I.

Cause
A.
REPUBLIC OF THE PHILIPPINES vs.PHILIPPINE RESOURCES DEVELOPMENT CORPORATION and the
COURT OF APPEALS,
FACTS:
Macario Apostol, allegedly acting for the Philippine Resources Development Corp. (PRDC), contracted with the
Bureau of Prison for the purchase of 100 tons of designated logs, but only a small payment of the purchase price was
made. In lieu of the balance of the purchase price, he caused to be delivered goods of the PRDC to the Bureau of
Prison as payment for the outstanding price. The Government asserted that the subject matter of its litigation with
Apostol was a sum of money allegedly due to the Bureau of Prison from Apostol and not the goods reportedly turned
over by Apostol in payment of his private debt to the Bureau of Prison and the recovery of which was sought by
PRDC; and for this reason, PRDC had no legal interest in the very subject matter in litigation as to entitle it to
intervene. The Government argued that the goods which belonged to PRDC were not connected with the sale
because Price ... is always paid in terms of money and the supposed payment being in kind, it is no payment at all
ISSUE:
Whether PRDC had the right to intervene in the sales transaction executed between Apostol and the Bureau of
Prisons and in the suit brought by the Government to enforce such sale.
HELD:
The Court held that the Governments contentions were untenable, ruling that Article 1458 provides that the
purchaser may pay a price certain in money or its equivalent, which means payment of the price need not be in
money. Whether the goods claimed by PRDC belong to it and delivered to the Bureau of Prison by Apostol in
payment of his account is sufcient payment therefor, is for the court to pass upon and decide after hearing all the
parties in the case. PRDC therefore had a positive right to intervene in the case because should the trial court credit
Apostol with the value price of the materials delivered by him, certainly PRDC would be affected adversely if its claim
of ownership to such goods were upheld.
Republic is not at all authority to say that under Article 1458, as it denes a contract of sale, the term equivalent of
price can cover other than money or other media of exchange, since Republic covers not the perfection stage of a
contract of sale, but rather the consummation stage where the price agreed upon (which ideally should be in money
or its equivalent) can be paid under the mutual arrangements agreed upon by the parties to the contract of sale, even
by dation in payment, as was the case in Republic.
B) ISAAC BAGNAS, ENCARNACION BAGNAS, SILVESTRE BAGNAS MAXIMINA BAGNAS, SIXTO BAGNAS
and
AGATONA
ENCARNACION
vs.
COURT
OF
APPEALS
G.R.
No.
L-38498;
August
10,
1989
FACTS: Hilario Mateum died on March 11, 1964, without ascendants or descendants, and survived only by collateral
relatives. Mateum left no will, no debts, and an estate consisting of twenty-nine parcels of land in Kawit and Imus,
Cavite, ten of which are involved in this appeal. On April 3, 1964, the private respondents, themselves collateral
relatives of Mateum registered with the Registry of Deeds for the Province of Cavite two deeds of sale purportedly
executed by Mateum in their favor covering ten parcels of land. The consideration were the sum of P1 peso and
services
rendered,
being
rendered
and
to
be
rendered
for
my
benefit.
On the strength of the deeds of sale, the respondents were able to secure title in their favor over three of the ten
parcels of land conveyed thereby. The petitioners commenced suit against the respondents seeking annulment of the
deeds of sale as fictitious, fraudulent or falsified, or, alternatively, as donations void for want of acceptance embodied
in a public instrument. Claiming ownership pro indiviso of the lands subject of the deeds by virtue of being intestate
heirs of Hilario Mateum, the petitioners prayed for recovery of ownership and possession of said lands, accounting of
the fruits thereof and damages. Although the complaint originally sought recovery of all the twenty-nine parcels of
land left by Mateum, at the pre-trial the parties agreed that the controversy be limited to the ten parcels subject of the
questioned sales, and the Trial Court ordered the exclusion of the nineteen other parcels from the action. Of the ten
parcels which remained in litigation, nine were assessed for purposes of taxation at values aggregating P10,500 00.
The defendants (respondents here) denied the alleged fictitious or fraudulent character of the sales in their favor,
asserting that said sales were made for good and valuable consideration; that while "... they may have the effect of

donations, yet the formalities and solemnities of donation are not required for their validity and effectivity
After the plaintiffs had presented their evidence, the defendants filed a motion for dismissal in effect, a demurrer to
the evidence reasserting the defense set up in their answer that the plaintiffs, as mere collateral relatives of Hilario
Mateum, had no light to impugn the latter's disposition of his properties by means of the questioned conveyances and
submitting, additionally, that no evidence of fraud maintaining said transfers had been presented.
The Trial Court granted the motion to dismiss. The plaintiffs appealed to the CA. The Appellate Court declared that
the testimony of the plaintiffs witness failed to establish fraud of any kind or that Mateum had continued paying taxes
on the lands in question even after executing the deeds conveying them to the defendants stating that since in duly
notarized and registered deeds of sale consideration is presumed, The Court does not and it necessary to rule on the
alternative allegations of the appellants that the said deed of sale were in reality donations.
ISSUE:

W/N

the

sale

is

void

for

want

of

consideration

HELD: YES. Upon the consideration alone that the apparent gross, not to say enormous, disproportion between the
stipulated price (in each deed) of P l.00 plus unspecified and unquantified services and the undisputably valuable real
estate allegedly sold worth at least P10,500.00 going only by assessments for tax purposes which, it is well-known,
are notoriously low indicators of actual value plainly and unquestionably demonstrates that they state a false and
fictitious consideration, and no other true and lawful cause having been shown, the Court finds both said deeds,
insofar as they purport to be sales, not merely voidable, but void ab initio. Neither can the validity of said
conveyances be defended on the theory that their true causa is the liberality of the transferor and they may be
considered in reality donations because the law also prescribes that donations of immovable property, to be valid,
must be made and accepted in a public instrument, and it is not denied by the respondents that there has been no
such acceptance which they claim is not required. The transfers in question being void, it follows as a necessary
consequence and conformably to the concurring opinion in Armentia, with which the Court fully agrees, that the
properties purportedly conveyed remained part of the estate of Hilario Mateum, said transfers notwithstanding,
recoverable by his intestate heirs, the petitioners herein, whose status as such is not challenged.

C)Antonio Goquiolay v. Washington Sycip

G.R. No. L-11840
Facts:
On May 29, 1940, the plaintiff partnership "Tan Sin An and Goquiolay" purchased the three (3) parcels of land, known
as Lots Nos. 526, 441 and 521 of the Cadastral Survey of Davao, subject-matter of the instant litigation, assuming the
payment of a mortgage obligation of P25,000.00, payable to "La Urbana Sociedad Mutua de Construccion y
Prestamos" for a period of ten (10) years, with 10% interest per annum. Another 46 parcels were purchased by Tan
Sin An in his individual capacity, and he assumed payment of a mortgage debt thereon for P35,000.00 with interest.
The downpayment and the amortization were advanced by Yutivo and Co., for the account of the purchasers.
On September 25, 1940, the two separate obligations were consolidated in an instrument executed by the
partnership and Tan Sin An, whereby the entire 49 lots were mortgaged in favor of the "Banco Hipotecario de
Filipinas" (as successor to "La Urbana") and the covenantors bound themselves to pay, jointly and severally, the
remaining balance of their unpaid accounts amounting to P52,282.80 within eight 8 years, with 8% annual interest,
payable in 96 equal monthly installments.
On March 29, 1949, after the death of her husband and due to demands of the creditors of the former, Kong Chai Pin,
wife of the former, filed a petition with the probate court for authority to sell all the 49 parcels of land to Washington Z,
Sycip and Betty Y. Lee, for the purpose preliminary of settling the aforesaid debts of Tan Sin An and the partnership.
Pursuant to a court order of April 2, 1949, the administratrix executed on April 4, 1949, a deed of sale 1 of the 49
parcels of land to the defendants Washington Sycip and Betty Lee in consideration of P37,000.00 and of vendees'
assuming payments of the claims filed by Yutivo Sons Hardware Co. and Sing Yee and Cuan Co., Inc.

Issue: WON the sale is invalid on account of the price being unreasonably low
Held:
No. Appellants assails the correctness of the amounts paid for the account of the partnership as found by the trial
court. This question, however, need not be resolved here, as in the deed of conveyance executed by Kong Chai Pin,
the purchasers Washington Sycip and Betty Lee assumed, as part consideration of the purchase, the full claims of
the two creditors, Sing Yee and Cuan Co., Inc. and Yutivo Sons Hardware Co.
There is complete failure of proof, moreover, that the price for which the properties were sold was unreasonably low,
or in any way unfair, since appellants presented no evidence of the market value of the lots as of the time of their sale
to appellees Sycip and Lee. The alleged value of P31,056.58 in May of 1955 is no proof of the market value in 1949,
specially because in the interval, the new owners appear to have converted the land into a subdivision, which they
could not do without opening roads and otherwise improving the property at their own expense. Upon the other hand,
Kong Chai Pin hardly had any choice but to execute the questioned sale, as it appears that the partnership had
neither cash nor other properties with which to pay its obligations. Anyway, we cannot consider seriously the
inferences freely indulged in by the appellants as allegedly indicating fraud in the questioned transactions, leading to
the conveyance of the lots in dispute to the appellee Insular Development Co., Inc.
G.) VALERIO vs. REFRESCA
G.R No. 163687
March 28, 2006
Facts:
Narciso Valerio, married to Nieves Valerio, owned two adjacent agricultural lots with a total area of 6.5 hectares. One
of these lots, Lot 428, was a four-hectare land. A portion thereof, consisting of 511 sq. m. and known as Lot 428-A, is
the subject of the petition in the case at bar. Spouses Alejandro and Vicenta Refresca started cultivating the 6.5hectare land as tenants. Narciso Valerio acquired ownership over the land. The Valerios entered into a leasehold
contract with tenant Alejandro Refresca whereby the latter was allowed to continue tilling the 6.5-hectare land in
exchange for fixed rentals. Narciso Valerio, with the consent of his wife Nieves, executed a Deed of Sale whereby he
sold his 6.5-hectare landholding to his heirs. The parties to the Deed of Sale, as co-owners, subdivided the 6.5hectare land and executed a Deed of Agreement of Subdivision.3The same 511 sq. m. of land was granted to tenant
Alejandro Refresca. Individual titles over the apportioned areas were subsequently issued to the vendees. Nieves
Valerio, entered into another leasehold agreement with the Refrescas over the 6.5-hectare landholding for the period
1984-1985 in exchange for the latters payment of rentals. Petitioners demanded that the respondents vacate the
land. They alleged that the 511 sq. m. lot was given to the respondents on the condition that they will surrender their
tenancy rights over the entire land but respondents failed to do so.
Issue: Whether or not the deed of sale was absolutely simulated
Ruling: The Ruling of the Supreme Court is that the deed of sale was relatively simulated. Article 1345 of the New
Civil Code provides that the simulation of a contract may be absolute or relative. In absolute simulation, there is a
colorable contract but it has no substance as the parties have no intention to be bound by it. The main characteristic
of an absolute simulation is that the apparent contract is not really desired or intended to produce legal effect or in
any way alter the juridical situation of the parties. As a result, an absolutely simulated or fictitious contract is void, and
the parties may recover from each other what they may have given under the contract. Thus, we rule that the 1975
Deed of Sale between the parties is a relatively simulated contract as the clear intent was to transfer ownership over
the land. Therefore, the contract binds the parties to their true agreement.

I.) YU BUN GUAN, PETITIONER, VS. ELVIRA ONG, RESPONDENT.

