Cases For Sales

BOSTON BANK OF THE PHILIPPINES, (formerly BANK OF COMMERCE) v. PERLA P. MANALO and CARLOS MANALO, JR. G.R.
NO. 158149, February 9, 2006
FACTS:
Spouses Manalo acquired lot from an agreement with the Xavierville Estate Inc. president. XEI president Emerito Ramos, Jr. contracted the
services of Engr. Carlos Manalo, Jr. who was in business of drilling deep water wells and installing pumps under the business name Hurricane
Commercial, Inc. For P34,887.66, Manalo, Jr. installed a water pump at Ramos' residence. Manalo, Jr. then proposed to XEI, through Ramos, to
purchase a lot in the Xavierville subdivision, and offered as part of the downpayment the P34,887.66 Ramos owed him, which Ramos agreed.
A letter was sent to Perla Manalo which contain the following conditions:
a. It confirmed the reservation of the spouses Manalo of Lot 1 and 2 of the said subdivision (1,740.3 sq. m);
b. Ramos pegged the price of the lots at P200.00 per square meter, or a total of P348,060.00;
c. 20% down payment of the purchase price amounting to P69,612.00 less the P34,887.66 owing from Ramos;
d. Downpayment shall be payable before December 31, 1972;
e. the corresponding Contract of Conditional Sale would then be signed on or before the same date, but if the selling operations of XEI
resumed after December 31, 1972, the balance of the downpayment would fall due then, and the spouses would sign the aforesaid
contract within five (5) days from receipt of the notice of resumption of such selling operations; and
f. In the meantime, the spouses may introduce improvements thereon subject to the rules and regulations imposed by XEI in the
subdivision.
Perla Manalo conformed to the letter agreement. The spouses Manalo took possession of the property on September 2, 1972, constructed a
house thereon, and installed a fence around the perimeter of the lots. When the spouses Manalo notified about the resumed selling operation of XEI,
they refused to pay for the remaining balance because Ramos failed to furnish them a contract. As a result, Perla Manalo went to the XEI office and
requested that the payment of the amount representing the balance of the downpayment be deferred, which, however, XEI rejected. The spouses were
being sent different statement of accounts because of the unpaid interests of lots but did not respond to the said requests because they were not
furnished any contract by Ramos.
Subsequently, Commercial Bank of Manila (CBM) acquired Xavierville Estate from the Overseas Bank of Manila (OBM). CBM (Boston
Bank of the Philippines) sent a letter to Perla Manalo stating that any construction in his lot since CBM is the owner of the lot and that they have not
asked for any permission from their office. In a conference with CBM, she was told to prove that there was a perfected sale between XEI and them
however, they failed to do so. CBM filed a complaint27 for unlawful detainer against the spouses with the Metropolitan Trial Court of Quezon City.
The case was docketed as Civil Case No. 51618. CBM claimed that the spouses had been unlawfully occupying the property without its consent and
that despite its demands, they refused to vacate the property. The latter alleged that they, as vendors, and XEI, as vendee, had a contract of sale over
the lots which had not yet been rescinded. CBM asserts that there was no perfected sale on the ground that the parties, XEI and Spouses Manalo, did
not agreed on the mode of payment of the lot, therefore there was no meeting of minds

ISSUE: Whether or not there was a perfected sale between XEI and the spouses Manalo?
HELD:
There was no perfected sale between XEI and spouses Manalo. The court held that for a perfected contract of sale or contract to sell to exist
in law, there must be an agreement of the parties, not only on the price of the property sold, but also on the manner the price is to be paid by the
vendee. Reiterating Article 1458 of the Civil Code, it was held that A contract of sale is perfected at the moment there is a meeting of the minds upon
the thing which is the object of the contract and the price. From the averment of perfection, the parties are bound, not only to the fulfillment of what
has been expressly stipulated, but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law. On
the other hand, when the contract of sale or to sell is not perfected, it cannot, as an independent source of obligation, serve as a binding juridical
relation between the parties. A definite agreement as to the price is an essential element of a binding agreement to sell personal or real property
because it seriously affects the rights and obligations of the parties. Price is an essential element in the formation of a binding and enforceable
contract of sale. The fixing of the price can never be left to the decision of one of the contracting parties. But a price fixed by one of the contracting
parties, if accepted by the other, gives rise to a perfected sale. It is not enough for the parties to agree on the price of the property. The parties must
also agree on the manner of payment of the price of the property to give rise to a binding and enforceable contract of sale or contract to sell. This is
so because the agreement as to the manner of payment goes into the price, such that a disagreement on the manner of payment is tantamount to a
failure to agree on the price. In a contract to sell property by installments, it is not enough that the parties agree on the price as well as the amount of
downpayment. The parties must, likewise, agree on the manner of payment of the balance of the purchase price and on the other terms and conditions
relative to the sale. Even if the buyer makes a downpayment or portion thereof, such payment cannot be considered as sufficient proof of the
perfection of any purchase and sale between the parties. Based on the letters sent to the Spouses Manalo, the determination of the terms of payment
of the P278,448.00 had yet to be agreed upon on or before December 31, 1972, or even afterwards, when the parties sign the corresponding contract
of conditional sale. Jurisprudence is that if a material element of a contemplated contract is left for future negotiations, the same is too indefinite to be
enforceable and when an essential element of a contract is reserved for future agreement of the parties, no legal obligation arises until such future
agreement is concluded. So long as an essential element entering into the proposed obligation of either of the parties remains to be determined by an
agreement which they are to make, the contract is incomplete and unenforceable. The reason is that such a contract is lacking in the necessary
qualities of definiteness, certainty and mutuality. In the case at bar, There is no evidence on record to prove that XEI or OBM and the respondents
had agreed, after December 31, 1972, on the terms of payment of the balance of the purchase price of the property and the other substantial terms and
conditions relative to the sale. Indeed, the parties are in agreement that there had been no contract of conditional sale ever executed by XEI, OBM or
petitioner, as vendor, and the respondents, as vendees.
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PATROCINIA RAVINA AND WILFREDO RAVINA, vs. MARY ANN P. VILLA ABRILLE, for herself and in behalf of INGRID D'LYN P.
VILLA ABRILLE, INGREMARK D'WIGHT VILLA ABRILLE, INGRESOLL DIELS VILLA ABRILLE AND INGRELYN DYAN VILLA
ABRILLE, G.R. NO. 160708, October 16, 2009
FACTS:

Mary Ann Pasaol Villa Abrille and Pedro Villa Abrille are husband and wife. They have four children, who are also parties to the instant
case and are represented by their mother, Mary Ann. the spouses acquired a 555-square meter parcel of land and covered by Transfer Certificate of
Title (TCT) No. T-88674 in their names. Said lot is adjacent to a parcel of land which Pedro acquired when he was still single and which is registered
solely in his name under TCT No. T-26471. Through their joint efforts and the proceeds of a loan from the Development Bank of the Philippines
(DBP), the spouses built a house on Lot 7 and Pedro's lot. The house was finished in the early 1980's but the spouses continuously made
improvements, including a poultry house and an annex.
Sometime in 1991, Pedro got a mistress and began to neglect his family. Mary Ann was forced to sell or mortgage their movables to
support the family and the studies of her children. By himself, Pedro offered to sell the house and the two lots to herein petitioners, Patrocinia and
Wilfredo Ravina, however, Mary Ann objected and notified the petitioners. Nonetheless, Pedro proceeded to the sale of the two lots and the house
without the consent of Mary Ann. Pedro and the Spouses Ravian executed a deed of sale without the signature of Mary Ann on it. Consequently,
Mary Ann and her daughters were forced by Pedro to transfer residence without their notice. Mary Ann and her daughters were prohibited to enter
their house. Thus, Mary Ann filed a complaint before the trial court asserting that the deed of sale of lot covered by TCT- No. T-88674 and the house
is invalid because it forms part of the conjugal property and therefore there should be a consent from her. The trial court rendered its judgment in
favor of Mary Ann stating that said lot which forms part of the conjugal property is valid as far as the one half of the house representing the share of
defendant Pedro Abrille is concerned but void as to the other half which is the share of plaintiff Mary Abrille because she did not give her
consent/sign the said sale. The petitioners appealed however the decision of the appellate court is still the same. Hence a petition for review was filed
before the Supreme Court by the spouses Ravina asserting that the sale was valid because they were buyers in good faith.
ISSUE: Whether or not the sale was valid? Are the spouses Ravina were purchasers in good faith? Are the spouses Ravina be able to recover any
reimbursement from the improvements they made in the house?
HELD:
The sale was not valid. Article 160 of the New Civil Code provides, "All property of the marriage is presumed to belong to the conjugal
partnership, unless it be proved that it pertains exclusively to the husband or to the wife." Therefore, the lot covered by TCT No. T-88674 was
acquired in 1982 during the marriage of Pedro and Mary Ann. In addition, the house built thereon is conjugal property, having been constructed
through the joint efforts of the spouses, who had even obtained a loan from DBP to construct the house. Significantly, a sale or encumbrance of
conjugal property concluded after the effectivity of the Family Code on August 3, 1988, is governed by Article 124 of the same Code that now treats
such a disposition to be void if done (a) without the consent of both the husband and the wife, or (b) in case of one spouse's inability, the authority of
the court. Article 124 of the Family Code, the governing law at the time the assailed sale was contracted. Just like the rule in absolute community of
property, if the husband, without knowledge and consent of the wife, sells conjugal property, such sale is void. If the sale was with the knowledge but
without the approval of the wife, thereby resulting in a disagreement, such sale is annullable at the instance of the wife who is given five (5) years
from the date the contract implementing the decision of the husband to institute the case.
Furthermore, the Court held that the spouses Ravina were not purchasers in good faith. a purchaser in good faith is one who buys the
property of another without notice that some other person has a right to, or interest in, such property and pays a full and fair price for the same at the
time of such purchase, or before he has notice of the claim or interest of some other person in the property. To establish his status as a buyer for value
in good faith, a person dealing with land registered in the name of and occupied by the seller need only show that he relied on the face of the seller's
certificate of title. But for a person dealing with land registered in the name of and occupied by the seller whose capacity to sell is restricted, such as
by Articles 166 and 173 of the Civil Code or Article 124 of the Family Code, he must show that he inquired into the latter's capacity to sell in order to
establish himself as a buyer for value in good faith. In the present case, the property is registered in the name of Pedro and his wife, Mary Ann.
Petitioners cannot deny knowledge that during the time of the sale in 1991, Pedro was married to Mary Ann. However, Mary Ann's conformity did
not appear in the deed. Even assuming that petitioners believed in good faith that the subject property is the exclusive property of Pedro, they were
apprised by Mary Ann's lawyer of her objection to the sale and yet they still proceeded to purchase the property without Mary Ann's written consent.
Moreover, the respondents were the ones in actual, visible and public possession of the property at the time the transaction was being made. Thus, at
the time of sale, petitioners knew that Mary Ann has a right to or interest in the subject properties and yet they failed to obtain her conformity to the
deed of sale. Hence, petitioners cannot now invoke the protection accorded to purchasers in good faith.

Lastly, the spouses Ravina is not entitled of any reimbursement from the improvements they introduced in the said property. As found by
the CA and reiterated by the Supreme Court, petitioner Patrocinia Ravina made improvements and renovations on the house and lot at the time when
the complaint against them was filed. Ravina continued introducing improvements during the pendency of the action. Thus, Article 449 of the New
Civil Code is applicable. It provides that, "(h)e who builds, plants or sows in bad faith on the land of another, loses what is built, planted or sown
without right to indemnity."

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RR Paredes et al vs Calilung
Facts: Respondent Atty Tarciso S Calilung, a businessman and son-in-law of one of the owners of the subject land instituted a complaint against the
officials of Caltex Philippines Inc with the Makati, Regional Trial Court, alleging them of several counts of estafa for employing deceit to induce
respondent to enter into a contract of sale with CPI by (1) falsely misrepresenting that CPI was the owner of the whole subject land thus could assign
to respondent the entire subject real properties when in truth CPI could only assign to respondent limited interest of Antonia Vda de Medina in the
subject real properties and (2) fraudulently concealing the fact that the subject real properties were covered by CARP and were actually the subject of
a pending Voluntary offer to Sell with DAR. The Makati, RTC and DOJ decided in favor of the petitioner, but it was reversed by Court of Appeals
therefore filed before Supreme Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court seeking the reversal and setting aside
of the decision of the Court of Appeals.
Issue: Whether or not the VOS covering the subject real properties already be deemed a consummated sale?
Ruling: Voluntary Offer to Sell pertaining to the subject land is not deemed consummated sale. The Court ruled that a VOS, as its name implies, is a
voluntary offer to sell the land to the government so that the latter can distribute the same to qualified tenants. While a landowner who voluntarily
offered his land for sale is precluded from withdrawing his offer except under specified circumstances, such a condition does not make the mere offer
a consummated sale. It bears to emphasize that the offer still needs to be accepted by the DAR on behalf of the government, and just compensation
for the land determined and paid to the landowner. The sale is deemed consummated when the landowner has received payment or deposit by the
DAR of just compensation with an accessible bank, in cash or Landbank bonds, since only then is ownership of the land finally transferred from the
landowner to the government.
In the present case, the VOS covering the subject real properties is still being processed by the DAR. There has so far been no express
acceptance by the DAR of the said VOS or payment of just compensation to CPI. There being no consummated sale of the subject real properties to
DAR, CPI could not have committed a double sale of the same. It remained a co-owner of the subject real properties, together with the other heirs of
Antonio Medina, and, thus, it could still legally sell its share or interest therein to another person, such as respondent. Should the DAR finally
approve the VOS covering the subject real properties, then respondent, after acquiring the interest of CPI, shall be entitled to just compensation
corresponding to his interest. Thus, present petition is granted and CA decision is reversed and set aside.
Beatingo v Gasis

