SALES-Digests.docx

-50. Nietes v. CA, 46 SCRA 654 [3] -51. Vasquez v. CA (GR 83759, 12 July 1991) -52. Ang Yu v. CA (GR 109125, 2 December 1994) -53. Equitorial Realty Development v. Mayfair Theater (GR 106063, 21 November 1996) -54. Villonco v. Bormaheco (GR L-268 72, 25 July 1975) -55. Spouses Doromal v. CA (GR L-36083, 5 September 1975) -56. Goldenrod v. CA (GR 126812, 24 November 1998) -57. Dalion v. CA (GR 78903, 28 February 1990) -58. Yuviengco v. Dacuycuy, 104 SCRA 668 (1981) [4] -59. First Philippine International Bank v. CA, 252 SCRA (1996) [5] - 60. Vda. de Jomoc v. CA (GR 92871, 2 August 1991) -61. Cuyugan v. Santos, 34 PHIL 100 (1916) [6] -62. Addison v. Felix (GR 12342, 3 August 1918) -63. Danguilan v. IAC (GR L-69970, 28 November 1988) -64. Pasagui v. Villablanco (GR L-21998, 10 November 1975) 65. Dy Jr. v. CA (GR 92989, 8 July 1991)

Aquilino Nietes v. Court of Appeals and Dr. Pablo Garcia G.R. No. L-32873

August 18, 1972

FACTS: On October 19, 1959, said petitioner and respondent Dr. Pablo C. Garcia entered into a "Contract of Lease with Option to Buy." Instead of paying the lessor in the manner set forth in the contract,  Nietes paid in various amounts. On or about July 31, 1964, Dr. Garcia's counsel wrote to Nietes the letterrescinding the contract.  Nietes, thru his counsel, sent his reply stating that he did not violate any terms of the contract contract and will exercise his option to purchase the land and building. On July 26, 1965, Nietes deposited with the branch office of the Agro-Industrial Bank in Angeles City checks amounting to P84,860.50, as balance of the purchase price of the property,  but he withdrew said sum on August 12, 1965, after the checks had been cleared. On August 2, 1965, he commenced the present action, in the Court of First Instance of Pampanga, for specific performance of Dr. Garcia's alleged obligation to execute in his favor a deed of absolute sale of the leased property. The Trial Court ruled in favor of the Petitioner. Both parties appealed to the CA. A Special Division of the CA rendered its decision affirming that of the trial court, except as regard to the attorney’s fees, fees, which were eliminated. The Special Division of the CA set aside and reversed the appealed decision of the trial court and dismissed the complaint of Nietes upon the filing of the motion for reconsideration of Dr. Garcia. ISSUE:Whether the petitioner has can buy the property. HELD: Yes. The contract does not say that Nietes had to pay the stipulated price of P100,000 before exercising his option to buy the property in question.In the case of an option to buy, the creditor may validly and effectively exercise his right by merely advising the debtor of the former's decision to buy and expressing his readiness to pay the stipulated price, provided that the same is available and actually delivered to the debtor upon execution and delivery by him of the corresponding deed of sale. Unless and until the debtor shall have done this the creditor is not and cannot be in default in the discharge of his obligation to pay.  Nietes had validly and effectively exercised his option to buy the property of Dr. Garcia, at least, on December 13, 1962, when he acknowledged receipt from Mrs. Nietes of the sum of P2,200 then delivered by her "in partial payment on the purchase of the property" described in the "Contract of Lease with Option to Buy"; that from the aggregate sum of P29,957.00 paid to him

up to that time, the sum of P12,708.33 should be deducted as rental for the period from June 1960 to December 13, 1962, or roughly thirty (30) months and a half, thereby leaving a balance of P17,248.67, consisting of P12,291.67, representing the rentals for the unused period of the lease, plus P4,957.00 paid in excess of said rental and advanced solely on account of the  purchase price; that deducting said sum of P17,248.67 from the agreed price of P100,000.00, there results a balance of P82,751.33 which should be paid by Nietes to Dr. Garcia, upon execution by the latter of the corresponding deed of absolute sale of the property in question, free from any lien or encumbrance whatsoever, in favor of Nietes, and the delivery to him of said deed of sale, as well as of the owner's duplicate of the certificate of title to said property; and that Dr. Garcia should indemnify Nietes in the sum of P2,500 as and for attorney's fees. Thus modified, the decision of the Court of First Instance of Pampanga is hereby affirmed in all other respects, and that of the Court of Appeals reversed.