GR No 144735 October 18, 2001
FACTS:
Respondent said that she and petitioner are husband and wife, having been married according to Chinese rites on
April 30, 1961. They lived together until she and her children were abandoned by petitioner because of the latter's

`incurable promiscuity, volcanic temper and other vicious vices'. She purchased a parcel of land referred to as the
Rizal Property from Aurora Seneris, supported by a Title and then subsequently registered in her name.
Before their separation, the respondent executed a Deed of Sale of the Rizal property in petitioners favor on the
promise that he would construct a commercial building for the benefit of the children. The consideration for the
`simulated sale' was that, after its execution in which he would represent himself as single, a Deed of Absolute Sale
would be executed in favor of the three (3) children and that he would pay the Allied Bank, Inc. the loan he obtained.
Petitioner did not pay the consideration. A new title was issued in petitioners name but the respondent did not deliver
the owners copy to him. Petitioner filed a Petition for Replacement of an owners duplicate title in which he attached
an Affidavit of Loss. It was granted by the court, following which a new owners copy of the title was issued to
petitioner.
Petitioner avers that he used the respondent as his dummy to purchase the Rizal property since at that time he was
not a Filipino citizen. Petitioner added that respondent could not have purchased the property because she had no
financial capability to do so. Petitioner averred that respondent was in pari delicto being privy to the simulated sale.
The RTC ruled that the Rizal property was the paraphernal property of the Respondent. It likewise voided the Deed of
Absolute Sale of the Rizal property for having been simulated and executed during the marriage of the parties. The
CA upheld the trial courts findings.
ISSUE:
Whether there was a valid contract of sale
HELD:
NO. A contract of purchase and sale is null and void and produces no effect whatsoever where the same is without
cause or consideration in that the purchase price which appears thereon as paid has in fact never been paid by the
purchaser to vendor.
In the present case, it is clear from the factual findings of both lower courts that the Deed of Sale was completely
simulated and, hence, void and without effect. No portion of the P200,000 consideration stated in the Deed was ever
paid. And, from the facts of the case, it is clear that neither party had any intention whatsoever to pay that amount.
Instead, the Deed of Sale was executed merely to facilitate the transfer of the property to petitioner pursuant to an
agreement between the parties to enable him to construct a commercial building and to sell the Juno property to their
children. Being merely a subterfuge, that agreement cannot be taken as the consideration for the sale.
J. PERFECTO DY, JR. petitioner, vs. COURT OF APPEALS, GELAC TRADING INC., and ANTONIO V.
GONZALES, Respondents.
G.R. No. 92989 July 8, 1991
FACTS:
Wilfredo Dy purchased a truck and a farm tractor through LIBRA which was also mortgaged with the latter, as a
security to the loan.Petitioner, expresses his desire to purchased his brothers tractor in a letter to LIBRA which also
includes his intention to shoulder its mortgaged. LIBRA approved the request. At the time that Wilfredo Dy executed a
deed of absolute sale in favor of petitioner, the tractor and truck were in the possession of LIBRA for his failure to pay
the amortization. When petitioner finally fulfilled its obligation to pay the tractor, LIBRA would only release the same
only if he would also pay for the truck. In order to fulfill LIBRAs condition, petitioner convinced his sister to pay for the
remaining truck, to which she released a check amounting to P22,000. LIBRA however, insisted that the check must
be first cleared before it delivers the truck and tractor. Meanwhile, another case penned Gelac Trading Inc vs.
Wilfredo Dy was pending in Cebu as a case to recover for a sum of money (P12,269.80). By a writ of execution the
court in Cebu ordered to seize and levy the tractor which was in the premise of LIBRA, it was sold in a public auction

to which it was purchased by GELAC. The latter then sold the tractor to Antonio Gonzales. RTC rendered in favor of
petitioner. CA dismissed the case, alleging that it still belongs to Wilfredo Dy.
ISSUE:
Whether or not there was a consummated sale between Petitioner and LIBRA?
HELD:
NO. The mortgagor who gave the property as security under a chattel mortgage did not part with the ownership over
the same. He had the right to sell it although he was under the obligation to secure the written consent of the
mortgagee. And even if no consent was obtained from the mortgagee, the validity of the sale would still not be
affected.
Article 1496 of the Civil Code states that the ownership of the thing sold is acquired by the vendee from the moment it
is delivered to him in any of the ways specified in Articles 1497 to 1501 or in any other manner signing an agreement
that the possession is transferred from the vendor to the vendee. In the instant case, actual delivery of the subject
tractor could not be made. However, there was constructive delivery already upon the execution of the public
instrument pursuant to Article 1498 and upon the consent or agreement of the parties when the thing sold cannot be
immediately transferred to the possession of the vendee.
The payment of the check was actually intended to extinguish the mortgage obligation so that the tractor could be
released to the petitioner. It was never intended nor could it be considered as payment of the purchase price because
the relationship between Libra and the petitioner is not one of sale but still a mortgage. The clearing or encashment of
the check which produced the effect of payment determined the full payment of the money obligation and the release
of the chattel mortgage. It was not determinative of the consummation of the sale. The transaction between the
brothers is distinct and apart from the transaction between Libra and the petitioner. The contention, therefore, that the
consummation of the sale depended upon the encashment of the check is untenable.

L.) RAFAEL G. SUNTAY vs. THE HON. COURT OF APPEALS and FEDERICO C. SUNTAY G.R. No. 114950
December 19, 1995
Facts: Federico Suntay was the registered owner of a parcel of land. He applied as a miller-contractor of the then
National Rice and Corn Corporation (NARIC). His application, prepared by his nephew-lawyer, Rafael Suntay, was
disapproved because at that time he was tied up with several unpaid loans. Federico allowed Rafael to make the
application for him. Rafael prepared an absolute deed of sale whereby Federico, for and in consideration of
P20,000.00 conveyed to Rafael said parcel of land with all its existing structures. Said deed was notarized. A counter
sale was prepared and signed by Rafael who also caused its delivery to Federico. Through this counter conveyance,
the same parcel of land was sold by Rafael back to Federico for P20,000.00 also. Although on its face, the second
deed appears to have been notarized, an examination thereof will show that, it is not the said deed of sale but a
certain "real estate mortgage on a parcel of land to secure a loan of P3,500.00 in favor of the Hagonoy Rural Bank."
As testimony, Atty. Flores (notary public) admitted that he failed to submit to the Clerk of Court a copy of the second
deed. Neither was he able to enter the same in his notarial register. Federico requested that Rafael deliver his copy of
title certificate so that Federico could have the counter deed of sale in his favor registered in his name. The request
was turned down. In opposition thereto, Rafael chronicled the discrepancy in the notarization of the second deed of
sale upon which said petition was premised and ultimately concluded that said deed was a counterfeit or "at least not
a public document which is sufficient to transfer real rights according to law." Rafael insisted that said property was
"absolutely sold and conveyed for a consideration of P20,000.00 and for other valuable consideration" as dacion en
pago.
Issue: Whether or not the sale constitutes as a sale of dacion en pago.
Held: No. The failure of the late Rafael to take exclusive possession of the property allegedly sold to him is a clear
badge of fraud. Federico remained in actual possession, cultivation and occupation of the disputed lot from the time
the deed of sale was executed until the present. It is a circumstance which is unmistakably added proof of the
fictitiousness of the said transfer, the same being contrary to the principle of ownership. According to the late Rafael,

he allowed Federico to remain in the premises and enjoy the fruits thereof because of their understanding that
Federico may subsequently repurchase the property. Contrary to what Rafael thought, this in fact is added reason for
simulation. If it were true that the first sale transaction was actually a "dacion en pago" in satisfaction of Federico's
alleged unpaid attorney's fees, it does strain the logical mind that Rafael had agreed to allow the repurchase of the
property three months thereafter. Federico was financially liquid. Had he intended to pay attorney's fees, he would
have paid Rafael in cash and not part with valuable income-producing real property.

A)

II. Forms
MARCIANA
G.R.

CONLU,
No.

ET
L-4508;

AL.,

vs.
March

PABLO
4,

ARANETA
1910

FACTS: Plaintiffs commenced an action against the defendants to recover, as owners, certain parcels of land located
in the pueblo of Molo, Province of Iloilo, together with damages, which parcels of land are described in par. 6 of the
complaint. Defendants allege that they are the owners of the parcels of land in question. The question thus presented
by the complaint was Who are the owners of said parcels of land? The lower court found that the plaintiffs were the
owners and were entitled to the possession of all of the parcels of land described in said paragraph 6 of the
complaint, except that parcel, together with the house located thereon, described in subsection (d) of said paragraph
6. This latter parcel of land the lower court held belonged to the estate of Vito Tiongco.
It was established that the house in question, with the tile roof, was originally the property of Catalina Tiongco, sister
of Anselma, which was afterwards left to Anselma by virtue of the will made by Catalina before her death. In 1887, her
nephew, Vito Tiongco, was appointed gobernadorcillo of Molo, whose appointment was contested on the ground that
he was not the owner of any reality. Anselma, who then possessed many properties, put him into possession of the
said tile-roofed house as apparently his own property. Vito lived in the house from that date up to the time of his death
in 1904, and, as it appeared to everybody, he considered it as if he was the real owner thereof. He made many
repairs as well as alterations in the house on his account further, after being put into possession of the house in the
manner above mentioned, Anselma agreed that he could have the house as his own if he would pay to her P3,000,
which sum is alleged to be the amount paid by her sister Catalina for the erection of said house; and that afterwards,
and before the death of Anselma, he had paid this sum to the satisfaction of Anselma, It was found that the house
with tile roof was, at the time of the death of Anselma, really the property of Vito Tiongco.
ISSUE:

W/N

the

sale

of

real

property

made

in

1887

be

proved

by

oral

testimony

HELD: YES. An oral contract for the sale of real estate, made prior to the enactment of the Code of Civil Procedure,
is binding between the parties thereto, although it may still be necessary for the parties seeking to enforce such
contract to take some action to secure the execution of proper documents, but this requirement will not render the
agreement
invalid.
Further, Sec. 335 of the Code of Procedure in Civil Actions, now in force, has established a rule relating to the
method of proving contracts of sale of real property, and an oral contract for the sale of real property can not now be
proven under said section 335 except "some note or memorandum thereof be in writing and subscribed by the party
charged or by his agent." However, said sectionmakes no attempt to render oral contracts invalid. It simply provides
that the contract shall not be enforced by an action, unless the same is evidenced by some note or memorandum.
The contract exists and is valid, though it may not be clothed with the necessary form and the effect of a
noncompliance with the provisions of the statute is simply that no action can be proved unless the requirement is
complied with; but a failure to except to the evidence because it does not conform with the statute is a waiver of the
provisions of the law. If the parties to the action, during the trial make no objection to the admissibility of oral evidence
to support a contract of sale of real property, and thus permit the contract to be proved, it will be just as binding upon
the
parties
as
if
it
had
been
reduced
to
writing.

In the present case the defendants called thirteen witnesses, who each testified concerning the sale of the parcel of
land and the house in question in or about the year 1887, and no objection was made by the plaintiffs to the
admissibility of this testimony. They permitted the defendants to prove the oral contract of sale. The contract of sale,
therefore, being fully proven, and under the provisions of the law an oral contract for the sale of real property being
binding and valid between the parties, we see no escape from the conclusion that if the evidence was sufficient to
show the sale, that the contract was binding, even though it had not been reduced to writing.
B) Julio Tapec v. Court of Appeals
G.R. No. 111952
Facts:
On 4 December 1994, the petitioners, who are husband and wife, filed a complaint for recovery of ownership with the
Regional Trial Court at Batac, Ilocos Norte, against David Cabuyadao and herein private respondent Loreto Raguirag.
The petitioners alleged in their complaint that they are the owners of a parcel of land with an area of 11,850 square
meters, located at Barangay
No. 26, Oaiag-Upay, Paoay, Ilocos Norte
The petitioners' claim of ownership is based on two deeds of absolute sale, one executed on 2 January 1950 by
Trinidad Gonzales in favor of petitioner Julio Tapec, and the other executed on 28 May 1949 by Rosario Gonzales in
favor of the petitioners, 5 both acknowledged before the same notary public and duly registered with the Office of the
Register of Deeds under Act No. 3344 on 8 March 1950 and 29 July 1949
Respondent Loreto Raguirag, on the other hand, anchored his defense on a document, dated 15 May 1931 and
handwritten in Ilocano, wherein the brothers Victoriano, Gregorio, Matias, and Alejandro, all surnamed Gonzales, sold
to the spouses Manuel Raguirag and Clara Tapec, grandparents of respondent Raguirag, for a consideration of
P150.00 a pasture situated in Dumalaoing, Paoay, Ilocos Norte, with an area of 3,450 sq. meters
Issue: WON the petitioners deed of sale should prevail over the alleged sale to the ancestors of respondent
Raguirag executed much earlier in a private instrument
Held:
No. The said private instrument is a deed of sale in which all the requisites of a valid contract are present and which
is binding upon the parties. Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. The trial court erroneously held that it is invalid
because it is not in a public document as required by Article 1358 of the Civil Code and pursuant to Manotok Realty,
Inc. vs. Court of Appeals. 27 Article 1358 does not invalidate the acts or contracts enumerated therein if they are not
embodied in public documents.
This Article enumerates certain contracts that must appear in public or private documents. This provision does not
require such form in order to validate the act or contract but to insure its efficacy. It is limited to an enumeration of the
acts and contracts which should be reduced to writing in a public or private instrument. The reduction to writing in a
public or private document, required in this article, is not an essential requisite for the existence of the contract, but is
simply a coercive power granted to the contracting parties by which they can reciprocally compel the observance of
these formal requisites.
D) G.R. No. 118509 December 1, 1995
LIMKETKAI SONS MILLING, INC vs. COURT OF APPEALS
MELO, J.:
FACTS:
In 1976, Philippine Remnants Co., Inc. constituted the Bank of the Philippine Islands (BPI) as its trustee to manage,
administer, and sell its real estate property, one of which was the disputed lot in Pasig. In 1988, Pedro Revilla, Jr., a
licensed real estate broker, was given formal authority by BPI to sell the lot for P1,000/sqm. Broker Revilla contacted
Alfonso Lim of Limketkai Sons Milling (LSM) who agreed to buy the land. LSM asked that the price of P1,000/sqm. be
reduced to P900.00 while Albano stated the price is to be P1,100.00. The parties finally agreed that the lot would be