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Facts: Petitioner alleged that she brought a piece of land from Flora Gasis as evidenced by a notarized Deed of Absolute Sale on May 1988but when
she had it registered to the Register of Deeds she failed to obtain such since she could not produce the owner’s duplicate of title. Petitioner then filed
a petition for the issuance of the owner’s duplicate of title but was opposed by the respondent who claimed that she was in possession of the OCT as
she purchased subject property form Flora on January 1999. She further accused respondent of inducing Flora to violate contract with her, which the
respondent denied. Moreover, respondent claimed that she is an innocent purchaser, that she has no knowledge of prior of the same property and that
she immediately occupied same property and enjoyed its produce upon payment of the purchase price.
Issue: Whether or not the contract is one of a double sale?
Ruling: The contract is one of a double sale. The Court ruled that the present controversy is a clear case of a double sale where the seller sold one
property to first to the petitioner then to the respondent. Art. 1544. If the same thing should have been sold to different vendees, the ownership shall
be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable
property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no
inscription, the ownership shall pertain to the person who in good faith was first in possession; and, in the absence thereof, to the person who presents
the oldest title, provided there is good faith.
In this case, though the sale was evidenced by a notarized deed of sale, petitioner admitted that she refused to make full payment on the subject
property and take actual possession thereof because of the presence of tenants on the subject property. Clearly, petitioner had not taken possession of
the subject property or exercised acts of dominion over it despite her assertion that she was the lawful owner thereof.awphi1
Respondent, on the other hand, showed that she purchased the subject property without knowledge that it had been earlier sold by Flora to petitioner.
She had reason to believe that there was no defect in her title since the owner’s duplicate copy of the OCT was delivered to her by the seller upon full
payment of the purchase price. She then took possession of the subject property and exercised acts of ownership by collecting rentals from the tenants
who were occupying it. Indeed, the execution of a public instrument shall be equivalent to the delivery of the thing that is the object of the contract.
Therefore, the Court agrees with the RTC decision in declaring that respondent has a better right to the subject property.
TOMAS K. CHUA v. CA and ENCARNACION VALDES-CHOY [G.R. No. 119255. April 9, 2003.]
FACTS:
1. The parties entered into a contract to sell on 30 June 1989, as evidenced by the Receipt for the P100,000.00 earnest money.
2. The contract to sell was subject to the following conditions: (1) the balance of P10,700,000.00 was payable not later than 15 July 1989; (2)
Valdes-Choy may stay in the Property until 13 August 1989; and (3) all papers must be "in proper order" before full payment is made.
3. Chua complied with the terms of the contract to sell. He that he was prepared to pay Valdes-Choy the consideration in full on 13 July 1989,
two days before the deadline of 15 July 1989. Chua even added P80,000.00 for the documentary stamp tax. He purchased from PBCom two
manager’s checks both payable to Valdes-Choy. The first check for P485,000.00 was to pay the capital gains tax. The second check for
P10,215,000.00 was to pay the balance of the purchase price. The trial court was convinced that Chua demonstrated his capacity and
readiness to pay the balance on 13 July 1989 with the production of the PBCom manager’s check for P10,215,000.00.
4. That Valdes-Choy did not perform her correlative obligation under the contract to sell to put all the papers in order. The trial court noted
that as of 14 July 1989, the capital gains tax had not been paid because Valdes-Choy’s counsel who was suppose to pay the tax did not do
so. The trial court declared that Valdes-Choy was in a position to deliver only the owner’s duplicate copy of the TCT, the signed Deeds of
Sale, the tax declarations, and the latest realty tax receipt. The trial court concluded that these documents were all useless without the
Bureau of Internal Revenue receipt evidencing full payment of the capital gains tax which is a pre-requisite to the issuance of a new
certificate of title in Chua’s name.
5. The trial court held that Chua’s non-payment of the balance of P10,215,000.00 on the agreed date was due to Valdes-Choy’s fault.
ISSUE: WON the transaction between Chua and Valdes-Choy is a perfected contract of sale or a mere contract to sell
HELD: we hold that the agreement between Chua and Valdes-Choy, as evidenced by the Receipt, is a contract to sell and not a contract of sale.
The distinction between a contract of sale and a contract to sell it well-settled:
In a contract of sale, the title to the property passes to the vendee upon the delivery of the thing sold; in a contract to sell, ownership is, by agreement,
reserved in the vendor and is not to pass to the vendee until full payment of the purchase price. Otherwise stated, in a contract of sale, the vendor
loses ownership over the property and cannot recover it until and unless the contract is resolved or rescinded; whereas, in a contract to sell, title is

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retained by the vendor until full payment of the price. In the latter contract, payment of the price is a positive suspensive condition, failure of which is
not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective.
In a contract to sell, the obligation of the seller to sell becomes demandable only upon the happening of the suspensive condition. In this case, the
suspensive condition is the full payment of the purchase price by Chua. Such full payment gives rise to Chua’s right to demand the execution of the
contract of sale.
It is only upon the existence of the contract of sale that the seller becomes obligated to transfer the ownership of the thing sold to the buyer.
The obligation of the seller is to transfer to the buyer ownership of the thing sold. In the sale of real property, the seller is not obligated to transfer in
the name of the buyer a new certificate of title, but rather to transfer ownership of the real property. There is a difference between transfer of the
certificate of title in the name of the buyer, and transfer of ownership to the buyer. The buyer may become the owner of the real property even if the
certificate of title is still registered in the name of the seller. As between the seller and buyer, ownership is transferred not by the issuance of a new
certificate of title in the name of the buyer but by the execution of the instrument of sale in a public document.
Customarily, in the absence of a contrary agreement, the submission by an individual seller to the buyer of the following papers would complete a
sale of real estate: (1) owner’s duplicate copy of the Torrens title; 36 (2) signed deed of absolute sale; (3) tax declaration; and (3) latest realty tax
receipt. The buyer can retain the amount for the capital gains tax and pay it upon authority of the seller, or the seller can pay the tax, depending on the
agreement of the parties.
In this case, Valdes-Choy was ready, able and willing to submit to Chua all the papers that customarily would complete the sale, and to pay as well
the capital gains tax. On the other hand, Chua’s condition that a new TCT be first issued in his name before he pays the balance of P10,215,000.00,
representing 94.58% of the purchase price, is not customary in a sale of real estate. Such a condition, not specified in the contract to sell as evidenced
by the Receipt, cannot be considered part of the "omissions of stipulations which are ordinarily established" by usage or custom. 41 What is
increasingly becoming customary is to deposit in escrow the balance of the purchase price pending the issuance of a new certificate of title in the
name of the buyer. Valdes-Choy suggested this solution but unfortunately, it drew no response from Chua.
Accordingly, since Chua refused to pay the consideration in full on the agreed date, which is a suspensive condition, Chua cannot compel Valdes-
Choy to consummate the sale of the Property.
LUMAYAG V. HEIRS OF NEMENO
FACTS:
1. During their lifetime, the sps Nemeno and Dalmacia Dayangco-Nemeno owned 2 parcels of coconut land. When Dalmacia died, Jacinto
joined by his 5 children, namely Meliton, Eleuteria, Timoteo, Justo, and Saturnino, conveyed to his daughter Felipa and her husband
Domingo Lumayag the 2 lots.
2. The instrument of conveyance is denominated as Deed of sale with Pacto De Retro.

3. Thereunder, it was stipulated that the consideration for the alleged sale of the 2 aforementioned lots was 20k and that the vendors a retro
have the right to repurchase the same lots
4. It was likewise agreed thereunder that in the event of no purchase is effected within the said stipulated period of five years, “conveyance
shall become absolute and irrevocable without the necessity of drawing up a new absolute deed of sale, subject to the requirements of law
regarding consolidation of ownership of real property.”
5. A decade after Jacinto’s death, a new owner’s duplicate copy of one of the lots was issued and delivered to the heirs of Jacinto and
Dalmacio.
6. On December 24, 1996, the heirs of Jacinto and Dalmacia, filed against the sps Lumayag a complaint for declaration of contract of sale as
equitable mortgage, accounting, and redemption with damages.
7. The complaint alleged that the subject deed of sale with pacto de retro was executed only for the purpose of securing the payment of a loan
of 20k obtained from the defendant spouses in connection with the medication and hospitalization of the then ailing Jacinto Nemeno.
8. The sps Lumayag denied that the contract in question was an equitable mortgage and claimed that the amount of 20k received by the
plaintiff heirs was the consideration for the sale of the 2 lots and not a loan.
9. Both the RTC and the CA found it as an equitable mortgage, hence this appeal.
ISSUE: WON the deed of sale with Pacto De Retro was an equitable mortgage
HELD: The deed of sale with pacto de retro was an equitable mortgage. Evidence is extant on the record that the respondent heirs, as vendors a
retro, remained in possession of the subject lots after the execution of the deed of sale with right to repurchase.
In stark contrast, evidence is wanting that petitioners ever enjoyed possession thereof. If the transaction was really a sale with right to repurchase, as
claimed by petitioners, then the latter should have asserted their rights for the immediate delivery of the lots to them instead of allowing some of the
respondents to freely stay in the premises. Well-settled to the point of elementary is the doctrine that where the vendor remains in physical possession
of the land and lessee or otherwise, the contract should be treated as an equitable mortgage.

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FELIPE V. ALDON
FACTS:
1. During the marriage of Maximo Aldon and Gemina Almorasa, they bought several pieces of land. The lands were divided into three lots.
2. Subsequently, Gemina sold the lots to the spouses Eduardo Felipe and Hermogena Felipe without the consent of her husband. Maximo
died.
3. After which, his heirs, namely Gemina and their children Sofia and Salvador filed a complaint against the Felipes alleging that they are the
owners of the lots.
4. The Felipes asserted that they had acquired the lots from the plaintiffs by purchase and subsequent delivery to them.
5. The trial court sustained the claim of the defendants. The CA reversed the decision of the trial court.
ISSUE: WON the sale of the lots by Gemina without the consent of the husband is defective
HELD: The sale of the lots by Gemina without the consent of the husband is defective. The view that the contract made by Gimena is a voidable
contract is supported by the legal provision that contracts entered by the husband without the consent of the wife when such consent is required, are
annullable at her instance during the marriage and within ten years from the transaction questioned.
The voidable contract of Gimena was subject to annulment by her husband only during the marriage because he was the victim who had an interest in
the contract. Gimena, who was the party responsible for the defect, could not ask for its annulment. Their children could not likewise seek the
annulment of the contract while the marriage subsisted because they merely had an inchoate right to the lands sold.
OLIMPIA HOUSING VS PANASIATIC TRAVEL CORP 395 SCRA 298
FACTS:
Plaintiff and defendant Ma. Nelida Galvez-Ycasiano entered into a Contract to Sell, whereby the former agreed to sell to the latter
condominium unit no. D-12 situated on the ground floor of Olympia Condominium for the agreed price of P2,340,000.00 payable in installments of
P33,657.40 per month. Pursuant to the Contract to Sell, defendant Ma. Nelida Galvez-Ycasiano made a reservation/deposit in the amount of
P100,000.00 and 50% down payment in the amount of P1,070,000.00. Defendants made several payments in cash and thru credit memos issued by
plaintiff representing plane tickets bought by plaintiff from defendant Panasiatic Travel Corp., which is owned by defendant Ma. Nelida Galvez-
Ycasiano, who credited/offset the amount of the said plane tickets to defendant's account due to plaintiff. Plaintiff alleged that far from complying
with the terms and conditions of said Contract to Sell, defendants failed to pay the corresponding monthly installments which as of June 2, 1988
amounted to P1,924,345.52. Demand to pay the same was sent to defendant Ma. Nelida Galvez-Ycasiano, but the latter failed to settle her obligation.
For failure of defendant to pay her obligation plaintiff allegedly rescinded the contract by a Notarial Act of Rescission. Defendant, while admitting
the existence of the contract to sell, interposed the defense that she has made substantial payments of the purchase price of the subject condominium
unit amounting to P1,964,452.82 in accordance with the provisions of the contract to sell and that she decided to stop payment of the purchase price
in the meantime because of substantial differences between her and the plaintiff in the computation of the balance of the purchase price. RTC, in their
decision, ordered defendants to vacate the premises due to failure to pay the full amount as well as the current amount due, including the penalties.
Respondents insist that there was no valid rescission of the contract to sell on account of the failure of petitioner to give notice of rescission by
notarial act, a requisite laid down in Republic Act No. 6552. On the other hand, petitioner argued that while the complaint before the trial court was
denominated as one for "recovery of possession," the suit could still be considered as a case for judicial rescission considering that the issue of
whether or not it was entitled to recover possession over the property subject matter of the contract to sell would require, for its resolution, passing
upon the initial issue of whether or not the contract was in fact rescinded by virtue of a notarial act.
ISSUE:
Whether or not the Contract to Sell was validly rescinded
RULING:

NO. Republic Act No. 6552, otherwise known as the "Realty Installment Buyer Protection Act" recognizes the right of the seller to cancel
the contract but any such cancellation must be done in conformity with the requirements prescribed by such Act. The so-called "notarial rescission"
was not sent to respondents prior to the institution of the case for reconveyance but merely served on respondents by way of an attachment to the
complaint. In any case, a notarial rescission, standing alone, could not have invalidly effected, in this case, the cancellation of the contract. In
13
addition to the notarial act of rescission, the seller is required to refund to the buyer the cash surrender value of the payments on the property. The

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actual cancellation of the contract can only be deemed to take place upon the expiry of a 30-day period following the receipt by the buyer of the
notice of cancellation or demand for rescission by a notarial act and the full payment of the cash surrender value.
ESCUETA VS LIM 512 SCRA 411
FACTS:

Respondent averred that she bought the hereditary shares (consisting of 10 lots) of Ignacio Rubio and the heirs of Luz Baloloy and a
Contract of Sale was executed by the vendors. It was agreed in the contracts that the vendors would secure certificates of title covering their
respective hereditary shares and that the balance of purchase price would be paid upon the presentation of their individual certificate of title.
However, Ignacio Rubio refused to receive the other half of the down payment which is P[100,000 and refused and still refuses to deliver to
respondent the certificates of title covering his share on the two lots. With respect to the heirs of Luz Baloloy, they also refused and still refuse to
perform the delivery of the two certificates of title covering their share in the disputed lots. As to petitioner Corazon Escueta, in spite of her
knowledge that the disputed lots have already been sold by Ignacio Rubio to respondent, it is alleged that a simulated deed of sale involving said lots
was effected by Ignacio Rubio in her favor. Petitioner however denied the material allegation stating that respondent has no cause of action, because
the subject contract of sale has no more force and effect as far as the Baloloys are concerned, since they have withdrawn their offer to sell for the
reason that respondent failed to pay the balance of the purchase price. Furthermore, petitioner alleged that respondent also has no right of action
against Rubio since the latter did not enter into a contract of sale with her.
ISSUE:
Whether or not there was a valid Contract of Sale
RULING:

YES. All the elements of a valid contract of sale under Article 1458 of the Civil Code are present, such as: (1) consent or meeting of the
minds; (2) determinate subject matter; and (3) price certain in money or its equivalent. Ignacio Rubio, the Baloloys, and their co-heirs sold their
hereditary shares for a price certain to which respondent agreed to buy and pay for the subject properties. The offer and the acceptance are

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concurrent, since the minds of the contracting parties meet in the terms of the agreement. In fact, earnest money has been given by respondent. "[I]t
shall be considered as part of the price and as proof of the perfection of the contract. It constitutes an advance payment to be deducted from the total
price.
VALLIDO VS PONO (APRIL 15, 2013)

