirbehalf.respondent should have done wasascertain the mortgage contract and any foreclosure sale arising therefrom are to Dr. Cruz in exchange for P40,000 and a diamond earring owned by the
the extent of authority of Dizon.Respondent cannot seek relief on the given effect by reason of public policy. This is the doctrine of "the
latter. A deed of absolute sale was prepared by Atty. Belarmino, and on
supposedagency.Wherefore, petitioners are ordered to mortgagee in good faith" based on the rule that all persons dealing with
the same day Fule went to the bank with Dichoso and Mendoza, and Dr.
refund torespondent the amount of 300,000 which theyreceived through Dizon property covered by a Torrens Certificate of Title, as buyers or
mortgagees, are not required to go beyond what appears on the face of Cruz arrived shortly thereafter. Dr. Cruz got the earrings from her safety
the title. The public interest in upholding the indefeasibility of a deposit box and handed it to Fule who, when asked if those were alright,
Manila metal corp vs pnb certificate of title, as evidence of the lawful ownership of the land or of nodded and took the earrings. Two hours after, Fule complained that the
any encumbrance thereon, protects a buyer or mortgagee who, in good earrings were fake. He files a complaint to declare the sale null and void
 ART. 1482. Whenever earnest money is given in a contract of sale, it
faith, relied upon what appears on the face of the certificate of title. on the ground of fraud and deceit.
shall be considered as part of the price and as proof of the perfection
of the contract
This principle is cited by petitioners in claiming that, as a mortgagee Issue:
 The deposit of P725,000 was accepted by PNB on the condition that
bank, it is not required to make a detailed investigation of the history of
the purchase price is still subject to the approval of the PNB Board
the title of the property given as security before accepting a mortgage.
 Absent proof of the concurrence of all the essential elements of a Whether the sale should be nullified on the ground of fraud
contract of sale, the giving of earnest money cannot establish the
We are not convinced, however, that under the circumstances of this
existence of a perfected contract of sale. Held:
case, CDB can be considered a mortgagee in good faith. While petitioners
are not expected to conduct an exhaustive investigation on the history
Cavite Development Bank Vs. Lim of the mortgagor's title, they cannot be excused from the duty of A contract of sale is perfected at the moment there is a meeting of the
exercising the due diligence required of banking institutions. In Tomas v. minds upon the thing which is the object of the contract and upon the
Tomas, we noted that it is standard practice for banks, before approving price. Being consensual, a contract of sale has the force of law between
Issue: WON there was a valid sale. a loan, to send representatives to the premises of the land offered as the contracting parties and they are expected to abide in good faith by
collateral and to investigate who are real owners thereof, noting that their respective contractual commitments. It is evident from the facts of
Held: NO. banks are expected to exercise more care and prudence than private the case that there was a meeting of the minds between petitioner and
individuals in their dealings, even those involving registered lands, for Dr. Cruz. As such, they are bound by the contract unless there are
In this case, the sale by CDB to Lim of the property mortgaged in 1983 by their business is affected with public interest. reasons or circumstances that warrant its nullification.
Rodolfo Guansing must, therefore, be deemed a nullity for CDB did not
have a valid title to the said property. To be sure, CDB never acquired a
Contracts that are voidable or annullable, even though there may have attachment thereon on July 27, 1998. But, even if consensual, not all Even the alleged lack of actual and personal knowledge of the
been no damage to the contracting parties are: (1) those where one of contracts of sale became automatically and immediately existence of the levy on attachment over the subject property by the
the parties is incapable of giving consent to a contract; and (2) those effective.[15] In Ramos vs. Court of Appeals[16] we held: Garcias cannot be sustained by this Court on the ground that one who
where the consent is vitiated by mistake, violence, intimidation, undue deals with registered land is charged with notice of the burdens on the
influence or fraud. The records, however, are bare of any evidence In sales with assumption of mortgage, the assumption of mortgage is a property which are duly noted on the certificate of title. On this specific
manifesting that private respondents employed such insidious words or condition precedent to the sellers consent and therefore, without point, we are concerned not with actual or personal knowledge but
machinations to entice petitioner into entering the contract of barter. It approval of the mortgagee, the sale is not perfected. constructive notice through registration in the Registry of Deeds.
was in fact petitioner who resorted to machinations to convince Dr. Cruz Otherwise stated, what we should follow is the annotation (or lack
to exchange her jewelry for the Tanay property. Apart therefrom, notwithstanding the approval of the sale by mortgagee thereof) on the original title on file with the Registry of Deeds, not on the
FEBTC (BPI), there was yet another step the Garcias had to take and it duplicate title in the hands of the private parties.
Furthermore, petitioner was afforded the reasonable opportunity was the registration of the sale from the Ngs to them. Insofar as third When a conveyance has been properl
required in Article 1584 of the Civil Code within which to examine the persons are concerned, what validly transfers or conveys a person's
jewelry as he in fact accepted them when asked by Dr. Cruz if he was interest in real property is the registration of the deed.[17] Gaite v. Fonacier
satisfied with the same. By taking the jewelry outside the bank,
Thus, when the Garcias bought the property on June 29, 1998, it
petitioner executed an act which was more consistent with his exercise Facts:
was, at that point, no more than a private transaction between them and
of ownership over it. This gains credence when it is borne in mind that the Ngs. It needed to be registered before it could become binding on all
he himself had earlier delivered the Tanay property to Dr. Cruz by affixing third parties, including BSC. It turned out that the Garcias registered it Gaite was appointed by Fonacier as attorney-in-fact to contract any party
his signature to the contract of sale. That after two hours he later claimed only on August 12, 1998, after FEBTC (now BPI) approved the sale. It was for the exploration and development of mining claims. Gaite executed a
that the jewelry was not the one he intended in exchange for his Tanay too late by then because, on July 27, 1998, the levy in favor of BSC, deed of assignment in favor of a single proprietorship owned by him. For
property, could not sever the juridical tie that now bound him and Dr. pursuant to the preliminary attachment ordered by the Manila RTC, had some reasons, Fonacier revoked the agency, which was acceded to by
Cruz. The nature and value of the thing he had taken preclude its return already been annotated on the original title on file with the Registry of Gaite, subject to certain conditions, one of which being the transfer of
after that supervening period within which anything could have Deeds. This registration of levy (or notice, in laymans language) now ores extracted from the mineral claims for P75,000, of which P10,000 has
happened, not excluding the alteration of the jewelry or its being became binding on the whole world, including the Garcias. The rights already been paid upon signing of the agreement and the balance to be
switched with an inferior kind. which had already accrued in favor of BSC by virtue of the levy on paid from the first letter of credit for the first local sale of the iron ores.
attachment over the property were never adversely affected by the To secure payment, Fonacier delivered a surety agreement with Larap
unregistered transfer from the spouses Ng to the Garcias. Mines and some of its stockholders, and another one with Far Eastern
Ownership over the parcel of land and the pair of emerald-cut diamond
earrings had been transferred to Dr. Cruz and petitioner, respectively, We sympathize with the Garcias but, had they only bothered to Insurance. When the second surety agreement expired with no sale
upon the actual and constructive delivery thereof. Said contract of sale check first with the Register of Deeds of Quezon City before buying the being made on the ores, Gaite demanded the P65,000 balance.
being absolute in nature, title passed to the vendee upon delivery of the property as a prudent buyer would have done they would have seen the Defendants contended that the payment was subject to the condition
thing sold since there was no stipulation in the contract that title to the warning about BSCs superior rights over it. This alone should have been that the ores will be sold.
property sold has been reserved in the seller until full payment of the sufficient reason for them to back out of the deal.