sold at P1,000/sqm. to be paid in cash. Notwithstanding the final agreement to pay P1,000/sqm. on a cash basis,
Alfonso Lim (LSM official) asked if it was possible to pay on terms. The bank officials stated that there was no harm in
trying to ask for payment on terms because in previous transactions, the same had been allowed. It was the
understanding, however, that should the term payment be disapproved, then the price shall be paid in cash. It was
Albano who dictated the terms under which the installment payment may be approved, and acting thereon, Alfonso
Lim wrote BPI through Merlin Albano embodying the payment initially of 10% and the remaining 90% within a period
of 90 days. 2 or 3 days later, LSM learned that its offer to pay on terms had been frozen. Alfonso Lim went to BPI and
tendered the full payment of P33,056,000.00 to Albano. The payment was refused because Albano stated that the
authority to sell that particular piece of property in Pasig had been withdrawn from his unit. The same check was
tendered to BPI Vice-President Nelson Bona who also refused to receive payment.
LSM filed an action for specific performance with damages against BPI. In the course of the trial, BPI informed the
trial court that it had sold the property under litigation to National Book Store (NBS) in 1989. The complaint was thus
amended to include NBS. RTC ruled in favor of LSM, holding that there was a perfected contract of sale between
LSM and BPI. CA reversed, holding that no contract of sale was perfected because there was no concurrence of the
three requisites enumerated in Article 1318 of the Civil Code.
ISSUE:
Whether or not there was a perfected contract between petitioner Limketkai Sons Milling, Inc. and respondent Bank
of the Philippine Islands (BPI)
HELD:
Yes. There was a meeting of the minds between the buyer and the bank in respect to the price of P1,000/sqm. The
requirements in the payment of the purchase price on terms instead of cash were suggested by BPI Vice-President
Albano. Since the authority given to broker Revilla specified cash payment, the possibility of paying on terms was
referred to the Trust Committee but with the mutual agreement that if the proposed payment on terms will not be
approved by our Trust Committee, Limketkai should pay in cash, the amount was no longer subject to the approval or
disapproval of the Committee, it is only on the terms. The record shows that if payment was in cash, either broker
Revilla or Aromin had full authority. But because LSM took advantage of the suggestion of Vice-President Albano, the
matter was sent to higher officials. Immediately upon learning that payment on terms was frozen and/or denied,
Limketkai exercised his right within the period given to him and tendered payment in full, thus complying with their
agreement.
The negotiation or preparation stage started with the authority given by Philippine Remnants to BPI to sell the lot,
followed by the authority given by BPI and confirmed by Philippine Remnants to broker Revilla to sell the property, the
offer to sell to Limketkai, the inspection of the property and the negotiations with Aromin and Albano at the BPI
offices. The perfection of the contract took place when Aromin and Albano, acting for BPI, agreed to sell and Alfonso
Lim with Albino Limketkai, acting for LSM, agreed to buy the disputed lot at P1,000/sqm. Aside from this there was
the earlier agreement between LSM and the authorized broker.
E) G.R. No. L-46715-16 July 29, 1988
LEONCIA T. ZAIDE, et. at. vs. Court of Appeals
Facts:
On January 11, 1965, Edita Zaide executed a public instrument denominated "Deed of Sale" by which, in
consideration of P5,000.00 paid to her, she sold the parcel of land covered by TCT No. 69088 to Leoncia T. Zaide.
The deed described both the vendor, Edita Zaide, and the vendee, Leoncia T. Zaide, as "married," but named neither
of their husbands. The document however did bear the signature of Edita's husband, Roberto de Leon, indicating his
"marital consent." The omission of the name of the vendee's husband in the deed of sale gave rise to a problem.
Precisely because of it, the Register of Deeds refused to accept it for registration. A second deed of sale couched
in the same terms as the first but this time with the names of the husbands of both the vendor and the vendee -was
made and shortly thereafter was presented to, and was promptly accepted for registration, by the Register of Deeds.
The latter then issued a new title, TCT No. 138606, in the name of "Leoncia T. Zaide, married to Primitivo Zaide."
With this lot as collateral, the Zaide Spouses thereafter obtained a loan from the Government Service Insurance
System in the sum of P28,500.00. This was sometime in November, 1964. The proceeds were used to construct a

two-story apartment building on the land. On June 1, 1969, the house of the de Leons burned down. They moved to
one of the doors of the apartment built by the Zaide Spouses. They were asked to pay rentals. They refused.
Litigation ensued. The de Leon Spouses filed a complaint with the Court of First Instance of Rizal against the Zaide
Spouses alleging that the second deed of sale was forged and therefore should be cancelled. The De Leons pouses
reasoned that they "could not possibly have sold their lot for the measly sum of P5,000.00 appear-ing in the forged
deed ..considering that the market price of the land ... cannot be less than P20,000.00.CFI rendered judgement in
favor of the Zaide Spouses i.e the second deed of sale is VALID. CA re-versed. Hence, this the instant case.
Issue:
Whether or not the first Deed of sale is valid even if defective of faulty in its form.
Held:
YES, the first deed of sale is VALID. Although the first deed of sale was genuine, it was so far defective as to render it
unregistrable in the Registry of Property. As already pointed out, it did not set forth the name of the vendee's husband
and was for this reason refused registration by the Register of Deeds. The defect was unsubstantial. It did not
invalidate the deed. The legal dispositions are clear. Though defective in form, the sale was valid; and the parties
could compel each other to do what was needful to make the document of sale registrable. The law generally allows
a contract of sale to be entered into in any form, whether "in writing, or by word of mouth, or partly in writing and
partly by word or mouth, or (even) inferred from the conduct of the parties;" but if the agreement concerns "the sale of
land or of an interest therein," the law requires not only that "the same, or some note or memorandum thereof, be in
writing, and subscribed by the party charged" in order that it may be enforceable by action, but also that the writing be
in the form of a "public document." The law finally provides that "If the law requires a document or other special form,
as in the acts and contracts enumerated in .. (Article 1358), the contracting parties may compel each other to observe
that form, once the contract has been perfected .. (and such) right may be exercised simultaneously with the action
upon the contract." In the case at bar, the Zaides thus had the right to compel the de Leons to observe the special
form pre-scribed by law; i.e., revised the public document by inserting the name of the vendee's husband. Indeed,
this was precisely what was done in the second deed of sale.
F.) UP v. PHILAB
[G.R. No. 152411. September 29, 2004]
Facts: University of the Philippines (UP) decided to construct an integrated system of research organization known as
the Research Complex. As part of the project, laboratory equipment and furniture were purchased for the National
Institute of Biotechnology and Applied Microbiology (BIOTECH) at the UP Los Baos. Providentially, the Ferdinand E.
Marcos Foundation (FEMF) came forward and agreed to fund the acquisition of the laboratory furniture, including the
fabrication thereof. Renato E. Lirio, the Executive Assistant of the FEMF, gave the go-signal to BIOTECH to contact a
corporation to accomplish the project. Dr. William Padolina, the Executive Deputy Director of BIOTECH, arranged for
Philippine Laboratory Industries, Inc. (PHILAB), to fabricate the laboratory furniture and deliver the same to BIOTECH
for the BIOTECH Building Project, for the account of the FEMF. Lirio directed Padolina to give the go-signal to
PHILAB to proceed with the fabrication of the laboratory furniture, and requested Padolina to forward the contract of
the project to FEMF for its approval. In a Letter dated July 23, 1982, Padolina informed Hector Navasero, the
President of PHILAB, to proceed with the fabrication of the laboratory furniture, per the directive of FEMF Executive
Assistant Lirio. Padolina also requested for copies of the shop drawings and a sample contract for the project, and
that such contract and drawings had to be finalized before the down payment could be remitted to the PHILAB the
following week. However, PHILAB failed to forward any sample contract. On August 24, 1982, FEMF remitted
P600,000 to PHILAB as downpayment for the laboratory furniture for the BIOTECH project, for which PHILAB issued
Official Receipt No. 253 to FEMF. On October 22, 1982, FEMF made another partial payment of P800,000 to
PHILAB, for which the latter issued Official Receipt No. 256 to FEMF. The remittances were in the form of checks
drawn by FEMF and delivered to PHILAB, through Padolina. On October 16, 1982, UP, through Emil Q. Javier, the
Chancellor of UP Los Baos and FEMF, represented by its Executive Officer, Rolando Gapud, executed a
Memorandum of Agreement (MOA) in which FEMF agreed to grant financial support and donate sums of money to
UP for the construction of buildings, installation of laboratory and other capitalization for the project, not to exceed
P29,000,000.00. In the meantime, Navasero promised to submit the contract for the installation of laboratory furniture
to BIOTECH, by January 12, 1983. However, Navasero failed to do so. Instead of submitting the said contract,

PHILAB submitted to BIOTECH an accomplishment report on the project as of February 28, 1983, and requested
payment thereon. President Marcos was ousted from office during the February 1986 EDSA Revolution. On March
26, 1986, Navasero wrote BIOTECH requesting for its much-needed assistance for the payment of the balance
already due plus interest of P295,234.55 for its fabrication and supply of laboratory furniture.
Issue: WON the CA failed to apply the law on contracts between PHILAB and FEMF
Ruling: The ruling of the Supreme Court is that the CA overlooked the evidentiary effect and substance of the
corresponding letters and communications which support the statements of the witnesses showing affirmatively that
an implied contract of sale existed between PHILAB and the FEMF. No contract existed between UP and PHILAB as
it could not have entered into any agreement without the requisite public bidding and a formal written contract. There
is no dispute that the respondent is not privy to the MOA executed by the petitioner and FEMF; hence, it is not bound
by the said agreement. Contracts take effect only between the parties and their assigns.

1.