FACTS:
Martino Dandan (Martino) was the registered owner of a parcel of land in Kananga, Leyte. He sold a portion of the subject property
equivalent to 18,214 square meters to respondent Purificacion Cerna (Purificacion). Upon execution of the Deed of Absolute Sale, Martino gave
Purificacion the owner’s copy of OCT No. P-429. The transfer, however, was not recorded in the Registry of Deeds. Purificacion sold her portion of
the subject property to respondent Marianito Pono. Marianito registered the portion he bought for taxation purposes, paid its taxes, took possession,
and allowed his son respondent Elmer Pono (Elmer) and daughter-in-law, Juliet Pono (Juliet), to construct a house thereon. Similarly, the transfer was
not registered in the Registry of Deeds. Martino sold the whole subject property to his grandson Esmeraldo, petitioner herein, but has no title to hand
over to Esmeraldo since the title was already given to Purificacion. Martino filed a petition seeking for the issuance of a new owner’s duplicate copy
which was granted by the RTC. Subsequently, Esmeraldo registered the deed of sale in the Registry of Deeds and a TCT was issued in his favor.
Petitioners filed before the RTC a complaint for quieting of title, recovery of possession of real property and damages against the respondents. In
their Answer, respondents Elmer and Juliet averred that their occupation of the property was upon permission of Marianito. RTC ruled in favor of
petitioners stating that there was a double sale and deemed the petitioners as buyers in good faith. The RTC concluded that because the petitioners
registered the sale in the Register of Deeds, they had a better right over the respondents. CA however reversed RTC’s decision on the ground that
petitioners failed to discharge the burden of proving that they were buyers and registrants in good faith. Hence, the case at bar.
ISSUE:
Whether or not petitioner has a better right over the parcel of land and is considered as a buyer or registrant in good faith.
RULING:
NO. Although it is a recognized principle that a person dealing on a registered land need not go beyond its certificate of title, it is also a
firmly settled rule that where there are circumstances which would put a party on guard and prompt him to investigate or inspect the property being
sold to him, such as the presence of occupants/tenants thereon, it is expected from the purchaser of a valued piece of land to inquire first into the
status or nature of possession of the occupants. As in the common practice in the real estate industry, an ocular inspection of the premises involved is
a safeguard that a cautious and prudent purchaser usually takes. Should he find out that the land he intends to buy is occupied by anybody else other
than the seller who, as in this case, is not in actual possession, it would then be incumbent upon the purchaser to verify the extent of the occupant’s
possessory rights.
The failure of a prospective buyer to take such precautionary steps would mean negligence on his part and would preclude him from
claiming or invoking the rights of a "purchaser in good faith." It has been held that "the registration of a later sale must be done in good faith to
entitle the registrant to priority in ownership over the vendee in an earlier sale."
JWB
Ursal vs. CA, 473 SCRA 52 (2005)
FACTS:
In January 1985, Winifreda Ursal and spouses Jesus and Cristita Moneset entered into a “Contract to Sell Lot & House.” The amount agreed upon
was P130, 000.00. Moreover, Ursal is to pay P50, 000.00 as down payment and will continue to pay P3,000.00 monthly starting the next month until
the balance is paid. After 6 months, Ursal stopped paying the Monesets for the latter failed to give her the transfer of certificate title. In November
1985, the Monesets executed an absolute deed of sale with one Dr. Canora. Also, the Monesets mortgaged the same property to the Rural Bank of
Larena for P100, 000.00. Unfortunately, the Monesets failed to pay the P100, 000; hence, the bank filed for foreclosure.
Trial ensued and the RTC ruled in favor of Ursal. The trial court ruled that there was fraud on the part of the Monesets for executing multiple sales
contracts. That the bank is not liable for fraud, but preference to redeem should be given to Ursal. The Monesets are ordered to reimburse Ursal plus
to pay damages and fees. However, Ursal was not satisfied as she believed that the bank was also at fault.
ISSUE:
Whether or not the Contract to Sell vested ownership in Ursal.
RULING:
The court said no. A contract to sell is a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the subject
property despite delivery thereof to the prospective buyer, binds himself to sell the said property exclusively to the prospective buyer upon fulfillment
of the condition agreed upon, that is, full payment of the purchase price. Moreover, the prospective seller expressly reserves the transfer of title to the
prospective buyer, until the happening of an event, which in this case is the full payment of the purchase price. What the seller agrees or obligates
himself to do is to fulfill his promise to sell the subject property when the entire amount of the purchase price is delivered to him.
Since the contract in this case is a contract to sell, the ownership of the property remained with the Monesets even after petitioner had paid the down

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payment and took possession of the property.
Sta. Lucia Realty vs. Uyecio 562 SCRA 26 (2008)

FACTS:
Romeo, Amaris, Reynaldo a and Manuel, all surnamed Uyecio (Uyecios), entered into a contract to sell with Sta. Lucia Realty & Development, Inc.,
(Sta. Lucia Realty) covering seven (7) lots. The sale was premised upon the brochures of the project detailing the improvements and amenities to the
unconstructed subdivision. The Uyecios agreed to pay part of down payment of the lots in installment of 10 years at 21% interest per annum. They
partially paid amortization until April 2001, despite the fact that the improvements and amenities reflected in the sales brochures were yet to be
completed.
The Uyecios filed a complaint against the Sta. Lucia Realty at the Housing and Land Use Regulatory Board (HLURB) compelling the completion of
the Sta. Lucia Realty‘s project within six (6) months or refund of their total payments. After the investigation, HLURB ruled in favor of the Uyecios
and ordered, among others, the rescission of the Contract to Sell between the parties. The decision of HLURB was affirmed by the Office of the
President and by the Court of Appeals.
ISSUE:
Whether or not the Court of Appeals erred in ordering the rescission of the Contract to Sell between the parties.
RULING:
In the present case, Sta. Lucia has not shown any ground to merit a disturbance of the findings of the HLURB which have been sustained by the OP
and the appellate court.
Articles 1191 of the Civil Code does not thus apply to a contract to sell since there can be no rescission of an obligation that is still non-existent, the
suspensive condition not having occurred. In other words, the breach contemplated in Article 1191 is the obligor’s failure to comply with an
obligation already extant, like a contract of sale, not a failure of a condition to render binding that obligation.
In a contract to sell real property on installments, the full payment of the purchase price is a positive suspensive condition, the failure of which is not
considered a breach, casual or serious, but simply an event which prevented the obligation of the vendor to convey title from acquiring any obligatory
force. Cancellation, not rescission, of the contract to sell is thus the correct remedy in the premises.

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Roman Catholic Church vs. Regino Pante (2012)
FACTS:
The Church, represented by the Archbishop of Caceres, owned a 32-square meter lot in Canaman, Camarines Sur. On September 25, 1992, the
Church contracted with Regino Pante for the sale of the lot on the belief that the latter was an actual occupant of the lot.
On June 28, 1994, the Church sold in favor of the spouses Rubi, a lot that included the lot previously sold to Pante. As no settlement could be reached
between the parties, Pante instituted with the RTC an action to annul the sale between the Church and the spouses Rubi, insofar as it included the lot
previously sold to him.
The Church filed its answer with a counterclaim, seeking the annulment of its contract with Pante. The Church alleged that its consent to the contract
was obtained by fraud when Pante, in bad faith, misrepresented that he had been an actual occupant of the lot sold to him, when in truth, he was
merely using the 32-square meter lot as a passageway from his house to the town proper. It contended that it was its policy to sell its lots only to
actual occupants. Since the spouses Rubi and their predecessors-in-interest have long been occupying the lot that included the lot sold to Pante, the
Church claimed that the spouses Rubi were the rightful buyers.
The RTC ruled in favor of the Church, finding that the Church's consent to the sale was secured through Pante's misrepresentation. As the Church's
consent was secured through its mistaken belief that Pante was a qualified "occupant," the RTC annulled the contract between the Church and Pante,
pursuant to Article 1390 of the Civil Code.
In 2006, the CA granted Pante's appeal and reversed the RTC's ruling. The CA characterized the contract between Pante and the Church as a contract
of sale, since the Church made no express reservation of ownership until full payment of the price is made. In fact, the contract gave the Church the
right to repurchase in case Pante fails to pay the installments within the grace period provided; the CA ruled that the right to repurchase is
unnecessary if ownership has not already been transferred to the buyer.
Even assuming that the contract had been a contract to sell, the CA declared that Pante fulfilled the condition precedent when he consigned the
balance within the three-year period allowed under the parties' agreement; upon full payment, Pante fully complied with the terms of his contract
with the Church.
After recognizing the validity of the sale to Pante and noting the subsequent sale to the spouses Rubi, the CA proceeded to apply the rules on double
sales in Article 1544 of the Civil Code.
Since neither of the two sales was registered, the CA upheld the full effectiveness of the sale in favor of Pante who first possessed the lot by using it
as a passageway since 1963.
The Church contends that the sale of the lot to Pante is voidable under Article 1390 of the Civil Code. Hence, the Appeal.
ISSUE: Whether or not the sale of the lot in question to Pante was valid.
RULING:
The Court resolves that no misrepresentation existed vitiating the seller's consent and invalidating the contract. Consent is an essential requisite of
contracts as it pertains to the meeting of the offer and the acceptance upon the thing and the cause which constitute the contract. To create a valid
contract, the meeting of the mind must be free, voluntary, willful and with a reasonable understanding of the various obligations the parties assumed
for themselves. Where consent, however, is given through mistake, violence, intimidation, undue influence, or fraud, the contract is deemed voidable.
However, not every mistake renders a contract voidable.

Page 10 of 45
For mistake as to the qualification of one of the parties to vitiate consent, two requisites must concur: the mistake must be either with regard to the
identity or with regard to the qualification of one of the contracting parties; and the identity or qualification must have been the principal
consideration for the celebration of the contract.
In the present case, the Church contends that its consent to sell the lot was given on the mistaken impression arising from Pante's fraudulent
misrepresentation that he had been the actual occupant of the lot. Willful misrepresentation existed because of its policy to sell its lands only to their
actual occupants or residents. Thus, it considers the buyer's actual occupancy or residence over the subject lot a qualification necessary to induce it to
sell the lot.
Contrary to the Church's contention, the actual occupancy or residency of a buyer over the land does not appear to be a necessary qualification that
the Church requires before it could sell its land. Had this been indeed its policy, then neither Pante nor the spouses Rubi would qualify as buyers as
none of them actually occupied or resided on the lot.
The above facts, in our view, establish that there could not have been a deliberate, willful, or fraudulent act committed by Pante that misled the
Church into giving its consent to the sale of the subject lot in his favor. That Pante was not an actual occupant of the lot and he purchased was a fact
that the Church either ignored or waived as a requirement. In any case, the Church was by no means led to believe or do so by Pante's act; there had
been no vitiation of the Church's consent to the sale of the lot to Pante.
Furthermore, the sale of the lot to Pante and later to the spouses Rubi resulted in a double sale that called for the application of the rules in Article
1544 of the NCC.
As neither Pante, nor the spouses Rubi registered the sale in their favor, the question now is who, between the two, was first in possession of the
property in good faith. Jurisprudence has interpreted possession in Article 1544 of the Civil Code to mean both actual physical delivery and
constructive delivery.
Actual delivery of a thing sold occurs when it is placed under the control and possession of the vendee.Pante claimed that he had been using the lot as
a passageway, with the Church's permission, since 1963.
Delivery of a thing sold may also be made constructively. Under this provision, the sale in favor of Pante would have to be upheld since the contract
executed between the Church and Pante was duly notarized, converting the deed into a public instrument. Thus, under either mode of delivery, Pante
acquired prior possession of the lot.
Garcia v. CA
Facts:
On May 28, 1993, plaintiffs spouses Faustino and Josefina Garcia and spouses Meliton and Helen Galvez (herein appellees) and defendant Emerlita
dela Cruz entered into a Contract to Sell wherein the latter agreed to sell to the former, for ₱3,170,220.00, five (5) parcels of land situated at Tanza,
Cavite. At the time of the execution of the said contract, three of the subject lots, namely, Lot Nos. 2776, 2767, and 2769 were registered in the name
of one Angel Abelida from whom defendant allegedly acquired said properties by virtue of a Deed of Absolute Sale dated March 31, 1989.
As agreed plaintiffs, made a down payment of ₱500,000.00 upon the signing of the contract. The balance of ₱2,670,220.00 would be paid in three
instalments.
On its due date, December 31, 1993, plaintiffs failed to pay the last installment in the amount of ₱1,670,220.00. In July 1995, plaintiffs offered to pay
the unpaid balance, which had already been delayed by one and [a] half year, which defendant refused to accept. On September 23, 1995, defendant
sold the same parcels of land to intervenor Diogenes G. Bartolome.
In order to compel defendant to accept plaintiffs’ payment in full satisfaction of the purchase price and, thereafter, execute the necessary document of
transfer in their favor, plaintiffs filed before the RTC a complaint for specific performance.
Plaintiffs alleged that they discovered the infirmity of the Deed of Absolute Sale covering Lot Nos. 2776, 2767 and 2769, between their former
owner Angel Abelida and defendant, the same being spurious because the signature of Angel Abelida and his wife were falsified; that at the time of
the execution of the said deed, said spouses were in the United States; that due to their apprehension regarding the authenticity of the document, they
withheld payment of the last installment; that they tendered payment of the unpaid balance sometime in July 1995, after Angel Abelida ratified the
sale made in favor [of] defendant, but defendant refused to accept their payment for no jusitifiable reason.
Defendant denied the allegation that the Deed of Absolute Sale was spurious and argued that plaintiffs failed to pay in full the agreed purchase price
on its due date despite repeated demands; that the Contract to Sell contains a proviso that failure of plaintiffs to pay the purchase price in full shall
cause the rescission of the contract and forfeiture of one-half (1/2%) percent of the total amount paid to defendant.
Issue: W/N the Maceda Law is applicable?

Page 11 of 45
Ruling:
No. The trial court erred in applying R.A. 6552,14 or the Maceda Law, to the present case. The Maceda Law applies to contracts of sale of real estate
on installment payments, including residential condominium apartments but excluding industrial lots, commercial buildings and sales to tenants. The
subject lands, comprising five (5) parcels and aggregating 69,028 square meters, do not comprise residential real estate within the contemplation of
the Maceda Law.15 Moreover, even if we apply the Maceda Law to the present case, petitioners’ offer of payment to Dela Cruz was made a year and
a half after the stipulated date. This is beyond the sixty-day grace period under Section 4 of the Maceda Law.16 Petitioners still cannot use the second
sentence of Section 4 of the Maceda Law against Dela Cruz for Dela Cruz’s alleged failure to give an effective notice of cancellation or demand for
rescission because Dela Cruz merely sent the notice to the address supplied by petitioners in the Contract to Sell.
It is undeniable that petitioners failed to pay the balance of the purchase price on the stipulated date of the Contract to Sell. Thus, Dela Cruz is within
her rights to sell the subject lands to Bartolome. Neither Dela Cruz nor Bartolome can be said to be in bad faith.

