1234 (Note: Write you four digit number ONLY)

I. Analysis and Treatment of an Earlier Case in a Court Decision

1. A v. B – Followed (even if it is also discussed)

2. C v. D – Cited
3. E v. F – Discussed
4. G v. H – Overruled

II. Analysis and Treatment of an Earlier Case in a Present Case

NOTE: The FIRST DECISION here which became the EARLIER CASE is the case of
Spouses Virgilio de Guzman, Jr. vs. Court of Appeals. The contents of each example
are assumed facts (the PRESENT CASE) which are or may be related to the content of
Spouses Virgilio de Guzman, Jr. vs. Court of Appeals.

Cited
“After the five-year period, the law impliedly permits alienation of the homestead;
but in line with the primordial purpose to favor the homesteader and his family, the
statute provides that such alienation or conveyance shall be subject to the right of
repurchase by the homesteader, his widow or heirs within five years.” (Spouses Virgilio
de Guzman, Jr. vs. Court of Appeals)
Discussed

We agree with the assessment made by the Court a quo in its resolution that the
focal issue raised in this present case has already been resolved and exhaustively
discussed in the case of Spouses Virgilio de Guzman, Jr. vs. Court of Appeals which
was steadfastly decided by this Honourable Court on November 30, 2016.

This Court again reiterates that the rule in pari delicto will not apply in the case of
sale of land under free patent, because to have this application, the equalization of law,
and the public policy of preserving the grantee’s right to the land under the homestead
law will then be destroyed. Moreover, the unblemished fact remains firm that the sale
effected by both parties belongs to a public land, which equates to a conclusion that it is
the vendor who has a better right to remain in possession of the property.
Followed
The issue being raised before this Court is whether or not the sale of land under
the Free Patent title effected by herein Petitioner Eufronio to Respondent Hermenia was
void applying the law under the Public Land Act.
The Court is of the view that the contract of sale entered by the petitioner and
respondent is void, and is of no effect.
Following the ruling of this Court in the case of Spouses Virgilio de Guzman, Jr.
vs. Court of Appeals, alienation or encumbrance of lands acquired under free patent or
homestead within the five-year prohibition from the date of issuance of patent is a void
and invalid. Hence, it cannot be ratified, and the vendor remains to have a better right
over the property.
Distinguished
This Court categorically declared a settled principle in the case of Spouses
Virgilio de Guzman, Jr. vs. Court of Appeals about the nature of contract of sale of land
employed within the five-year prohibition. In that particular case, the petitioner acquired
a parcel of lot from the respondent’s parents through a free patent title. The Court ruled
that the sale of land was void and is of no effect since it was made in violation of the
provisions of Public Land Act.
However, We are of the opinion that the case at bar warrants no application of the
abovementioned case. It was clear that in this particular case, the vendee of the land
under free patent was the Department of Energy (DOE), a government institution, which
is the exception under Section 118 of the Public Land Act, which unambiguously states
that:
“Except in favor of the government or any of its branches, units,
or institutions, lands acquired under free patent or homestead
provisions shall not be subject to encumbrance or alienation from
the date of the approval of the application and for a term of five
years from and after the date of issuance of the patent or grant…”
 (Emphasis and underscoring supplied)

Overruled

In the case of Spouses Virgilio de Guzman, Jr. vs. Court of Appeals, we

repeatedly pronounced that the prohibition on the alienation or encumbrance of land
reckons from the date of the approval of the application, and for a term of five years from
and after the date of issuance of the patent or grant. This Court also expressed that the
period is not computed from the date of registration with the Registry of Deeds or from
the date of certificate of title.

However, We overrule the same doctrine we have established on the above case.
Under the 1987 Constitution, doctrine and principle of law laid down by the court in a
decision rendered en banc or in division may be modified or reversed of the court sitting
en banc.

We are not unaware that there is already more than countless disputes before the
Supreme Court regarding the circumvention of the Public Land Act made by the vendor
of land under free patent. Therefore, We consider it that the prohibition should start
EITHER from the date of the approval of the application and for a term of five years from
and after the date of issuance of the patent or grant, OR from the date of registration
with the Registry of Deeds or from the date of certificate of title, which of those that are
more favourable to the vendee, in case of fraud and bad faith on the part of the vendor.
(Emphasis and Underlining supplied)

In relation to the case at hand, we grant the present appeal of herein vendee.
Here, the patent was issued to the vendor, Haydee, on August 6, 1956. It was recorded
and its certificate of title was issued on November 2, 1959. It is only on November 3,
1961 that the vendor successfully alienates it, knowingly in violation of Public Land Act,
in favour of herein vendee, named EJ. Thus, the sale was effected within five years from
the date of the registration of the patent, which was on November 2, 1959, but outside of
five years if this period is to be reckoned from August 6, 1956, the date of the grant.
Hence, the sale was valid, using the date more favourable to the Vendee.