IV. Effects of A Perfected Contract of Sale

PERPETUA ABUAN VS. EUSTAQUIO GARCIA
Facts: On August 7, 1953, petitioners Perpetua Abuan et al. sold a parcel of rice land to defendants Eustaquio Garcia
et al. through a Deed of Absolute Sale. A TCT was issued to defendants. Later, petitioners filed an action to recover
the land, alleging the sale was tainted with fraud and was without consideration. Reaching an amicable settlement,
the parties entered into an "Agreement" dated February 28, 1955, under which defendants paid P500 as partial
payment of the purchase price of the land, and promised to pay the balance of P1, 500 on or before April 30, 1955,
with a grace period of 30 days. The Agreement also stated that it "shall supersede all previous agreements or
contracts heretofore entered into..." Plaintiffs instituted the present action on March 4, 1960. Defendants moved to
dismiss, on the ground that plaintiffs' right of action was already barred, because the five-year redemption period had
already expired. Section 119 of the Public Land Law provides: o Every conveyance of land acquired under the free
patient or homestead provisions, when proper, shall be subject to re-purchase by the applicant, his widow, or legal
heirs, for a period of five years from the date of conveyance . Plaintiffs argue that the period should be counted from
the date of full payment (May 1965) since it was on this date that the contract was consummated. CFI Nueva Vizcaya
dismissed the complaint, fixing the starting date as February 28, 1955, when the Agreement was entered into. CA
certified the case to SC. SC: "Conveyance" means transfer of ownership; it means the date when the title to the land
is transferred from one person to another. The 5-year period should, therefore, be reckoned with from the date that
defendants acquired ownership.
Issue: Whether or not the defendants legally acquire ownership of the land?
Held: Upon execution of the Deed of Absolute Sale (August 7, 1953). Dismissal affirmed. Under Art. 1498, When the
sale is made through a public instrument, as in this case, the execution thereof shall be equivalent to the delivery of
the thing which is the object of the contract, if from the deed the contrary does not appear or cannot be clearly
inferred. This manner of delivery is common to personal as well as real property. It is clear, therefore, that defendants
acquired ownership to the land in question upon the execution of the Deed of Absolute on August 7, 1953. The
Agreement of February 28, 1955, only superseded the deed as to the terms and conditions of payment. The
Agreement did not operate to revest the ownership of the land in the plaintiffs. Assuming arguendo that the Deed is
null and void as petitioners allege, we can consider the date of the Agreement at the latest, as the time within which
ownership is vested in the defendants. While it is a private instrument the execution of which could not be construed
as constructive delivery under Art. 1498, Art.1496 explicitly provides that ownership of the thing sold is acquired by
the vendee from the moment it is delivered to him "in any other manner signifying an agreement that the possession
is transferred from the vendor to the vendee." The intention to give possession (and ownership) is manifest in the
Agreement, especially considering the following circumstances: (1) the payment of part of the purchase price, there
being no stipulation in the agreement that ownership will not vest in the vendees until full payment of the price; and
(2) the fact that the agreement was entered into in consideration of plaintiffs' desistance, as in fact they did desist, in
prosecuting their reivindicatory action, thereby leaving the property in the hands of the then and now defendants

as owners thereof, necessarily. This was delivery brevi manu permissible under Articles 1499 and 1501 of the New
Civil Code. In the absence of an express stipulation to the contrary, the payment of the price is not a condition
precedent to the transfer of ownership, which passes by delivery of the thing to the buyer.

2.) FILINVEST CREDIT CORPORATION, PLAINTIFF-APPELLEE, VS. PHILIPPINE ACETYLENE, CO., INC.,
DEFENDANT-APPELLANT.
GR No L-50449 January 30, 1982
FACTS:
Defendant-appellant Philippine Acetylene Co., Inc., purchased from Alexander Lim, as evidenced by a Deed of Sale,
a motor vehicle (Chevrolet, 1969 model) for P55,247.80 with a down payment of P20,000.00 and the balance of
P35,247.80 payable, under the terms and conditions of the promissory note.
As security for the payment of said promissory note, the appellant executed a chattel mortgage over the same motor
vehicle in favor of said Alexander Lim. Subsequently, Alexander Lim assigned to the Filinvest Finance Corporation all
his rights, title, and interests in the promissory note and chattel mortgage by virtue of a Deed of Assignment.
Thereafter, the Filinvest Finance Corporation, as a consequence of its merger with the Credit and Development
Corporation assigned to the new corporation, herein plaintiff-appellee Filinvest Credit Corporation, all its rights, title,
and interests on the aforesaid promissory note and chattel mortgage which, in effect, the payment of the unpaid
balance owed by defendant-appellant to Alexander Lim was financed by plaintiff-appellee such that Lim became fully
paid.
Philippine Acetylene Co., Inc failed to comply with the terms and conditions set forth in the promissory note and
chattel mortgage since it had defaulted in the payment of nine successive installments. Filinvest then sent a demand
letter to remit the said amount in full in addition to stipulated interest and charges or return the mortgaged property to
my client within five (5) days from date of the letter. Philippine Acetylene Co., Inc wrote back advising Filinvest of its
decision to "return the mortgaged property, which return shall be in full satisfaction of its indebtedness pursuant to
Article 1484 of the New Civil Code." Accordingly, the mortgaged vehicle was returned to Filinvest together with the
document "Voluntary Surrender with Special Power of Attorney To Sell" executed by Philippine Acetylene Co., Inc.
(PACI)
Later on, Filinvest wrote a letter to PACI informing the latter that Filinvest cannot sell the motor vehicle as there were
unpaid taxes on the vehicle. Filinvest then offered to deliver back the motor vehicle to PACI but the latter refused to
accept it, so Filinvest instituted an action for collection of a sum of money with damages.
Appellant PACI avers that Filinvest has no cause of action against it since its obligation towards Filinvest was
extinguished when in compliance with the demand letter, it returned the mortgaged property to Filinvest, and that
assuming arguendo that the return of the property did not extinguish its obligation, it was nonetheless justified in
refusing payment since Filinvest is not entitled to recover the same due to the breach of warranty committed by the
original vendor-assignor Alexander Lim.
PACI further contended that when it opted to return, as in fact it did return, the mortgaged motor vehicle to Filinvest,
said return necessarily had the effect of extinguishing appellant's obligation for the unpaid price to the appellee,
construing the return to and acceptance by the appellee of the mortgaged motor vehicle as a mode of payment,
specifically, dation in payment or dacion en pago which according to PACI, virtually made Filinvest the owner of the
mortgaged motor vehicle by the mere delivery thereof.

ISSUE:
Whether the return of the mortgaged motor vehicle to the appellee by virtue of its voluntary surrender by the appellant
totally extinguished and/or cancelled its obligation to the appellee
HELD:
NO. The evidence on the record fails to show that the mortgagee, the herein appellee, consented, or at least
intended, that the mere delivery to, and acceptance by him, of the mortgaged motor vehicle be construed as actual
payment
The mere return of the mortgaged motor vehicle by the mortgagor, the herein appellant (PACI), to the mortgagee, the
herein appellee (Filinvest), does not constitute dation in payment or dacion en pago in the absence, express or
implied of the true intention of the parties. Dacion en pago, according to Manresa, is the transmission of the
ownership of a thing by the debtor to the creditor as an accepted equivalent of the performance of obligation. In
dacion en pago, as a special mode of payment, the debtor offers another thing to the creditor who accepts it as
equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale, that
is, the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the
debtor's debt. As such, the essential elements of a contract of sale, namely, consent, object certain, and cause or
consideration must be present. In its modern concept, what actually takes place in dacion en pago is an objective
novation of the obligation where the thing offered as an accepted equivalent of the performance of an obligation is
considered as the object of the contract of sale, while the debt is considered as the purchase price. In any case,
common consent is an essential prerequisite, be it sale or innovation to have the effect of totally extinguishing the
debt or obligation.
A more solid basis of the true intention of the parties is furnished by the document executed by appellant captioned
"Voluntary Surrender with Special Power of Attorney To Sell." An examination of the language of the document
reveals that the possession of the mortgaged motor vehicle was voluntarily surrendered by the appellant to the
appellee authorizing the latter to look for a buyer and sell the vehicle in behalf of the appellant who retains ownership
thereof, and to apply the proceeds of the sale to the mortgage indebtedness, with the undertaking of the appellant to
pay the difference, if any, between the selling price and the mortgage obligation. With the stipulated conditions as
stated, the appellee, in essence was constituted as a mere agent to sell the motor vehicle which was delivered to the
appellee, not as its property, for if it were, he would have full power of disposition of the property, not only to sell it as
is the limited authority given him in the special power of attorney. Had appellee intended to completely release
appellant of its mortgage obligation, there would be no necessity of executing the document captioned "Voluntary
Surrender with Special Power of Attorney To Sell." Nowhere in the said document can We find that the mere
surrender of the mortgaged motor vehicle to the appellee extinguished appellant's obligation for the unpaid price.
3) UNION MOTOR CORPORATION vs.THE COURT OF APPEALS
Facts:
Bernal spouses purchased from Union Motor Corporation one Cimarron Jeepney to be paid in installments and
executed a promissory note and a deed of chattel mortgage in favor of the petitioner. They entered into a contract of
assignment of the promissory note and chattel mortgage with Jardine-Manila Finance, Inc through Manuel Sosmea,
an agent of the petitioner, although the respondent spouses have not yet physically possessed the vehicle. Sosmea
required them to sign the receipt as a condition for the delivery of the vehicle that Spouses continued paying the
installments even if the subject motor vehicle remained undelivered in asmuch as Jardine-Manila Finance, Inc.
promised to deliver the subject jeepney. The respondent spouses have paid a total of worth of installments before
they discontinued paying on account of non-delivery of the subject motor vehicle, the reason why the vehicle was not
delivered was due to the fact that Sosmea allegedly took the subject motor vehicle in his personal capacity.JardineManila Finance, Inc., filed a complaint for a sum of money, against the respondent Bernal spouses before the then
Court of First Instance of Manila.The complaint was amended and transferred to the Regional Trial Court of Makati to
include petitioner Union Motor Corporation as alternative defendant.Trial court rendered a decision ordering petitioner
to pay the spouses. Not satisfied the petitioner interposed an appeal before the Court of Appeals while the

respondent spouses appealed to hold the petitioner solidarily liable with Jardine-Manila Finance, Inc. Appeal was
denied.
Issue: Whether there has been a delivery, physical or constructive, of the subject motor vehicle
Held:
NO. The respondent Bernal spouses should bear the loss thereof in accordance with Article 1504 that when the
ownership of goods is transferred to the buyer, the goods are at the buyers risk. But Bernal spouses never came into
possession of the subject motor vehicle. It is but appropriate that they be reimbursed by the petitioner of the initial
payment which they made. The court ruled in favor of the respondent Bernal spouses.Undisputed is the fact that the
respondent Bernal spouses did not come into possession of the subject Cimarron jeepney that was supposed to be
delivered to them by the petitioner.The registration certificate, receipt and sales invoice that the respondent Bernal
spouse assigned were signed as a part of the processing and for the approval of their application to buy the subject
motor vehicle. Without such signed documents, no sale, much less delivery, of the subject jeepney could be made.
The documents were not therefore an acknowledgment by respondent spouses of the physical acquisition of the
subject motor vehicle but merely a requirement of delivery. Issuance of a sales invoice does not prove transfer of
ownership of the thing sold to the buyer; an invoice is nothing more than a detailed statement of the nature, quantity
and cost of the thing sold and has been considered not a bill of sale. The thing is considered to be delivered when it
is placed in the hands and possession of the vendee. (Civil Code, Art. 1462). It is true that the same article declares
that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract,
but, in order that this symbolic delivery may produce the effect, it is necessary that the vendor shall have had control
over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to
confer upon the purchaser the ownership and the right of possession. The thing sold must be placed in his control.
When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole
will of the vendor, symbolic delivery through the execution of a public instrument is sufficient . But if,notwithstanding
the execution of the instrument, the purchaser cannot have the enjoyment and material tenancy of the thing and
make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the
interposition of another will, then the delivery has not been effected .