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MANILA METAL V. PNB
Facts:
Petitioner was the owner of a 8,015 square meter parcel of land located in Mandaluyong. The property was covered by Transfer Certificate of Title
(TCT) No. 332098 of the Registry of Deeds of Rizal. To secure a P900,000.00 loan it had obtained from respondent Philippine National Bank (PNB),
petitioner executed a real estate mortgage over the lot. Respondent PNB later granted petitioner a new credit accommodation of P1,000,000.00; and,
on November 16, 1973, petitioner executed an Amendment of Real Estate Mortgage over its property. On March 31, 1981, petitioner secured another
loan of P653,000.00 from respondent PNB, payable in quarterly installments of P32,650.00, plus interests and other charges.
On August 5, 1982, respondent PNB filed a petition for extrajudicial foreclosure of the real estate mortgage and sought to have the property sold at
public auction for P911,532.21, petitioner's outstanding obligation to respondent PNB as of June 30, 1982, plus interests and attorney's fees.
After due notice and publication, the property was sold at public auction on September 28, 1982 where respondent PNB was declared the winning
bidder for P1,000,000.00. The Certificate of Sale issued in its favor was registered with the Office of the Register of Deeds of Rizal.
Petitioner sent a letter dated August 25, 1983 to respondent PNB, requesting that it be granted an extension of time to redeem/repurchase the
property. On February 10, 1984, petitioner reiterated its request for a one year extension from February 17, 1984 within which to redeem/repurchase
the property on instalment basis. PNB Pasay City Branch personnel informed petitioner that as a matter of policy, the bank does not accept "partial
redemption."
Special Assets Management Department (SAMD) had prepared a statement of account, and as of June 25, 1984 petitioner's obligation amounted to
P1,574,560.47. This included the bid price of P1,056,924.50, interest, advances of insurance premiums, advances on realty taxes, registration
expenses, miscellaneous expenses and publication cost. When apprised of the statement of account, petitioner remitted P725,000.00 to respondent
PNB as "deposit to repurchase."
The SAMD recommended to the management of respondent PNB that petitioner be allowed to repurchase the property for P1,574,560.00. PNB
management informed petitioner that it was rejecting the offer and the recommendation of the SAMD. It was suggested that petitioner purchase the
property for P2,660,000.00, its minimum market value. Respondent PNB gave petitioner until December 15, 1984 to act on the proposal; otherwise,
its P725,000.00 deposit would be returned and the property would be sold to other interested buyers.
On August 28, 1989, petitioner filed a complaint against respondent PNB for "Annulment of Mortgage and Mortgage Foreclosure, Delivery of Title,
or Specific Performance with Damages." To support its cause of action for specific performance, it alleged that as early as June 25, 1984, PNB had
accepted the down payment from Manila Metal in the substantial amount of P725,000.00 for the redemption/repurchase price of P1,574,560.47 as
approved by its SMAD and considering the reliance made by Manila Metal and the long time that has elapsed, the approval of the higher
management of the Bank to confirm the agreement of its SMAD is clearly a potestative condition which cannot legally prejudice Manila Metal which
has acted and relied on the approval of SMAD.

Page 13 of 45
Respondent PNB averred that it had acquired ownership over the property after the period to redeem had elapsed. It claimed that no contract of sale
was perfected between it and petitioner after the period to redeem the property had expired.
Issue: W/N the P725,000.00 petitioner had remitted to respondent was "earnest money" which could be considered as proof of the perfection of a
contract?
Ruling:
No. The deposit of P725,000 was accepted by PNB on the condition that the purchase price is still subject to the approval of the PNB Board.
Thus, the P725,000.00 was merely a deposit to be applied as part of the purchase price of the property, in the event that respondent would approve the
recommendation of SAMD for respondent to accept petitioner's offer to purchase the property for P1,574,560.47. Unless and until the respondent
accepted the offer on these terms, no perfected contract of sale would arise. Absent proof of the concurrence of all the essential elements of a contract
of sale, the giving of earnest money cannot establish the existence of a perfected contract of sale.

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Title: Rayos vs CA
G.R. No. 135528 July 14, 2004

Petitioner: SPOUSES ORLANDO A. RAYOS and MERCEDES T. RAYOS
Respondent: THE COURT OF APPEALS and SPOUSES ROGELIO and VENUS MIRANDA
Facts:
1. Orlando A. Rayos, with his wife obtained secured a short-term loan from the Philippine Savings Bank (PSB) payable within a period of one (1)
year in quarterly installments of P29,190.28, the first quarterly payment to start on March 24, 1986.
2. The loan was evidenced by a promissory note which the petitioners executed on December 24, 1985.
3. To secure the payment of the loan, the petitioners-spouses executed, on the same date, a Real Estate Mortgage over their property covered by
Transfer Certificate of Title (TCT) No. 100156 located in Las Piñas, Metro Manila.
4. Petitioners (as vendors) and private respondents, Spouses Rogelio and Venus Miranda executed a Deed of Sale with Assumption of Mortgage
over the subject property for P214,000.00.
5. A month after, the spouses executed a contract to sell in favor of Spouses Miranda for P250,000.00 and obliged themselves to execute a deed of
absolute sale upon full payment of the purchase price.
6. Notwithstanding the refusal of PSB to secure the approval of Rogelio’s assumption of petitioners’ obligation on the loan, Rogelio was able to
pay the 3 quarterly installments.
7. Fearing that respondents would be unable to pay the amount due, Orlando paid P27,981.41 leaving a balance of P1,048.04 which he eventually
paid.
8. Spouses Rayos asserted that the CA erred in not finding that respondents committed a breach of contract to sell and behooved CA to apply
Article 1192 of the Civil Code which states that, “the power to rescind obligation is implied in reciprocal ones, in case one of the obligors should not
comply with what is incumbent upon him.“
Issue:
1) Whether or not the petitioners unilaterally canceled their contract to sell with the respondents;
2) Whether or not the one constituted is that of a “contract to sell” and not a “contract to sale”;
Held:
1) NO

Page 15 of 45
Petitioners did not unilaterally cancel their contract to sell with respondents when they paid the total amount of P29,062.80 to the PSB in December
1986.
In fact, the petitioners wrote the respondents on January 3, 5, and 17, 1987 that they were ready to execute the deed of absolute sale and turn over the
owner’s duplicate of TCT upon the respondents’ remittance of the amount of P29,062.80 plus P160.87.
The respondents were obliged under the contract to sell to pay the said amount to PSB as part of the purchase price of the property. On the other
hand, it cannot be argued by the petitioners that the respondents committed a breach of their obligation when they refused to refund the said amount.
2) YES
Construing the contracts together, it is evident that the parties executed a contract to sell and not a contract of sale. The petitioners retained ownership
without further remedies by the respondents until the payment of the purchase price of the property in full. Such payment is a positive suspensive
condition, failure of which is not really a breach, serious or otherwise, but an event that prevents the obligation of the petitioners to convey title from
arising, in accordance with Article 1184 of the Civil Code.
In Lacanilao v. Court of Appeals, we held that:
It is well established that where the seller promised to execute a deed of absolute sale upon completion of payment of the purchase price by the buyer,
the agreement is a contract to sell. In contracts to sell, where ownership is retained by the seller until payment of the price in full, such payment is a
positive suspensive condition, failure of which is not really a breach but an event that prevents the obligation of the vendor to convey title in
accordance with Article 1184 of the Civil Code.
The non-fulfillment by the respondent of his obligation to pay, which is a suspensive condition to the obligation of the petitioners to sell and deliver
the title to the property, rendered the contract to sell ineffective and without force and effect. The parties stand as if the conditional obligation had
never existed. Article 1191 of the New Civil Code will not apply because it presupposes an obligation already extant.There can be no rescission of an
obligation that is still non-existing, the suspensive condition not having happened
Title: Godinez vs Fong Pak Luen
G. R. No. L-36731 January 27, 1983

Page 16 of 45
Plaintiff-appelants: VICENTE GODINEZ, ET AL
Defendant-appelee: FONG PAK LUEN ET AL., defendants, TRINIDAD S. NAVATA
Facts:
1. Without the knowledge of the plaintiffs, Jose Godinez, for valuable consideration, sold the aforesaid parcel of land to the defendant Fong Pak
Luen, a Chinese citizen, which transaction is contrary to law and in violation of the Civil Code because the latter being an alien who is inhibited by
law to purchase real property
2. Fong Pak Luen executed a power of attorney to Kwan Pun Ming, also an alien, who conveyed and sold the above described parcel of land to co-
defendant Trinidad S. Navata, who is aware of and with full knowledge that Fong Pak Luen is a Chinese citizen as well as Kwan Pun Ming.
3. Said property is conjugal property inherited by the plaintiffs from their mother, Jose Godinez could -not have legally conveyed the entire
property; that notwithstanding repeated demands on said defendant to surrender to plaintiffs
4. The plaintiffs thus pray that they be adjudged as the owners of the parcel of land in question and Transfer Certificate of Title No. 'L322 issued in
the name of defendant Navata be likewise declared null and void.
5. Navata filed her answer, among others, that he cause of action has been barred by the statute of limitations as the alleged document of sale
executed by Jose Godinez on November 27, 1941, conveyed the property to defendant Fong Pak Luen as a result of which a title was issued to said
defendant under Article 1144 (1) of the Civil Code, an action based upon a written contract must be brought within 10 years from the time the right
of action accrues; that the right of action accrued on November 27, 1941 but the complaint was filed only on September 30, 1966, beyond the 10 year
period provided for by law.
6. Trial court dismissed the petition on ground of prescription of action.
Issue:
Whether or not the sale is null and void ab initio since it violates the Constitutional Prohibition of aliens to possess land and the provision on
prescription of action under A. 1144.
Held:
NO
The sale is not null and void ab initio.
Prescription may not be used to defend a contract which the Constitution prohibits, it does not necessarily follow that the appellants may be allowed
to recover the property sold to an alien. As earlier mentioned, Fong Pak Luen, the disqualified alien vendee later sold the same property to Trinidad
S. Navata, a Filipino citizen qualified to acquire real property.
It is a well settled rule, that when an alien vendee later sold the property to a Filipino corporation, this Court, affirmed a judgment dismissing the
complaint to rescind the sale of real property to the defendant on the ground that the vendee was an alien and under the Constitution incapable to own
and hold title to lands, held: the majority of this Court has ruled that in sales of real estate to aliens incapable of holding title thereto by virtue of the
provisions of the Constitution both the vendor and the vendee are deemed to have committed the constitutional violation and being thus in pari
delicto* (both party at fault) the courts will not afford protection to either party. Respondent Navata, the titled owner of the property is declared the
rightful owner.

Page 17 of 45
Title: CONGREGATION OF THE RELIGIOUS OF THE VIRGIN MARY vs OROLA
G.R. No. 169790 April 30, 2008
Petitioner: CONGREGATION OF THE RELIGIOUS OF THE VIRGIN MARY and/or THE SUPERIOR GENERAL OF THE

Page 18 of 45
RELIGIOUS OF THE VIRGIN MARY, represented by The REVEREND MOTHER MA. CLARITA BALLEQUE
Respondent:
EMILIO Q. OROLA, JOSEPHINE FATIMA LASERNA OROLA, MYRNA ANGELINE LASERNA OROLA, MANUEL
LASERNA OROLA, MARJORIE MELBA LASERNA OROLA & ANTONIO LASERNA OROLA
Facts:
1. In 1999 Religious Virgin Mary (RVM) through Sr. Fe Enhenco and respondents met to discuss the sale of the latter’s property.
2.Josephine Orola went to Manila to see Mother Superior General of RVM in the person of Very Reverend Mother Ma. Clarita Balleque
[VRM Balleque] regarding the sale of the property.
3. A contract to sell dated June 2, 1999 made out in the names of petitioner and respondents as parties to the agreement was presented in
evidence pegging the total consideration of the property at P5,555,000.00 with 10% of the total consideration payable upon the execution of the
contract
4. It was already signed by all the respondents and Sr. Enhenco, as witness.
5. Since the said property was still registered in the name of respondent’s predecessor-in-interest they executed an extrajudicial settlement of
the said estate.
6. Respondents, armed with an undated Deed of Absolute Sale arranged a meeting with VRM Balleque to finalized the saled and to obtain
payment of the remaining balance of the purchase price in the amount of P4,999,500.00.
7. However, VRM Balleque did not meet with respondents.

8. In an exchange of correspondence between the parties’ respective counsels, RVM denied respondents’ demand for payment because:
(1) the purported Contract to Sell was merely signed by Sr. Enhenco as witness, and not by VRM Balleque, head of the corporation
sole; and
(2) as discussed by counsels in their phone conversations, RVM will only be in a financial position to pay the balance of the purchase
price in two years time.
9. Thus, respondents filed with the RTC a complaint with alternative causes of action of specific performance or rescission.
10. RTC and CA ruled that there is a perfected contract to sale
Issue: Whether or not there is a perfected contract to sale.

Held:
YES. There was a perfected contract of sale between the parties.
A contract of sale carries the correlative duty of the seller to deliver the property and the obligation of the buyer to pay the agreed price. As there was
already a binding contract of sale between the parties, RVM had the corresponding obligation to pay the remaining balance of the purchase price
upon the issuance of the title in the name of respondents.
The supposed 2-year period within which to pay the balance did not affect the nature of the agreement as a perfected contract of sale. In fact, we note
that this 2-year period is neither reflected in any of the drafts to the contract, nor in the acknowledgment receipt of the downpayment executed by
respondents Josephine and Antonio with the conformity of Sr. Enhenco. In any event, we agree with the CA’s observation that the 2-year period to
effect payment has been mooted by the lapse of time (1999-2000).
NAVARRA VS. PLANTERS DEVELOPMENT BANK 527 SCRA 562 (2007)

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Topic: Nature and Form of the Contract
Petitioners: Sps. Jorge Navarra and Carmelita Bernardo Navarra; (Sps. Navarra) RRRC Development Corporation (RRRC)
Respondents: Planters Development Bank; (Planters) Roberto Gatchalian Realty, Inc.
FACTS:
1. Sps. Navarra obtained a loan from Planters, executing a deed of mortgage over five (5) parcels of land owned by them as security.
2. The couple failed to pay, thus, their properties were foreclosed. The spouses failed to redeem said properties.
3. On the other hand, RRRC Development Corporation, owned by the parents of Navarra, also obtained a loan from Planters and secured another set
of properties as security.
4. The properties were also foreclosed for non-payment of loan. However, RRRC was able to redeem the property and later on sold it to 3rd persons.
5. Jorge Navarra then requested Planters to repurchase the 5 lots auctioned to the bank and further requested that the excess payment in connection
with the redemption made by RRRC be applied as the down payment for the said repurchase.
6. Because the excess amount was source from a different transaction and involved different debtors, Planters then required Navarra to submit a
board resolution covering the proposed transaction.
7. Later on, Planters informed Jorge that they will no longer proceed with the proposed repurchase due to latters non-compliance with the
requirement.
8. The spouses claimed that they have already delivered the copies of the required resolution.
9. Planters did not receive the said copies. They later on demanded the spouses to surrender and vacate the area for failing to redeem it.
10. The spouses then filed a complaint for specific performance with injunction against Planters alleging that a perfected contract of sale was made
between them from the moment the latter sent a letter formally accepting the offer of the spouses to repurchase the properties.
11. On the other hand, Planters asserted that there was no perfected contract of sale because the terms and conditions for repurchase have not yet been
agreed upon.
12. RTC ruled that a perfected contract of sale existed in favor of Sps. Navarra over the properties and ordered Planters to execute the necessary deed
of sale.
13. CA revered RTC’s ruling.

