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SALES AND LEASE

CASE DOCTRINES FINALS

1. CARBONNEL VS CA

Under 1544, in case of double sale of immovable property, priority shall be


given to the first buyer who registers the same in good faith. Prior registration
in good faith is a pre-condition to a superior title. Furthermore, Statute of
Frauds does not apply in this case as there was already partial performance
i.e, partial payments.

2. DAGUPAN TRADING VS MACAM

In the case of a foreclosure at the time the land was unregistered: the
controlling law that should prevail is Rule 39 of the ROC, to the effect that the
execution of and delivery in favor of the purchaser of land sold in an
execution sale, shall have the effect of the latter being subsisted to the
rights, title and interest and claim of the judgment debtor to the property as
to the time of levy.

3. DAVID VS BANDIN

The defense of purchasing the property in good faith may only be availed if
the land involved is registered and the buyer relied in good faith on the clear
title of the registered owner. The issue of good faith or bad faith is only
relevant in registered lands.

4. OLIVAREZ VS GONZALES

While the sale of an unregistered land may defeat a subsequent registered


sale, in the interest of justice and equity, a petition for consolidation which
fails to implead the purchasers in the second sale is tantamount to a
deprivation of an opportunity to be heard.

5. CARAM VS LAURETA

In case of double sales, the party who first registers it in good faith is entitled
to the ownership. However, this may be defeated when there is knowledge of
the first sale by the second purchaser, which is equivalent to registration.

6. CRUZ VS CABANA
Knowledge of the first sale makes the second purchaser in bad faith. The
court held that the one who registers the same must register it in good faith.
Second buyer must show continuing good faith from purchase to registration.

7. VALDEZ VS CA

Under ART 1544, the first buyer who registers the sale in good faith is
afforded with a better right. A prior sale with an annotated adverse claim may
defeat a subsequent assignment of interest. In the case, the notice of
adverse claim was registered prior to the execution of the deed of
assignment, thus, the former shall have a better right.

8. NUGUID VS CA

An innocent purchaser for value is protected such that when land has already
passed to him, reconveyance cannot be made. An unregistered sale makes
the title free from notice of a prior right, thus, can be the basis of good faith
by a subsequent purchaser.

9. RADIOWEALTH FINANCE VS PALILEO

Under act no 3344, the registration of instruments affecting unregistered


lands is without prejudice to a third party with a better right. The mere
registration of a sale in ones favor does not give him a right over the land if
the vendor was not anymore the owner of the land, having previously sold
the same to somebody else even if the earlier sale is unrecorded. 1544 has
no application to unregistered lands.

10. TANEDO VS CA

The one who first registers a sale acquires a better right, even if the first
buyers are in possession.

11. OCEANA VS ESPONILLA

In all cases of double sale of immovables, good faith is essential. The defense
of indefeasibility of Torrens title does not extend to a transferee who takes it
in bad faith. A buyer of real property in the possession of other persons other
than the seller must be wary and should investigate the rights of those in
possession.

12. MOLES VS IAC


No implied warranty as to the quality or fitness for the purpose intended
applies to a sale of second hand goods. Theres only an implied warranty for
its ordinary purpose. The exception to this rule is when a buyer makes known
his purpose for buying the thing, and he relies on the skill or judgment of the
latter. Such operates as an express warranty, which requires prescription of
four years.

13. ENGINEERING ND MACHINERY CORP VS CA

A contract for a piece of work is governed by pertinent provisions of warranty


of title and against hidden defects. The remedy for breach of such is a
redhibitory action or demand for a proportionate reduction of the price with
damages.

14. CATUNGAL VS RODRIGUEZ

The court distinguished between a condition for the fulfillment of a contract


and a condition imposed for the performance of an obligation. Failure of the
first results in the failure of the contract, while the failure of the second gives
the option to proceed with the sale by waiver of the conditions, or refusal to
proceed.

15. LO VS CA

Assignment of credit is by nature, a sale of personal property, but is also


bound by certain warranties. Seller should warrant the existence of the credit
at the time of the sale or assignment.

16. RAMOS VS CA

Several undisputed circumstances persuaded the court that the questioned


deeds should be construed as equitable mortgages, namely:
1. The plaintiff vendor remained in possession after the sale
2. The sums representing the alleged purchased price were actually
advanced by the plaintiff by way of loans; and
3. The properties allegedly have never been declared in the names of the
vendee for taxation purposes.

The circumstances show that the true intention of the parties is that the
transaction shall secure the payment of said debt, and therefore, presumed
an equitable mortgage under ART 1602, par. 6 of the Civil Code. The
existence of one circumstance is already enough to have the presumption.

17. DE LEON VS SALVADOR

While in ordinary sales for reasons of equity a transaction may be invalidated


on the ground of inadequacy of price, or when inadequacy shocks ones
conscience as to justify the courts to interfere, such does not follow when the
law gives the owner the right to redeem, as when a sale is made at a public
auction, upon the theory that the lesser the price the easier it is for the owner
to affect the redemption.

When there is right to redeem, inadequacy of price should not be material,


because the judgment debtor may reacquire the property or also sell his right
to redeem and thus recover the loss he claims to have suffered by reason of
the price obtained at the auction sale.

18. FLORES VS SO

The Spanish Civil Code provided that if the vendor does not comply with his
obligation to return the price plus expenses, the vendee shall acquire
irrevocably the ownership of the thing sold.
Under the old civil code, the ownership was consolidated in the vendee a
retro by operation of law. This is contrary to the present Civil Code, which
requires consolidation of ownership to be effected only by a judicial order.

19. ALONZO VS IAC

Notice should be given by the vendor, not the vendees, as required in ART
1623. The law intended that the notice should be given exclusively the
notice given by the vendee would not toll the running of the 30-day period.
An objection made only after 14 years of the sale does shows negligence on
the part of the supposed redemptioner in pacto de retro sale.