Spouses Cipriano Vasquez and ValerianaGayanelo v. Court of Appeals and Spouses Martin Vallejera and Apolonia Olea G.R. No. 83759

July 12, 1991

FACTS: On January 15, 1975, the spouses Vallejeraplaintiffs-spouses (respondents herein) filed this action against the Spouses Vasquez defendants-spouses (petitioners herein) seeking to redeem Lot No. 1860 of the HimamaylanCadastre which was previously sold by respondents to  petitioners on September 21, 1964. The said lot was registered in the name of the respondents. On October 1959, the same was leased by respondents to the petitioners up to crop year 1966-67, which was extended to crop year 1968-69. After the execution of the lease, repondents took possession of the lot, up to now and devoted the same to the cultivation of sugar. On September 21, 1964, the respondents sold the lot to the petitioners under a Deed of Sale for the amount of P9,000.00. The Deed of Sale was duly ratified and notarized. On the same day and along with the execution of the Deed of Sale, a separate instrument, denominated as Right to Repurchase was executed by the parties granting respondents the right to repurchase the lot for P12,000.00, likewise duly ratified and notarized. By virtue of the sale, petitioners secured TCT  No. T-58898 in their name. On January 2, 1969, respondents sold the same lot to Benito Derrama, Jr., after securing the  petitioners' title, for the sum of P12,000.00. Upon the protestations of petitioners, assisted by counsel, the said second sale was cancelled after the payment of P12,000.00 by the petitioners to Derrama.  petitioners resisted this action for redemption on the premise that the Right to Repurchase is just an option to buy since it is not embodied in the same document of sale but in a separate document, and since such option is not supported by a consideration distinct from the price, said deed for right to repurchase is not binding upon them. After trial, the court rendered judgment against the petitioners, ordering them to resell the lot of the HimamaylanCadastre to the respondents for the repurchase price of P24,000.00, which amount combines the price paid for the first sale and the price paid by defendants to Benito Derrama, Jr. Petitioners moved for, but were denied reconsideration.

ISSUE: Whether there is a sale with right to repurchase between the parties. HELD:  No. The nature of the transaction between the parties is not a sale with right to repurchase. Conventional redemption takes place "when the vendor reserves the right to repurchase the thing sold, with the obligation to comply with the provisions of Article 1616 and other stipulations which may have been agreed upon. (Article 1601, Civil Code). In this case, there was no reservation made by the vendor. Thus, it was more of an option to buy or a mere promise on the part of the vendee to resell the property to the vendor. The right of repurchase is not a right granted the vendor by the vendee in a subsequent instrument, but is a right reserved by the vendor in the same instrument of sale as one of the stipulations of the contract. Once the instrument of absolute sale is executed, the vendor can no longer reserve the right to repurchase, and any right thereafter granted the vendor by the vendee in a separate instrument cannot be a right of repurchase but some other right like the option to  buy in the instant case. In the instant case, since the transaction between the petitioners and private respondents was not a sale with right to repurchase, the private respondents cannot avail of Article 1601 of the Civil Code which provides for conventional redemption.

Ang Yu Asuncion, Arthur Go and Keh Tiong v. Court of Appeals and Buen Realty Development Corporation G.R. No. 109125

December 2, 1994

FACTS: On July 29, 1987, an amended Complaint for Specific Performance was filed by petitioners Ang Yu Asuncion and others against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan before RTC.Petitioners (Ang Yu) alleged that: 1. they are the tenants or lessees of residential and commercial spaces owned by Bobby Unijeng and others located in Binondo, Manila, since 1935; 2. that on several occasions before October 9, 1986, the lessors informed the lessees (petitioners) that they are offering to sell the premises and are giving them priority to acquire the same; 3. that during the negotiations, Bobby Cu Unjieng offered a price of six million while they made a counter offer of P5-million; and 4. that they wrote them on October 24, 1986 asking that they specify the terms and conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent another letter dated January 28, 1987 with the same request; The RTC found that Cu Unjiengs’ offer to sell was never accepted by the petitioners for the reason that they did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all. The Court of Appeals affirmed the decision of the lower court. This decision was brought to the Supreme Court by petition for review on certiorari which subsequently denied the appealfor insufficiency in form and substance. On November 15, 1990,while the case was pending consideration by the Supreme Court, the Cu Unjieng spouses executed a Deed of Sale transferring the subject property to petitioner Buen Realty and Development Corporation.