ISSUE:
Whether or not there was a perfected contract of sale.
HELD:
NO. In general, contracts undergo three distinct stages, to wit: negotiation, perfection or birth, and consummation. Negotiation begins from the time
the prospective contracting parties manifest their interest in the contract and ends at the moment of their agreement.
Perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract, i.e., consent, object and price.
Consummation occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof. A
negotiation is formally initiated by an offer which should be certain with respect to both the object and the cause or consideration of the envisioned
contract.
In order to produce a contract, there must be acceptance, which may be express or implied, but it must not qualify the terms of the offer. The
acceptance of an offer must be unqualified and absolute to perfect the contract. In other words, it must be identical in all respects with that of the
offer so as to produce consent or meeting of the minds.
While the foregoing letters indicate the amount of ₱300,000.00 as down payment, they are, however, completely silent as to how the succeeding
installment payments shall be made. At most, the letters merely acknowledge that the down payment of ₱300,000.00 was agreed upon by the parties.
However, this fact cannot lead to the conclusion that a contract of sale had been perfected.
Quite recently, this Court held that before a valid and binding contract of sale can exist, the manner of payment of the purchase price must first be
established since the agreement on the manner of payment goes into the price such that a disagreement on the manner of payment is tantamount to a
failure to agree on the price.
DISCUSSIONS: • Stages of Contract

(1) Negotiation è Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment
of their agreement.
(2) Perfection / Birth è Perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract, i.e., consent,
object and price.
(3) Consummation è Consummation occurs when the parties fulfill or perform the terms agreed upon in the contract, culminating in the
extinguishment thereof.
• A negotiation is formally initiated by an offer which should be certain with respect to both the object and the cause or consideration of the
envisioned contract. In order to produce a contract, there must be acceptance, which may be express or implied, but it must not qualify the terms of
the offer. The acceptance of an offer must be unqualified and absolute to perfect the contract. In other words, it must be identical in all respects with
that of the offer so as to produce consent or meeting of the minds.
• Elements of a Contract of Sale

(1) Consent/ Meeting of the Minds

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(2) Determinate Subject Matter
(3) Price Certain in Money/ its Equivalent
• When is a Contract of Sale born/ perfected? è From the moment there is a meeting of minds upon the thing which is the object of the contract and
upon the price.
BOY VS. CA 427 SCRA 196 (2004)

Topic: Nature and Form of the Contract
Petitioner: Lagrimas Boy (Lagrimas)
Private Respondents: Isagani Ramos and Erlinda Gasingan Ramos (Sps. Ramos)
FACTS:
1. Spouses Ramos alleged that they were the owners of a parcel of land and the house existing thereon in Manila.
2. They said properties were acquired from Lagrimas who sold to them by virtue of a Deed of Absolute Sale.
3. Lagrimas requested for time to vacate the area, in which the spouses agreed as they were not in immediate need of it.
4. Time came when they needed the area, thus, they demanded Lagrimas to vacate the area, however, the former refused to do so.
5. The spouses then filed an action for ejectment against Lagrimas.

6. Lagrimas, in her answer, alleged that the properties were used as a collateral when she borrowed P15,000.00 from the spouses. The property was
then sold the property for the sum of P31,000.00 in favor of the spouses.
7. The remaining balance was not paid, thus they entered an agreement (Kasunduan) acknowledging the sale of the land and the upper portion of the
house and that the possession of the property will only be transferred to the spouses upon full payment of the purchase price.
8. MeTC ruled in favor of the spouses and held that the Kasunduan was not binding and that the continued occupation by Lagrimas after the sale,
without payment of rent, was by mere tolerance.
9. RTC reversed MeTC’s decision and held that the Kasunduan was binding and that pending the determination of the question of ownership, it
cannot deprive the actual possessor the right to continue peacefully with said possession.
10. CA reversed RTC’s decision. Hence, this petition.

ISSUE:
Whether or not spouses have a right of material possession over the disputed property. (Whether or not ownership of the property sold passes to the
vendee upon execution of Deed of Absolute Sale)
HELD:
YES. It has been established that petitioner sold the subject property to private respondents for the price of ₱31,000, as evidenced by the Deed of
Absolute Sale, the due execution of which was not controverted by petitioner. The contract is absolute in nature, without any provision that title to the
property is reserved in the vendor until full payment of the purchase price. By the contract of sale, petitioner (as vendor), obligated herself to transfer
the ownership of, and to deliver, the subject property to private respondents (as vendees) after they paid the price of ₱31,000.
Under Article 1477 of the Civil Code, the ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery
thereof. In addition, Article 1498 of the Civil Code provides that 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
clearly be inferred.
In this case, the Deed of Absolute Sale does not contain any stipulation against the constructive delivery of the property to private respondents. In the
absence of stipulation to the contrary, the ownership of the property sold passes to the vendee upon the actual or constructive delivery thereof. The
Deed of Absolute Sale, therefore, supports private respondents’ right of material possession over the subject property.
TORRECAMPO VS ALINDOGAN
Facts:
May 1997, Spouses Jose and Lina Belmes executed a deed of sale in favor of spouses Dennis and Heide Alindogan over a house and lot. After Lina
Belmes delivered the constructive possession of the property, spouses Alindogan sought the actual possession of the same but failed because spouses
Gil and Brenda Torrecampo, and spouses Jonathan Lozares and Jocelyn Torrecampo,entered and occupied its premises. When the latter refused to
vacate the property in spite of demands, spouses Alindogan filed a complaint for recovery of Ownership, Possession and Damages against them
before the Regional Trial Court (RTC). In the answer to the complaint, spouses Torrecampo contended that as earlier as March 1997, the former made
an advance payment of P73,000 to spouses Belmes pursuant to their “Contract to Buy and Sell” over the same property for atotal price of P350,000.
Consequently, the RTC declared the spouses Alindogan as the owners of the subject property and are entitled to its possession. Moreover, RTC

Page 21 of 45
directed the spouses Torrecampo to return the possession of the property in question to spouses Alindogan. The Court of Appeals (CA) affirmed the
RTC decision on the ground that the transaction between spouses Torrecampo and spouses Belmes is a mere contract to sell. Thus, the latter did not
transfer ownership of the house and lot to the former.Hence, this petition was filed.
Issue:
Whether or not the transaction was a mere contract to sell and not a contract of sale.
Held:
The agreement between petitioners and spouses Belmes is not a contract of sale but only acontract to sell. The distinction between a contract of sale
and a contract to sell is well-settled. In a contract of sale, the title to the property passes to the vendee upon the delivery of thething sold; in a contract
to sell, ownership is, by agreement, reserved in the vendor and is not to pass to the vendee until full payment of the purchase price. Otherwise stated,
in a contract of sale, thevendor loses ownership over the property and cannot recover it until and unless the contract is resolved or rescinded;
whereas, in a contract to sell, title is retained by the vendor until full payment of the price. In the latter contract, payment of the price is a positive
suspensive condition, failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective.
LUZON DEVELOPMENT BANK VS. ANGELES CATHERINE ENRIQUEZ
Facts::
Delta Development and Management Services (Delta) entered into a loan with Luzon Development Bank (Bank), secured by a Real Estate Mortgage.
The REM was amended to include a bigger sum loaned from the bank. The proceeds of the loan were applied to Delta project of developing a
subdivision. It subsequently entered into a contract to sell with Angeles Enriquez (Enriquez) over one of the subdivision lots. Enriquez was able to
pay around half of the value of the property. Subsequently, Delta was unable to pay for the loan it took with the bank, but instead of letting the bank
foreclose on the mortgaged properties, it entered into a dacion en pago (dation in payment) where it turned over property to the bank. The property
subject to the contract to sell with Enriquez was included in the dation.
Issue:
Whether or not contract to sell conveys ownership.
Held:
A contract to sell is one where the prospective seller reserves the transfer of title to the prospective buyer until the happening of an event, such as full
payment of the purchase price. What the seller obliges himself to do is to sell the subject property only when the entire amount of the purchase price
has already been delivered to him. "In other words, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of
which prevents the obligation to sell from arising and thus, ownership is retained by the prospective seller without further remedies by the
prospective buyer." It does not, by itself, transfer ownership to the buyer.
Pagtalunan V Dela Cruz
Facts:
Patricio Pagtalunan, petitioner's stepfather and predecessor-in-interest, entered into a Contract to Sell with respondent, wife of Patricio's former
mechanic, Teodoro Manzano, whereby the former agreed to sell, and the latter to buy, a house and lot in installment basis and that respondent could

Page 22 of 45
immediately occupy the house but incase of default in installments or 90 days after due date, the contract is automatically rescinded and payments
and improvements introduced be considered as rentals for the use of the land.
Petitioner claimed that respondent stopped paying after December 1979 without justification. Hence petitioner asserted that due to the failure of the
payment of installments, her status is transformed to that of a lessee. Respondent on the other hand claimed to have paid her monthly installments
religiously but stopped payment when patricio changed his mind and offered to refund all her payments. Patricio and his wife passed away, making
petitioner as successor in interest pursuant to waiver by other parties. Thereafter petitioner filed a complaint of unlawful detainer against the
respondent before the MTC.
MTC decided in favor of petitioner ruling that respondent's failure to pay not a few installments caused the resolution or termination of the Contract
to Sell. The RTC, however, reversed the decision of the MTC. According to the RTC, the agreement could not be automatically rescinded since there
was delivery to the buyer. A judicial determination of rescission must be secured by petitioner as a condition precedent to convert the possession de
facto of respondent from lawful to unlawful. In the Court of Appeals, the CA found that the RTC and MTC failed to apply RA 6552 (Maceda law)
and held that the contract was not validly cancelled under sec. 3 (b) of RA 6552.
Issue:
Whether or not the Maceda law is applicable in the case at bar.
Ruling:
Yes, the CA correctly ruled that R.A No. 6552, which governs sales of real estate on installment, is applicable in the resolution of this case. This case
originated as an action for unlawful detainer. Respondent is alleged to be illegally withholding possession of the subject property after the termination
of the Contract to Sell between Patricio and respondent. It is, therefore, incumbent upon petitioner to prove that the Contract to Sell had been
cancelled in accordance with R.A. No. 6552.
R.A. No. 6552, otherwise known as the "Realty Installment Buyer Protection Act," recognizes in conditional sales of all kinds of real estate
(industrial, commercial, residential) the right of the seller to cancel the contract upon non-payment of an installment by the buyer, which is simply an
event that prevents the obligation of the vendor to convey title from acquiring binding force.
The Court agrees with petitioner that the cancellation of the Contract to Sell may be done outside the court particularly when the buyer agrees to such
cancellation. However, the cancellation of the contract by the seller must be in accordance with Sec. 3 (b) of R.A. No. 6552, which requires a notarial
act of rescission and the refund to the buyer of the full payment of the cash surrender value of the payments on the property. Actual cancellation of
the contract takes place after 30 days from receipt by the buyer of the notice of cancellation or the demand for rescission of the contract by a notarial
act and upon full payment of the cash surrender value to the buyer.
Based on the records of the case, the Contract to Sell was not validly rescinded under Sec. 3 (b) of R.A. No. 6552. First, Patricio, the vendor in the
Contract to Sell, died without canceling the Contract to Sell. Second, petitioner also failed to cancel the Contract to Sell in accordance with law.
There being no valid cancellation of the Contract to Sell, the CA correctly recognized respondent's right to continue occupying the property subject of
the Contract to Sell and affirmed the dismissal of the unlawful detainer case by the RTC.
Ramos V heruela
Facts:
Sps. Ramos filed a complaint for Recovery of Ownership with Damages against the Sps. Heruela. Sps Ramos, owner of a parcel of land, made an
agreement with Sps Heruela. According to Sps. Ramos, the agreement is a contract of conditional sale covering a 306 sqm. Lot and that out of the
P15300 consideration for the sale of the same land, the sps. Heruela only paid P4000 and refused to pay the balance which caused the cancellation of
the deed of conditional sale. On the other hand, spouses Heruela, the possessor of the lot, contend that the contract is a sale on instalment basis and
that the same offered to pay the balance of P11300 but the sps Ramos refused the offer.
The RTC ruled in favor of Sps. Heruela declaring the agreement to be a contract to sell and applied the Maceda law (RA 6552) the spouses Heruela
having paid less than 2 years instalments granting the same the rights of a buyer of real property in instalment basis granted by Maceda law.
Issue:
1. Whether or not the ownership was already transferred to spouses heruela.