5.) SAN LORENZO DEVELOPMENT CORPORATION vs. COURT OF APPEALS G.R. No. 124242 January 21,
2005
Facts: On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to respondent Pablo Babasanta
who made a down payment of fifty thousand pesos (P50,000.00) as evidenced by a memorandum receipt issued by
Pacita Lu of the same date. Several other payments totaling two hundred thousand pesos (P200,000.00) were made
by Babasanta. He demanded the execution of a Final Deed of Sale in his favor so he may effect full payment of the
purchase price; however, the spouses declined to push through with the sale. They claimed that when he requested
for a discount and they refused, he rescinded the agreement. Thus, Babasanta filed a case for Specific Performance.
San Lorenzo Development Corporation (SLDC) alleged that on 3 May 1989, the two parcels of land involved had
been sold to it in a Deed of Absolute Sale with Mortgage. It alleged that it was a buyer in good faith and for value and
therefore it had a better right over the property in litigation.
Issue: Whether or not there was a perfected contract of sale between Babasanta and Spouses Lu.
Held: No. The agreement between Babasanta and the Spouses Lu is a contract to sell and not a contract of sale. The
receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos (P50,000.00) from
Babasanta as partial payment. Spouses Lu never intended to transfer ownership to Babasanta except upon full
payment of the purchase price. Babasantas letter dated 22 May 1989 was quite telling. He stated therein that despite
his repeated requests for the execution of the final deed of sale in his favor so that he could effect full payment of the
price, Pacita Lu allegedly refused to do so. In effect, Babasanta himself recognized that ownership of the property

would not be transferred to him until such time as he shall have effected full payment of the price. The receipt signed
by Pacita Lu should legally be considered as a perfected contract to sell. There was no double sale in this case
because the contract in favor of Babasanta was a mere contract to sell; hence, Art. 1544 is not applicable. There was
neither actual nor constructive delivery as his title is based on a mere receipt. Based on this alone, the right of SLDC
must be preferred.
10. Estelita Villamar vs. Balbino Mangaoil
G.R. No.: G.R. No. 188661Date: April 11, 2012
FACTS:The petitioner Villamar, the registered owner of the property, entered into an agreement with the respondent
Mangaoil to purchase and sale a parcel of land. The terms in their agreement includes the down payment of P
185,000 pesos, which will be for the payment of a loan secured from the Rural Bank of Cauayan so that it will be
withdrawn and released from the bank and that a deed of absolute sale will be executed in favor of the respondent
Mangaoil which was complied by the parties.Consequently, the respondent Mangaoil informed the petitioner that he
will withdraw from the agreement for the land was not yet free from incumbrances as there were still tenants who
were not willing to vacate the land without giving them back the amount that they mortgaged the land. Also, the
petitioner failed and refused, despite repeated demands, to handover the Certificate of Title. Then, the respondent
Mangaoil demanded the refund of the down payment that he had secured with the petitioner and filed a complaint
with the RTC to rescind the contract of sale. In the response of the petitioner, she averred that she had already
complied with the obligations and caused the release of the mortgaged land and the delivery of the Certificate of Title
will be facilitated by a certain Atty. Pedro C. Antonio. The respondent insisted that he can rescind the contract for the
petitioner had failed to deliver the Certificate of Title.The RTC and the CA dismissed the complaints for upon the deed
of absolute sale, there was already a valid and constructive delivery
.ISSUE:
1) Whether or not the failure of delivery of the Certificate of Title will constitute rescission of the contract?
2) Whether or not the execution of the deed of sale of real property is equivalent to a valid and constructive delivery?
HELD:
1) No, the Court held that the failure of the petitioner to comply with the obligation to deliver to the respondent the
possession of the property and the certificate of the title.

Based on Article 1191 of the New Civil Code of the Philippines, it is clear that the power to rescind obligations is
implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him. The
respondent cannot be deprived of his right to demand for rescission in view of the petitioners failure to abide with
item nos. 2 and 3 of the agreement. This remains true notwithstanding the absence of express stipulations in the
agreement indicating the consequences of breaches which the parties may commit. To hold otherwise would render
Article 1191 of the NCC as useless.
2) The execution of the deed of absolute sale does not constitute a constructive delivery for this case falls under to
the exception since a mere presumption and not conclusive delivery was created as the respondent failed to take
material possession of the subject property. A person who does not have actual possession of the thing sold cannot
transfer constructive possession by the execution and delivery of a public instrument. Thus, the respondent can
rescind the contract.The petition was denied and the petitioner is bound return the down payment plus interest to the
respondent.
V.
1. ALEJANDRA BUGARIN VDA. DE SARMIENTO, plaintiff-appellee, vs. JOSEFA R. LESACA, defendantappellant
FACTS:

On January 18, 1949, plaintiff bought from defendant two parcels of land for P5,000; that after the sale, plaintiff tried
to take actual physical possession of the lands but was prevented from doing so by one Martin Deloso who claims to
be the owner thereof; that on February 1, 1949, plaintiff instituted an action before the Tenancy Enforcement Division
of the Department of Justice to oust said Martin Deloso from the possession of the lands, which action she later
abandoned for reasons known only to her; that on December 12, 1949, plaintiff wrote defendant asking the latter
either to change the lands sold with another of the same kind and class or to return the purchase price together with
the expenses she had incurred in the execution of the sale, plus 6 per cent interest; and that since defendant did not
agree to this proposition as evidenced by her letter dated December 21,1949, plaintiff filed the present action.
ISSUE:
Whether or not the execution of the deed of sale in a public document (Exhibit A) is equivalent to delivery of
possession of the lands sold to appellee thus relieving her of the obligation to place appellee in actual possession
thereof.
HELD:
NO. There was no delivery; hence, rescission was proper. Rescission was proper since a contract of sale is a
reciprocal obligation. Undoubtedly in a contract of purchase and sale the obligation of the parties is reciprocal, and,
as provided by the law, in case one of the parties fails to comply with what is incumbent upon him to do, the person
prejudiced may either exact the fulfillment of the obligation or rescind the sale.
When a contract of sale is executed the vendor is bound to deliver to the vendee the thing sold by placing the vendee
in the control and possession of the subject-matter of the contract. However, if the sale is executed by means of a
public instrument, the mere execution of the instrument is equivalent to delivery unless the contrary appears or is
clearly to be inferred from such instrument.
The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered
when it is placed "in the hands and possession of the vendee." (Civ. Code, art. 1462.) It is true that the same article
declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the
contract, but in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor
shall have such control over the thing sold that, at the moment of the sale, its material delivery could have been
made. It is not enough to confer upon the purchaser the ownership and right of possession. The thing sold must be
placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the
purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is
sufficient.But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and
material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and
enjoyment are opposed by the interposition of another will, then fiction yields to reality -the delivery has not been
effected.
2)
G.R.

PERPETUA

ABUAN,
No.

ET

AL.,
L-20091;

vs.

EUSTAQUIO
July

S.

GARCIA,
30,

ET

AL.,
1965

FACTS: This is an action for legal redemption under Section 119 of the Public Land Law which provides that Every
conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, for a period of five years from the date of conveyance.
Laureano Abuan acquired the homestead passed after his death to his legal heirs, the plaintiffs herein. Consequently,
the OCT in his name was cancelled, and in lieu thereof, TCT No. T-5486 was issued in their names. On August 7,
1953, plaintiffs sold the parcel of land to defendants, the sale being evidenced by a public instrument entitled "Deed
of Absolute Sale"; and by virtue thereof, a TCT was issued to defendants. Later, plaintiffs filed an action to recover the
land, alleging that the deed of absolute sale had been executed through fraud, without consideration. However, the
case was subsequently settled amicably, when the parties entered into an "Agreement" dated February 28, 1955,
under the terms of which defendants paid P500.00 on that day as partial payment of the purchase price of the land,
and promised to pay the balance of P1,500.00 on or before April 30, 1955, with a grace period of thirty days. The
parties also stipulated in said Agreement that it shall supersede all previous agreements or contracts heretofore
entered into and executed by and between plaintiff and defendants, involving the same parcel of riceland. Claiming
that full payment had been effected only sometime in May 1955, plaintiffs instituted the present action on March 4,
1960.

Defendants moved to dismiss, on the ground that plaintiffs' right of action was already barred, because the five-year
redemption period had already expired. the Nueva Vizcaya court dismissed the complaint. Plaintiffs appealed to the
Court of Appeals, which certified the case to the SC because only a legal issue remains to be determined.
ISSUE: W/N the five-year period within which plaintiffs may exercise their right of repurchase begin to run on August
7,
1953,
when
the
Deed
of
Absolute
Sale
was
executed
HELD: YES. Conveyance means transfer of ownership; it means the date when the title to the land is transferred from
one person to another. The five-year period should, therefore, be reckoned with from the date that defendants
acquired
ownership
of
the
land.
Art. 1477 of the New Civil Code provides that ownership of the thing sold shall be transferred to the vendee upon the
actual or constructive delivery thereof; and Art. 1496 points out that ownership of the thing sold is acquired by the
vendee from the moment it is delivered to him in any of the ways specified in articles 1497 to 1501. Under Art. 1498,
When the sale is made through a public instrument as in this case the execution thereof shall be equivalent to
the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot be
clearly inferred. This manner of delivery of the thing through the execution of a public document is common to
personal
as
well
as
real
property.
It is clear that defendants acquired ownership to the land in question upon the execution of the deed of sale. The
deed of sale was executed on August 7, 1953, which was "superseded" by the Agreement of February 28, 1955, as to
the terms and conditions of payment of the purchase price. The latter agreement did not operate to revest the
ownership of the land in the plaintiffs. It is apparent that five years had elapsed since the execution of the deed of
sale at the time plaintiffs filed this action for redemption. the SC finds support in a long line of decisions holding, that
the five-year period starts from the date of the execution of the instrument of conveyance.
3) Norkis Distributors Inc. v. Court of Appeals
G.R. No. 91029
Facts:
On September 20, 1979, private respondent Alberto Nepales bought from the Norkis-Bacolod branch a brand new
Yamaha Wonderbike motorcycle. The price of P7,500.00 was payable by means of a Letter of Guaranty from the
Development Bank of the Philippines (DBP), Kabankalan Branch, which Norkis' Branch Manager Labajo agreed to
accept. Hence, credit was extended to Nepales for the price of the motorcycle payable by DBP upon release of his
motorcycle loan. As security for the loan, Nepales would execute a chattel mortgage on the motorcycle in favor of
DBP. Branch Manager Labajo issued Norkis Sales Invoice No. 0120 showing that the contract of sale of the
motorcycle had been perfected. Nepales signed the sales invoice to signify his conformity with the terms of the sale.
In the meantime, however, the motorcycle remained in Norkis' possession.
The motorcycle met an accident on February 3, 1980 at Binalbagan, Negros Occidental. An investigation conducted
by the DBP revealed that the unit was being driven by a certain Zacarias Payba at the time of the accident. The unit
was a total wreck, and was returned and stored inside Norkis' warehouse.
Upon claim by respondent, Norkis answered that the motorcycle had already been delivered to private respondent
before the accident, hence, the risk of loss or damage had to be borne by him as owner of the unit.
Norkis concedes that there was no "actual" delivery of the vehicle. However, it insists that there was constructive
delivery of the unit upon:
1.
the issuance of the Sales Invoice No. 0120 (Exh. 1) in the name of the private respondent and the affixing of
his signature thereon;
2.
the registration of the vehicle on November 6, 1979 with the Land Transportation Commission in private
respondent's name
Issue: WON Delivery has been made which places liability on Nepales

Held:
No. The Supreme Court ruled that Article 1496 of the Civil Code which provides that "in the absence of an express
assumption of risk by the buyer, the things sold remain at seller's risk until the ownership thereof is transferred to the
buyer," is applicable in the case at bar for there was neither an actual nor constructive delivery of the thing sold.
In this case, the purpose of the execution of the sales invoice and the registration of the vehicle in the name of
Alberto Nepales with the Land Registration Commission was not to transfer the ownership and dominion over the
motorcycle to him, but only to comply with the requirements of the DBP for processing private respondent's
motorcycle loan. On March 20, 1980, before private respondent's loan was released and before he even paid Norkis,
the motorcycle had already figured in an accident while driven by one ZacariasPayba. Payba was not shown by
Norkis to be a representative or relative of private respondent. The circumstances in the case itself more than amply
rebut the disputable presumption of delivery upon which Norkis anchors its defense to Nepales' action.

5) GONZALES VS. HABERER

G.R. No. L-22604
February 3, 1925
FACTS:
The defendant admits that of the purchase price stated in the agreement a balance of P31,000 remains unpaid, but
by way of special defense, alleges that at the time of entering into the contract the plaintiffs through false
representations lead him to believe that they were in possession of the land and that the title to the greater portion
thereof was not in dispute; that on seeking to obtain possession he found that practically the entire area of the land
was occupied by adverse claimants and the title thereto disputed; that he consequently has been unable to obtain
possession of the land; and that the plaintiffs have made no efforts to prosecute the proceedings for the registration
of the land. He therefore asks that the contract be rescinded; that the plaintiffs be ordered to return to him the
P30,000 already paid by him to them and to pay P25,000 as damages for breach of the contract.
The contract in question reads as follows:
Know all men by these presents:
That I, Guadalupe Gonzalez y Morales de Gomez, married with Luis Gomez, of age, and resident of the municipality
of Bautista, Province of Pangasinan, Philippine Islands, do hereby state:
xxx
3. That in consideration of the sum of P125 per hectare I do hereby agree and bind myself to sell and transfer by way
of real and absolute sale the land above described to Mr. E.J. Habere, binding myself to execute the deed of sale
immediately after the decree of the court adjudicating said land in my favor is registered in the registry of property of
the Province of Nueva Ecija. The condition of this obligation to sell are as follows:
xxx
"3. That said Mr. E.J. Haberer shall have the right to take possession of the aforesaid land immediately after the
execution of this document together with all the improvements now existing on the same land, such as palay
plantation and others.
The court below declared the contract rescinded and void and gave Haberer judgment upon his counterclaim for the
sum of P30,000, with interest from the date upon which the judgment becomes final. The case is now before this
court upon appeal by the plaintiffs from that judgment.
ISSUE: Is the plaintiff under the obligation to place the defendant under the possession of the land? YES.
HELD:
Cause 3 of paragraph 3 of the contract gave the defendant the right to take possession of the land immediately upon
the execution of the contract and necessarily created the obligation on the part of the plaintiffs to make good the right
thus granted; it was one of the essential conditions of the agreement and the failure of the plaintiffs to comply with
this condition, without fault on the part of the defendant, is in itself sufficient ground for the rescission, even in the
absence of any misrepresentation on their part.