price or that the vendor has the right to unilaterally resolve the contract Issue:
the moment the buyer fails to pay within a fixed period. It is doctrinal that a levy on attachment, duly registered, has
While it is true that the amount of P40,000.00 forming part of the preference over a prior unregistered sale and, even if the prior
unregistered sale is subsequently registered before the sale on execution (1) Whether the sale is conditional or one with a period
consideration was still payable to petitioner, its nonpayment by Dr. Cruz
but after the levy is made, the validity of the execution sale should be
is not a sufficient cause to invalidate the contract or bar the transfer of
upheld because it retroacts to the date of levy. The priority enjoyed by (2) Whether there were insufficient tons of ores
ownership and possession of the things exchanged considering the fact
the levy on attachment extends, with full force and effect, to the buyer
that their contract is silent as to when it becomes due and demandable. at the auction sale conducted by virtue of such levy.[18] The sale between
Held:
BIAN STEEL CORPORATION, petitioner, vs. HON. COURT OF APPEALS, the spouses Ng and the Garcias was undoubtedly a valid transaction
between them. However, in view of the prior levy on attachment on the
MYLENE C. GARCIA and MYLA C. GARCIA, respondents. (1) The shipment or local sale of the iron ore is not a condition precedent
same property, the Garcias took the property subject to the
attachment. The Garcias, in buying registered land, stood exactly in the (or suspensive) to the payment of the balance of P65,000.00, but was
The Garcias claim they acquired the subject property by means of a
deed of sale with assumption of mortgage dated June 29, 1998, meaning, shoes of their vendors, the Ngs, and their title ipso facto became subject only a suspensive period or term. What characterizes a conditional
they purchased the property ahead of the inscription of the levy on to the incidents or results of the pending litigation[19] between the Ngs obligation is the fact that its efficacy or obligatory force (as distinguished
and BSC. from its demandability) is subordinated to the happening of a future and
uncertain event; so that if the suspensive condition does not take place, G.R. No. 149750 June 16, 2003
the parties would stand as if the conditional obligation had never existed. HELD:
FACTS:
A contract of sale is normally commutative and onerous: not only does Spouses De Leon are the owners of a parcel of land situated in the First Issue:
each one of the parties assume a correlative obligation (the seller to Municipality of San Manuel, Pangasinan with an area of Four Thousand NO. It is during the delivery that the law requires the seller to have the
Two Hundred Twelve square meters more or less. Respondent Hermoso right to transfer ownership of the thing sold. In general, a perfected
deliver and transfer ownership of the thing sold and the buyer to pay the
De Leon inherited the said lot from his father Marcelino De Leon by virtue contract of sale cannot be challenged on the ground of the seller’s non-
price),but each party anticipates performance by the other from the very
of a Deed of Extra-Judicial Partition. Said lot is covered by Original ownership of the thing sold at the time of the perfection of the contract.
start. While in a sale the obligation of one party can be lawfully Certificate of Title No. 22134 of the Land Records of Pangasinan.
subordinated to an uncertain event, so that the other understands that Further, even after the contract of sale has been perfected between the
he assumes the risk of receiving nothing for what he gives (as in the case parties, its consummation by delivery is yet another matter. It is through
Sometime 1960s, Spouses De Leon engaged the services of the late Atty.
of a sale of hopes or expectations,emptio spei), it is not in the usual Florencio Juan to take care of the documents of their properties. They tradition or delivery that the buyer acquires the real right of ownership
course of business to do so; hence, the contingent character of the over the thing sold.
were asked to sign voluminous documents by the latter. After the death
obligation must clearly appear. Nothing is found in the record to of Atty. Juan, some documents surfaced and most revealed that their Undisputed is the fact that at the time of the sale, Rodolfo De Leon was
evidence that Gaite desired or assumed to run the risk of losing his right properties had been conveyed by sale or quitclaim to Hermoso’s not the owner of the land he delivered to petitioner. Thus, the
over the ore without getting paid for it, or that Fonacier understood that brothers and sisters, to Atty. Juan and his sisters, when in truth and in consummation of the contract and the consequent transfer of ownership
Gaite assumed any such risk. This is proved by the fact that Gaite insisted fact, no such conveyances were ever intended by them. Furthermore, would depend on whether he subsequently acquired ownership of the
on a bond a to guarantee payment of the P65,000.00, an not only upon respondent found out that his signature in the Deed of Extra-judicial land in accordance with Article 1434 of the Civil Code. Therefore, we
Partition with Quitclaim made in favor of Rodolfo de Leon was forged. need to resolve the issue of the authenticity and the due execution of
a bond by Fonacier, the Larap Mines & Smelting Co., and the company's
They discovered that the land in question was sold by Rodolfo de Leon the Extrajudicial Partition and Quitclaim in his favor.
stockholders, but also on one by a surety company; and the fact that
to Aurora Alcantara
appellants did put up such bonds indicates that they admitted the Acap v. CA
definite existence of their obligation to pay the balance of P65,000.00. Spouses De Leon demanded the annulment of the document and re-
conveyance but defendants refused. Petitioner, Aurora Alcantara-Daus Facts:
The appellant have forfeited the right court below that the appellants averred that she bought the land in question in good faith and for value
have forfeited the right to compel Gaite to wait for the sale of the ore on December 1975 and that she has been in continuous, public, peaceful, Felixberto Oruma sold his inherited land to Cosme Pido, which land is
before receiving payment of the balance of P65,000.00, because of their open possession over the same and has been appropriating the produce rented by petitioner Teodoro Acap. When Cosme died intestate, his heirs
failure to renew the bond of the Far Eastern Surety Company or else thereof without objection from anyone. executed a “Declaration of Heirship and Waiver of Rights” in favor of
replace it with an equivalent guarantee. The expiration of the bonding
private respondent Edy delos Reyes. Respondent informed petitioner of
company's undertaking on December 8, 1955 substantially reduced the The RTC of Urdaneta, Pangasinan rendered its Decision in favor of herein
his claim over the land, and petitioner paid the rental to him in 1982.
security of the vendor's rights as creditor for the unpaid P65,000.00, a petitioner. It ruled that respondents’ claim was barred by laches,
security that Gaite considered essential and upon which he had insisted However in subsequent years, petitioner refused to pay the rental, which
because more than 18 years had passed since the land was sold. It
when he executed the deed of sale of the ore to Fonacier. further ruled that since it was a notarial document, the Deed of prompted respondent to file a complaint for the recovery of possession
Extrajudicial Partition in favor of Rodolfo de Leon was presumptively and damages. Petitioner averred that he continues to recognize Pido as
(2) The sale between the parties is a sale of a specific mass or iron ore authentic. the owner of the land, and that he will pay the accumulated rentals to
because no provision was made in their contract for the measuring or Pido’s widow upon her return from abroad. The lower court ruled in
weighing of the ore sold in order to complete or perfect the sale, nor was ISSUES: favor of private respondent.
the price of P75,000,00 agreed upon by the parties based upon any such
measurement.(see Art. 1480, second par., New Civil Code). The subject Whether or not the Deed of Absolute executed by Rodolfo De Leon over Issues:
the land in question in favor of petitioner was perfected and binding
matter of the sale is, therefore, a determinate object, the mass, and not
upon the parties therein? (1) Whether the “Declaration of Heirship and Waiver of Rights” is a
the actual number of units or tons contained therein, so that all that was
required of the seller Gaite was to deliver in good faith to his buyer all of recognized mode of acquiring ownership by private respondent
Whether or not the evidentiary weight of the Deed of Extrajudicial
the ore found in the mass, notwithstanding that the quantity delivered is Partition with Quitclaim, executed by respondent Hermoso de Leon,
less than the amount estimated by them. Perlita de Leon and Carlota de Leon in favor of Rodolfo de Leon was (2) Whether the said document can be considered a deed of sale in favor
overcome by more than a preponderance of evidence of respondents? of private respondent
ALCANTARA-DAUS v. SPOUSES DE LEON
Ker and Co., LTD vs Lingad Allegedly, AgatonaGuevarra (“Guevarra”) inherited a property from in favor of the conjugal partnership. There was no evidence presented to
Justina Navarro, which is now under possession of the heirs of Guevarra. establish that Navarro acquired the Property during her marriage.
GR No. L-20871 April 30, 1971 Guevarra had six children, one of them is Vicente Lopez, the father of
petitioner Milagros Lopez Manongsong (“Manongsong”). The VDA. DE JAYME VS. CA
respondents, the Jumaquio sisters and Leoncia Lopez claimed that the 390 SCRA 380
property was actually sold to them by Justina Navarro prior to her death. 2002 October 4
The respondents presented deed of sale dated October 11, 1957.