2. Whether or not RA 6552 is applicable.
Ruling:
1. No, Article 1458 of the Civil Code provides that a contract of sale may be absolute or conditional. A contract of sale is absolute when
title to the property passes to the vendee upon delivery of the thing sold. A deed of sale is absolute when there is no stipulation in
the contract that title to the property remains with the seller until full payment of the purchase price. The sale is also absolute if
there is no stipulation giving the vendor the right to cancel unilaterally the contract the moment the vendee fails to pay within a
fixed period. In a conditional sale, as in a contract to sell, ownership remains with the vendor and does not pass to the vendee until full
payment of the purchase price. The full payment of the purchase price partakes of a suspensive condition, and non-fulfillment of the
condition prevents the obligation to sell from arising. The records show that the spouses Heruela did not immediately take actual, physical
possession of the land. The spouses Ramos alleged that they only discovered in June 1982 that the spouses Heruela were already occupying
the land. In their answer to the complaint, the spouses Heruela alleged that their occupation of the land is lawful because having made

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partial payments of the purchase price, 'they already considered themselves owners' of the land. Clearly, there was no transfer of title to the
spouses Heruela. The spouses Ramos retained their ownership of the land. This only shows that the parties did not intend the transfer of
ownership until full payment of the purchase price.
2. Yes, known as the Maceda Law, R.A. No. 6552 recognizes in conditional sales of all kinds of real estate (industrial, commercial,
residential) the right of the seller to cancel the contract upon non-payment of an instalment by the buyer, which is simply an event that
prevents the obligation of the vendor to convey title from acquiring binding force. In this case, the spouses Heruela paid less than two years
of instalments. Thus, Section 4 of RA 6552 applies.
.
Villadar V Zabala
Facts:
IN 1995, Respondent Samuel Zabala Sr. sold half of lot no. 5095 to his mother in-law Estelita Villadar on installment basis. Except for a note of
partial payment of P6,500.5, no contract was executed nor was there an agreement on when Estelita shall pay all installments. In 1997, Samuel Sr.
also sold half of lot 5095 to respondent Eldon Zabala. Lot 5095 was subdivided into lot. 5095 A and B half was registered under Eldons and Samuel
Sr.s name.
In 1997, Estelita made additional payments. Later, however, the spouses Samuel sr. decided to cancel the sale. Samuel Sr. also filed a complaint of
ejectment with the lupon tagapamayapa against Estilitas son who occupied one of the houses that stood on the property. Thereafter, Eldon and
Samuel, Sr. filed a Complaint for unlawful detainer against Estelitas son, petitioners Sergio Villadar, Jr. before the MTCC for failure of the latter to
vacate a store that stood on the disputed lot after having asked to leave by the former.,
In his defense, Sergio Villadar, alleged that half of the property was sold to his mother and that Estelita tried to tender the balance of the purchase
price, but Samuel, Sr. unjustifiably refused to receive the payment. Further, that the house which he constructed and occupied stood on the lot
between lot 5095 A and B because of the wrongful division of lot. 5095.
MTCC ruled in favour of Villadar and the same was affirmed by the RTC. The CA, however, reversed the rulings of MTCC and RTC ruling that
although there was an oral sale between Samuel Sr. and Estelita Villadar, the former reserved his title to the property until full payment of the
purchase price by Estelita the sale being one in instalment basis. The Court of Appeals likewise denied petitioners' motion for reconsideration. Hence,
this petition.
Villadar argue that Estelita owns one-half of Lot No. 5095 and that their possession of the disputed portion was based on their agreement with
Estelita, not upon Zabalas tolerance. Villadar also add that they cannot be summarily ejected from the disputed portion without first resolving the
ownership of the land sold to Estelita in an accion publiciana.
Respondents counter that since Estelita failed to pay the full price within two years, Samuel, Sr., who reserved his title until full payment, retained
ownership. Respondents insist that petitioners must vacate upon demand since their possession is merely tolerated and they have no better right than
Estelita.
Issue:
whether or not the appellate court erred in reversing the RTC's ruling that the respondents cannot validly eject petitioners.
Ruling:
Yes, While the price was payable on installment, there was no agreement between Estelita and Samuel, Sr. that the latter reserved his title,
conditioning the transfer of ownership upon full payment of the price. Therefore, the oral contract was a contract of sale, not a contract to sell. It is in
a contract to sell that ownership is, by agreement, reserved in the seller and is not to pass to the buyer until full payment of the purchase price.
Notably, the Court of Appeals stated that unless rescinded, the perfected contract of sale remains valid. Incidentally, this statement reveals the
inconsistency of the Court of Appeals in finding that Samuel, Sr. reserved his title and also saying that the transaction was a contract of sale.
Anent Samuel, Sr.'s decision to cancel the sale and refusal to receive Estelita's payment of the balance of the price, Samuel, Sr. neither notified
Estelita by notarial act that he was rescinding the sale nor did he sue in court to rescind the sale. Thus, under the circumstances, Estelita's claim of
ownership is valid, absent a valid rescission or cancellation of the contract of sale. Hence, she was properly within her rights when she allowed
petitioners to occupy part of the land she bought upon her promise to sell it to them.

Page 24 of 45
Page 25 of 45
Moreno, Jr. v. Private Management Office
FACTS:
th
The subject-matter of this complaint is the J. Moreno Building. Plaintiff Jose R. Moreno is the owner of the Ground Floor, the 7 Floor and the
nd rd th th
Penthouse of the J. Moreno Building and the lot on which it stands. Defendant Private Management Office is the owner of the 2 , 3 , 4 , 5 and
th
6 floors of the building.
On February 13, 1993, the defendant called for a conference for the purpose of discussing plaintiffs right of first refusal over the floors of the
building owned by defendant. At said meeting, defendant informed plaintiff that the proposed purchase price for said floors was TWENTY ONE
MILLION PESOS (P21,000,000.00). On February 22, 1993, defendant, in a letter signed by its Trustee, Juan W. Moran, informed plaintiff thru Atty.
Jose Feria, Jr., that the Board of Trustees (BOT) of PMO is in agreement that Mr. Jose Moreno, Jr. has the right of first refusal and requested plaintiff
to deposit 10% of the suggested indicative price of P21.0 million on or before February 26, 1993.
Then on March 12, 1993, defendant wrote plaintiff that its Legal Department has questioned the basis for the computation of the indicative price for
the said floors.On April 2, 1993, defendant wrote plaintiff that the BOT has tentatively agreed on a settlement price of P42,274,702.17 for the said
floors.
Issue: Whether or not there was a perfected contract of sale over the subject floors at the price of P21M.

Page 26 of 45
HELD:
The Court ruled that there no perfection of the contract of sale over the subject floors at the price of P21M.
The letter of February 22, 1993 and the surrounding circumstances clearly show that the parties are not past the stage of negotiation, hence there
could not have been a perfected contract of sale. The letter clearly states that P21,000,000.00 is merely a suggested indicative price of the subject
floors as it was yet to be approved by the Board of Trustees. Before the Board could confirm the suggested indicative price, the Committee on
Privatization must first approve the terms of the sale or disposition. The imposition of this suspensive condition finds basis under Proclamation No.
50 which vests in the Committee the power to approve the sale of government assets, including the price of the asset to be sold.
Petitioner further argues that the suggested indicative price of P21,000,000.00 is not a proposed price, but the selling price indicative of the value at
which respondent was willing to sell. Petitioner posits that under Section 14, Rule 130 of the Revised Rules of Court, the term should be taken in its
ordinary and usual acceptation and should be taken to mean as a price which is indicated or specified which, if accepted, gives rise to a meeting of
minds.
Under the same section and rule invoked by petitioner, the terms of a writing are presumed to have been used in their primary and general
acceptation, but evidence is admissible to show that they have a local, technical, or otherwise peculiar signification, and were so used and understood
in the particular instance, in which case the agreement must be construed accordingly.
The reliance of the trial court in the Webster definition of the term indicative, as also adopted by petitioner, is misplaced. The transaction at bar
involves the sale of an asset under a privatization scheme which attaches a peculiar meaning or signification to the term indicative price. Under No.
6.1 of the General Bidding Procedures and Rules of respondent, an indicative price is a ball-park figure and [respondent] supplies such a figure
purely to define the ball-park. The plain contention of petitioner that the transaction involves an ordinary arms-length sale of property is
unsubstantiated and leaves much to be desired. This case sprung from a case of specific performance initiated by petitioner who has the burden to
prove that the case should be spared from the application of the technical terms in the sale and disposition of assets under privatization. Petitioner
failed to discharge the burden.

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SPS EMMA H. VER REYES and RAMON REYES vs. DOMINADOR SALVADOR G.R. No. 139047 September 11, 2008
FACTS: A parcel of unregistered land located the Province of Rizal, now a part of Metro Manila, designated as Lot 1 of Plan Psu-205035, with an
area of 19,545 square meters (subject property) is the core of the controversy in the Petitions at bar. It previously formed part of a bigger parcel of
agricultural land first declared in the name of Domingo Lozada (Domingo) in the year 1916 under Tax Declaration No. 2932. Domingo married
Graciana San Jose in the year 1887and their marriage produced two children, namely Nicomedes and Pablo. After the settlement, the subject
property, i.e., Lot 1, was adjudicated to Nicomedes; while Lot 2 was given to the heirs of Pablo. Nicomedes then declared the subject property in his
name in 1965 under Tax Declaration No. 2050. On 23 June 1965, Nicomedes executed a Deed of Conditional Sale over the subject property in favor
of Emma Ver Reyes (Emma), which stated that the Vendor [Nicomedes] is the true and lawful owner of a parcel of land situated at Tungtong, Las
Pinas, Rizal. Emma was only able to pay the first installment of the total purchase price agreed upon by the parties. Furthermore, as will be discussed
later on, Nicomedes did not succeed in his attempt to have any title to the subject property issued in his name. On 14 June 1968, Nicomedes entered
into another contract involving the subject property with Rosario D. Bondoc (Rosario).Designated as an Agreement of Purchase and Sale. On 7
March 1969, Nicomedes and Rosario executed a Joint Affidavit,[14] whereby they confirmed the sale of the subject property by Nicomedes to
Rosario through the Agreement of Purchase and Sale dated 14 June 1968. They likewise agreed to have the said Agreement registered with the
Registry of Deeds in accordance with the provisions of Section 194 of the Revised Administrative Code, as amended by Act No. 3344. The
Agreement of Purchase and Sale was thus registered on 10 March 1969. Five months thereafter, Nicomedes executed on 10 August 1969 a third
contract, a Deed of Absolute Sale of Unregistered Land,[16] involving a portion of the subject property measuring 2,000 square meters, in favor of
Maria Q. Cristobal (Maria). Nicomedes passed away on 29 June 1972. The Deed of Absolute Sale of Unregistered Land between Nicomedes and
Maria was registered only on 8 February 1973,[18] or more than seven months after the former’s death.
ISSUE: Which party acquired valid and registrable title to the same.
RULING: After a conscientious review of the arguments and evidence presented by the parties, the Court finds that the Deed of Conditional Sale
between Nicomedes and Emma and the Agreement of Purchase and Sale between Nicomedes and Rosario were both mere contracts to sell and did
not transfer ownership or title to either of the buyers in light of their failure to fully pay for the purchase price of the subject property. A Contract to
Sell may not be considered as a Contract of Sale because the first essential element is lacking. In a contract to sell, the prospective seller explicitly
reserves the transfer of title to the prospective buyer, meaning, the prospective seller does not as yet agree or consent to transfer ownership of the
property subject of the contract to sell until the happening of an event, which for present purposes we shall take as the full payment of the purchase
price. What the seller agrees or obliges himself to do is to fulfill his promise to sell the subject property when the entire amount of the purchase price
is delivered to him. In other words the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which prevents
the obligation to sell from arising and thus, ownership is retained by the prospective seller without further remedies by the prospective buyer. Viewed
in light of the foregoing pronouncements, the Deed of Conditional Sale executed by Nicomedes in favor of Emma on 23 June 1965 is unmistakably a
mere contract to sell. The Court looks beyond the title of said document, since the denomination or title given by the parties in their contract is not
conclusive of the nature of its contents.[52] In the construction or interpretation of an instrument, the intention of the parties is primordial and is to be
pursued.[53] If the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its
stipulations shall control. If the words appear to be contrary to the evident intention of the parties, the latter shall prevail over the former.
[GR No. 176791, November 14, 2012]

COMMUNITIES CAGAYAN, INC., vs. SPOUSES ARSENIO (Deceased) and ANGELES NANOL AND ANYBODY CLAIMING RIGHTS
UNDER THEM

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FACTS:
Sometimes in 1994, Arsenio and Angeles Nanol entered into a Contract to Sell with Communities Cagayan, Inc., (CCI) whereby the latter
agreed to sell to the spouses a house and Lots 17 and 19 located at Block 16, Camella Homes Subdivision, Cagayan de Oro City, for the price of
P368,000.00.
However, the spouses did not avail of CCI’s inhouse financing due to its high interest rates. Instead, they obtained a loan from Capitol
Development Bank, a sister company of CCI, using the property as collateral. To facilitate the loan, a simulated sale over the property was executed
by CCI in favor of the spouses. Accordingly, titles were transferred in the names of Spouses Nanol under Transfer Certificates of Title (TCT) Nos.
105202 and 105203, and submitted to Capitol Development Bank for loan processing. Unfortunately, the bank collapsed and closed before it could
release the loan.
Thus, on November 30, 1997, the spouses entered into another Contract to Sell with CCI over the same property for the same price of
P368,000.00. This time, the spouses availed of CCI’s in-house financing thus, undertaking to pay the loan over four years, from 1997 to 2001.
Sometime in 2000, Arsenio Nanol demolished the original house and constructed a three-story house allegedly valued at P3.5 million, more
or less.
In July 2001, Arsenio died, leaving his wife, herein respondent Angeles, to pay for the monthly amortizations.
On September 10, 2003, CCI sent the spouses a notarized Notice of Delinquency and Cancellation of Contract to Sell due to the latter’s
failure to pay the monthly amortizations.
CCI, on July 27, 2005, filed before Branch 18 of the RTC, Cagayan de Oro City, a Complaint for Cancellation of Title, Recovery of
Possession, Reconveyance and Damages against Spouses Nanol and all persons claiming rights under them.
Regional Trial Court ruled that Spouses Nanol and any person claiming rights under them are directed to turn-over the possession of the
house and lot to CCI, subject to CCI’s payment of Spouses Nanol’s total monthly installments and the value of the new house minus the cost of the
original house (improvements).
ISSUES
1. Whether or not the Spouses Nanol are builders in good faith

2. Whether or not the spouses are entitled to reimbursement from CCI of the improvements made on the property, applying Art. 448 of the
Civil Code.
HELD
1. The Spouses are builders in good faith.

As a general rule, Art. 448 applies when the builder believes that he is the owner of the land or that by some title he has the right to build
thereon, or that, at least, he has a claim of title thereto. However, in this case, there is no right and claim of title, because the subject property is only
covered by Contract to Sell.
The Court applied Art 448 by construing good faith BEYOND ITS LIMITED DEFINITION.
In the case of Javier vs Javier, the owner of the materials is deemed to be in good faith for building the house (improvement) with the
knowledge and consent of the land owner, upon which the house was built.
In Sps Macasaet vs Sps Macasaet , the owner of the materials are considered builders in good faith even if they knew they were not the owners
of the land because the land owner knew and approved of the construction of the improvements introduced thereon, thus:
1. Good faith is presumed on the part of Spouses Nanol

2. CCI failed to rebut this presumption
3. No evidence was presented to show that CCI opposed or objected to the improvements introduced by Spouses Nanol
SHence, SC validly presumed that CCI consented to the improvements being constructed. This presumption is being bolstered by the fact that as
the subdivision Developer, CCI must have given Spouses Nanol permits to commence and undertake the construction. Furthermore, under Article
453 of the Civil Code, "it is understood that there is bad faith on the part of the landowner whenever the act was done with his knowledge and
without opposition on his part.
2. The spouses are entitled to reimbursement from CCI of the improvements made on the property, applying Art. 448 of the Civil Code.
Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the

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works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.
Thus, SC held that CCI, as landowner, has two options:
1. It may appropriate the new house by reimbursing Spouses Nanol of the current market value thereof minus the cost of the old house; or,
2. It may sell the lots to Spouses Nanol at a price equivalent to the current fair value thereof. However, if the value of the lots is considerably
more than the value of the improvement, Spouses Nanol cannot be compelled to purchase the lots. She can only be obliged to pay the
reasonable rent.