The contention of the appellants that the symbolic delivery effected by the execution and delivery of the agreement
was a sufficient delivery of the possession of the land, is also without merit. The possession referred to in the contract
is evidently physical; if it were otherwise it would not have been necessary to mention it in the contract.
8. Carlos Gabila vs Pablo Perez, Ramon Perez and Mercedes Perez
G.R. No. L-2954 169 SCRA 517
Facts: On September 16, 1948, in the City of Davao, Pablo, Ramon and Mercedes, all surnamed Perez, executed in
favor of Carlos Gabila, a Deed of Sale of a parcel of land registered in the name of their deceased father Mariano
Perez under Transfer Certificate of Title No. 899 of the Registry of Deeds of Davao, which they inherited upon his
demise. The Deed of Sale was duly signed and ratified before Notary Public Isidro Bastida of Davao City on the same
date, September 16, 1958, and possession of the land was immediately delivered to the vendee. The monthly
installments of the price of the sale were completely paid in due time. However, the vendors took no steps to comply
with their promise to execute an extrajudicial partition of their father's properties so that his title to the land in question
can be transferred in their names and from them, to the vendee Gabila. Gabila filed this action praying that the
defendants be ordered:
1) To execute an extra-judicial partition of all the properties of their deceased father or otherwise settle his estate and
pay the corresponding estate and inheritance taxes, and execute the requisite instruments for the registration and
transfer of the title to him; and
2) To pay him Pl,000 as attorney's fees and expenses of the suit, plus costs.
The Perezs alleged in their Answer that the deed of sale was intended merely to guarantee a loan of P2, 500 and
then Gabila alleged that at the time of the execution of the deed of sale, Mercedes Perez stated that she was of age,
and plaintiff had no reason to doubt that statement. But, assuming that she was under age at the time, she ratified the
sale by her failure to repudiate it in due time; that the allegation that the deed was only a guarantee for a P2,500 loan
was not true because a part of the purchase price was paid to the defendants in ten (10) monthly installments; that
the price agreed upon in 1948 was fair and reasonable; and, that the approval of the sale by the Secretary of
Agriculture and Natural Resource was not necessary. On January 21, 1961, the trial court rendered the assailed
decision, dismissing the complaint. It held that the Perez's could not be ordered to execute an extrajudicial partition of
all the properties of their deceased father because the properties to be partitioned are not Identified in the complaint,
and, the Perezs can no longer partition the land described in TCT No. 899, because it has been sold to Gabila.
Issue: Whether or not the an extrajudicial partition of their father's properties so that his title to the land in question
can be transferred in their names?
Held: This action is not one for specific performance of the sale of the property to the appellant, for the sale had been
consummated by the payment of the price to the vendors-appellees as stipulated in the deed, and by the delivery of
the peaceful possession of the land to the plaintiff-vendee. What the plaintiff seeks merely is the transfer of the title of
the land in his name. The defendants-appellees, as the only legal heirs of their father, the deceased Mariano Perez,
became the owners of the property in question upon his demise. The rights to the succession were transmitted to
them from the moment of his death (Art. 77, Civil Code). Their sale to the appellant of the property, which they
inherited from their father put an end to their co-ownership over it (Art. 1082 Civil Code). Consequently there is no
further need for them to partition it, the purpose of partition being to separate, divide, and assign a thing held in
common among those to whom it may belong (Art. 1079, Civil Code). Their declaration therein that the registered
owner of the land is Mariano Perez, who died on October 11, 1942, is the father of the vendors, that "the vendors
inherited said land from their deceased father, being the legitimate children" and that "the Vendors are the owners" of
said land is, in effect, an adjudication of the land to themselves. Such adjudication renders the stipulation in the deed
of sale that "the Vendors will execute immediately an Extrajudicial Partition of all the properties of their deceased
father" (Exhibit A-1), superfluous and unnecessary. It may be overlooked or deemed not written at all. All that needs
to be done now is to register on the TCT No. 899 of the late Mariano Perez the deed of sale which may also be
treated as an affidavit of adjudication of the land to the vendors in order that their father's title may be cancelled and a
new one can be issued to their vendee, Carlos Gabila.

9.) ALFONSO QUIJADA ET AL VS COURT OF APPEALS ET AL

GR No 126444 December 4, 1998

FACTS:
Petitioners are the children of the late Trinidad Corvera Vda. De Quijada. Trinidad was one of the heirs of the late
Pedro Corvera and inherited from the latter two-hectare parcel of land subject of the case located in the barrio of San
Agustin, Talacogon, Agusan del Sur. Trinidad Quijada together with her sisters Leonila Corvera Vda. de Sequea and
Paz Corvera Cabiltes and brother Epapiadito Corvera executed a conditional deed of donation of the two-hectare
parcel of land subject of the case in favor of the Municipality of Talacogon, the condition being that the parcel of land
shall be used solely and exclusively as part of the campus of the proposed provincial high school in Talacogon.
Apparently, Trinidad remained in possession of the parcel of land despite the donation.
Thereafter, Trinidad sold one (1) hectare of the subject parcel of land to defendant-appellant Regalado Mondejar.
Subsequently, Trinidad verbally sold the remaining one (1) hectare to defendant-appellant (respondent) Regalado
Mondejar without the benefit of a written deed of sale and evidenced solely by receipts of payment.
In 1980, the heirs of Trinidad, who at that time was already dead, filed a complaint for forcible entry against
defendant-appellant (respondent) Regalado Mondejar, which complaint was, however, dismissed for failure to
prosecute. In 1987, the proposed provincial high school having failed to materialize, the Sangguniang Bayan of the
municipality of Talacogon enacted a resolution reverting the two (2) hectares of land donated back to the donors. In
the meantime, defendant-appellant (respondent) Regalado Mondejar sold portions of the land to defendantsappellants (respondents) Fernando Bautista, Rodolfo Goloran, Efren Guden and Ernesto Goloran.
plaintiffs-appellees (petitioners) filed this action against defendants-appellants (respondents). In the complaint,
plaintiffs-appellees (petitioners) alleged that their deceased mother never sold, conveyed, transferred or disposed of
the property in question to any person or entity much less to Regalado Mondejar save the donation made to the
Municipality of Talacogon in 1956; that at the time of the alleged sale to Regalado Mondejar by Trinidad Quijada, the
land still belongs to the Municipality of Talacogon, hence, the supposed sale is null and void.
Defendants-appellants (respondents), on the other hand, in their answer claimed that the land in dispute was sold to
Regalado Mondejar, the one (1) hectare on July 29, 1962, and the remaining one (1) hectare on installment basis
until fully paid. As affirmative and/or special defense, defendants-appellants (respondents) alleged that plaintiffs'
action is barred by laches or has prescribed.
The RTC ruled in favor of the petitioners, ruling that Trinidad Quijada had no legal title or right to sell the land to
Mondejar, the same not being hers to dispose of because ownership belongs to the Municipality of Talacogon. The
Court of Appeals reversed and set aside the judgment a quo ruling that the sale made by Trinidad Quijada to
respondent Mondejar was valid as the former retained an inchoate interest on the lots by virtue of the automatic
reversion clause in the deed of donation.
ISSUE:
Whether the sale of the subject property made by Trinidad Quijada to Mondejar is valid
HELD:
NO. The donation made on April 5, 1956 by Trinidad Quijada and her brother and sisters was subject to the condition
that the donated property shall be "used solely and exclusively as a part of the campus of the proposed Provincial
High School in Talacogon." The donation further provides that should "the proposed Provincial High School be
discontinued or if the same shall be opened but for some reason or another, the same may in the future be closed"
the donated property shall automatically revert to the donor. Such condition, not being contrary to law, morals, good
customs, public order or public policy was validly imposed in the donation.
When the Municipality's acceptance of the donation was made known to the donor, the former became the new
owner of the donated property -- donation being a mode of acquiring and transmitting ownership - notwithstanding the
condition imposed by the donee. The donation is perfected once the acceptance by the donee is made known to the

donor. Accordingly, ownership is immediately transferred to the latter and that ownership will only revert to the donor if
the resolutory condition is not fulfilled.
In this case, that resolutory condition is the construction of the school. It has been ruled that when a person donates
land to another on the condition that the latter would build upon the land a school, the condition imposed is not a
condition precedent or a suspensive condition but a resolutory one. Thus, at the time of the sales made in 1962
towards 1968, the alleged seller (Trinidad) could not have sold the lots since she had earlier transferred ownership
thereof by virtue of the deed of donation. So long as the resolutory condition subsists and is capable of fulfillment, the
donation remains effective and the donee continues to be the owner subject only to the rights of the donor or his
successors-in-interest under the deed of donation.
10) CHUA HAI vs. HON. RUPERTO KAPUNAN, JR.
FACTS: Roberto Soto purchased from Youngstown Hardware, owned by Ong Shu, 700 corrugated galvanized iron
sheets and 249 pieces of round iron bar for P6,137.70, and in payment thereof he issued a check drawn against the
Security Bank and Trust Company for P7,000.00, without informing Ong Shu that he had no sufficient funds in said
bank to answer for the same. When the check was presented for payment, it was dishonored for insufficiency of
funds. Soto sold 165 sheets in Pangasinan and 535 sheets in Calapan, Mindoro. Of those sold in Pangasinan, 100
were sold to petitioner Chua Hai. When the case was filed in the Court of First Instance of Manila against Roberto
Soto, for estafa, the offended party filed a petition asking that the 700 galvanized iron sheets, which were deposited
with the Manila Police Department, be returned to him, as owner of the Youngstown Hardware. Petitioner herein
opposed the motion with respect to the 100 sheets that he had bought from Soto. Notwithstanding the opposition, the
court ordered the return of the galvanized iron sheets to Ong Shu. Petitioner then presented a motion to reconsider
the order, alleging that by the return thereof to the offended party, the court had not only violated the contract of
deposit, because it was in that concept that petitioner had delivered the 100 sheets to the Manila Police Department,
and that said return to Ong Shu amounted to a deprivation of his property without due process of law. It is also
claimed that Article 105 of the Revised Penal Code, under whose authority the return was ordered, can be invoked
only after the termination of the criminal case and not while said criminal case is still pending trial.
The court having given no heed to these protests on the part of the petitioner, the latter brought the present petition to
this Court alleging that the order of the respondent judge constitutes a deprivation of petitioner's property without due
process of law, violating the contract of deposit under which the sheets were delivered to the police department of the
City of Manila, and determining the respective rights of petitioner and respondent Ong Shu without a previous trial of
the criminal case all of which constitute a grave abuse of discretion and excess of jurisdiction.
ISSUE: Whether or not the failure to make good tge price would rescind the sale
HELD: No.
It can not be assumed at this stage of the proceedings that respondent Ong Shu is still the owner of the property; to
do so it take for granted that the estafa was in fact committed, when so far, the trial on the merits has not even
started, and the presumption of innocence holds full sway.
The civil liability of the offender to make restitution, under Art. 105 of the Revised Penal Code, does not arise until his
criminal liability is finally declared, since the former is a consequence of the latter. Art. 105 of the Revised Penal
Code, therefore, can not be invoked to justify the order of the court below, since that very article recognizes the title of
an innocent purchaser when it says:
But even if the articles in dispute had not been acquired in a market, fair or merchant's store, still, so far as disclosed,
the facts do not justify a finding that the owner, respondent Ong Shu, was illegally deprived of the iron sheets, at least
in so far as appellant was concerned. It is not denied that Ong Shu delivered the sheets to Soto upon a perfected
contract of sale, and such delivery transferred title or ownership to the purchaser. The ownership of the thing sold is

acquired by the vendee from the moment it is delivered to him in any of the ways specified in articles 1497 to 1501, or
in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee.
The failure of the buyer to make good the price does not, in law, cause the ownership to revest in the seller until and
unless the bilateral contract of sale is first rescinded or resolved pursuant to Article 1191 of the new Civil Code. And,
assuming that the consent of Ong Shu to the sale in favor of Sotto was obtained by the latter through fraud or deceit,
the contract was not thereby rendered void ab initio, but only voidable by reason of the fraud,.
Hence, until the contract of Ong Shu with Sotto is set aside by a competent court (assuming that the fraud is
established to its satisfaction), the validity of appellant's claim to the property in question cannot be disputed, and his
right to the possession thereof should be respected.
It is no excuse that the respondent Ong Shu was required to post a redelivery bond. An indemnity bond, while
answering for damages, is not, by itself alone, sufficient reason for disturbing property rights, whether temporarily or
permanently. If the invasion is not warranted, the filing of a bond will not make it justifiable.