III. Case Summary

Case:

Ace Foods, Inc., petitioner v. Micro Pacific Technologies Co., Ltd., respondent.
G.R. No. 200602, December 11, 2013. 712 SCRA 679

Perlas-Bernabe, J.:

Facts:

ACE Foods is a domestic corporation engaged in the trading and distribution of

consumer goods in wholesale and retail bases, while MICRO PACIFIC TECHNOLOGIES CO.,
LTD. (MTCL) is one engaged in the supply of computer hardware and equipment.

MTCL sent a letter-proposal for the delivery and sale of the subject products to be
installed at various offices of ACE Foods. ACE Foods accepted MTCL’s proposal and
accordingly issued Purchase Order No. 10002310 (Purchase Order) for the subject
products amounting to P646,464.00 (purchase price). Thereafter, MTCL delivered the said
products to ACE Foods as reflected in Invoice No. 7733 11 (Invoice Receipt). The fine print
of the invoice states, inter alia, that "title to sold property is reserved in MICROPACIFIC
TECHNOLOGIES CO., LTD. until full compliance of the terms and conditions of above and
payment of the price" (title reservation stipulation). After delivery, the subject products
were then installed and configured in ACE Foods’s premises. MTCL’s demands against ACE
Foods to pay the purchase price, however, remained unheeded. Instead of paying the
purchase price, ACE Foods sent MTCL a letter stating that it “has been returning the subject
products to MTCL thru its sales representative Mr. Mark Anteola who has agreed to pull out
the said products but had failed to do so up to now.”

Eventually, ACE Foods lodged a Complaint against MTCL before the Regional Trial
Court (RTC), praying that the latter pull out from its premises the subject products since
MTCL breached its "after delivery services" obligations to it and the subject products MTCL
delivered are defective and not working.

For its part, MTCL, in its Answer with Counterclaim, maintained that it had duly
complied with its obligations to ACE Foods and that the subject products were in good
working condition when they were delivered, installed and configured in ACE Foods’s
premises. Further, MTCL posited that ACE Foods refused and failed to pay the purchase
price for the subject products despite the latter’s use of the same for a period of nine (9)
months. As such, MTCL prayed that ACE Foods be compelled to pay the purchase price, as
well as damages related to the transaction.
 The RTC directed MTCL to remove the subject products from ACE Foods’s premises
and pay actual damages and attorney fees in the amounts of ₱200,000.00 and ₱100,000.00,
respectively. At the outset, it observed that the agreement between ACE Foods and MTCL
is in the nature of a contract to sell based on fine print of the Invoice Receipt which
provided for the title reservation stipulation.

The Court of Appeals (CA) reversed and set aside the RTC’s ruling, and ordered ACE
Foods to pay MTCL the amount of ₱646,464.00, plus legal interest at the rate of 6% per
annum and attorney’s fees amounting to ₱50,000.00. It found that the agreement between
the parties is in the nature of a contract of sale, observing that the said contract had been
perfected from the time ACE Foods sent the Purchase Order to MTCL which, in turn,
delivered the subject products covered by the Invoice Receipt and subsequently installed
and configured them in ACE Foods’s premises.

Issue: Whether or not ACE Foods should pay MTCL the purchase price for the subject
products.

Ruling:

The answer is is affirmative.

A contract is what the law defines it to be, taking into consideration its essential
elements, and not what the contracting parties call it. The real nature of a contract may be
determined from the express terms of the written agreement and from the
contemporaneous and subsequent acts of the contracting parties. However, in the
construction or interpretation of an instrument, the intention of the parties is primordial
and is to be pursued. The denomination or title given by the parties in their contract is not
conclusive of the nature of its contents.

The very essence of a contract of sale is the transfer of ownership in exchange for a
price paid or promised. This may be gleaned from Article 1458 of the Civil Code which
defines a contract of sale as follows:

“Article 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership and to deliver a determinate thing, and the
other to pay therefor a price certain in money or its equivalent.

A contract of sale may be absolute or conditional.”