Facts:
Milagros and CarlitoManongsong (“petitioners”) filed a Complaint on FACTS: On January 8, 1973, the spouses Graciano and Mamerta Jayme
June 19, 1992 praying for the partition and award to them of an area entered into a Contract of Lease with George Neri, president of Airland
CIR assessed the sum of P20,272.33 as the commercial broker’s
equivalent to one-fifth (1/5), by right of representation. The RTC ruled Motors Corporation (now Cebu Asiancars Inc.), covering one-half of Lot
percentage tax, surcharge, and compromise penalty against Ker & Co.
that the conveyance made by Justina Navarro is subject to nullity 2700 owned and registered to the former. The lease was for twenty (20)
Ker and Co. requested for the cancellation of the assessment and filed a because the property conveyed had a conjugal character and years. The terms and conditions of the lease contract stipulated that
petition for review with the Court of Tax Appeals. The CTA ruled that Ker
that AgatonaGuevarra as her compulsory heir should have the legal right Cebu Asiancars Inc. may use the leased premises as a collateral to secure
and Co is liable as a commercial broker. Ker has a contract with US
to participate with the distribution of the estate under question to payment of a loan which Asiancars may obtain from any bank, provided
rubber. Ker is the distributor of the said company. Ker was precluded
the exclusion of others. The Deed of Sale did not at all provide for the that the proceeds of the loan shall be used solely for the construction of
from disposing the products elsewhere unless there has been a written
reserved legitime or the heirs, and, therefore it has no force and effect a building which, upon the termination of the lease or the voluntary
consent from the company. The prices, discounts, terms of payment,
against AgatonaGuevarra and should be declared a nullity ab initio. surrender of the leased premises before the expiration of the contract,
terms of delivery and other conditions of sale were subject to change in
shall automatically become the property of the Jayme spouses (the
the discretion of the Company.
ISSUE: lessors).
Issue:
Whether or not the rights of the compulsory heirs were impaired by the In October 1977, Asiancars obtained a loan of P6,000,000 from the
alleged sale of the property by Justina. Metropolitan Bank and Trust Company. The entire Lot 2700 was offered
Whether the relationship of Ker and Co and US rubber was that of a as one of several properties given as collateral for the loan. As
vendor- vendee or principal-broker mortgagors, the spouses signed a Deed of Real Estate Mortgage dated
RULING:
November 21, 1977 in favor of MBTC. It stated that the deed was to
secure the payment of a loan obtained by Asiancars from the bank.
No. The Kasulatan, being a document acknowledged before a notary
Meeting financial difficulties and incurring an outstanding balance on the
public, is a public document and prima facie evidence of its authenticity
Ruling: loan, Asiancars conveyed ownership of the building on the leased
and due execution. There is no basis for the trial court’s declaration that
premises to MBTC, by way of "dacion en pago." The building was valued
the sale embodied in the Kasulatan deprived the compulsory heirs of
The relationship of Ker and Co and US rubber was that of a principal- at P980,000 and the amount was applied as partial payment for the loan.
Guevarra of their legitimes. As opposed to a disposition inter vivos by
broker/ agency. Ker and Co is only an agent of the US rubber because it There still remained a balance of P2,942,449.66, which Asiancars failed
lucrative or gratuitous title, a valid sale for valuable consideration does
can dispose of the products of the Company only to certain persons or to pay. Eventually, MBTC extrajudicially foreclosed the mortgage.
not diminish the estate of the seller. When the disposition is for valuable
entities and within stipulated limits, unless excepted by the contract or consideration, there is no diminution of the estate but merely a
by the Rubber Company, it merely receives, accepts and/or holds upon A public auction was held on February 4, 1981. MBTC was the highest
substitution of values, that is, the property sold is replaced by the
consignment the products, which remain properties of the latter bidder for P1,067,344.35. A certificate of sale was issued and was
equivalent monetary consideration. The Property was sold in 1957 for
company, every effort shall be made by petitioner to promote in every registered with the Register of Deeds on February 23, 1981. Meanwhile,
P250.00.
way the sale of the products and that sales made by petitioner are Graciano Jayme died, survived by his widow Mamerta and their children.
subject to approval by the company. Since the company retained As a result of the foreclosure, Graciano’s heirs filed a civil complaint, in
The trial court’s conclusion that the Property was conjugal, hence the
ownership of the goods, even as it delivered possession unto the dealer January of 1982, for Annulment of Contract with Damages with Prayer
sale is void ab initio was not based on evidence, but rather on a
for resale to customers, the price and terms of which were subject to the for Issuance of Preliminary Injunction, against respondent Asiancars, its
misapprehension of Article 160 of the Civil Code, which provides: “All
company’s control, the relationship between the company and the officers and incorporators and MBTC. Later, in 1999, Mamerta Jayme
property of the marriage is presumed to belong
dealer is one of agency.Milagros Manongsong v. FelomenaJumaquio also passed away.
to the conjugal partnership; unless it be proved that it pertains
Estimo
exclusively to the husband or to the wife.” The presumption under Article
G. R. No. 136773. June 25, 2003 The trial court ruled that the REM is valid and binding upon the Jaymes.
160 of the Civil Code applies only when there is proof that the property
The CA affirmed with modifications. Both the trial and appellate courts
was acquired during the marriage. Proof of acquisition during the
FACTS: found that no fraud attended the execution of the deed of mortgage. The
marriage is an essential condition for the operation of the presumption
Motion for Reconsideration was denied.
Lo, doing business under the name San’s Enterprises, ordered scaffolding responsible for the existence and legality of the credit at the time of the
ISSUE: Whether or not the dacion en pago by Asiancars in favor of MBTC equipments from KJS worth P540,425.80. Lo paid a downpayment of sale, unless it should have been sold as doubtful; but not for the solvency
is valid and binding despite the stipulation in the lease contract that P150,000 and the balance was to be paid in 10 monthly installments. of the debtor, unless it has been so expressly stipulated or unless the
ownership of the building will vest on the Jaymes at the termination of insolvency was prior to the sale and of common knowledge.
the lease. KJS delivered the scaffoldings to Lo, who paid the first two installments.
However, his business encountered financial difficulties and he was Lo, as assignor, is bound to warrant the existence and legality of the
RULING: YES. The alienation of the building by Asiancars in favor of MBTC unable to settle his obligation despite oral and written demands. credit at the time of the sale or assignment. When Jomero claimed that
for the partial satisfaction of its indebtedness is valid. it was no longer indebted to Lo since the latter also had an unpaid
Lo and KJS executed a Deed of Assignment, whereby Lo assigned to KJS
obligation to it, it essentially meant that its obligation to Lo has been
The ownership of the building had been effectively in the name of the his receivables in the amount of P335,462.14 from Jomero Realty
extinguished by compensation. As a result, KJS alleged the non-existence
lessee-mortgagor (Asiancars), though with the provision that said Corporation. The agreement also stipulated: “The ASSIGNOR further
of the credit and asserted its claim to Lo’s warranty under the
ownership be transferred to the Jaymes upon termination of the lease or agrees and stipulates as aforesaid that the said ASSIGNOR, his heirs,
assignment. Lo was therefore required to make good its warranty and
the voluntary surrender of the premises. The lease was constituted on executors, administrators, or assigns, shall and will at times hereafter, at
pay the obligation.
