Sales...

Here the cases to be digested and submitted in a notebook:

Perfection:
XYST Corp. v. DMC Urban Properties Dev., Inc., 594 SCRA 598 (2009)
Absolute Acceptance of a Certain Offer (Art. 1475)
Manila Metal Container Corp. v. PNB, 511 SCRA 444 (2006)
If sale subject to suspensive condition:
People's Homesite & Housing Corp. v. CA, 133 SCRA 777(1984)
When Deviation Allowed:
Villonco v. Bormaheco, 65 SCRA 352 (1975).
Sale by Auction
Province of Cebu v. Heirs of Rufina Morales, 546 SCRA 315 (2008)
For our lesson on Tuesday and Wednesday, research on these topics and cases:
Tuesday:
Earnest Money (Art. 1482)
Manila Metal Container Corp. v. PNB, 511 SCRA 444 (2006)
Starbright Sales Enterprises, Inc. v. Philippines Realty Corp., 663 SCRA 326 (2012)
Difference Between Earnest Money and Option Money.
Oesmer v. Paraiso Dev. Corp., 514 SCRA 228 (2007).
FORMAL REQUIREMENTS FOR THE CONTRACT OF SALE (Arts. 1357, 1358 (1), 1406 and 1483)
Form Not Important for Validity of Sale

Gallar v. Husain, 20 SCRA 186 (1967)

The Estate of Pedro C. Gonzales v. Heirs of Marcos Perez, 605 SCRA 47 (2009)
Tigno v. Aquino, 444 SCRA 61 (2003)

WHEN FORM IMPORTANT IN SALE

To bind 3rd Parties
Dalion v. CA, 182 SCRA 872 (1990)
Wednesday:
For Enforceability Between the Parties: STATUTE OF FRAUDS (Arts. 1403 and 1405)
Presupposes Valid Contract of Sale:
Firme v. Bukal Enterprises and Dev. Corp., 414 SCRA 190 (2003)
Memorandum
Must contain all the essential terms of the contract of sale.
Yuviengco v. Dacuycuy, 104 SCRA 668 (1981);
even when scattered into various correspondences which can be brought together
City of Cebu v. Heirs of Candido Rubi, 306 SCRA 408 (1999)
Waiver (Art. 1405)
Cross-examination on the contract is deemed a waiver of the defense of the Statute. ---

Abrenica v. Gonda, 34 Phil. 739 (1916)

Partial Performance
Alfredo v. Borras, 404 SCRA 145 (2003)
A receipt proves payment which takes it out of the operation of the Statute of Frauds
Toyota Shaw, Inc. v. CA, 244 SCRA 320 (1995)
Peoples Homesite vs. Court of Appeals, and Mendoza

133 SCRA 777

December 1984
FACTS:
In February 1960, herein petitioner Peoples Homesite & Housing Corporation (PHHC) passed a
resolution, subject to the approval of the Court Court Council of the PHHCs consolidation
subdivision plan, awarding Lot 4 with an area of 4,182.2 square meters located at Diliman, Court
City to respondents Rizalino and Adelaida Mendoza (spouses Mendoza) at a price of twenty-one
pesos (P21.00) per square meter. The Court Court Council disapproved the consolidation
subdivision plan in August 1960 but approved in February 1964 its revised version where Lot 4
was reduced to an area of 2,608.7 square meters. Then in October 1965, the PHHC withdrew the
tentative award of Lot 4 to the spouses Mendoza for the latters failure neither to pay its price
nor to make a 20% initial deposit, and re-awarded said lot jointly and in equal shares to Miguela
Sto. Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo Redublo and Jose Fernandez, all of
whom made the initial deposit. The subdivision of Lot 4 into five lots was later approved by the
Court council and the Bureau of Lands.
The spouses Mendoza asked for reconsideration and for the withdrawal of the said 2nd award to
Sto. Domingo and four others, and at the same time filed an action for specific performance plus
damages. The trial court sustained the award but the Court of Appeals reversed the said
decision, declared void the re-award to Sto. Domingo and four others, and ordered the PHHC to
sell Lot 4 with an area of 2,608.7 square meters at P21.00 per square meter to spouses Mendoza.
ISSUE:
Was there a perfected sale of Lot 4, with its reduced area, between the parties?
COURT RULING:
The Supreme Court found that there was no perfected sale of Lot 4 because the said lot was
conditionally or contingently awarded to the Mendozas subject to the approval by the Court
council of the proposed consolidation subdivision plan and the approval of the award by the
valuation committee and higher authorities.
When the plan with the area of Lot 4 reduced to 2,608.7 square meters was approved in 1964,
the spouses Court should have manifested in writing their acceptance of the award for the
purchase of Lot 4 just to show that they were still interested in its purchase although the area
was reduced. Article 1475 of the Civil Court says [t]he 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
law governing the form of contracts. Indeed, there was a no meeting of the minds between the
parties on the purchase of Lot 4 with an area of 2,608.7 square meters at P21 a square meter
and the PHHC board of directors acted within its rights in withdrawing the tentative award.
G.R. No. 166862 December 20, 2006
Lessons Applicable: Doctrine of Centralized Management: Powers of Board of Directors
(Corporate Law)

Doctrine of Centralized Management (Corporate Law)

Price (Sales)

Earnest Money (Sales)

FACTS:

Manila Metal Corp. executed a real estate mortgage (TCT. 32098) as a security for its loan
from PNB amounting to 900,000 php, later on 1,000,000 php and 653,000 php

Aug. 5, 1982: PNB filed a petition for extrajudicial foreclosure for the property to be sold at
a public auction 911,532.21 php (outstanding as of June 30) + interest + attorney's fees

Sept. 2, 1982: PNB won the public auction at 1,000,000 php

Feb. 17, 1983: Certificate of Sale was issued and registered at the Registry of Deeds and
was annotated at the dorsal portion of the title (Redeemable until Feb 17,1983)

Petitioner requested 1 year extension until Feb 17,1984 but was rejected by PNB saying it
is their policy not to accept partial redemption

Jun. 1,1984: Since petitioner failed to redeem, TCT. 32098 was cancelled and a new title
was issued in favor of PNB


Meanwhile, Special Assets Management Department (SAMD) had prepared a statement of
account as of Jun 25,1984 amounting to 1,574,560.47 php (bid price + interest + advances of
insurance premiums + advances on relaty taxes + reg. exp. +misc. exp + piblication cost)

Petitioner deposited 725,000 php as deposit to repurchase and was issued an O.R.

PNB management rejected the recommendation of SAMD and demanded that petitioner
pay the markt value of 2,660,000 php.

Jun 24, 1984: PNB informed petitioner that its B.O.D had agreed to accept its offer to
purchase but at 1,931,389.53 less the 725,000 php.
o
PNB President did not conform to the letter but merely indicated that he has received it.
o
Petitioner rejected this since PNB has already accepted its downpayment so it can no
longer increase the price.
o
PNB also rejected petitioners payment for the balance.

Petitioner filed a complaint against PNB for Annulment of Mortgage and Mortgage
Foreclosure, Delivery of Title, or Specific Performance with Damages

CA affirmed RTC: Favored PNB and demanded that it refund the 725,000 php (no sale
because no meeting of the minds in terms of price)

Lot was later transferred to its PNB President Bayani Gabriel

Petitioner filed a petition for certiorari

ISSUE:
1.
W/N the statement of account by SAMD is only a recommendation subject to the approval
of the BOD - YES
2.
W/N there was a contract of sale - NO
3.
W/N earnest money establishes a contract of sale - NO
HELD: Denied. Costs Against Petitioner.
1.
YES

Art. 1318 of NCC:

o
no contract unless the following requisites concur:
2.
Consent of the contracting parties;
3.
Object certain which is the subject matter of the contract;
4.
Cause of the obligation which is established

The fixing of the price can never be left to the decision of one of the contracting parties.
But a price fixed by one of the contracting parties, if accepted by the other, gives rise to a
perfected sale.

When there is merely an offer by one party without acceptance of the other, there is no
contract.
2. NO

Section 23 of the Corporation Code:

o
corporate powers of all corporations shall be exercised by the board of directors. Just as a
natural person may authorize another to do certain acts in his behalf, so may the board of
directors of a corporation validly delegate some of its functions to individual officers or agents
appointed by it. Thus, contracts or acts of a corporation must be made either by the board of
directors or by a corporate agent duly authorized by the board. Absent such valid
delegation/authorization, the rule is that the declarations of an individual director relating to the
affairs of the corporation, but not in the course of, or connected with the performance of
authorized duties of such director, are held not binding on the corporation.

a corporation can only execute its powers and transact its business through its:
o
Board of Directors
o
officers and agents when authorized by:

a board resolution;or

its by-laws
3. NO

ART. 1482. Whenever earnest money is given in a contract of sale, it shall be considered as
part of the price and as proof of the perfection of the contract

The deposit of P725,000 was accepted by PNB on the condition that the purchase price is
still subject to the approval of the PNB Board

Absent proof of the concurrence of all the essential elements of a contract of sale, the
giving of earnest money cannot establish the existence of a perfected contract of sale.
VILLONCO REALTY V. BORMAHECO (July 25, 1975)
FACTS:
Francisco Cervantes of Bormaheco Inc. agrees to sell to Villonco Realty a parcel of land and its
improvements located in Buendia, Makati.

Bormaheco made the terms and condition for the sale and Villonco returned it with some
modifications.
The sale is for P400 per square meter but it is only to be consummated after respondent shall
have also consummated purchase of a property in Sta. Ana, Manila. Bormaheco won the bidding
for the Sta.Ana land and subsequently bought the property.
Villonco issued a check to Bormaheco amounting to P100,000 as earnest money. 26 days after
signing the contract of sale, Bormaheco returned the P100,000 to Villonco with 10% interest for
the reason that they are not sure yet if they will acquire the Sta.Ana property.
Villonco rejected the return of the check and demanded for specific performance.
ISSUE:
WON Bormaheco is bound to perform the contract with Villonco.
HELD:
The contract is already consummated when Bormaheco accepted the offer by Villonco. The
acceptance can be proven when Bormaheco accepted the check from Villonco and then returned
it with 10% interest as stipulated in the terms made by Villonco.
On the other hand, the fact that Villonco did not object when Bormaheco encashed the check is a
proof that it accepted the offer of Bormaheco.
Whenever earnest money is given in a contract of sale, it shall be considered as part of the price
and as proof of the perfection of the contract" (Art. 1482, Civil Code).