Petitioner Buen Realty and Development Corporation, as the new owner of the subject property, wrote a letter to the lessees demanding that the latter vacate the premises. On August 30, 1991, the RTC ordered the Cu Unjiengs to execute the necessary Deed of Sale of the property in litigation in favor of Ang Yu Asuncion, Keh Tiong and Arthur Go for the consideration of P15 Million pesos in recognition of petitioners’ right of first refusal and that a new Transfer Certificate of Title be issued in favor of the buyer. The court also set aside the title issued to Buen Realty Corporation for having been executed in bad faith. On September 22, 1991, the Judge issued a writ of execution. The CA reversed the RTC ruling. ISSUE: Whether the right of first refusal is deemed as a perfected contract of sale and whether the filing of the writ of execution is a proper remedy. HELD:  No. In the law on sales, the so-called "right of first refusal" is an innovative juridical relation.  Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code. Neither can the right of first refusal, understood in its normal concept, per se be  brought within the purview of an option under the second paragraph of Article 1479, aforequoted, or possibly of an offer under Article 13199 of the same Code.An option or an offer would require, among other things, a clear certainty on both the object and the cause or consideration of the envisioned contract. In a right of first refusal, while the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantor's eventual intention to enter into a binding  juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merely belonging to a class of  preparatory juridical relations governed not by contracts (since the essential elements to establish the vinculum juris would still be indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct. Even on the premise that such right of first refusal has been decreed under a final judgment, like here, its breach cannot justify correspondingly an issuance of a writ of execution under a  judgment that merely recognizes its existence, nor would it sanction an action for specific  performance without thereby negating the indispensable element of consensuality in the  perfection of contracts. The final judgment in the case has merely accorded a "right of first refusal" in favor of  petitioners. The consequence of such a declaration entails no more than what has been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private respondents to honor the right of first refusal, the remedy is not a writ of execution on the  judgment, since there is none to execute, but an action for damages in a proper forum for the  purpose.

Equitorial Realty Development v. Mayfair Theater G.R. No. 106063 November 21, 1996 FACTS: Carmelo &Bauermann, Inc. owned a land, together with two 2-storey buildings at Claro M. Recto Avenue, Manila, and covered by TCT No. 18529.

On June 1, 1967, Carmelo entered into a Contract of Lease with Mayfair Theater Inc. fpr 20 years. The lease covered a portion of the second floor and mezzanine of a two-storey building with about 1,610 square meters of floor area, which respondent used as Maxim Theater. Two years later, on March 31, 1969, Mayfair entered into a second Lease with Carmelo for another portion of the latter’s property this time, a part of the second floor of the two-storey  building, and two store spaces on the ground floor. In that space, Mayfair put up another movie house known as Miramar Theater. The Contract of Lease was likewise for a period of 20 years. Both leases contained a clause giving Mayfair a right of first refusal to purchase the subject  properties. Sadly, on July 30, 1978 - within the 20-year-lease term -- the subject properties were sold by Carmelo to Equatorial Realty Development, Inc. for eleven million smackers, without their first being offered to Mayfair. As a result of the sale of the subject properties to Equatorial, Mayfair filed a Complaint before the Regional Trial Court of Manila for the recission of the Deed of Absolute Sale between Carmelo and Equatorial, specific performance, and damages. RTC decided for Carmelo and Equatorial. Tsk tsk. CA reversed and ruled for Mayfair. The SC denied a petition questioning the CA decision. What happened is that the contract did get rescinded, Equatorial got its money back and asserted that Mayfair have the right to purchase the lots for 11 million bucks. Decision became final and executory, so Mayfair deposited with the clerk the 11M (less 847grand withholding) payment for the properties (Carmelo somehow disappeared). Meanwhile, on Sept 18, 1997, barely five months after Mayfair submitted its Motion for Execution, Equatorial demanded from Mayfair backrentals and reasonable compensation for the Mayfair’s continued use of the subject premises after its lease contracts expired. Remember that Mayfair was still occupying the premises during all this hullabaloo. ISSUE: Whether or not the option clause in the contracts of lease is actually a right of first refusal proviso. HELD: Yes. The aforecited contractual stipulation provides for a right of first refusal in favor of Mayfair. It is not an option clause or an option contract. It is a contract of a right of first refusal. In his Law Dictionary, edition of 1897, Bouvier defines an option as a contract, in the following language: A contract by virtue of which A, in consideration of the payment of a certain sum to B, acquires the privilege of buying from, or selling to B, certain securities or properties within a limited time at a specified price. The rule so early established in this jurisdiction is that the deed of option or the option clause in a contract, in order to be valid and enforceable, must, among other things, indicate the definite  price at which the person granting the option, is willing to sell. By a contract of sale, “one of the contracting parties obligates himself to transfer ownership of and to deliver a determinate thing and the other to pay therefor a price certain in money or its equivalent.” Ownership of the thing sold is a real right, which the buyer acquires only upon delivery of the thing to him “in any of the ways specified in Articles 1497 to 1501, or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee.” This right is transferred, not by contract alone, but by tradition or delivery. Non nudispactissedtraditionedominia rerum transferantur.