January 8, 1973 and was to expire 20 years thereafter, or on January 8, the request of said ASSIGNEE, its successors or assigns, at his cost and
1993. The alienation via dacion en pago was made by Asiancars to MBTC expense, execute and do all such further acts and deeds as shall be Furthermore, Lo breached his obligation under the Deed of Assignment
on December 18, 1980, during the subsistence of the lease. At this point, reasonably necessary to effectually enable said ASSIGNEE to recover as he did not “execute and do all such further acts and deeds as shall be
the mortgagor, Asiancars, could validly exercise rights of ownership,
whatever collectibles said ASSIGNOR has in accordance with the true reasonably necessary to effectually enable said ASSIGNEE to recover
including the right to alienate it, as it did to MBTC.
intent and meaning of these presents.” whatever collectibles said ASSIGNOR has in accordance with the true
intent and meaning of these presents.” By warranting the existence of
Dacion en pago is the delivery and transmission of ownership of a thing When KJS tried to collect the said credit from Jomero, it refused to honor
by the debtor to the creditor as an accepted equivalent of the the credit, Lo should have ensured its performance in case it is found to
the Deed of Assignment because it claimed that Lo was also indebted to
performance of the obligation. It is a special mode of payment where the be inexistent. He should be held liable to pay to KJS the amount of his
it. KJS sent a letter to Lo demanding payment but he refused claiming
debtor offers another thing to the creditor who accepts it as equivalent indebtedness
that his obligation had been extinguished when they executed the Deed
of payment of an outstanding debt. The undertaking really partakes in
of Assignment. Inchausti vs Cromwell
one sense of the nature of sale, that is the creditor is really buying the
20 Phil. 345 October 16, 1911
thing or property of the debtor, payment for which is to be charged KJS filed an action for recovery of a sum of money against Lo with the
against RTC, which dismissed the complaint on the ground that the assignment Facts:
of credit extinguished the obligation. However, the CA held that the Deed Inchausti is engaged in the business of buying and selling wholesale
the debtor’s debt. As such, the essential elements of a contract of sale,
of Assignment did not extinguish the obligation of Lo. hemp on commission. It is customary to sell hemp in bales which are
namely, consent, object certain, and cause or consideration must be
made by compressing the loose fiber by means of presses, covering two
present. In its modern concept, what actually takes place in dacion en Issue: W/N the Deed of Assignment extinguished Lo’s obligation. sides of the bale with matting, and fastening it by means of strips of
pago is an objective novation of the obligation where the thing offered
rattan; that the operation of bailing hemp is designated among
as an accepted equivalent of the performance of an obligation is Held:
merchants by the word “prensaje.” In all sales of hemp by Inchausti, the
considered as the object of the contract of sale, while the debt is
NO, he failed to comply with his warranty. In dacion en pago as a special price is quoted to the buyer at so much per picul, no mention being made
considered as the purchase price. In any case, common consent is an
mode of payment, the debtor offers another thing to the creditor who of bailing. It is with the tacit understanding that the hemp will be
essential prerequisite, be it sale or novation, to have the effect of totally
accepts it as equivalent of payment of an outstanding debt. The delivered in bales. The amount depends under the denomination of
extinguishing the debt or obligation. Private respondent MBTC is ordered
“prensaje” or the baled hemp. CIR made demand in writing upon
to pay petitioners rentals in the total amount of P602,083.33, with six (6) undertaking really partakes in one sense of the nature of sale – the
Inchausti for the payment of the sum of P1,370.68 as a tax of one third
percent interest per annum until fully paid. creditor is really buying the thing or property of the debtor, payment for
of one per cent on the sums of money mentioned as aggreagate sum
which is to be charged against the debtor’s debt.
collected as prensaje or the baled hemp. Inchausti paid upon protest,
The assignment of credit, which is in the nature of a sale of personal contending that the collected amount is illegal upon the ground that the
property, produced the effects of a dation in payment, which may said charge does not constitute a part of the selling price of the hemp,
SONNY LO vs KJS ECO-FORMWORK SYSTEM PHIL, INC. but is a charge made for the service of baling the hemp.
extinguish the obligation. However, as in any other contract of sale, the
Facts:
vendor or assignor is bound by certain warranties. Paragraph 1 of Article
Issue:
1628 of the Civil Code provides: The vendor in good faith shall be Whether or not the baled hemp constitutes a contract of sale
ENGINEERING AND MACHINERY CORP. VS. COURT OF APPEALS the customer and upon his special order, and not for the general market,
Ruling: G.R. No. 52267 January 24, 1996 it is a contract for a piece of work .
Inchausti vs Cromwell
Facts: The contract in question is one for a piece of work. It is not petitioner’s
20 Phil. 345 October 16, 1911 line of business to manufacture air-conditioning systems to be sold “off-
Almeda and Engineering signed a contract, wherein Engineering the-shelf.” Its business and particular field of expertise is the fabrication
Facts: undertook to fabricate, furnish and install the air-conditioning system in and installation of such systems as ordered by customers and in
the latter’s building along Buendia Avenue, Makati in consideration of accordance with the particular plans and specifications provided by the
Inchausti is engaged in the business of buying and selling wholesale P210,000.00. Petitioner was to furnish the materials, labor, tools and all customers. Naturally, the price or compensation for the system
hemp on commission. It is customary to sell hemp in bales which are services required in order to so fabricate and install said system. The manufactured and installed will depend greatly on the particular plans
made by compressing the loose fiber by means of presses, covering two system was completed in 1963 and accepted by private respondent, who and specifications agreed upon with the customers.
sides of the bale with matting, and fastening it by means of strips of paid in full the contract price.
rattan; that the operation of bailing hemp is designated among 2)The original complaint is one for damages arising from breach of a
Almeda learned from the employees of NIDC of the defects of the air- written contract – and not a suit to enforce warranties against hidden
merchants by the word “prensaje.” In all sales of hemp by Inchausti, the conditioning system of the building. Almeda spent for the repair of the
price is quoted to the buyer at so much per picul, no mention being made defects – we here – with declare that the governing law is Article 1715
air-conditioning system. He now sues Engineering for the refund of the (supra). However, inasmuch as this provision does not contain a specific
of bailing. It is with the tacit understanding that the hemp will be repair. Engineering contends that the contract was of sale and the claim prescriptive period, the general law on prescription, which is Article 1144
delivered in bales. The amount depends under the denomination of is barred by prescription since the responsibility of a vendor for any of the Civil Code, will apply. Said provision states, inter alia, that actions
“prensaje” or the baled hemp. CIR made demand in writing upon hidden faults or defects in the thing sold runs only for 6 months (Arts “upon a written contract” prescribe in ten (10) years. Since the governing
Inchausti for the payment of the sum of P1,370.68 as a tax of one third 1566, 1567, 1571). Almeda contends that since it was a contract for a contract was executed on September 10, 1962 and the complaint was
of one per cent on the sums of money mentioned as aggreagate sum piece of work, hence the prescription period was ten years (Hence Art filed on May 8, 1971, it is clear that the action has not prescribed.
collected as prensaje or the baled hemp. Inchausti paid upon protest, 1144 should apply on written contracts).
contending that the collected amount is illegal upon the ground that the Quiroga vs Parsons
RTC found that Engineering failed to install certain parts and accessories G.R. No. L-11491
said charge does not constitute a part of the selling price of the hemp, called for by the contract, and deviated from the plans of the system, Subject: Sales
but is a charge made for the service of baling the hemp. thus reducing its operational effectiveness to achieve a fairly desirable Doctrine: Contract of Agency to Sell vs Contract of Sale
room temperature. Facts: On Jan 24, 1911, plaintiff and the respondent entered into a
Issue:
Issue: contract making the latter an “agent” of the former. The contract
Whether or not the baled hemp constitutes a contract of sale stipulates that Don Andres Quiroga, here in petitioner, grants exclusive
1) Whether the contract for the fabrication and installation of a central
air-conditioning system in a building, one of “sale” or “for a piece of rights to sell his beds in the Visayan region to J. Parsons. The contract
Ruling: only stipulates that J.Parsons should pay Quiroga within 6 months upon
work”? CONTRACT FOR PIECE OF WORK.
