120 SCRA 897 G.R. No.

L-54070 February 28, 1983 HEIRS OF ENRIQUE ZAMBALES and JOAQUINA ZAMBALES, petitioners, vs. COURT OF APPEALS, NIN BAY MINING CORPORATION, ANGELA C. PREYSLER and JOAQUIN B. PREYSLER, respondents. MELENCIO-HERRERA, J.:

Facts: The Zambaleses were homestead patentees of a parcel of land in Del Pilar, Roxas, Palawan pursuant to Homestead Patent No. V-59502 dated September 6, 1955. They instituted a civil case claiming damages from the Nin Bay Mining Corporation who allegedly removed silica sand from their land and destroyed the plants and others improvements thereon. Nevertheless, having been duly assisted by their counsel, Atty. Perfecto de los Reyes, the Zambaleses and the Corporation entered into a compromise agreement on October 29, 1959, the latter becoming their attorney-in-fact as regards a promise to sell the land to Preysler on September 10, 1960. Nine years after the sale, the Zambaleses contended that their was fraud in obtaining their consent, as much as they are unschooled and were unable to understand the contents of the agreement. Issue: Whether or not both the bilateral agreement to buy and sell, and the subsequent contract of sale were valid, the petitioners having the capacity and right to transfer ownership Ruling: No. The bilateral promise to buy and sell between the Zambaleses and the Corporation is null and void, as well as the sale executed by the Corporation in favor of Preysler. However, this is not attributable to the fraud alleged by the Zambaleses, and their lack of understanding as to the contents of the agreement. The Court ruled that, [it] is not convinced that indeed appellees were victims of a fraudulent scheme employed upon them by their former counsel by reason of their alleged illiteracy and ignorance. xxx They cannot capitalize on the fact that they are uneducated only because they had no formal schooling inasmuch as one's knowledge of the facts of life is not dependent on whether one had formal schooling or not and it does not necessarily follow always that if one is unschooled he is ignorant. Instead, the nullity of the agreement, having been entered into only on October 29, 1959, and when the patent was granted in 1955, is based on the violation of Public Land Act, which prohibits alienation and encumbrance of a homestead lot within five years from the issuance of patent. Clearly, the bilateral promise to buy and sell the homestead lot at a price certain, which was reciprocally demandable, was entered into within the five-year prohibitory period and is therefore, illegal and void. xxx The law does not distinguish between executory and consummated sales. xxx That "rentals" were ostensibly to be paid during the five-year prohibitory period, and the agency to sell made effective only after the lapse of the said period, was merely a devise to circumvent the prohibition. xxx [The Court] hold[s], therefore, that the bilateral promise to buy and sell, and the agency to sell, entered into within five years from the date of the homestead patent, was in violation of section 118 of the Public Land Law, although the executed sale was deferred until after the expiration of the five-year- prohibitory period.

97 Phil 249 G.R. No. L-7382 June 29, 1955

SOUTHWESTERN SUGAR AND MOLASSES COMPANY, plaintiff-appellee, vs. ATLANTIC GULF & PACIFIC COMPANY, defendant-appellant. BAUTISTA ANGELO, J.: Facts: On March 24, 1953, Atlantic Gulf granted an option to Southwestern Company, to buy its barge No. 10 for the sum of P30,000 to be exercised within a period of 90 days. On May 11, 1953, the Southwestern Co. wanted to exercise the option at the earliest convenience, but on June 25, 1953, Atlantic Gulf reiterated the unavailability of the barge as there is further work to be done on it. On June 27, 1953, the Southwestern Company instituted an action to compel the Atlantic Gulf to sell the barge in line with the option. On June 29, 1953, the Atlantic Gulf withdraw its "offer of option" with due notices to the Southwestern Company stating as reason therefor that the option was granted merely as a favor. Issue: Whether or not the unilateral promise to buy is binding among the parties Ruling: An accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price. xxx Here it is not disputed that the option is without consideration. It can therefore be withdrawn notwithstanding the acceptance made of it by appellee. It is true that under article 1324 of the new Civil Code, the general rule regarding offer and acceptance is that, when the offerer gives to the offeree a certain period to accept, "the offer may be withdrawn at any time before acceptance" except when the option is founded upon consideration, but this general rule must be interpreted as modified by the provision of article 1479 referred to, which applies to "a promise to buy and sell" specifically. As already stated, this rule requires that a promise to sell to be valid must be supported by a consideration distinct from the price.

G.R. No. L-14475

May 30, 1961

SOUTHERN MOTORS, INC., plaintiff-appellee, vs. ANGELO MOSCOSO, defendant-appellant. PAREDES, J.: Facts: Southern Motors, Inc. sold to Angel Moscoso one Chevrolet truck, on installment basis. Upon making a down payment, the defendant executed a promissory note for the unpaid balance, secured by a chattel mortgage on the truck. After defendant failed to pay 3 installments, a writ of attachment was issued on the Chevrolet truck and a house and lot of the defendant. Still, the trial court condemned the defendant to pay the plaintiff the amount of P4,475.00 with interest at the rate of 12% per annum from August 16, 1957, until fully paid, plus 10% thereof as attorneys fees and costs. The defendant contended that the attachment caused to be levied on the truck and its immediate sale at public auction was supposed to be tantamount to the foreclosure of the chattel mortgage on said truck, the third remedy under Art. 1848, which bars an action for further recovery of any unpaid balance.

Issue: Whether or not the procedural steps taken by the appellee is tantamount to a foreclosure of the chattel mortgage and a bar to further recovery on any unpaid balance of the price under the Recto Law Ruling: Article 1484 of the new Civil Case, which provides:
ART. 1484. In a contract of sale of personal property the price of which is payable in installments, the vendor may exercise any of the following remedies: (1) Exact fulfillment of the obligation, should the vendee fail to pay; . (2) Cancel the sale, should the vendee's failure to pay cover two or more installments; (3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's failure to pay cover two or more installments. In this case, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be void.

Manifestly, the appellee had chosen the first remedy. The complaint is an ordinary civil action for recovery of the remaining unpaid balance due on the promissory note. The plaintiff had not adopted the procedure or methods outlined by Sec. 14 of the Chattel Mortgage Law but those prescribed for ordinary civil actions, under the Rules of Court. Had appellee elected the foreclosure, it would not have instituted this case in court; it would not have caused the chattel to be attached under Rule 59, and had it sold at public auction, in the manner prescribed by Rule 39. [The Court] perceive[s] nothing unlawful or irregular in appellee's act of attaching the mortgaged truck itself. Since herein appellee has chosen to exact the fulfillment of the appellant's obligation, it may enforce execution of the judgment that may be favorably rendered hereon, on all personal and real properties of the latter not exempt from execution sufficient to satisfy such judgment.