There is said to be delivery if and when the thing sold “is placed in the control and possession of the vendee.” Thus, it has been held that while the execution of a public instrument of sale is recognized by law as equivalent to the delivery of the thing sold, such constructive or symbolic delivery, being merely presumptive, is deemed negated by the failure of the vendee to take actual  possession of the land sold. Delivery has been described as a composite act, a thing in which  both parties must join and the minds of both parties concur. It is an act by which one party parts with the title to and the possession of the property, and the other acquires the right to and the  possession of the same. In its natural sense, delivery means something in addition to the delivery of property or title; it means transfer of possession. In the Law on Sales, delivery may be either actual or constructive, but both forms of delivery contemplate “the absolute giving up of the control and custody of the property on the part of the vendor, and the assumption of the same by the vendee.”

Villonco Realty Company v. Bormaheco G.R. No. L-26872

July 25, 1975

FACTS: Francisco N. Cervantes and his wife, Rosario P. Navarra-Cervantes, are the owners of Lots 3, 15 and 16 located at 245 Buendia Avenue, Makati, Rizal with a total area of 3,500 sq.ms. The lots were mortgaged to the Development Bank of the Philippines (DBP) as security for a loan of P441,000. The mortgage debt was fully paid. Cervantes is the president of Bormaheco, Inc., a dealer and importer of industrial and agricultural machinery. The entire three lots are occupied by the building, machinery and equipment of Bormaheco, Inc. and are adjacent to the property of Villonco Realty Company situated at 219 Buendia Avenue. There were negotiations for the sale of the said lots and the improvements thereon between Romeo Villonco of Villonco Realty Company “and Bormaheco, Inc., represented by its  president, Francisco N. Cervantes, through the intervention of Edith Perez de Tagle, a real estate  broker”. In the course of the negotiations, the brothers Romeo and Teofilo Villonco conferred with Cervantes in his office to discuss the price and terms of the sale. Later, Cervantes went to see Villonco for the same reason until some agreement was arrived at. On a subsequent occasion, Cervantes, accompanied by Edith Perez de Tagle, discussed again the terms of the sale with Villonco. During the negotiations, Villonco Realty Company assumed that the lots belonged to Bormaheco and that Cervantes was duly authorized to sell the same. Cervantes did not disclose to the broker and to Villonco Realty that the lots were conjugal  properties of himself and his wife and that they were mortgaged to the DBP. Bormaheco, through Cervantes, made a written offer to Romeo Villonco for the sale of the property. The  property mentioned in Bormaheco’s letter was the land of the National Shipyards & Steel Corporation (Nassco). At the bidding that land was awarded to Bormaheco, the highest bidder. The Nassco Board of Directors in its resolution authorized the General Manager to sign the necessary contract. The Nassco Acting General Manager wrote a letter to the Economic Coordinator, requesting approval of that resolution. The Acting Economic Coordinator approved the resolution. Meanwhile, Bormaheco and Villonco Realty continued their negotiations for the sale of the Buendia Avenue property. Cervantes and Teofilo Villonco had a final conference and as a result of that conference, Villonco Realty, in its letter made a revised counter-offer (Romeo Villonco’s first counter-offer) for the purchase of the property.