Yes, the baled hemp constitutes a contract of sale. In the case at bar, the 2) Corrollarily whether the claim for refund was extinguished by the delivery of beds.
prescription? NO. Quiroga files a case against Parsons for allegedly violating the following
baled form before the agreement of sale were made and would have
stipulations: not to sell the beds at higher prices than those of the
been in existence even if none of the individual sales in question had
Held: invoices; to have an open establishment in Iloilo; itself to conduct the
been consummated. The hemp, even if sold to someone else, will be sold 1) A contract for a piece of work, labor and materials may be agency; to keep the beds on public exhibition, and to pay for the
in bales. When a person stipulates for the future sale of articles which he distinguished from a contract of sale by the inquiry as to whether the advertisement expenses for the same; and to order the beds by the
is habitually making, and which at the time are not made or finished, it is thing transferred is one not in existence and which would never have dozen and in no other manner. With the exception of the obligation on
essentially a contract of sale and not a contract for piece of work. It is existed but for the order, of the person desiring it. In such case, the the part of the defendant to order the beds by the dozen and in no other
otherwise when the article is made pursuant to agreement. If the article contract is one for a piece of work, not a sale. On the other hand, if the manner, none of the obligations imputed to the defendant in the two
ordered by the purchaser is exactly such as the plaintiff makes and keeps thing subject of the contract would have existed and been the subject of causes of action are expressly set forth in the contract. But the plaintiff
on hand for sale to anyone, and no change or modification of it is made a sale to some other person even if the order had not been given, then alleged that the defendant was his agent for the sale of his beds in Iloilo,
at the defendant’s request, it is a contract of sale, even though it may be the contract is one of sale. and that said obligations are implied in a contract of commercial agency.
entirely made after, and in consequence of, the defendant’s order for it. The whole question, therefore, reduced itself to a determination as to
A contract for the delivery at a certain price of an article which the whether the defendant, by reason of the contract hereinbefore
vendor in the ordinary course of his business manufactures or procures transcribed, was a purchaser or an agent of the plaintiff for the sale of
for the general market, whether the same is on hand at the time or not his beds.
is a contract of sale, but if the goods are to be manufactured specially for Issue: Whether the contract is a contract of agency or of sale.
Held: In order to classify a contract, due attention must be given to its price, Arco formally authorized the order. The following year, both Whether the relationship of Ker and Co and US rubber was that of a
essential clauses. In the contract in question, what was essential, as parties agreed for another order of sound reproducing equipment on the vendor- vendee or principal-broker
constituting its cause and subject matter, is that the plaintiff was to same terms as the first at $1,600.00 plus 10% plus all other expenses. 3
furnish the defendant with the beds which the latter might order, at the Ruling:
years later, Arco discovered that the prices quoted to them by GPS with
price stipulated, and that the defendant was to pay the price in the regard to their first 2 orders mentioned, were not the net prices but The relationship of Ker and Co and US rubber was that of a principal-
manner stipulated. Payment was to be made at the end of sixty days, or rather the latter has obtained a discount from SPC thus, equipment is
before, at the plaintiff’s request, or in cash, if the defendant so preferred, broker/ agency. Ker and Co is only an agent of the US rubber because it
deemed overpriced and GPS had to reimburse the excess amount. can dispose of the products of the Company only to certain persons or
and in these last two cases an additional discount was to be allowed for
prompt payment. These are precisely the essential features of a contract entities and within stipulated limits, unless excepted by the contract or
ISSUE:
of purchase and sale. There was the obligation on the part of the plaintiff by the Rubber Company, it merely receives, accepts and/or holds upon
to supply the beds, and, on the part of the defendant, to pay their price. Is there a contract of agency? consignment the products, which remain properties of the latter
These features exclude the legal conception of an agency or order to sell company, every effort shall be made by petitioner to promote in every
whereby the mandatory or agent received the thing to sell it, and does HELD:
way the sale of the products and that sales made by petitioner are
not pay its price, but delivers to the principal the price he obtains from subject to approval by the company. Since the company retained
No. The contract between the petitioner and the respondent was one of
the sale of the thing to a third person, and if he does not succeed in ownership of the goods, even as it delivered possession unto the dealer
purchase and sale. The letters, Exhibits 1 and 2, by which the respondent
selling it, he returns it. By virtue of the contract between the plaintiff and for resale to customers, the price and terms of which were subject to the
accepted the prices of $1,700.00 and $1,600.00, respectively, for the
the defendant, the latter, on receiving the beds, was necessarily obliged
sound reproducing equipment subject of its contract with petitioner, are company’s control, the relationship between the company and the
to pay their price within the term fixed, without any other consideration
clear in their terms and admit no other interpretation that the dealer is one of agency.
and regardless as to whether he had or had not sold the beds.
In respect to the defendant’s obligation to order by the dozen, the only respondent in question at the prices indicated which are fixed and
one expressly imposed by the contract, the effect of its breach would determinate. The respondent admitted in its complaint with the CFI of
only entitle the plaintiff to disregard the orders which the defendant Manila that the petitioner agreed to sell to it the first sound reproducing Antonio Medina v. CIR and CTA
might place under other conditions; but if the plaintiff consents to fill equipment. To hold the petitioner an agent of the respondent in the
them, he waives his right and cannot complain for having acted thus at purchase of equipment and machinery from the SPC of Richmond, Facts:
his own free will. Indiana, is incompatible with the admitted fact that the petitioner is the
For the foregoing reasons, we are of opinion that the contract by and exclusive agent of the same company in the Philippines. It is out of the Subsequent to marriage, petitioners engaged in concessions with the
between the plaintiff and the defendant was one of purchase and sale, ordinary for one to be the agent of both the vendor and the purchaser. government, while his wife started to engage in business as a lumber
and that the obligations the breach of which is alleged as a cause of dealer. From 1949 to 1952, petitioner sold logs to his wife. On the thesis
action are not imposed upon the defendant, either by agreement or by Ker and Co., LTD vs Lingad that the sales are null and void, CIR considered the sales by Mrs. Medina
law. as the petitioner’s original sales taxable under the NIRC. Petitioner filed
GR No. L-20871 April 30, 1971
a petition for reconsideration, revealing for the first time the alleged
Facts: premarital agreement of complete separation of property.
Gonzalo Puyat vs. Arco Amusement

FACTS: CIR assessed the sum of P20,272.33 as the commercial broker’s Issue:
percentage tax, surcharge, and compromise penalty against Ker & Co.
Arco Amusement was engaged in the business of operating Ker and Co. requested for the cancellation of the assessment and filed a Whether or not the sales made by the petitioner to his wife could be
cinematographs while Gonzalo Puyat & Sons (GPS) was the exclusive petition for review with the Court of Tax Appeals. The CTA ruled that Ker considered as his original taxable sales
agent in the Philippines for the Starr Piano Company (SPC). Desiring to and Co is liable as a commercial broker. Ker has a contract with US
equip its cinematograph with sound reproducing devices, Arco rubber. Ker is the distributor of the said company. Ker was precluded Held:
approached GPS, through its president, Gil Puyat, and an employee from disposing the products elsewhere unless there has been a written
named Santos. After some negotiations, it was agreed between the consent from the company. The prices, discounts, terms of payment, It appears that at the time of the marriage between petitioner and his
parties that GPS would order sound reproducing equipment from SPC terms of delivery and other conditions of sale were subject to change in wife, they neither had any property nor business of their own, as to have
and that Arco would pay GPS, in addition to the price of the equipment, the discretion of the Company. really urged them to enter into the supposed property agreement.
a 10% commission, plus all expenses such as freight, insurance, etc. Secondly, the testimony that the separation of property agreement was
When GPS inquired SPC the price (without discount) of the equipment, Issue: recorded in the Registry of Property three months before the marriage,
the latter quoted such at $1,700.00 FOB Indiana. Being agreeable to the is patently absurd, since such a prenuptial agreement could not be
effective before marriage is celebrated, and would automatically be being exerted by one spouse on the other, there is no reason why this The question raised on this appeal is whether or not under the
cancelled if the union was called off. In the third place, despite their prohibition shall not apply also to common- provisions of article 1459 of the Civil Code the plaintiff, Joseph N.
insistence on the existence of the ante nuptial contract, the couple, law relationships.The court, however, said that the lack of the don Wolfson, was prohibited from purchasing the judgment of his client in
strangely enough, did not act in accordance with its alleged covenants. It ation made by the deceased to Respondent does not necessarily mean such manner and to such extent that the contract of
was not until July of 1954 that he alleged, for the first time, the existence that the Petitioner will have exclusive rights to the disputed property which such purchase was a part was absolutely null and void and
of the supposed property separation agreement. Finally, the Day Book of because the relationship between Felix and Respondent were could be attacked by a person not a party to the transaction. The article
the Register of Deeds on which the agreement would have been entered, legitimated by marriage. in question reads as follow:
had it really been registered as petitioner insists, and which book was
among those saved from the ravages of the war, did not show that the "Art. 1459. The following persons can not acquire by purchase, even
document in question was among those recorded therein. at public or judicial auction, neither in person nor by an agent:
[ G. R. No. 5970, October 13, 1911 ]
"1. The guardian or protutor, the property of the person or persons who
The wife is authorized to engage in business and for the incidents that may be under their guardianship.