12.) ISABEL FLORES vs. TRINIDAD LIM G.R. No. 26844 September 27, 1927
Facts: Subject land of Isabel Flores in Tayabas Province was sold to Trinidad Lim at sheriffs sale for P1,603.78. The
land has 164 coconut trees planted, 1,000 non-bearing and about 300 buri trees. The usual certificate of sale was
issued to the defendant. Prior to one-year period of redemption, Lim took the actual physical possession of the
property. The latter refused and still refuses to render an account of fruits, profits, to plaintiffs damage in the sum of
P1,000. Flores prays judgment that Lim be ordered to render an itemized account, the amount if which be deducted
from the price of redemption; that plaintiff have the right to redeem; and that the defendant pay her P1,000 for
damages and costs.
Issue: Whether of not Lim is entitled to reimbursement for the coconut trees he had planted as well as other
improvements.
Held. No. Lim is a possessor in bad faith, for he should have waited for the termination of one-year redemption period
before entering into the possession of the property and therefore not entitled to a refund of useful improvements.
VII LOSS OF THE THING
1. ROMAN vs. GRIMALT
G.R.No. 2412, April 11, 1906
FACTS:
Pedro Roman, the owner of the schooner Sta. Maria and Andres Grimalt had been negotiating for several days for
the purchase of the schooner. They agreed upon the sale of the vessel for the sum of P1500 payable on three
installments, provided the title papers to the vessel were in proper form. The sale was not perfected and the
purchaser did not consent to the execution of the deed of transfer for the reason that the title of the vessel was in the
name of one Paulina Giron and not in the name of Pedro Roman. Roman promised however, to perfect his title to the
vessel but he failed to do so. The vessel was sunk in the bay in the afternoon of June 25, 1904 during a severe storm
and before the owner had complied with the condition exacted by the proposed purchaser. On the 30th of June 1904,
plaintiff demanded for the payment of the purchase price of the vessel in the manner stipulated and defendant failed
to pay.
ISSUE: Whether there was a perfected contract of sale and who will bear the loss.
HELD: There was no perfected contract of sale because the purchase of which had not been concluded. The
conversations had between the parties and the letter written by defendant to plaintiff did not establish a contract
sufficient in itself to create reciprocal rights between the parties.

If no contract of sale was actually executed by the parties the loss of the vessel must be borne by its owner and not
by the party who only intended to purchase it and who was unable to do so on account of failure on the part of the
owner to show proper title to the vessel and thus enable them to draw up contract of sale.

2. JOSE DE LEON, CECILIO DE LEON, in their individual capacity, and JOSE DE LEON and CECILIO DE LEON
, as administrators of the intestate estate of Felix de Leon, petitioner, vs. ASUNCION SORIANO,
FACTS:
Jose de Leon, Cecilio de Leon and Albina de Leon, were natural children of Felix de Leon, deceased, while Asuncion
Soriano, is his widow. In the administration and settlement of the decedent's estate, the said widow, on the one hand,
and the natural children, reached an agreement, approved by the probate court, whereby the natural children
obligated themselves to deliver cavanes of rice at the end of each agricultural year.
The defendants failed to deliver exact cavanes to the plaintiff due to "the Huk troubles in Central Luzon which
rendered impossible full compliance with the terms of the agreement;" and it was contended that "inasmuch as the
obligations of the defendants to deliver the full amount of the palay is depending upon the produce as this is in the
nature of an annuity, . . . the obligations of the defendants have been fully fulfilled by delivering in good faith all that
could be possible under the circumstances."
It was to recover this shortage or its value that this action was commenced.
ISSUE:
HELD:
Article 1182 of the Civil Code, provide that "Any obligation which consists in the delivery of a determinate thing shall
be extinguished if such thing should be lost or destroyed without fault on the part of the debtor and before he is in
default. Inversely, the obligation is not extinguished if the thing that perishes is indeterminate.
Except as to quality and quantity, the first of which is itself generic, the contract sets no bounds or limits to the palay
to be paid, nor was there even any stipulation that the cereal was to be the produce of any particular land. Any palay
of the quality stipulated regardless of origin on however acquired (lawfully) would be obligatory on the part of the
obligee to receive and would discharge the obligation. It seems therefore plain that the alleged failure of crops
through alleged fortuitous cause did not excuse performance.
The decision of the Court of Appeals is affirmed with costs against the petitioners and appellants.
3)
G.R.

UNION

MOTOR
No.

CORPORATION
117187.

vs.

THE
July

COURT

OF
20,

APPEALS
2001

FACTS: On September 14, 1979, the respondent Bernal spouses purchased from petitioner Union Motor Corporation
one Cimarron Jeepney for P37,758.60 to be paid in installments. For this purpose, the respondent spouses executed
a promissory note and a deed of chattel mortgage in favor of the petitioner. Meanwhile, the petitioner entered into a
contract of assignment of the promissory note and chattel mortgage with Jardine-Manila Finance, Inc. Through
Manuel Sosmea, an agent of the petitioner, the parties agreed that the respondent spouses would pay the amount of
the promissory note to Jardine-Manila Finance, Inc., the latter being the assignee of the petitioner. To effectuate the
sale as well as the assignment of the promissory note and chattel mortgage, the respondent spouses were required
to sign a notice of assignment, a deed of assignment, a sales invoice, a registration certificate, an affidavit, and a
disclosure statement. The respondent spouses were obliged to sign all these documents for the reason that,
according to Sosmea, it was a requirement of petitioner Union Motor Corporation and Jardine-Manila Finance, Inc. for
the respondent spouses to accomplish all the said documents in order to have their application approved. Upon the
respondent spouses tender of the downpayment worth P10,037.00, and the petitioners acceptance of the same, the
latter approved the sale. Although the respondent spouses have not yet physically possessed the vehicle, Sosmea
required
them
to
sign
the
receipt
as
a
condition
for
the
delivery
of
the
vehicle.
The respondent spouses continued paying the agreed installments even if the subject motor vehicle remained
undelivered. The respondent spouses have paid a total of P7,507.00 worth of installments before they discontinued
paying on account of non-delivery of the subject motor vehicle. According to the respondent spouses, the reason why

the vehicle was not delivered was due to the fact that Sosmea allegedly took the subject motor vehicle in his personal
capacity.
Jardine-Manila Finance, Inc., filed a complaint for a sum of money against the respondent Bernal spouses. The
complaint was amended to include petitioner Union Motor Corporation as alternative defendant, the reason being that
if the respondent spouses refusal to pay Jardine-Manila Finance, Inc. was due to petitioners non-delivery of the unit,
the latter should pay Jardine-Manila Finance, Inc. what has been advanced to the petitioner. The respondent spouses
presented witnesses in support of their defense and counterclaim against the plaintiff and cross-claim against the
petitioner. The petitioner did not present any evidence inasmuch as the testimony of the witness it presented was
ordered stricken off the record for his repeated failure to appear for cross-examination on the scheduled hearings.
The trial court deemed the presentation of the said witness as having been waived by the petitioner.
ISSUE:

W/N

there

has

been

delivery,

physical

or

constructive,

of

the

subject

motor

vehicle.

HELD: NONE. Undisputed is the fact that the respondent Bernal spouses did not come into possession of the subject
Cimarron jeepney that was supposed to be delivered to them by the petitioner. The registration certificate, receipt and
sales invoice that the respondent Bernal spouses signed were explained during the hearing without any opposition by
the petitioner. According to testimonial evidence adduced by the respondent spouses during the trial, the said
documents were signed as a part of the processing and for the approval of their application to buy the subject motor
vehicle. Without such signed documents, no sale, much less delivery, of the subject jeepney could be made. The
documents were not therefore an acknowledgment by respondent spouses of the physical acquisition of the subject
motor vehicle but merely a requirement of petitioner so that the said subject motor vehicle would be delivered to
them.
The SC ruled that the issuance of a sales invoice does not prove transfer of ownership of the thing sold to the buyer;
an invoice is nothing more than a detailed statement of the nature, quantity and cost of the thing sold and has been
considered
not
a
bill
of
sale.
The registration certificate signed by the respondent spouses does not conclusively prove that constructive delivery
was made nor that ownership has been transferred to the respondent spouses. Like the receipt and the invoice, the
signing of the said documents was qualified by the fact that it was a requirement of petitioner for the sale and
financing contract to be approved. In all forms of delivery, it is necessary that the act of delivery, whether constructive
or actual, should be coupled with the intention of delivering the thing. The act, without the intention, is insufficient.The
critical factor in the different modes of effecting delivery which gives legal effect to the act, is the actual intention of
the vendor to deliver, and its acceptance by the vendee. Without that intention, there is no tradition.
Further, It is true that the execution of a public instrument is equivalent to the delivery of the thing which is the object
of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the
vendor shall have had control over the thing sold that, at the moment of the sale, its material delivery could have
been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The thing sold
must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the
tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument
is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and
material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and
enjoyment are opposed by the interposition of another will, then fiction yields to reality-the delivery has not been
effected.
4) Lawyers Cooperative Publishing Company v. Perfecto Tabora
G.R. No. L-21263
Facts:
On May 3, 1955, Perfecto A. Tabora bought from the Lawyers Cooperative Publishing Company one complete set of
American Jurisprudence consisting of 48 volumes with 1954 pocket parts, plus one set of American Jurisprudence,
General Index, consisting of 4 volumes, for a total price of P1,675.50 which, in addition to the cost of freight of P6.90,

makes a total of P1,682.40. Tabora made a partial payment of P300.00, leaving a balance of P1,382.40. The books
were duly delivered and receipted for by Tabora on May 15, 1955 in his law office Ignacio Building, Naga City.
It was provided in the contract that "title to and ownership of the books shall remain with the seller until the purchase
price shall have been fully paid. Loss or damage to the books after delivery to the buyer shall be borne by the buyer."
As Tabora failed to pay the monthly installments agreed upon on the balance of the purchase price
notwithstanding the long time that had elapsed, the company demanded payment of the installments due, and having
failed, to pay the same, it commenced the present action before the Court of First Instance of Manila for the recovery
of the balance of the obligation. Plaintiff also prayed that defendant be ordered to pay 25% of the amount due as
liquidated damages, and the cost of action.
Defendant, in his answer, pleaded force majeure as a defense. He alleged that the books bought from the plaintiff
were burned during the fire that broke out in Naga City on May 15, 1955, and since the loss was due toforce majeure
he cannot be held responsible for the loss.
Issue: WON Tabora is still obligated to pay despite the attending circumstances
Held:
Yes. Neither can appellant find comfort in the claim that since the books were destroyed by fire without any fault on
his part he should be relieved from the resultant obligation under the rule that an obligor should be held exempt from
liability when the loss occurs thru a fortuitous event. This is because this rule only holds true when the obligation
consists in the delivery of a determinate thing and there is no stipulation holding him liable even in case of fortuitous
event. Here these qualifications are not present. The obligation does not refer to a determinate thing, but is pecuniary
in nature, and the obligor bound himself to assume the loss after the delivery of the goods to him. In other words, the
obligor agreed to assume any risk concerning the goods from the time of their delivery, which is an exception to the
rule provided for in Article 1262 of our Civil Code.
6) YU TEK CO vs GONZALES
G.R. No. L-9935
February 1, 1915
FACTS:
In a written contract, Mr. Basilio Gonzalez acknowledges receipt of the sum of P3,000 from Messrs. Yu Tek and Co.,
and that in consideration of said sum be obligates himself to deliver to the said Yu Tek and Co., 600 piculs of sugar of
the first and second grade, according to the result of the polarization, within the period of three months, beginning on
the 1st day of January, 1912, and ending on the 31st day of March of the same year 2012. Mr. Basilio Gonzales also
obligates himself to deliver at any place within the said municipality of Santa Rosa which the said Messrs. Yu Tek and
Co., or a representative of the same may designate. Lastly, in case Gonzales does not deliver within the period of
three months, this contract will be rescinded and Gonzales will then be obligated to return to Yu Tek and Co. the
P3,000 received and also the sum of P1,200 by way of indemnity for loss and damages.
Plaintiff proved that no sugar had been delivered to it under this contract nor had it been able to recover the P3,000.
Plaintiff prayed for judgment for the P3,000 and, in addition, for P1,200 under paragraph 4, supra. Judgment was
rendered for P3,000 only, and from this judgment both parties appealed.
The defendant assumes that the contract was limited to the sugar he might raise upon his own plantation; that the
contract represented a perfected sale; and that by failure of his crop he was relieved from complying with his
undertaking by loss of the thing due. (Arts. 1452, 1096, and 1182, Civil Code.)
ISSUE: Whether or not compliance of the obligation to deliver depends upon production in defendants plantation?
NO.
HELD:
In the case at bar, there is no clause in the written contract which even remotely suggests the condition that the sugar
was to be obtained exclusively from the crop raised by the defendant.. The defendant undertook to deliver a specified
quantity of sugar within a specified time. The contract placed no restriction upon the defendant in the matter of
obtaining the sugar. He was equally at liberty to purchase it on the market or raise it himself. It may be true that
defendant owned a plantation and expected to raise the sugar himself, but he did not limit his obligation to his own