The counter-offer was accepted by Cervantes. Enclosed to it was a MBTC Check as earnest money. The check was delivered by Perez de Tagle to Bormaheco and was received by Cervantes. In the voucher-receipt evidencing the delivery the broker indicated in her handwriting that the earnest money was subject to the terms and conditions embodied in Bormaheco’s letter and Villonco Realty Company’s letter. Unexpectedly, Cervantes returned the earnest money, with interest. Cervantes cited as an excuse the circumstance that despite the lapse of 45 days there is no certainty yet for the acquisition of the Punta property. Villonco Realty Company refused to accept the letter and the checks of Bormaheco. Cervantes sent them by registered mail. When he rescinded the contract, he was already aware that the Punta lot had been awarded to Bormaheco. Edith Perez de Tagle, the broker, articulated her shock and surprise at Bormaheco’s turnabout. Cervantes in his letter of 6 April 1964, a reply to Miss Tagle’s letter, alleged that the 45 day  period had already expired and the sale to Bormaheco, Inc. of the Punta property had not been consummated. Cervantes said that his letter was a “manifestation that we are no longer interested to sell” the Buendia Avenue property to Villonco Realty. The latter was furnished with a copy of that letter. In a letter, Villonco Realty Company returned the two checks to Bormaheco, Inc., stating that the condition for the cancellation of the contract had not arisen and at the same time announcing that an action for breach of contract would be filed against Bormaheco. On that same date, Villonco Realty filed the complaint for specific performance against Bormaheco. A notice of lis pendens was annotated on the titles of the said lots. ISSUE: Whether there is a perfected contract of Sales HELD: YES. There was a perfected contract of sale. The alleged changes made in the counter-offer are immaterial and are mere clarifications. The changes of the words “Sta. Ana property” to another  property as well as the insertion of the number “12” in the date, and the words “per annum” in the interest are trivial. There is no incompatibility in the offer and counter-offer. Cervantes assented to the interest and he, in fact, paid the same. Also, earnest money constitutes proof of the perfection of the contract of sale and forms part of the consideration. The condition regarding the acquisition of the Sta. Ana property was likewise fulfilled; there is thus no ground for the refusal of Cervantes to consummate the sale.

Spouses Doromal v. Court of Appeals and Filomena Javellana G.R. No. L-36083

September 5, 1975

FACTS: A parcel of land in Iloilo were co-owned by seven (7) siblings all surnamed Horilleno. Five (5) of the siblings gave an SPA to their niece Mary Jimenez, who succeeded her father as a coowner, for the sale of the land to father and son Doromal. One of the co-owner, herein petitioner, Filomena Javellana however did not gave her consent to the sale even though her siblings executed an SPA for her signature. The co-owners went on with the sale of 6/7 part of the land and a new title for the Doromals were issued. Respondent offered to repurchase the land for 30K as stated in the deed of sale but petitioners declined invoking lapse in time for the right of repurchase. Petitioner also contend that the 30K  price was only placed in the deed of sale to minimize payment of fees and taxes and as such, respondent should pay the real price paid which was P115, 250.

ISSUE: Whether the period to repurchase of petitioner has already lapsed. HELD:  No. The period of repurchase has not yet lapsed because the respondent was not notified of the sale. The 30-day period for the right of repurchase starts only after actual notice not only of a  perfected sale but of actual execution and delivery of the deed of sale. The letter sent to the respondent by the other co-owners cannot be considered as actual notice  because the letter was only to inform her of the intention to sell the property but not its actual sale. As such, the 30-day period has not yet commenced and the respondent can still exercise his right to repurchase. The respondent should also pay only the 30K stipulated in the deed of sale because a redemptioner’s right is to be subrogated by the  same terms and conditions stipulated in the contract.

Goldenrod, Inc. v. Court of Appeals, Pio Barreto and Sons, Inc., G.R. No. 126812

November 24, 1998

FACTS: Barretto owned parcels of land which were mortgaged to UCPB. Barretto failed to pay; the  properties were foreclosed. Goldenrod made an offer to Barretto that it would buy the properties and pay off the remaining balance of Barretto’s loan with UCPB. It paid Barretto 1 million pesos as part of the purchase price. The remaining balance would be paid once Barretto had consolidated the titles. On the date that Goldenrod was supposed to pay, Goldenrod asked for an extension. UCPB agreed. When the extension date arrived, Goldenrod asked for another extension. UCPB refused. Barretto successfully consolidated the titles. Goldenrod informed Barretto that it would not be able to push through with their agreement. It asked Barretto to return the 1 million pesos. Barretto did not give in to Goldenrod’s rescission. Instead, it sold the  property that was part of their agreement to Asiaworld. ISSUE: Whether Goldenrod should be paid back its payment. HELD: Yes. Art. 1385 of the Civil Code provides that rescission creates the obligation to return the things which were the object of the contract together with the fruits and interest. The vendor is therefore obliged to return the purchase price paid to him by the buyer if the latter rescinds the sale, or when the transaction was called off and the subject property had already been sold to a third person, as what obtained in this case. Barretto is obliged to pay Goldenrod back because 1) Goldenrod decided to rescind the sale; 2) the transaction was called off and; 3) the property was sold to a third person. By virtue of the extrajudicial rescission of the contract to sell by Goldenrod, without opposition from Barretto, who in turn sold it to a third person, Barretto had the obligation to return the 1 million pesos plus legal interest from the date it received the notice of rescission.