JOSEPH N. WOLFSON, PLAINTIFF AND APPELLEE, VS. THE ESTATE OF
flow therefrom when she so engages therein. But the transactions
FRANCISCO MARTINEZ, DECEASED, DEFENDANT AND APPELLANT. "2. Agents, the property the administration or sale of which may have
permitted are those entered into with strangers, and do not constitute
exceptions to the prohibitory provisions of Article 1490 against sales been intrusted to them.
between spouses. DECISION
Contracts violative of the provisions of Article 1490 of the Civil Code are "3. Executors, the property intrusted to their care.
null and void. Being void transactions, the sales made by the petitioner MORELAND, J.:
"4. Public officials, the property of the State, municipalities, towns, and
to his wife were correctly disregarded by the Collector in his tax This is an appeal by the defendant from a judgment of the Court of First also of public institutions, the administration of which has been intrusted
assessments that considered as the taxable sales those made by the wife to them.
Instance of Manila, the Hon. A. S. Crossfield presiding, reversing
through the spouses' common agent, Mariano Osorio. In upholding that
the findings of certain commissioners who rejected the claim of the "This provision shall apply to judges and experts who, in any manner
stand, the Court below committed no error.
plaintiff presented against the estate of Francisco Martinez, whatsoever, take part in the sale.
deceased, and finding in favor of the plaintiff for the sum of P12,000.
Matabuena v. Cervantes "5. Associate justices, judges, members of the department of public
G.R. No. L-28771 (March 31, 1971) The learned trial court in the opinion which forms the basis of his prosecution, clerks of superior and inferior courts, and officials of
judgment said; justice, the property and rights in litigation before the court in the
FACTS: jurisdiction or territory over which they exercise their respective duties,
"From the evidence presented at the trial it appears that on the 29th
Felix Matabuena cohabitated with Respondent. During this period, this prohibition including the act of acquiring by assignment. "From
day of January, 1906, a judgment was entered in this court by Hon. John this rule shall be excepted the cases in which hereditary actions among
Felix Matabuena donated to Respondent a parcel of land. Later the two
C. Sweeney, one of the judges thereof, in favor of Mariano Yap-Tuangco coheirs are involved, or assignments in payment of debts, or security
were married. After the death of Felix Matabuena, his sister, Petitioner,
against the deceased Francisco Martinez for the sum of twelve for the goods they may possess.
sought the nullification of the donation citing Art.133 of the Civil Code
“Every donation between the spouses during the marriage shall be thousand pesos; "The prohibition contained in this number shall include the lawyers and
void.” solicitors with regard to the property and rights, which may be the object
"That there was a contract agreement between the plaintiff in that
The trial court ruled that this case was not covered by the prohibition of the litigation, in which they may take part by virtue of their profession
judgment and the above mentioned Joseph N. Wolfson and one Basilio
because the donation was made at the time the deceased and Regalado y Mapa to the effect that said Wolfson and Mapa and office."
Respondent were not yet married and were simply cohabitating. should have as their fees for prosecuting the case fifty per cent of On this appeal we do not discuss or decide the question whether or
whatever amount might be obtained; not the judgment in question actually falls within the prohibition of the
ISSUE:
W/N the prohibition applies to donations between live-in partners. "That subsequently said Mapa assigned his interest in said contract to article, it being the disposition of a majority of the court to place the
the said Wolfson; decision wholly upon the proposition that, even if it be conceded that
HELD: "That subsequently and on the 18th day of June, 1907, the plaintiff the purchase of the judgment in question was within the prohibition of
Yes. It is a fundamental principle in statutory construction that what is Mariano Yap-Tuangco, for value received, sold and transferred the article quoted, nevertheless, the contract of purchase and sale is
within the spirit of the law is as much a part of the law as what is written. not void but voidable at the election of the vendor. This being so, its
and delivered to said Wolfson all his right, title and interest in and to
Since the reason voidability can not be asserted by one not a party to the transaction, or
the aforementioned judgment."
for the ban on donations between spouses during the marriage is t his representatives.
o prevent the possibility of undue influence and improper pressure
Manresa, commenting on this section, says; Manresa, commenting on the latter article, says: administratrix prayed that she be allowed to sell the only parcel of land
belonging to the estate with an area of 19 hectares for the purposeof
"Considering the question from the point of view of the civil law, the view "Two different requisites are required to confer the necessary capacity paying debts. This land was a part of a parcel of land of 23 hectares
taken by the code, we must limit ourselves to classifying as void all acts for the exercise of such action. With each of the said requisites the two of which belonged to Rodriguez."4. The court authorized
done contrary to the express prohibition of the statute. Now then: As paragraphs of this section deal separately. The first requisite is that the the administratrix to sell the land. The latter thensold it to Silverio Choco.
the code does not recognize such nullity by the mere operation of law, plaintiff must have an interest in the contract. The second is that the Thereafter, the administratrix paid the approvedclaims against the
the nullity of the acts herein before referred to must be asserted by the victim and not the party responsible for the defect is the person who estate. These payments, all of which were made after the sale in favor of
person having the necessary legal capacity to do so and decreed by a must assert the same." (Manresa, Spanish Civil Code, vol. 8, p. 737.) Silverio Choco, conclusively prove that sale was notfictitious as alleged
competent court. Chapter 6, title 2, book 4 of the code contains the "It was declared in a judgment of the 18th of April, 1901, in accordance by the appellants.5. More than two years later, Choco sold the same land
provisions applicable to the matter under consideration." (Manresa, with the rule hereinbefore stated, that he who is not a party to to the spouses PioVillar and Trinidad Mactal for the sum of P4,500, who
Spanish Civil Code, vol. 10, p. 108.) a contract, or an assignee thereunder, or does not represent those who in turn mortgagedit to PNB for the same amount.
took part therein, has, under articles 1257 and 1302 of the Civil Code, Petitioners-
Article 1257 of the Civil Code reads ; no legal capacity to challenge the validity of such contract." (Manresa, appellant’s contention:
Spanish Civil Code, vol. 8, p. 788.) they alleged that this sale wasfictitious, that there was collusion between
"Contracts shall be valid only between the parties who execute them Choco and Mactal and that theformer never paid the latter.The
and their heirs, except, with regard to the latter, the case in which the In relation to the same matter the supreme court of Spain on the 23d appellants relied on article 1459 of the Civil Code, which
rights and obligations arising from the contract are not of November, 1903, published a decision [p. 702] in which appears the enumeratespersons who cannot take by purchase, i.e. agents and
transmissible, either by their nature, or by agreement, or by provision following: executors.They insisted that the administratrix bought the land indirectly
of law. through themediation of Choco and that both sales should be annulled
"The judgment appealed from in so far as it declares that the
under theprovisions of the article cited above.
"Should the contract contain any stipulation in favor of a third person, instrument of dissolution of the partnership between A and B was null
Issue:
he may demand its fulfillment, provided he has given notice of his and void for the reason that the plaintiff was not bound, either
acceptance to the person bound before it may have been revoked." principally or subsidiarily, by the said instrument, is contrary to the WON the sale in question should be annulled due to the fact that
Commenting on articles 1457, 1458, and 1459 of the Civil Code, Manresa provisions of article 1302 of the Civil Code."
it fallsunder the prohibition under article 1459 with respect to purchase
says: Even if the sale of the judgment in question is found comprehended
byexecutors/ administrators.
within the prohibition of article 1459, a question which we do not now
"From this statement of the rule and its relation to the succeeding Held:
decide, still the defendant is not entitled to invoke the terms of said
articles, these consequences logically follow: (1) That there are no article for the reason, above stated, that such prohibition is personal to
incapacities except those expressly mentioned in the law and that such the parties to the contract, being available only to them or their
No.
incapacities can not be extended to other cases by implication for the representatives.
