Sales Case Digests - Ching

RAFAEL G. SUNTAY vs. THE HON. COURT OF APPEALS and FEDERICO C. SUNTAY G.R. No. 114950 December 19, 1995 Facts: Federico Suntay was the registered owner of a parcel of land. He applied as a miller-contractor of the then National Rice and Corn Corporation (NARIC). His application, although prepared by his nephew-lawyer, petitioner Rafael Suntay, was disapproved because at that time he was tied up with several unpaid loans. Federico allowed Rafael to make the application for him. Rafael prepared an absolute deed of sale whereby Federico, for and in consideration of P20,000.00 conveyed to Rafael said parcel of land with all its existing structures. Said deed was notarized. A counter sale was prepared and signed by Rafael who also caused its delivery to Federico. Through this counter conveyance, the same parcel of land was sold by Rafael back to Federico for P20,000.00 also. Although on its face, the second deed appears to have been notarized, an examination thereof will show that, it is not the said deed of sale but a certain "real estate mortgage on a parcel of land to secure a loan of P3,500.00 in favor of the Hagonoy Rural Bank." As testimony, Atty. Flores (notary public) admitted that he failed to submit to the Clerk of Court a copy of the second deed. Neither was he able to enter the same in his notarial register. Federico requested that Rafael deliver his copy of title certificate so that Federico could have the counter deed of sale in his favor registered in his name. The request was turned down. In opposition thereto, Rafael chronicled the discrepancy in the notarization of the second deed of sale upon which said petition was premised and ultimately concluded that said deed was a counterfeit or "at least not a public document which is sufficient to transfer real rights according to law." Rafael insisted that said property was "absolutely sold and conveyed for a consideration of P20,000.00 and for other valuable consideration" as dacion en pago. Issue: Whether or not the sale constitutes as a sale of dacion en pago. Held: No. The failure of the late Rafael to take exclusive possession of the property allegedly sold to him is a clear badge of fraud. The fact that, notwithstanding the title transfer, Federico remained in actual possession, cultivation and occupation of the disputed lot from the time the deed of sale was executed until the present, is a circumstance which is unmistakably added proof of the fictitiousness of the said transfer, the same being contrary to the principle of ownership. According to the late Rafael, he allowed Federico to remain in the premises and enjoy the fruits thereof because of their understanding that Federico may subsequently repurchase the property. Contrary to what Rafael thought, this in fact is added reason for simulation. The idea of allowing a repurchase goes along the same lines posed by the theory of Federico. If it were true that the first sale transaction was actually a "dacion en pago" in satisfaction of Federico's alleged unpaid attorney's fees, it does strain the logical mind that Rafael had agreed to allow the repurchase of the property three months thereafter. Federico was obviously financially liquid. Had he intended to pay attorney's fees, he would have paid Rafael in cash and not part with valuable income-producing real property.

SAN LORENZO DEVELOPMENT CORPORATION vs. COURT OF APPEALS G.R. No. 124242 January 21, 2005 Facts: On 20 August 1986, the Spouses Lu purportedly sold the two parcels of land to respondent Pablo Babasanta who made a down payment of fifty thousand pesos (P50,000.00) as evidenced by a memorandum receipt issued by Pacita Lu of the same date. Several other payments totaling two hundred thousand pesos (P200,000.00) were made by Babasanta. He demanded the execution of a Final Deed of Sale in his favor so he may effect full payment of the purchase price; however, the spouses declined to push through with the sale. They claimed that when he requested for a discount and they refused, he rescinded the agreement. Thus, Babasanta filed a case for Specific Performance. San Lorenzo Development Corporation (SLDC) alleged that on 3 May 1989, the two parcels of land involved had been sold to it in a Deed of Absolute Sale with Mortgage. It alleged that it was a buyer in good faith and for value and therefore it had a better right over the property in litigation. Issue: Whether or not there was a perfected contract of sale between Babasanta and Spouses Lu. Held: No. The agreement between Babasanta and the Spouses Lu is a contract to sell and not a contract of sale. The receipt signed by Pacita Lu merely states that she accepted the sum of fifty thousand pesos (P50,000.00) from Babasanta as partial payment. Spouses Lu never intended to transfer ownership to Babasanta except upon full payment of the purchase price. Babasanta’s letter dated 22 May 1989 was quite telling. He stated therein that despite his repeated requests for the execution of the final deed of sale in his favor so that he could effect full payment of the price, Pacita Lu allegedly refused to do so. In effect, Babasanta himself recognized that ownership of the property would not be transferred to him until such time as he shall have effected full payment of the price. The receipt signed by Pacita Lu should legally be considered as a perfected contract to sell. There was no double sale in this case because the contract in favor of Babasanta was a mere contract to sell; hence, Art. 1544 is not applicable. There was neither actual nor constructive delivery as his title is based on a mere receipt. Based on this alone, the right of SLDC must be preferred.

ISABEL FLORES vs. TRINIDAD LIM G.R. No. 26844 September 27, 1927 Facts: Subject land of Isabel Flores in Tayabas Province was sold to Trinidad Lim at sheriff’s sale for P1,603.78. The land has 164 coconut trees planted, 1,000 non-bearing and about 300 buri trees. The usual certificate of sale was issued to the defendant. Prior to one-year period of redemption, Lim took the actual physical possession of the property. The latter refused and still refuses to render an account of fruits, profits, to plaintiff’s damage in the sum of P1,000. Flores prays judgment that Lim be ordered to render an itemized account, the amount if which be deducted from the price of redemption; that plaintiff have the right to redeem; and that the defendant pay her P1,000 for damages and costs. Issue: Whether of not Lim is entitled to reimbursement for the coconut trees he had planted as well as other improvements. Held. No. Lim is a possessor in bad faith, for he should have waited for the termination of one-year redemption period before entering into the possession of the property and therefore not entitled to a refund of useful improvements.

JOSE B. AZNAR vs. RAFAEL YAPDIANGCO G.R. No. L-18536 March 31, 1965 Facts: Theodoro Santos advertised in the newspapers the sale of his Ford Fairlane 500. Certain de Dios, claiming to be the nephew of Marella, went to the residence of Santos and expressing his uncle’s intent to purchase the car. Since Santos wasn't around, it was his son Irineo who talked with de Dios. Marella expressed his intention to purchase the car. A deed of sale was prepared. When Irineo and de Dios arrived at the residence of Marella, the latter averred that his money was short and had to borrow from his sister. He then instructed de Dios and Irineo to go the supposed house of the sister to obtain the money with an unidentified person. He also asked Irineo to leave the deed to have his lawyer see it. Relying on the good faith of Marella, Irineo did as requested. Upon arriving at the house of Marella’s supposed to be sister, de Dios and the unidentified person then disappeared together with the car. This prompted Santos to report the incident to the authorities. Thereafter, Marella was able to sell the car to Aznar. And while in possession of the car, police authorities confiscated the same. This prompted Aznar to file an action for replevin. Issue: Whether or not Santos has better right than Aznar. Held: Yes. Teodoro Santos has the better right. Marella did not have any title to the property under litigation because the same was never delivered to him. He may have the contract but he never acquired valid title. Although the keys to the car may have been given to the unidentified companion, it may be done only because that companion took them to the place where the sister of Marella was supposed to live. The car was evidently stolen and that the buyer did not acquire any valid title thereto. Article 559 of Civil Code provides the effect that if the owner has lost a thing, or if he has been unlawfully deprived of it, he has a right to recover it, not only from its finder, thief or robber, but also from third persons who may have acquired it in good faith from such finder, thief or robber.