Spouses Dalion v. Court of Appeals and Ruperto Sabesaje, Jr. G.R. No. 78903

February 28, 1990

FACTS: A land in Southern Leyte was declared in the name of Segundo Dalion. Sabesaje sued to recover ownership of the land based on a private deed of absolute sale, allegedly executed by Dalion. The spouses denied the claims of Sabesaje and claims that his signature in the document was forged. Spouses Dalion admitted of administering five parcels of land in Southern Leyte, which  belonged to Leonardo Sabesaje, grandfather of the respondent. The spouses Dalion never received their agreed 10% and 15% commission on the sales of copra and abaca. ISSUE: Whether the contract of sale is valid. HELD: Yes. The authenticity of the signature of Dalion was proven by the testimony of several witnesses including the person who made the deed of sale. Dalion never presented any evidence or witness to prove his claim of forgery. Dallion’s claim that the sale is invalid because it was not made in a public document is misplaced. The provision of Art. 1358 on the necessity of a public document is only for convenience, not for validity or enforceability. It is not a requirement for the validity of a contract of sale of a parcel of land that this be embodied in a public instrument. Sale is perfected upon meeting of the minds of both parties.

Suga Sotto Yuvienco, Britania Sotto, and Marcelino Sotto v. Hon. Auxencio Dacuycuy et al G.R. No. L-55048

May 27, 1981

FACTS: Petitioners own a property in Tacloban City which they intend to sell for 6.5M. They gave the respondents the right to purchase the property. Respondents replied that they agree to buy the  property and they will negotiate for details. Petitioner sent another telegram informing respondents that their proposal is accepted and a contract will be prepared. Atty. Pedro Gamboa arrived bringing a contact with an altered mode of payment which says that the balance payment should be paid within 30 days instead of the former 90 days. (Original terms: P2M payment upon execution and P4.5M after 90 days) ISSUE: Whether there is a valid contract of sale between the parties. HELD:  No. The contract of sale between parties was not perfected because both parties are still under negotiation. Thus, there was no meeting of the minds. Atty. Gamboa even went to the respondents to negotiate for the sale. Even though there was an agreement on the terms of  payment, there was no absolute acceptance because respondents still insisted on further details. With regard to the alleged violation of terms of payment, there was no written document to prove that the respondents agreed to pay not in cash but in instalment. In sale of real property, payment of instalment must be in requisite of a note under the statute of frauds.

First Philippine International Bank And Mercurio Rivera v. Court Of Appeals, Carlos Ejercito G.R. No. 115849. January 24, 1996 FACTS: Producers Bank (now called First Philippine International Bank), which has been under conservatorship since 1984, is the owner of 6 parcels of land. The Bank had an agreement with Demetrio Demetria and Jose Janolo for the two to purchase the parcels of land for a purchase  price of P5.5 million pesos. The said agreement was made by Demetria and Janolo with the Bank’s manager, Mercurio Rivera. Later however, the Bank, through its conservator, Leonida Encarnacion, sought the repudiation of the agreement as it alleged that Rivera was not authorized to enter into such an agreement, hence there was no valid contract of sale. Subsequently, Demetria and Janolo sued Producers Bank. The regional trial court ruled in favor of Demetria et al. The Bank filed an appeal with the Court of Appeals. Meanwhile, Henry Co, who holds 80% shares of stocks with the said Bank, filed a motion for intervention with the trial court. The trial court denied the motion since the trial has been concluded already and the case is now pending appeal. Subsequently, Co, assisted by ACCRA law office, filed a separate civil case against Carlos Ejercito as successor-in-interest (assignee) of Demetria and Janolo seeking to have the purported contract of sale be declared unenforceable against the Bank. Ejercito et al argued that the second case constitutes forum shopping. ISSUE: Whether or not there is forum shopping. HELD: Yes. There is forum shopping because there is identity of interest and parties between the first case and the second case. There is identity of interest because both cases sought to have the agreement, which involves the same property, be declared unenforceable as against the Bank. There is identity of parties even though the first case is in the name of the bank as defendant, and the second case is in the name of Henry Co as plaintiff. There is still forum shopping here  because Henry Co essentially represents the bank. Both cases aim to have the bank escape liability from the agreement it entered into with Demetria et al. The Supreme Court also discussed that to combat forum shopping, which originated as a concept in international law, the principle of forum non conveniens was developed. The doctrine of forum non conveniens provides that a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most “convenient” or available forum and the parties are not  precluded from seeking remedies elsewhere.