crop of sugar. Our conclusion is that the condition which the defendant seeks to add to the contract by parol evidence
cannot be considered. The rights of the parties must be determined by the writing itself.
The defendants assumption that there was a perfected sale is faulty. Article 1450 defines a perfected sale as
follows:
The sale shall be perfected between vendor and vendee and shall be binding on both of them, if they have agreed
upon the thing which is the object of the contract and upon the price, even when neither has been delivered.
Article 1452 reads: "The injury to or the profit of the thing sold shall, after the contract has been perfected, be
governed by the provisions of articles 1096 and 1182." This court has consistently held that there is a perfected
sale with regard to the "thing" whenever the article of sale has been physically segregated from all other
articles. We conclude that the contract in the case at bar was merely an executory agreement; a promise of
sale and not a sale. At there was no perfected sale, it is clear that articles 1452, 1096, and 1182 are not
applicable.
For the foregoing reasons the judgment appealed from is modified by allowing the recovery of P1,200 under
paragraph 4 of the contract. As thus modified, the judgment appealed from is affirmed, without costs in this instance.
8) Philippine Virginia Tobacco Administration v Judge Delos Santos
G.R. No. L-27829
August 19, 1988
Facts: Respondent Timoteo Sevilla, proprietor and General Manager of the Philippine Associated Resources (PAR)
together with two other entities, namely, the Nationwide Agro-Industrial Development Corp. and the Consolidated
Agro-Producers Inc. were awarded in a public bidding the right to import Virginia leaf tobacco for blending purposes
and exportation by them of PVTA and farmer's low-grade tobacco at a rate of one (1) kilo of imported tobacco for
every nine (9) kilos of leaf tobacco actually exported. The contract entered into between the petitioner Philippine
Virginia Tobacco Administration and respondent Sevilla was for the importation of 85 million kilos of Virginia leaf
tobacco and a counterpart exportation of 2.53 million kilos of PVTA and 5.1 million kilos of farmer's and/or PVTA at
P3.00 a kilo. In accordance with their contract respondent Sevilla purchased from petitioner and actually exported
2,101.470 kilos of tobacco, paying the PVTA the sum of P2,482,938.50 and leaving a balance of P3,713,908.91.
Before respondent Sevilla could import the counterpart blending Virginia tobacco, amounting to 525,560 kilos,
Republic Act No. 4155 was passed and took effect on June 20, 1 964, authorizing the PVTA to grant import privileges
at the ratio of 4 to 1 instead of 9 to 1 and to dispose of all its tobacco stock at the best price available. Thus, on
September 14, 1965 subject contract which was already amended on December 14, 1963 because of the prevailing
export or world market price under which respondent will be exporting at a loss, (Complaint, Rollo, p. 3) was further
amended to grant respondent the privileges under aforesaid law, subject to the following conditions: (1) that on the
2,101.470 kilos already purchased, and exported, the purchase price of about P3.00 a kilo was maintained; (2) that
the unpaid balance of P3,713,908.91 was to be liquidated by paying PVTA the sum of P4.00 for every kilo of imported
Virginia blending tobacco and; (3) that respondent Sevilla would open an irrevocable letter of credit No. 6232 with the
Prudential Bank and Trust Co. in favor of the PVTA to secure the payment of said balance, drawable upon the release
from the Bureau of Customs of the imported Virginia blending tobacco. While respondent was trying to negotiate the
reduction of the procurement cost of the 2,101.479 kilos of PVTA tobacco already exported which attempt was denied
by petitioner and also by the Office of the President, petitioner prepared two drafts to be drawn against said letter of
credit for amounts which have already become due and demandable.
Issue: Whether or not Judge Delos Angeles acted with grave abuse of discretion in releasing the funds to the
applicant of the letter of credit.
Held: Judge Delos Angeles violated the irrevocability of the letter of credit issued by respondent Bank in favor of
petitioner. An irrevocable letter of credit cannot, during its lifetime, be cancelled or modified Without the express
permission of the beneficiary. Consequently, if the finding the trial on the merits is that respondent Sevilla has ailieged
unpaid balance due the petitioner, such unpaid obligation would be unsecured.

9. ALLIANCE TOBACCO CORPORATION, INC vs PHILIPPINE VIRGINIA TOBACCO ADMINISTRATION,

FARMER'S 'VIRGlNlA TOBACCO REDRYING COMPANY, INC. and INTERMEDIATE APPELLATE COURT
179 SCRA 336

Facts: The Philippine Virginia Tobacco Administration (PVTA), a government corporation created under Republic Act
No. 2265 to promote the tobacco industry, entered into a contract of procuring, redrying and servicing with Farmer's
Virginia Tobacco Redrying Company, Inc. (FVTR) for the1963 tobacco trading operation. In June of that year, the
PVTA also entered into a merchandising loan agreement with the Alliance Tobacco Corporation, a duly incorporated
and authorized tobacco trading entity, whereby the PVTA agreed to lend P25,500 to the Alliance Tobacco Corporation
for the purchase of flue-cured Virginia tobacco from bona fide Virginia tobacco former-producers. The following
month, Alliance Tobacco Corporation shipped to the FVTR 96 bales of tobacco weighing 4,800 kilos covered by Guia
but the remaining un-graded and un-weighed 174 bales with a total value of P28,382 were lost while they were in the
possession of the FVTR Having learned of such loss in 1965, petitioner demanded for its value and the application of
the same to its merchandising loan with PVTA but both the latter and the FVTR refused to heed said demands.
Alliance Tobacco Corporation filed in the then Court of First Instance of La Union, in its filling it stated that the PVTA
and FVTR ordered to pay it P4,443 representing the value of the 89 bales which were weighed, graded and accepted
by them, P28,382.00 representing the value of the lost bales of tobacco and/or that the said amount be applied to its
loan with PVTA and P4,000 as attorney's fees and litigation expenses. FVTR was declared in default and the PVTA
submitted a stipulation of facts and agreed that a partial judgment be rendered as to the 89 bales of tobacco which
had been weighed and graded. The ruling is that the PVTA should not be held responsible for the lost bales of
tobacco because they were not yet properly graded and weighed and that Alliance Tobacco Corporation failed to
present the weigher's tally sheets and warehouse receipts or quedans.
Issue: Whether or not there is a perfected contract of sale between Alliance Tobacco Corporation and respondent
PVTA with respect to the aforesaid remaining bales of tobacco.
Held: At the outset, it should be emphasized that the lower court made a definitive factual finding on the actual and
physical delivery of the lost bales of tobacco from Alliance Tobacco Corporation to the FVTR. The parties, however,
disagree as to the legal implications of such delivery. Petitioner contends that it bound not only FVTR but also the
PVTA and perfected the contract of sale between petitioner and the PVTA On the other hand, the PVTA argues that
the delivery was not valid and binding on it considering that, not having been weighed and graded by its agents, it
had not duly accepted the shipments so as to perfect the contract of sale. the actual, physical delivery of the
shipments was not proven. On the other hand, in this case, the lower court established from the testimonies of
witnesses the fact that petitioner entrusted to the FVTR a total of 263 bales of tobacco 89 bales of which were even
actually weighed and graded in the redrying plant. FVTR also refused to grant Alliance Tobacco Corporation's request
to withdraw the un-weighed and un-graded shipments. As it turned out later, said shipments were lost while in the
custody of FVTR thereby placing the Alliance Tobacco Corporation in a "no win" situation.

VIII.
1.) JOSE R. CRUZ vs REYNALDO PAHATI, ET AL
GR No L-8257 April 13, 1956
FACTS:
Jose Cruz delivered his car to Belizo for the latter to sell the same. Belizo forged the letter of Cruz to the Motor
Section of the Bureau of Public Works and converted the same into a Deed of Sale. Using the forged deed, he had
the car registered in his name. Thereafter, Belizo sold the car to Bulahan, who in turn sold the same to Pahati.
However, the car was impounded by the police, and the sale to Pahati was cancelled. Bulahan now contends that
between 2 innocent parties (Bulahan and Cruz), the person who made possible the injury must bear the lossin this
case, supposedly Cruz.
ISSUE:
Whether Cruz may recover the car from Bulahan
HELD:

YES. It is true that both Bulahan and Cruz acted in good faith. One who has lost a movable or had been deprived of
the same may recover it from the possessor. This rule applies squarely to this case. Cruz has a better right to the car
in question than defendant Bulahan for it cannot be disputed that plaintiff had been illegally deprived thereof because
of the ingenious scheme utilized by Belizo to enable him to dispose of it as if he were the owner thereof. Plaintiff
therefore can still recover the possession of the car even if defendant Bulahan had acted in good faith in purchasing
it from Belizo. Nor can it, be pretended that the conduct of plaintiff in giving Belizo a letter to secure the issuance of
a new certificate of registration constitutes a sufficient defense that would preclude recovery because of the
undisputed fact that that letter was falsified and this fact can be clearly seen by a cursory examination of the
document. If Bulahan had been more diligent he could have seen that the pertinent portion of the letter had been
erased which would have placed him on guard to make an inquiry as regards the authority of Belizo to sell the
car.
4.) JOSE B. AZNAR vs. RAFAEL YAPDIANGCO G.R. No. L-18536 March 31, 1965
Facts: Theodoro Santos advertised in the newspapers the sale of his Ford Fairlane 500. Certain de Dios, claiming to
be the nephew of Marella, went to the residence of Santos and expressing his uncles intent to purchase the car.
Since Santos wasn't around, it was his son Irineo who talked with de Dios. Marella expressed his intention to
purchase the car. A deed of sale was prepared. When Irineo and de Dios arrived at the residence of Marella, the latter
averred that his money was short and had to borrow from his sister. He then instructed de Dios and Irineo to go the
supposed house of the sister to obtain the money with an unidentified person. He also asked Irineo to leave the deed
to have his lawyer see it. Relying on the good faith of Marella, Irineo did as requested. Upon arriving at the house of
Marellas supposed to be sister, de Dios and the unidentified person then disappeared together with the car. This
prompted Santos to report the incident to the authorities. Thereafter, Marella was able to sell the car to Aznar. And
while in possession of the car, police authorities confiscated the same.
Issue: Whether or not Santos has better right than Aznar.
Held: Yes. Teodoro Santos has the better right. Marella did not have any title to the property under litigation because
the same was never delivered to him. He may have the contract but he never acquired valid title. Although the keys to
the car may have been given to the unidentified companion, it may be done only because that companion took them
to the place where the sister of Marella was supposed to live. The car was evidently stolen and that the buyer did not
acquire any valid title thereto. Article 559 of Civil Code provides the effect that if the owner has lost a thing, or if he
has been unlawfully deprived of it, he has a right to recover it, not only from its finder, thief or robber, but also from
third persons who may have acquired it in good faith from such finder, thief or robber.