The proofs in this case do not substantiate this claim of theappellants.
reason that such construction would be in conflict with the very nature The SC declared that In order to bring the sale in thiscase within the
For these reasons the judgment of the court below is affirmed without
of the provision; (2) That as a general rule those who can bind part of article 1459, quoted above, it is essential thatthe proof
special finding as to costs.
themselves have also legal capacity to buy and sell; (3) That there are submitted establish some agreement between SilverioChoco and
certain exceptions to this rule; (4) That the incapacity to buy or sell may Mactal to the effect that Choco should buy the propertyfor the benefit
be absolute or relative; (5) That such incapacity is absolute in the^Jase Rodriguez vs. MactalNature: of Mactal. If there was no such agreement, either express or implied,
of persons who can not bind themselves; (6) That relative incapacity This is an appeal from an order of the Court of First Instance of Nueva then the sale cannot be set aside. The evidencebefore this court does
may exist with reference to certain persons or a certain class of Ecija, issued in the intestate proceeding of Mauricia de not establish such agreement.
property." (Manresa, Spanish Civil Code, vol. 10, p. 87.) Guzman,deceased, denying the motion of the appellants in which they Note: (Additional contention of the appellants)The appellants also
sought to annula sale, executed January 23, 1926, by the administratrix alleged that the order of the court authorizing theadministrator to sell
Article 1302 of the Civil Code reads: Trinidad Mactal, of aparcel of land to Silverio Choco and a resale of the the land in question is null and void due to the fact themotion of Trinidad
same land on March 10,1928, to the administratrix Trinidad Mactal. Mactal, praying that she be authorized to sell, was notaccompanied by
"The action for nullity of contracts may be brought by those who are Facts: the written consent of the heirs or their duly authorizedguardian.The SC
principally or subsidiarily obligated by virtue thereof. Persons 1. The appellants Catalina and Rodriguez, and the appellee Mactal, are applied Act No. 3882, sec 714 provides that:
with capacity can not, however, allege the incapacity of those with allheirs of Mauricia de Guzman whose estate is under administration Realty may be sold or encumbered
whom they contracted; neither those who caused the intimidation or inCFI.2. Appellee Mactal was appointed as administratrix. The committee .
violence, or employed deceit, or caused the error, can base their action of claims submitted a report in which various claims against the estate —
on these defects of the contract." wereallowed. The report was approved by the court.3. The
When there is no personal estate of the deceased or when,though there WON Candida Acabo did not cease to be the owner of the properties despite nevertheless levied upon andsold as the result of a writ of execution
be such, its sale would redound to the detriment of the interestsof the certain irregularities and defects in thesaid auction. issued by him. Whatthe law intends to avoid is the improper interference
participants in the estate and the deceased has left no HELD: with aninterest of a judge in a thing levied upon and sold by
testamentarydisposition for the payment of his debts and charges of The trial court was impressed by the circumstancethat in the hisorder.virtual law libraryIf under the law Gardner was prohibited from
administration, thecourt, on application of the executor or public auction the purchaser was the justice of thepeace himself. This, acquiring
administrator, and on written notice tothe heirs, devisees, and other in the judge's opinion, was unauthorized,because article 1459, No. 5, of the Civil theo w n e r s h i p o f A c a b o ' s l a n d s , t h e n h e c o u l d n
persons interested, may grant him a license tosell, mortgage, or Code, prohibits judgesfrom acquring by purchase, even at pub;ic or o t h a v e transmitted to Faustino Abad the right of ownership that
otherwise encumber for that purpose real estate, if itclearly appears that judicial sale,e i t h e r i n p e r s o n o r b y a n a g e n t , hed i d
such sale, mortgaging or encumbrance would bebeneficial to the persons a n y p r o p e r t y o r r i g h t s litigated in the court in n o t p o s s e s s ; n o r c o u l d A b a d , t o w h o m t h i s a l l e g e d ow
interested and will not defeat any devise of land; inwhich case the assent the jurisdiction or territory withinwhich they exercise their nership had not been transmitte, have conveyed the sameto Pabinguit.
of the devisee shall be required. respective duties; this prohibitionincludes taking of property by assignment. The What Gardner should have done in view of thefact that the sale, as he
The appealed order of the lower court is affirmed with costs against appellant alleges that the property purchased by justiceof the peace finally acknowledged, was void, wasto claim the price that had been
theappellants. Gardner was not the subject of litigation in the justice court; that the deposited in court, and
action was to recover a certain sum the justice of the peace of Guijulngan should have declared theauction
of m o n e y , a n d t h a t h e h a d o r d e r e d t h e p r o p e r t void and have ordered a new sale to be held,
GAN TINGCO vs PABINGUITFACTS: y s o l d o n execution.chanroblesvirtualawlibrary chanrobles This raises, there besidesc o r r e c t i n g t h e e r r o r s t h a t h a d b e e n c o m m
Candida Acabo was the owner of six parcels of land,all situated in the fore, a question as to the true meaning of paragraph 5 of article 1459 of the Civil itted in t h e proceedings. To the reasons already
municipality of Jimalalud, Oriental Negros. These lands were sold on June Code.in accordance with which the Civil Codewas enacted, provides as stated, there is to beadded the additional one, with respect to the
12, 1911 by Candida Acabo, toone Gan Tingco. But the purchaser Gan follows sale made byFaustino Abad to Silvino Pabinguit, that Abad was a minor
Tingco was unable totake possession of the six parcels of land sold him 26: The forms, requirements and conditions of each particularc o n t r a c atthe time - a circumstance that deprived him of capacity to sell(Civil
by Acabo,for they were in the possession of Silvino t shall be determined and defined subject to theg e n Code, art. 1263). Abad had no ownership to transmit toanyone and,
Pabinguit, whoalleges certain rights therein. He claims to have eral list of obligations and their effects, with besides, he had no personality to enable him tocontract by himself, on account
purchasedthem from Faustino Abad. Abad had become the t h e understanding that the legislation in force and t of his lack of legal age. This court finds no reason whatever why it should
ownerthrough purchase from Henry Gardner.Prior to the purchase made by h e l e g a l principles evolved therefrom by judicial decisions, etc., not affirmthe judgment appealed from
Garnder, a judgment has beenrendered against Ancabo as a result of the etc.,shall serve as basis.One of the bodies of law which conastitute the
complaint filed bySilvestre Basaltos. Because of Ancabo’s failure to legislation nowin force in the. In Law 4, Title 14, Book5 of the same is
comply, herfixtures and other chattels were levied upon the found the following provision: "We order thatin public auctions held by MACARIOLA VS. ASUNCION, 114 SCRA 77
order of Gardner being the justice of peace.Public auction sale was executed direction of our alcaldes, neither thelatter nor any person whomsoever in their Posted by kaye lee on 7:44 AM
and Gardner appeared to bethe highest bidder and was the purchaser of name shall bid Macariola Vs. Asuncion 114 SCRA 77
Candida Acabo'slands and ina n y t h i n g s o l d a t s u c h p u b l i c
carabaos sold at public auction held in the barrio of Martelo, Municipality of a u c t i o n s . " T h e word alcaldes means judges Facts:
Tayasan on March 20, 1907.As Gardner subsequently learned . The caption of Title 14 is"
that he was forbidden topurchase, he sold what he had purchased Alcaldes On June 8, 1963, respondent Judge Elias Asuncion rendered a decision in
to Faustino Abad,Candida Acabo's son.On June 19, 1907, Faustino Abad, for or Provincial Judges," and the entire title deals withthe exercise of Civil Case 3010 final for lack of an appeal.
the sum of P375 sold toSilvino Pabinguit six parcels of judicial jurisdiction. Prior to the enactment of the Civil Code, the Penal Code
land. The Court of First Instance of Oriental NEgros rendered judgment in was also in force. Article 400 of the latter prohinits, under penalty, any judge On October 16, 1963, a project of partition was submitted to Judge
behalf of the plaintiff, Gan Tingco, declaring himt h e o w n e r o f t h e from taking Asuncion. The project of partition of lots was not signed by the parties
lands described in the complaint, andordered the de part,either directly, or indirectly, in any operation of exchang themselves but only by the respective counsel of plaintiffs and petitioner
f e n d a n t , S i l v i n o P a b i n g u i t , t o r e s t o r e t h e plaintiff to their e,trade or porfit with respect to things not the product of Bernardita R. Macariola. The Judge approved it in his order dated
possession.ibrary The defendant appealed, with the right to a review of th hisown property, within the territory over which October 23, 1963.