Maria P. Vda. De Jomoc, Et al. V. The Court of Appeals, Regional Trial Court of Misamis Oriental G.R. No. 92860

August 2, 1991

FACTS: A parcel of land in CDO owned by late Pantaleon Jomoc was fictitiously sold to third persons in which the last transferee are the spouses Mariano and Maria So. Maria Vda de Jomoc filed suit to recover the property and won. While pending appeal, Vda de Jomoc executed executed a Deed of Extrajudicial Settlement and Sale of Land with private respondent for P300,000.00. The document was not yet signed by all the parties nor notarized but in the meantime, Maura So had made partial payments amounting to P49,000.00.

So demanded from the heirs of Jomoc for the execution of final deed of conveyance but the latter did no comply. As such, So filed a civil case and a notice of lis pendens were placed in the title of the land. On the same date, the heirs of Jomoc executed another extra-judicial settlement with absolute sale in favor of intervenors Lim Leong Kang and Lim Pue claiming that they believe that So already backed-out from the agreement. ISSUE: Whether the sale is enforceable. HELD: Since petitioners admit the existence of the extra-judicial settlement, the court finds that there was meeting of the minds between the parties and hence, there is a valid contract that has been  partly executed. The contract of sale of real property even if not complete in form, so long as the essential requisites of consent of the contracting parties, object, and cause of the obligation concur and they were clearly established to be present, is valid and effective as between the parties. Public document is only needed to bind third persons. The payment made by So is a clear proof of her intention to acquire the property and the  petitioners cannot claim about the respondent backing out. The sale to the intervenors Lim cannot be recognized because when they bought the property, there was already a notice of lis  pendens and the sale cannot be said to be in good faith.

Eutiquiano Ciyugan v. Isidoro Santos G.R. No. 10265 March 3, 1916 FACTS: Eutiquiyano Cuyugan filed an action to compel Santos to enforce his right to repurchase in the deed of sale entered into by his late mother, Guillerma, with the defendant. Allegedly, a deed of sale of the subject land was entered into by Guillerma, and Santos with a right to repurchase the land in a stipulated period of time, although this deed of sale is executed as a security for a loan that Guillerma have with Santos. In the deed of sale, it further stated that Guillerma shall continue to have possession of the land, and pay an annual rental of Php 420 per annum which is the amount equal to the loan’s interest. That after sometime, Guillerma paid 1,000 pesos on the loan, which then reduced the amount of the annual rental from 400 to 320 php. When Guillerma died, Santos sent Cuyugan a notice to comply with the 420 php rental, which was agreed upon  prior to the payment of 1000php or he will eject Cuyugan from the land. Cu yugan then offered to  pay the balance that his mother owes Santos by virtue of the right to repurchase agreed upon on the deed of sale, but Santos refused to do so. ISSUE: Whether there is a valid sale. HELD:  No. The Supreme Court held that what should be given force is the intention of the parties, and not the provisions of the instrument on its face. Under the provisions of contracts, for a valid contract to exist, there should be: 1) consent 2) cause 3) consideration.

Thus, in the present case, what is consented by both parties is that this deed of sale is only in consideration for a loan, or by a nature of a contract of mortgage. Moreover, by way of evidence it was established by the court that the parties indeed treat such as a contract of loan rather than a deed of sale when Santos, when given by Guillerma 1000 php in favor of such contract, lowered the payment of the rental from 400-320 php. Since the agreement was the 400 be equal to the interest per annum, when the loan was reduced, the interest as well reduced. This transaction  proved that the treatment and the intention of the parties was indeed as a security for the loan, and not as a deed of sale appearing before the face of the contract.