Corollary thereto, a contract of sale is classified as a consensual contract, which

means that the sale is perfected by mere consent. No particular form is required for its
validity. Upon perfection of the contract, the parties may reciprocally demand performance,
i.e., the vendee may compel transfer of ownership of the object of the sale, and the vendor
may require the vendee to pay the thing sold.
 In contrast, a contract to sell is defined as a bilateral contract whereby the
prospective seller, while expressly reserving the ownership of the property despite
delivery thereof to the prospective buyer, binds himself to sell the property exclusively to
the prospective buyer upon fulfillment of the condition agreed upon, i.e., the full payment of
the purchase price. A contract to sell may not even be considered as a conditional contract
of sale where the seller may likewise reserve title to the property subject of the sale until
the fulfillment of a suspensive condition, because in a conditional contract of sale, the first
element of consent is present, although it is conditioned upon the happening of a
contingent event which may or may not occur.

The Court concurred with the CA that the parties have agreed to a contract of sale
and not to a contract to sell as adjudged by the RTC. Bearing in mind its consensual nature,
a contract of sale had been perfected at the precise moment ACE Foods, as evinced by its
act of sending MTCL the Purchase Order, accepted the latter’s proposal to sell the subject
products in consideration of the purchase price of P646,464.00. From that point in time,
the reciprocal obligations of the parties – i.e., on the one hand, of MTCL to deliver the said
products to ACE Foods, and, on the other hand, of ACE Foods to pay the purchase price
therefor within thirty (30) days from delivery – already arose and consequently may be
demanded. Article 1475 of the Civil Code makes this clear:

“Article 1475. The contract of sale is perfected at the moment there is a

meeting of minds upon the thing which is the object of the contract and upon
the price.
From that moment, the parties may reciprocally demand performance,
subject to the provisions of the law governing the form of contracts.”

At this juncture, the Court must dispel the notion that the stipulation anent MTCL’s
reservation of ownership of the subject products as reflected in the Invoice Receipt, i.e., the
title reservation stipulation, changed the complexion of the transaction from a contract of
sale into a contract to sell. Records are bereft of any showing that the said stipulation
novated the contract of sale between the parties which, to repeat, already existed at the
precise moment ACE Foods accepted MTCL’s proposal.

The decision of the CA is affirmed.

IV. ANALYSIS OF A COURT’S DECISION

(NOTE: You will answer the 10 Questions in relation to your THIRD DECISION)

1. Is the court’s decision appropriate?

Answer: No, the court’s decision is not appropriate. The court’s decision fails to
appreciate the evidence presented by the petitioner in the lower court. (NOTE: Explain or
elaborate your answer)
2. Does the decision change/modify/conform with an existing law?

Answer: The decision modifies an existing law particularly….

V. ALTERNATIVE COURT DECISION

(NOTE: Assuming the Third Decision here is Tatong v.Ephong. )

REPUBLIC OF THE PHILIPPINES
SUPREME COURT
BRANCH 143, LA UNION

CHANNING TATONG, petitioner

-versus- G.R. No. 15-143-143

ZAC EPHONG, respondent

Date: November 30, 2016
x---------------------------------------------------------------------x
DELA CRUZ, J:

DECISION

Before this court is a Petition to declare null and void the Contract of Sale entered
into by Channing Tatung and Zac Epong on February 14, 2016, plus damages, since the
same is allegedly in violation of Article 1575 of the New Civil Code.

FACTS OF THE CASE

(NOTE: The facts of your case are the facts of your THIRD DECISION. There is no need to
restate the facts)
ISSUE OF THE CASE
 We are tasked to decide on whether or not the contract entered into by the
contract warrants nullification applying the Article 1575.

RULING
(NOTE: YOUE RULING HERE should be different (opposite and contrary to) from the
ACTUAL RULING in your THIRD DECISION. Your RULING HERE should be equally
convincing as the ACTUAL RULING in your DECISION)

We are of the opinion that the contract entered by Channing Tatung and Zac
Epong was void and inexistent, applying the existing laws and jurisprudence.
By contract of sale, one of the contracting parties obligates himself to transfer the
ownership and to deliver a determinate thing, and the other to pay therefor a price
certain in money or its equivalent.1 Elementary is the rule that in order to qualify under
this provision, the thing must be licit and the vendor must have a right to transfer the
ownership thereof at the time it is delivered.2 In addition, it can only be perfected at the
moment there is meeting of minds upon the thing which is the object of the contract and
upon the price.3
In relation to the case at bench, the New Civil Code specifically provides the
following provisions:

“Article 1575. The sale of animals suffering from

contagious diseases shall be void.