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[G.R. NO. 142618 : July 12, 2007]
PCI LEASING AND FINANCE, INC., Petitioner, v. GIRAFFE-X CREATIVE IMAGING, INC., Respondent.
FACTS:
Petitioner PCI LEASING and respondent GIRAFFE entered into a Lease Agreement, whereby the former leased out to the latter two
printing equipment wherein the parties signed another document denominated as Lease Schedule. Likewise forming parts of the basic lease
agreement were two (2) separate documents denominated Disclosure Statements of Loan/Credit Transaction (Single Payment or Installment Plan)
that GIRAFFE also executed for each of the leased equipment. By the terms of the Lease Agreement, GIRAFFE undertook to remit the certain
amount "guaranty deposit," a sort of performance and compliance bond for the two equipment. Furthermore, the same agreement embodied a
standard acceleration clause, operative in the event GIRAFFE fails to pay any rental and/or other accounts due.
After a year, GIRAFFE defaulted in its monthly rental-payment obligations. And following a three-month default, PCI LEASING
addressed a formal pay-or-surrender-equipment type of demand letter to GIRAFFE. The demand went unheeded causing PCI LEASING to institute
the instant case against GIRAFFE in the RTC of Quezon City. In its complaint, PCI LEASING prayed for the issuance of a writ of replevin for the
recovery of the leased property with additional relief.
After trial, the judgment rendered in favor of plaintiff [PCI LEASING] and against the defendant [GIRAFFE] declaring the plaintiff
entitled to the possession of the subject properties, ordering the defendant to pay the balance of rental/obligation inclusive of interest and charges, and
ordering defendant to pay plaintiff the expenses of litigation and cost of suit. Upon PCI LEASING's posting of a replevin bond, the trial court issued
a writ of replevin, paving the way for PCI LEASING to secure the seizure and delivery of the equipment covered by the basic lease agreement.
GIRAFFE filed a Motion to Dismiss arguing that the seizure of the two (2) leased equipment stripped PCI LEASING of its cause of action
citing Article 1484 of the Civil Code on installment sales of personal property. GIRAFFE contends that Article 1484 of the Civil Code applies to its
contractual relation with PCI LEASING because the lease agreement in question, as supplemented by the schedules documents, is really a lease with
option to buy under the companion article, Article 1485. GIRAFFE also argues, upon the seizure of the leased equipment pursuant to the writ of
replevin, which seizure is equivalent to foreclosure.
PCI LEASING insists that its contract with GIRAFFE is a straight lease without an option to buy. PCI LEASING rejects the applicability
to the suit of Article 1484 in relation to Article 1485 of the Civil Code, claiming that, under the terms and conditions of the basic agreement, the
relationship between the parties is one between an ordinary lessor and an ordinary lessee.
ISSUE: Whether or not Article 1484 in relation to Article 1485 of the Civil Code should apply in this case.
HELD: Article 1485 of the Civil Code should apply. The PCI LEASING - GIRAFFE lease agreement is in reality a lease with an option to purchase
the equipment. There could be no other explanation than that if the respondent paid the balance, then it could keep the equipment for its own; if not,
then it should return them.
The present case reflects a situation where the financing company can withhold and conceal - up to the last moment - its intention to sell
the property subject of the finance lease, in order that the provisions of the Recto Law may be circumvented. It may be, as petitioner pointed out, that
the basic "lease agreement" does not contain a "purchase option" clause. The absence, however, does not necessarily argue against the idea that what
the parties are into is not a straight lease, but a lease with option to purchase. This Court has long been aware of the practice of vendors of personal
property of denominating a contract of sale on installment as one of lease to prevent the ownership of the object of the sale from passing to the
vendee until and unless the price is fully paid.
In choosing, through replevin, to deprive the respondent of possession of the leased equipment, the petitioner waived its right to bring an action to
recover unpaid rentals on the said leased items. Paragraph (3), Article 1484 in relation to Article 1485 of the Civil Code, which we are hereunder re-
reproducing, cannot be any clearer.
ART. 1484. In a contract of sale of personal property the price of which is payable in installments, the vendor may exercise any of the following
remedies:
(3) Foreclose the chattel mortgage on the thing sold, if one has been constituted, should the vendee's failure to pay cover two or more installments. In
this case, he shall have no further action against the purchaser to recover any unpaid balance of the price. Any agreement to the contrary shall be
void.
ART. 1485. The preceding article shall be applied to contracts purporting to be leases of personal property with option to buy, when the lessor has
deprived the lessee of the possession or enjoyment of the thing.
(33) CASTILLO VS. CASTILLO GR NO. L-18238, JANAURY 22, 1980 Topic: Capacity to Buy or Sell Plaintiffs: Zenaida Castillo; Emilio
Cordova, Jr. Defendants: Horacio Castillo and friends FACTS: 1. Ysidro Castillo died in 1947, leaving as his heirs, his wife Enriqueta Katigbak and
their nine (9) children – Horacio, Beatriz, Zenaida, Ysidro, Jr., Leonor, Crispin, Lourdes, Alicia, and Ernesto. 2. Enriqueta was appointed as
administratix. 3. Later on, when she was ordered to submit a project of partition, she submitted said project of partition which constitutes the
residuary hereditary estated of Ysidro. 4. The partition was approved and the intestate proceeding was closed. 5. Despite this fact, the properties
remained under the administration of Enriqueta. 6. In 1960, after an extrajudicial demand for partition failed, Zenaida Castillo filed an action for
partition against her mother, Enriqueta, and her brothers and sisters. Zenaida alleged that the project of partition omitted to include properties which
were acquired before the death of Ysidro. 7. Among these properties is a land originally co-owned by Romeo Ona. 8. Enriqueta then alleged that
although she and her husband appear as two of the buyers of said property, neither of them paid any part of the purchase price, and that their co-
buyers, Spouses Paolo and Gabriela Macasaet, only gave a down-payment and that Paulo, upon learning that the land was subject of a litigation, sold
the entire lot to the former. Enriqueta alleged that the property was to be paid on installment basis and said installments were paid using the fruits of
the property and her other properties. 9. The lower court ruled that ½ of this property was conjugal as the money used in the purchase belonged to
Spouses Ysidro and Enriqueta, and therefore subject to partition. ISSUE: Whether or not the lower court erred when it held that the money used in

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the purchase of ½ of the land belonged to sps. Ysidro and Enriqueta, and that such be partitioned as conjugal partnership property. HELD: NO. We
must here underscore the specific rule in our civil law that all properties of the marriage shall be presumed conjugal unless it be proved that they
belong exclusively to either of the spouses. To rebut or overcome this presumption, there must be clear, convincing and satisfactory proof that this
consideration of the sale was paid by only one of the spouses and from her exclusive or separate property. We agree with the plaintiffs-appellants that
the version of Enriqueta K. Vda. de Castillo that the controverted property is paraphernal cannot be given serious consideration. The improbability
that her name and that of her husband would not have been written as co- buyers of the land in Exhibit Plaintiff 2 unless they were the actual co-
purchasers thereof can easily be discerned It is indeed extremely difficult to believe that the vendor Romeo Baldeo Ona would have acknowledged in
the deed of sale receipt in full of the purchase price of P30,000.00 from the vendees if he had not really received full payment from the latter, This
version of Enriqueta becomes even more doubtful in view of the fact that the vendor, Romeo Baldeo Ona, signed and executed the said deed of sale
not only in his personal capacity but also as attorney-in-fact of his brother Claro Baldeo Ona and his sister Adelaida Baldeo Ona, for such fiduciary
capacity naturally and rightly would have made him more careful and cautious in entering into the transaction. It stands to reason to conclude that
Romeo Baldeo Ona would not have signed or executed the document in question unless its recital were in truth and in fact as therein stated. Although
the testimony of the surviving spouse regarding the nature of the property is corroborated by defendant- appellant Horacio K. Castillo, the eldest of
the surviving children, such corroboration cannot carry weight, the same being self-serving. In fine, defendants-appellants have not come up with
such substantial, satisfactory and convincing proof as would be sufficient to rebut the presumption that the property in controversy is conjugal.

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MACABABBAD, JR. V. MARISAG
G.R. No. 161237
Brion, J.
Facts:
The deceased Spouses Pedro Masirag (Pedro) and Pantaleona Tulauan (Pantaleona) werethe srcinal registered owners of Lot No. 4144 of the
Cadastral Survey of Tuguegarao. Pedro and Pantaleona had eight (8) children, namely, Valeriano, Domingo, Pablo, Victoria, Vicenta, Inicio, Maxima
and Maria. Respondents Fernando, Faustina, Corazon and Leonor Masirag are thechildren of Valeriano and Alfora Goyagoy, while Leoncio is the son
of Vicenta and Braulio Goyagoy. The respondents allegedly did not know of the demise of their respective parents; they only learned of the
inheritance due from their parents in the first week of March 1999 when theirrelative, Pilar Quinto, informed respondent Fernando and his wife
Barbara Balisi about it.
They immediately hired a lawyer to investigate the matter. The investigation disclosed that the petitioners falsified an extrajudicial settlement of
estate and sale December 3, 1967 so that therespondents were deprived of their shares in Lot No. 4144. The document purportedly bore
therespondents’ signatures, making them appear to have participated in the execution of the document when they did not; they did not even know the
petitioners.
The document ostensibly conveyed the subject property to Macababbad for the sum of P1,800.00. Subsequently, OCT No. 1946 was cancelled and
Lot No.4144 was registered in the names of its new owners under Transfer Certificate of Title (TCT) No. 13408, presumably after the death of Pedro
andPantaleona. However, despite the supposed sale to Macababbad, his name did not appear on the face of TCT No. 13408. Despite his exclusion
from TCT No. 13408 his petition for another owner’s duplicate copy of TCT No. 13408, filed in the Court of First Instance of Cagayan, was granted
on July 27, 1982. Subsequently, Macababbad registered portions of Lot No. 4144 in his name and sold other portions to third parties.
On May 18, 1972, Chua filed a petition for the cancellation of TCT No T-13408 and the issuance of a title evidencing his ownership over a
subdivided portion of Lot No. 4144 covering 803.50 square meters. On May 23, 1972, TCT No. T-18403 was issued in his name.
Respondents filed an alleged action for reconveyance, quieting of titles, nullity of titles, damages and attorney’s fees. The respondents likewise argue
that their action is one for the annulment of the extrajudicial settlement of estate and sale bearing their forged signatures. They contend that their
action had not yet prescribed because an action to declare an instrument null and void is imprescriptible.
The petitioners, on the other hand, argue that the relevant prescriptive period here is ten (10) years from the date of the registration of title, this being
an action for reconveyance based on an implied or constructive trust.
Issue:
Whether the action, which was filed 32 years after the property was partitioned and after a portion was sold to Macababbad, had already prescribed
Ruling:
Precedents say it does not; the action remains imprescriptible, the issuance of the certificates of titles notwithstanding. Ingjug-Tiro v. Casals is
instructive on this point:

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Article 1458 of the New Civil Code provides: By the contract of sale one of the contracting parties obligates himself of
transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price certain in money or its
equivalent. It is essential that the vendors be the owners of the property sold otherwise they cannot dispose that which does
not belong to them. As the Romans put it: Nemo dat quod non habet "No one can give more than what he has" The sale of
the realty to respondents is null and void insofar as it prejudiced petitioner’s interests and participation therein. At best, only
the ownership of the shares of Luisa, Maria and Guillerma in the disputed property could have been transferred to
respondents.
Consequently, respondents could not have acquired ownership over the land to the extent of the shares of petitioners. The
issuance of a certificate of title in their favor could not vest upon them ownership of the entire property; neither could it
validate the purchase thereof which is null and void. Registration does not vest title; it is merely the evidence of such title.
Our land registration laws do not give the holder any better title than what he actually has. Being null and void, the sale to
respondents of the petitioner’s shares produced no legal effects whatsoever.
Similarly, the claim that Francisco Ingjug died in 1963 but appeared to be a party to the Extrajudicial Settlement and
Confirmation of Sale executed in 1967 would be fatal to the validity of the contract, if proved by clear and convincing
evidence. Contracting parties must be juristic entities at the time of the consummation of the contract. Stated otherwise, to
form a valid and legal agreement it is necessary that there be a party capable of contracting and party capable of being
contracted with. Hence, if any one party to a supposed contract was already dead at the time of its execution, such contract is
undoubtedly simulated and false and therefore null and void by reason of its having been made after the death of the party
who appears as one of the contracting parties therein. The death of a person terminates contractual capacity.
In actions for reconveyance of the property predicated on the fact that the conveyance complained of was null and void ab initio, a claim of
prescription of action would be unavailing. The action or defense for the declaration of the inexistence of a contract does not prescribe. Neither could
laches be invoked in the case at bar. Laches is a doctrine in equity and our courts are basically courts of law and not courts of equity. Equity, which
has been aptly described as justice outside legality, should be applied only in the absence of, and never against, statutory law. Aequetas nunguam
contravenit legis. The positive mandate of Article 1410 of the New Civil; Code conferring imprescriptibility to actions for declaration of the
inexistence of a contract should preempt and prevail over all abstract arguments based only on equity. Certainly, laches cannot be set up to resist the
enforcement of an imprescriptible legal right, and petitioner can validly vindicate their inhirentance despite the laspse of time.

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Villamaria v CA

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Villamaria v CA & Bustamante GR No. 165881 April 19, 2006
FACTS:
Oscar Villamaria, Jr. was the owner of Villamaria Motors, a sole proprietorship engaged in assembling passenger jeepneys with a public
utility franchise to operate along the Baclaran-Sucat route. By 1995, Villamaria stopped assembling jeepneys and retained only nine, four of which
operated by employing drivers on a “boundary basis.” One of those drivers was respondent Bustamante.

Bustamante remitted 450 a day to Villamaria as boundary and kept the residue of his daily earnings as compensation for driving the
vehicle. In August 1997, Villamaria verbally agreed to sell the jeepney to Bustamante under a “boundary-hulog scheme”, where Bustamante would
remit to Villamaria P550 a day for a period of 4 years; Bustamane would then become the owner of the vehicle and continue to drive the same under
Villamaria’s franchise, but with Php 10,000 downpayment.