20. LAO VS CA

In determining the nature of the contract, the court looks at the intent of the
parties and not at the nomenclature used to describe it. It is settled that the
pacto de retro sale should be treated as a mortgage where the property sold
never left the possession of the vendors. Furthermore, an extension of the
period for redemption also shows prima facie proof of an equitable mortgage.
In case of ambiguity, the court deems the contract to be one which involves
the lesser transmission of rights and interest over the property in controversy.

21. LANUZA VS DE LEON

The court held that the sale is in reality, an equitable mortgage.


Circumstances would show that it was intended as such: 1) there was gross
inadequacy of the price; 2) the ownership did not vest into the vendees as
the vendors remained in possession of the property; and 3) the vendors
remained in possession even after the period of redemption expired.
However, a subsequent registered mortgage may defeat an equitable
mortgage.
22. CAPULONG VS CA

The deed of absolute sale and the document giving the right to repurchase
where in fact, a part of a single transaction which must be construed as an
equitable mortgage. Records show that the private respondents waited for
the period of redemption to expire before taking possession of the land. If the
transaction is really a sale, then they would have assumed possession
immediately.

23. SOLIDHOMES INC VS CA

The court held that ART 1616 of the NCC should be construed together with
1601 of the NCC, which provides that conventional redemption shall take
place when the vendor reserves the right to repurchase the thing sold, with
the obligation to comply with the provisions of 1616 and other stipulations
which may be agreed upon. In a contract of sale with pacto de retro, the
vendee has the right to immediate possession of the property sold unless
otherwise agreed upon. The title and ownership of the property sold are
immediately vested in the vendee a retro, subject only to the resolutory
condition of repurchase by the vendor a retro within the stipulated period.

24. PRIMARY STRUCTURES CORP VS VALENCIA

ART 1621 states that the owners of adjoining lands shall also have the right
of redemption when a piece of rural land, the area of which does not exceed
one hectare, is alienated unless the grantee does not own any rural land
This provision cannot be invoked of the lands in question is an urban land.
This right may be defeated if it can be shown that the grantee does not own
any rural land.

25. ETCUBAN VS CA

Where the vendors or co-owners of petitioner stated under oath in the deeds
of sale that notice of sale had been given to prospective redemptioners in
accordance to 1623, it has the effect of determining whether an offer to
redeem was made on or out of time, or whether there was substantial
compliance with the said provisions. It is true that 1623 does not prescribe
any form of notice or method by which the notice shall be made, so long as
the latter is informed in writing of the sale and the particulars thereof, the 30
days for redemption start running.

LEASE CASES
26. GUZMAN, BUCALING AND CO VS BONNEVIE

A stipulation in a contract of lease granting the lessee the right to exercise


first priority, which emphasizes all things and conditions being equal means
that if the latter fails to exercise such right, the lessor should offer the same
terms and conditions to a third party in a contract of sale. The court held that
there should be an identity of terms and conditions to be offered to the lessee
and to all prospective buyers.

It is not necessary to secure the approval of the probate court of the contract
of lease as it did not involve alienation of real property, nor did the lease
exceed one year as to make it fall under ART 1878 of the Civil Code.

The proper remedy in a breach of the right of first refusal is the rescission of
the contract. The property was handed to a third person to the damage of the
lessee, justifying the reconveyance of the same as the third party is in bad
faith.

27. YEK SENG CO VS CA

The circumstance that the lessee paid its rentals for the duration of twenty
years does not justify the extension of the duration of the contract of lease.
Notwithstanding that it is a verbal contact of lease, the contract expired upon
the demand of the lessor to vacate, and could no longer be extended.
Furthermore, the extension by the court of the contract of lease rests in its
sound discretion, and is of no means obligatory as it is not ministerial in
nature.

28. CLUTARIO VS CA

Under BP blg. 25, the need of the lessors to repossess the unit for their own
or immediate familys use for residential purpose, and the non-payment of
rentals for three months at any time, are sufficient grounds for the ejectment
of the lessee. Furthermore, case law dictates that the acceptance by the
lessors of the payment of arrears made by the lessees cannot constitute as
waiver of the default in the payment of rentals as a valid cause of action for
ejectment.

29. YAP VS CRUZ

When the contract of lease is on a month-to-month basis, the contract may


be terminated upon the end of any month after a demand to vacate the
premises has been given. In the absence of such demand, the lease contract
continues to be in force and cannot be deemed to have expired at the end of
the month automatically. The contract can only be terminated on the ground
of non-payment of rental when a demand to pay the same has been
furnished. With this, an action for forcible entry shall lie against any party
who takes possession of the property as lessee, arising from a new contract
of lease with the lessor.

30. UNITED REALTY CORP VS CA

The fact that the disputed leased premises is used as a place of worship,
does not render it protected under PD 20 and BP blg 25, which suspends or
freezes the rental amounts at the present level in the amount not exceeding
P300. Such provision can only be invoked when the leased property is used
as dwelling. Therefore, the lessor has the right to eject the lessee in case of
non-payment of the increased price. Furthermore, when the contract is one of
a monthly term, it may be terminated at the end of any month, which is to be
deemed when the lessee refuses to pay an increased rental upon demand.

31.LEGAR MANAGEMENT AND REALTY CORP VS CA

The court held that lease contracts without a definite term, where the lessee
pays monthly, is deemed to be one of a month-to-month basis. They are for a
definite term and may be terminated after the last day of the thirty month
period upon a demand to vacate. The expiration of a lease contract
constitutes a valid ground for the ejectment of the lessee under BP 877, also
known as the Rent Control Law.