A contract of sale of animals shall also be void if the

use or service for which they are acquired has been
stated in the contract, and they are found to be unfit
therefor.”4 (Emphasis and Underscoring Supplied)

1 “An Act to Ordain and Institute the Civil Code of the Philippines”, [CIVIL CODE], Republic Act No.
386, August 30 1950, Article 1458. See also, Spouses Onnie Serrano and Amparo Herrera v.
Godofredo Caguiat, G.R. No. 139173,2007, citing Sing Yee v. Santos, 47 O.G. 6372, 1951.
2 CIVIL CODE, Article 1459.
3 Ibid at Article 1475, pg. 1.
4 Ibid at Article 1575.
 and

“Article 1409. The following contracts are inexistent

and void from the beginning:

xxx
(4) Those whose object is outside the commerce
of men;
xxx
(7) Those expressly prohibited or declared void
by law.” (Emphasis and Underscoring Supplied)

First of all, as a general rule, all things which are not outside the commerce of men
may be an object of a contract of sale.5 However, as aptly expressed by Article 1575 of the
New Civil Code, it excludes the sale of animals suffering from contagious diseases, and
labeling it as void contract. This being the case, the contract between Channing and Zac
should be declared void, since it is in violation of the said provision. Moreover, it is also
because of the reason that it is against public interest.6 Likewise, since the horse was lost
in consequence of its hidden defect, and the Zac was in fact aware of them, he shall bear
the loss, and shall be obliged to return the price and refund the expenses of the contract,
with damages to Channing.7 Furthermore, assuming arguendo that Zac happened to be
unaware of the infliction of communicable disease on the horse he sold to Channing, he
will still be responsible to the Channing for its hidden defect since there is no stipulation
to the contrary.8 Under the New Civil Code, the vendor shall be responsible for warranty
against the hidden defects which the thing sold may have, should they render it unfit for
the use for which it is intended, or should they diminish its fitness for such use to such an
extent that, had the vendee been aware thereof, he would not have acquired it or would
have given a lower price for it; but said vendor shall not be answerable for patent defects

5 See., Ibid at Article 1347. See also, Chavez v. PEA and AMARI Corporation, G. R. No. 133250, May 6,
2003.
6 De Leon, Jr., (2014). Law on Sales: A Comprehensive Discussion. Manila, Philippines: Rex National

Bookstore.
7 CIVIL CODE, Art. 1568.
8 Ibid. at Art. 1566.
or those which may be visible, or for those which are not visible if the vendee is an expert
who, by reason of his trade or profession, should have known them.9
Secondly, New Civil Code, being a compilation of civil laws10, specifically declares
that a contract is void when it is expressly prohibited or declared void by law. In relation
to Article 1575 of the same Code, as unambiguously provided, the sale of animals with
communicable disease is void. Being a void and inexistent contract, the same cannot be
ratified. 11 Reimbursement of the purchase price is the only remedy left upon this Court
to impose.
WHEREFORE, in view of the foregoing, the Contract of Sale entered into by herein
petitioner and respondent dated February 14, 2016 is hereby declared VOID.
Respondent Zac Epong is ORDERED to return the purchase price of P150, 000.00 to
petitioner with interest from the date of the filing of the complaint, and P10, 000.00 for
damages.
SO ORDERED.
(NOTE: In the ACTUAL RULING the contract of sale was declared Valid.)

9 Ibid. at Article 1561.

10E.g., Persons and Family Relations, Sales, Law on Obligations and Contracts, Family Code, etc. See
also., What is Civil Law? (“Branch of law that treats the personal and family relations of a person, his
property and successional rights, and the effects of obligation and contracts.”Civil" is derived from
the Latin "civiles", a citizen. Originally, the word pertained to a member of "civitas" or a free
political community (Black's Law Dictionary)”, retrieved from http://www.batasnatin.com/law-
library/civil-law/persons-and-family/84-civil-law-definition.html (last accessed April 2, 2016).
11 See Binayag v. Ugaddan, G.R. No. 181623, December 5, 2012, 687 SCRA 260, 273 citing Heirs of

Policronio M. Oreta, Sr. v. Heirs of Liberato M. Ureta, G.R. No. 165748, September 14, 2011, 657
SCRA 555, 580.