On August 7, 1997, Villamaria executed a contract entitled “Kasunduan ng Bilihan ng Sasakyan sa Pamamagitan ng Boundary Hulog”. The
parties agreed that if Bustamante failed to pay the boundary- hulog for 3 days, Villamaria Motors would hold on to the vehicle until Bustamante paid
his arrears, including a penalty of 50 a day; in case Bustamante failed to remit the daily boundary-hulog for a period of one week, the Kasunduan
would cease to have the legal effect and Bustamante would have to return the vehicle to Villamaria motors.

In 1999, Bustamante and other drivers who also had the same arrangement failed to pay their respective boundary-hulog. The prompted
Villamaria to serve a “Paalala”. On July 24, 2000. Villamaria took back the jeepney driven by Bustamante and barred the latter from driving the
vehicle.
Bustamante filed a Complaint for Illegal Dismissal against Villamaria and his wife Teresita and the Labor Arbiter rendered judgment in
favor of the spouses Villamaria and ordered the complaint to be dismissed.

Bustamante appealed the decision to the NLRC, insisting that the Kasunduan did not extinguish the employer-employee relationship
between him and Villamaria. Bustamante maintained that he remained an employee because he was engaged to perform activities which were
necessary or desirable to Villamaria’s trade or business. The NLRC rendered judgment dismissing the appeal for lack of merit.
Bustamante elevated the matter to the CA via Petition for Certiorari and the CA reversed and set aside the NLRC decision.

The appellate court ruled that the Labor Arbiter had jurisdiction over Bustamante’s complaint. Under the Kasunduan, the relationship
between him and Villamaria was dual: that of vendor-vendee and employer-employee. The CA ratiocinated that Villamaria’s exercise of control over
Bustamante’s conduct in operating the jeepney is inconsistent with the former’s claim that he was not engaged in the transportation business.

Villamaria, claims that the CA erred in ruling that the juridical relationship between him and respondent under the Kasunduan was a
combination of employer-employee and vendor-vendee relationships. The terms and conditions of the Kasunduan clearly state that he and respondent
Bustamante had entered into a conditional deed of sale over the jeepney; as such, their employer-employee relationship had been transformed into
that of vendor-vendee. Petitioner insists that he had the right to reserve his title on the jeepney until after the purchase price thereof had been paid in
full.
ISSUES:
WON the existence of a boundary-hulog agreement negates the employer-employee relationship between the vendor and vendee

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HELD:
The boundary system is a scheme by an owner/operator engaged in transporting passengers as a common carrier to primarily govern the
compensation of the driver, that is, the latter’s daily earnings are remitted to the owner/operator less the excess of the boundary which represents the
driver’s compensation. Under this system, the owner/operator exercises control and supervision over the driver. It is unlike in lease of chattels where
the lessor loses complete control over the chattel leased but the lessee is still ultimately responsible for the consequences of its use. The management
of the business is still in the hands of the owner/operator, who, being the holder of the certificate of public convenience, must see to it that the driver
follows the route prescribed by the franchising and regulatory authority, and the rules promulgated with regard to the business operations. The fact
that the driver does not receive fixed wages but only the excess of the "boundary" given to the owner/operator is not sufficient to change the
relationship between them. Indubitably, the driver performs activities which are usually necessary or desirable in the usual business or trade of the
owner/operator.
Under the Kasunduan, respondent was required to remit P550.00 daily to petitioner, an amount which represented the boundary of
petitioner as well as respondent’s partial payment (hulog) of the purchase price of the jeepney.
Respondent was entitled to keep the excess of his daily earnings as his daily wage. Thus, the daily remittances also had a dual purpose: that
of petitioner’s boundary and respondent’s partial payment (hulog) for the vehicle. This dual purpose was expressly stated in the Kasunduan. The
well-settled rule is that an obligation is not novated by an instrument that expressly recognizes the old one, changes only the terms of payment, and
adds other obligations not incompatible with the old provisions or where the new contract merely supplements the previous one. The two obligations
of the respondent to remit to petitioner the boundary-hulog can stand together.
The parties expressly agreed that petitioner, as vendor, and respondent, as vendee, entered into a contract to sell the jeepney on a daily
installment basis of P550.00 payable in four years and that petitioner would thereafter become its owner. A contract is one of conditional sale,
oftentimes referred to as contract to sell, if the ownership or title over the property sold is retained by the vendor, and is not passed to the vendee
unless and until there is full payment of the purchase price and/or upon faithful compliance with the other terms and conditions that may lawfully be
stipulated.Such payment or satisfaction of other preconditions, as the case may be, is a positive suspensive condition, the failure of which is not a
breach of contract, casual or serious, but simply an event that would prevent the obligation of the vendor to convey title from acquiring binding force.
Stated differently, the efficacy or obligatory force of the vendor's obligation to transfer title is subordinated to the happening of a future and uncertain
event so that if the suspensive condition does not take place, the parties would stand as if the conditional obligation had never existed.54 The vendor
may extrajudicially terminate the operation of the contract, refuse conveyance, and retain the sums or installments already received, where such
rights are expressly provided for.
Under the boundary-hulog scheme, petitioner retained ownership of the jeepney although its material possession was vested in respondent as its
driver. In case respondent failed to make his P550.00 daily installment payment for a week, the agreement would be of no force and effect and
respondent would have to return the jeepney to petitioner; the employer-employee relationship would likewise be terminated unless petitioner would
allow respondent to continue driving the jeepney on a boundary basis of P550.00 daily despite the termination of their vendor-vendee relationship
The juridical relationship of employer-employee between petitioner and respondent was not negated by the foregoing stipulation in the Kasunduan,
considering that petitioner retained control of respondent’s conduct as driver of the vehicle. As correctly ruled by the Court of Appeals.
ALMOCERA vs ONG
FACTS:
Johnny Ong tried to acquire from the defendants a "townhome" described as Unit No. 4 of Atrium Townhomes in Cebu City. In a Contract to Sell, the
selling price of the unit was P3,400,000.00 pesos and was able to pay the amount of P1,060,000.00 as partial payment. Prior to the full payment of
this amount, they alleged that Andre Almocera and First Builders fraudulently concealed the fact that before and at the time of the perfection of the
aforesaid contract to sell, the property was already mortgaged to and encumbered with the Land Bank of the Philippines (LBP). The construction of
the house has long been delayed and remains unfinished.
Trial Court ruled that petitioner and First Builders Multi-purpose Coop. Inc., failed to fulfil their obligation that respondent was able to make a down
payment or partial payment of P1,060,000.00 and that the defendants failed to complete the construction of, as well as deliver to respondent, the
townhouse within six months from the signing of the contract. Moreover, respondent was not informed by the defendants at the time of the perfection
of their contract that the subject townhouse was already mortgaged to LBP. The mortgage was foreclosed by the LBP and the townhouse was
eventually sold at public auction. It said that defendants were guilty of fraud in their dealing with respondent because the mortgage was not disclosed
to respondent when the contract was perfected. There was also non-compliance with their obligations under the contract when they failed to complete
and deliver the townhouse unit at the agreed time.
ISSUE: WON Johnny Ong was still obliged to pay the remaining balance of the contract price
Ruling : NO

the obligation of respondent to pay the balance of the contract price was conditioned on petitioner and FBMC’s performance of their
obligation to complete and deliver the townhouse unit within the prescribed period is determinative of the respondent’s obligation to pay the balance
of the contract price. Considering that the latter did not comply with their obligation to complete and deliver the townhouse unit within the period
agreed upon, respondent could not have incurred delay. They cannot insist that respondent comply with his obligation. For failure of one party to
assume and perform the obligation imposed on him, the other party does not incur delay.
Where one of the parties to a contract did not perform the undertaking to which he was bound by the terms of the agreement to perform, he

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is not entitled to insist upon the performance of the other party.
14


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FABILLO v. IAC
FACTS:
In her will, Justina Fabillo bequeathed to her brother, Florencio, a house and lot in San Salvador and to her husband Gregorio, a piece of land in
Pugahanay. After Justina’s death, Florencio filed a petition for the probate of the will. The trial court approved the project of partition. Florencio
sought the assistance of lawyer Murillo in recovering the property. Murillo wrote Florencio acquiescing to the rendering of his services for 40% of
the money value of the house and lot as a contingent fee in case of success. Florencio and Murillo entered into a “contract of services” providing that
Florencio promises to pay “Murillo, in case of success in any or both cases the sum equivalent to 40% of whatever benefit I may derive from such
cases.” The contract also stipulates that “if the house and lot or a portion thereof is just occupied by the undersigned or his heirs, Murillo shall have
the option of either occupying or leasing to any interested party forty per cent of the house and lot.” Pursuant to the contract, Murillo filed for
Florencio a suit against Gregorio to recover the San Salvador property. The case was terminated on Oct. 29, 1964 when the Court, upon the parties’
joint motion in the nature of a compromise agreement, declared Florencio as the lawful owner not only of the San Salvador property but also the
Pugahanay parcel of land. So, Murillo implemented the contract of services between him and Florencio by taking possession and exercising rights of
ownership over 40% of said properties. He installed a tenant in the Pugahanay property. In 1966, Florencio claimed exclusive rights over the two
properties and refused to give Murillo his share of their produce. Murillo sued Florencio. The trial court declared Murillo to be the owner of 40% of
both San Salvador and Pugahanay properties and the improvements thereon.
ISSUE: WON Contract of Services violates Art. 1491of the Civil Code par. 5
Ruling: NO.

The prohibition applies only if the sale or assignment of the property takes place during the pendency of the litigation involving the client's
property. Hence, a contract between a lawyer and his client stipulating a contingent fee is not covered by said prohibition under Article 1491 (5) of
the Civil Code because the payment of said fee is not made during the pendency of the litigation but only after judgment has been rendered in the
case handled by the lawyer. In fact, under the 1988 Code of Professional Responsibility, a lawyer may have a lien over funds and property of his
client and may apply so much thereof as may be necessary to satisfy his lawful fees and disbursements. As long as the lawyer does not exert undue
influence on his client, that no fraud is committed or imposition applied, or that the compensation is clearly not excessive as to amount to extortion, a
contract for contingent fee is valid and enforceable.
JIMENEZ VS JORDANA
FACTS:

Madeliene S. Bunye was the owner of a parcel of residential land, Metro Manila, covered by TCT No. 17133 issued by the Register of
Deeds. Respondent, Juan Jose Jordana wrote a letter to Bunye offering to purchase the said property for the price of P12,300,000.00 payable in cash,
and to remit to her, by way of earnest money, the amount of P500,000.00 within five (5) days from his receipt of her acceptance of said offer. Bunye
wrote a letter to Jordana informing the latter that she accepted his offer. Jordana did remit the P500,000.00 but Bunye refused to receive the money.
On January 3, 1994, Bunye wrote a letter to Jordana confirming her rejection of the earnest money and that she can no longer accept his offer of
P12,300,000.00 as her property was worth much more and willing to sell her property to him for P16,000,000.00. On or about March 30, 1995, she
sold the same property to spouses Jimenez, pursuant to which TCT No. 171333 was cancelled and TCT No. 200308 issued to the latter on April 3,

Page 44 of 45
1995.
CA, held that respondent and Bunye had entered into a Contract of Sale, not a Contract to Sell which was perfected by their mere consent thereto.
Thus, Bunye was deemed to have relinquished ownership of the property to respondent and spouses Jimenez was not in good faith.
ISSUE: WON there was a perfected contract of sale
RULING: YES.

All elements of a valid contract of sale was present under Article 1458 of the Civil Code are the following: (1) the parties' consent or
meeting of minds, (2) a determinate subject matter, and (3) a price certain in money or its equivalent. Being consensual, a contract of sale is perfected
upon the meeting of the minds of the buyer and the seller as to the object of the sale and the cause or consideration. Through an exchange of letters, a
definite offer and an unqualified acceptance as to the object of the sale and the cause or consideration therefor transpired between him and Bunye.
Upon these allegations, a contract of sale was deemed perfected as of December 29, 1993, the day he received Bunye's letter of unqualified
acceptance. From that moment, respondent acquired the legal right to compel the transfer of ownership of the property to him. The parties may
reciprocally demand performance; that is, the vendee may compel the transfer of the ownership of the object of the sale, and the vendor may require
the vendee to pay the price of the thing sold.

Prior to the second sale and delivery to petitioners, there was already a perfected sale of the Adelfa property to respondent. Hence, Bunye
was duty-bound to execute a deed of sale; and petitioners, to reconvey the property to him.

Page 45 of 45

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BOSTON BANK OF THE PHILIPPINES, (formerly BANK OF COMMERCE) v. PERLA P. MANALO and CARLOS MANALO, JR. G.R.

NO. 158149, February 9, 2006

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Issue: Whether or not the contract is one of a double sale?

The distinction between a contract of sale and a contract to sell it well-settled:

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LUMAYAG V. HEIRS OF NEMENO

2. The instrument of conveyance is denominated as Deed of sale with Pacto De Retro.

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OLIMPIA HOUSING VS PANASIATIC TRAVEL CORP 395 SCRA 298

​Whether or not the Contract to Sell was validly rescinded

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ESCUETA VS LIM 512 SCRA 411

​Whether or not there was a valid Contract of Sale

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VALLIDO VS PONO (APRIL 15, 2013)

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Sta. Lucia Realty vs. Uyecio 562 SCRA 26 (2008)

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Issue: W/N the Maceda Law is applicable?

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G.R. No. 135528 ​July 14, 2004

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In Lacanilao v. Court of Appeals, we held that:

Title: Godinez vs Fong Pak Luen

G. R. No. L-36731 January 27, 1983

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6. Trial court dismissed the petition on ground of prescription of action.

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7. However, VRM Balleque did not meet with respondents.

Issue: Whether or not there is a perfected contract to sale.

NAVARRA VS. PLANTERS DEVELOPMENT BANK 527 SCRA 562 (2007)

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13. CA revered RTC’s ruling.

DISCUSSIONS: • Stages of Contract

• Elements of a Contract of Sale

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BOY VS. CA 427 SCRA 196 (2004)

5. The spouses then filed an action for ejectment against Lagrimas.

10. CA reversed RTC’s decision. Hence, this petition.

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LUZON DEVELOPMENT BANK VS. ANGELES CATHERINE ENRIQUEZ

Whether or not contract to sell conveys ownership.

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1. Whether or not the ownership was already transferred to spouses heruela.

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[GR No. 176791, November 14, 2012]

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1. Whether or not the Spouses Nanol are builders in good faith

1. The Spouses are builders in good faith.

1. Good faith is presumed on the part of Spouses Nanol

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Thus, SC held that CCI, as landowner, has two options:

Whether or not the Contract to Sell was validly rescinded

Whether or not there was a valid Contract of Sale

G.R. No. 135528 July 14, 2004