eevidence. The appeal was heard by this court, it having beenbrought it by he exercises jurisdiction. Judging from the legal oprecedents on
bill of exceptions. The appellant alleges that the trial court erred in holding which theCivil Code is based, it would not seem too much to
that,notwithstanding the sale of the lands in question at concludethat the said article of the Civil Code does not make One of the lots in the project of partition was Lot 1184, which was
publicauction, Candida Acabo did not cease to be anydistinction between property in litigation. In effect, it appearsto be subdivided into 5 lots denominated as Lot 1184 A – E. Dr. Arcadio
the owner of these properties, because there were certain irregularities as delicate a matter for a judge to take part in the saleof property Galapon bought Lot 1184-E on July 31, 1964, who was issued transfer of
anddefects in the said auction. that had been the subject of ligitgation in hiscourt, as to intervene in certificate of Title No, 2338 of the Register of Deeds of Tacloban City. On
ISSUE: auction of property which, though notdirectly litigated in his court, is
March 6, 1965, Galapon sold a portion of the lot to Judge Asuncion and automatically abrogated, unless they are reenacted by Affirmative Act of of Article 1491 of the New Civil Code; andagainst the three lawyers, for allegedly rigging
his wife. the New Sovereign. thecase against her parents.
ISSUES:(issue 1 lang ang connected pero iapil nlng nakoang uban basig
On August 31, 1966, spouses Asuncion and Galapon conveyed their Asuncion cannot also be held liable under the par. H, Sec. 3 of RA 3019, pangutaon)
respective shares and interest inn Lot 1184-E to the Traders citing that the public officers cannot partake in any business in I . W h e t h e r o r n o t A t t y . C a b
Manufacturing & Fishing Industries Inc. Judge Asuncion was the connection with this office, or intervened or take part in his official a n t i n g p u r c h a s e d the subject property in violation of
President and his wife Victoria was the Secretary. The Asuncions and capacity. The Judge and his wife had withdrawn on January 31, 1967 from Art. 1491 of theNew Civil
Galapons were also the stockholder of the corporation. the corporation and sold their respective shares to 3rd parties, and it Code.I I . W h e t h e r o r n o t A t t
appears that the corporation did not benefit in any case filed by or y s . A n t i n i w a n d Jovellanos are guilty of
Respondent Macariola charged Judge Asuncion with "Acts unbecoming a malpractice in falsifyingnotarial documents.
against it in court as there was no case filed in the different branches of
Judge" for violating the following provisions: Article 1491, par. 5 of the III.
the Court of First Instance from the time of the drafting of the Articles of
New Civil Code, Article 14, par. 1 & 5 of the Code of Commerce, Sec. 3 Whether or not the three lawyers connivedin rigging the case against spouses Valencia.
Incorporation of the corporation on March 12, 1966 up to its
par H of RA 3019 also known as the Anti-Graft & Corrupt Practice Act., HELD:
incorporation on January 9, 1967. The Judge realized early that their
Sec. 12, Rule XVIII of the Civil Service Rules and Canon 25 of the Canons Under Article 1491 of the New Civil Code: The followingpersons cannot acquire by
interest in the corporation contravenes against Canon 25. purchase, even at a publicof judicial auction, either in person or through themediation of
of Judicial Ethics.
another: (5) . . . this prohibition includesthe act of acquiring by assignment and shall apply
On November 2, 1970 a certain Judge Jose D. Nepomuceno dismissed the PAULINO VALENCIA vs. ATTY. ARSENIO FERCABANTINGFACTS: tolawyers, with respect to the property and rights whichmay be the object
complaints filed against Asuncion. In 1933, complainant Paulino Valencia and hiswife allegedly bought a parcel of land, of any litigation in which they maketake part by virtue of their profession. Public
where they builttheir house, from a certain Serapia Raymundo, an heirof Pedro policyprohibits the transactions in view of the fiduciaryrelationship involved. It is
Issue: intended to curtail anyundue influence of the lawyer upon his client. Greedmay
Raymundo the original owner. However, theyfailed to register the sale or secure a
transfercertificate of title in their names. A conference washeld in the get the better of the sentiments of loyalty anddisinterestedness. Any violation
Whether or Not the respondent Judge violated the mentioned
house of Atty. Eduardo Jovellanos to settlethe land dispute between Serapia of this prohibitionwould constitute malpractice and is a ground forsuspension. Art. 1491,
provisions. prohibiting the sale to thecounsel concerned, applies only while the litigation
and the Valenciaspouses. Serapia was willing to relinquish ownership if the Valencias
Ruling: could show documents evidencingownership. Paulino exhibited a deed of sale written ispending.In the case at bar, while it is true that Atty. Arsenio Fer.Cabanting
inthe Ilocano dialect. However, Serapia claimed that thedeed purchased the lot after finality of judgment ,there was still a pending
No. Judge Asuncion did not violate the mentioned provisions constituting covered a different property. Serapia, assistedby Atty. Arsenio Fer. Cabanting, filed a Certiorari proceeding. A thingis said to be in litigation not only if there is somecontest
of "Acts unbecoming a Judge" but was reminded to be more discreet in complaintagainst Paulino for the recovery of possession withdamages. The or litigation over it in court, but also from themoment that it becomes
his private and business activities. Valencias engaged the services of Atty.Dionisio Antiniw. Atty. Antiniw advised subject to the judicial actionof the judge. Logic indicates, in
them to presenta notarized deed of sale in lieu of the private documentwritten in Ilocano. Certiorari proceedings,that the appellate court may either grant or dismissthe
For this purpose, Paulino gave Atty.Antiniw an amount of P200.00 to pay the person petition. Hence, it is not safe to conclude, forpurposes under Article 1491 that
whowould falsify the signature of the alleged vendor. A"Compraventa Definitiva" as a the litigation hasterminated when the judgment of the trial courtbecome final while a
result thereof. The Court of First Instance of Pangasinan, rendered adecision Certiorari connected therewith isstill in progress. Thus, purchase of the property byAtty.
Respondent Judge did not buy the lot 1184-E directly on the plaintiffs in Cabanting in this case constitutes malpractice inviolation of Art. 1491 and the Canons of
in favor of Serapia. Paulino filed a Petitionfor
Civil Case No. 3010 but from Dr. Galapon who earlier purchased the lot ProfessionalEthics. Clearly, this malpractice is a ground forsuspension. The sale
Certiorari
from 3 of the plaintiffs. When the Asuncion bought the lot on March 6, with Preliminary Injunction before the CA.While the petition was pending, the TC issued in favor of Atty. Jovellanos doesnot constitute malpractice. There was
1965 from Dr. Galapon after the finality of the decision which he an orderof execution stating that "the decision in this case hasalready no attorney-client relationship between Serapia and Atty. Jovellanos, considering
rendered on June 8, 1963 in Civil Case No 3010 and his two orders dated become final and executory".On March 20, 1973, Serapia sold 40 square meters of the that the latter did not take partas her counsel. The transaction is not covered by
October and November, 1963. The said property was no longer the litigated lot to Atty. Jovellanos and the remainingportion she sold to her Art.1491 nor by the Canons adverted to
subject of litigation. counsel, Atty. Arsenio Fer.Cabanting, on April 25, 1973. Paulino filed adisbarment
proceeding against Atty. Cabanting on theground that said counsel allegedly violated
In the case at bar, Article 14 of Code of Commerce has no legal and Article1491 of the New Civil Code as well as Article II of theCanons of Professional Ethics,
binding effect and cannot apply to the respondent. Upon the sovereignty prohibiting the purchaseof property under litigation by a counsel. The appellatecourt
from the Spain to the US and to the Republic of the Philippines, Art. 14 dismissed the petition of Paulino.Constancia Valencia, daughter of Paulino, also filed
of this Code of Commerce, which sourced from the Spanish Code of adisbarment proceeding against Atty. Dionisio Antiniwfor his participation in the forgery
Commerce, appears to have been abrogated because whenever there is and its subsequentintroduction as evidence for his client; and also,against Attys. Eduardo
a change in the sovereignty, political laws of the former sovereign are Jovellanos and ArsenioCabanting for purchasing a litigated property allegedlyin violation