A. A. Addison, v. Marciana Felix and Balbino Tioco G.R. No. L-12342

August 3, 1918

FACTS: Four (4) parcels of land as describe in a public instrument was subject of a contract of sale  between the petitioner and the defendant. Defendant paid 3000 upon the execution of deeds and  promised to pay 2000 on July 15, 1914 and another 5000 (30) days after the issuance of her certificate of title The contract was stipulated as follows: That the defendant is to pay P10 within ten years for trees in bearing and P5 for trees not in  bearing with the condition that it will not exceed the amount of P85,000. That the purchaser shall deliver 25% of the value of the products "from the moment she takes  possession of them until the Torrens certificate of title be issued in her favor." Further stipulated was that "within one year from the date of the certificate of title in favor of Marciana Felix, this latter may rescind the present contract of purchase and sale, in which case Marciana Felix shall be obliged to return to me, A. A. Addison, the net value of all the products of the four parcels sold, and I shall obliged to return to her, Marciana Felix, all the sums that she may have paid me, together with interest at the rate of 10 per cent per annum." In 1915, Addison filed a suit to compel the defendant to pay him the P2000 with interest as in the accordance of the terms of the contract. However, in a form of special defense, Felix alleges that the petitioner failed to do his obligation of the contract by failing to deliver the parcels of land. That out of the 4 parcels of land only 2 of it where delivered and that 2/3 of the other half were in the possession of a third person. She then filed for a declaration of the rescission of the contract, whereby she prayed that petitioner return her P3000 plus interest and indemnity. ISSUE: Whether delivery of the public instrument is equivalent to the delivery of the subject matter of the sale. HELD:  No. The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is considered to be delivered when it is placed "in the hands and possession of the vendee." (Civ. Code, art. 1462.) It is true that the same article declares that the execution of a public instruments is equivalent to the delivery of the thing which is the object of the contract, but, in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have been made. It is not enough to confer upon the purchaser the ownership and the right of  possession. The thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and

material tenancy of the thing and make use of it himself or through another in his name, because such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields to reality —  the delivery has not been effected. The execution of a public instrument is sufficient for the purposes of the abandonment made by the vendor; but it is not always sufficient to permit of the apprehension of the thing by the  purchaser. It is evident, then, in the case at bar, that the mere execution of the instrument was not a fulfillment of the vendors' obligation to deliver the thing sold, and that from such non-fulfillment arises the purchaser's right to demand, as she has demanded, the rescission of the sale and the return of the price. (Civ. Code, arts. 1506 and 1124.) Inasmuch as the rescission is made by virtue of the provisions of law and not by contractual agreement, it is not the conventional but the legal interest that is demandable.

Felix Danguilan v. Intermediate Appellate Court, Apolonia Melad, assisted by her husband, Jose Tagacay G.R. No. L-69970 November 28, 1988 Two lots were owned by Domingo Melad. The lots are claimed by both Felix Daguilan and Apolonia Melad (and her husband Jose Tagacay). On 29 January 1962, Apolonia Melad filed a complaint against Daguilan in the then CFI Cagayan for recovery of a farm lot and a residential lot which she claimed she had purchased from Domingo Melad in 1943 and were now being unlawfully withheld by Daguilan. In his answer, Daguilan denied the allegation and averred that he was the owner of the said lots of which he had been in open, continuous and adverse  possession, having acquired them from Domingo Melad in 1941 and 1943. The case was dismissed for failure to prosecute but was refiled in 1967. At the trial, Melad presented a deed of sale dated 4 December 1943, purportedly signed by Domingo Melad and duly notarized, which conveyed the said properties to her for the sum of P80.00. She said the amount was earned by her mother as a worker at the Tabacalera factory. She claimed to be the illegitimate daughter of Domingo Melad, with whom she and her mother were living when he died in 1945. She moved out of the farm only when in 1946 Felix Danguilan approached her and asked permission to cultivate the land and to stay therein. She had agreed on condition that he would deliver part of the harvest from the farm to her, which he did from that year to 1958. The deliveries having stopped, she then consulted the municipal judge who advised her to file the complaint against Danguilan. Melad’s mother, her only other witness, corroborated this testimony. Daguilan testified that he was the husband of Isidra Melad, Domingo’s niece, whom Domingo Melad and his wife Juana Malupang had taken into their home as their ward as they had no children of their own. He and his wife lived with the couple in their house on the residential lot and helped Domingo with the cultivation of the farm. Domingo Melad signed in 1941 a private instrument in which he gave Daguilan the farm and in 1943 another private instrument in which he also gave him the residential lot, on the understanding that the latter would take care of the grantor and would bury him upon his death. Danguilan presented three other witnesses to corroborate his statements and to prove that he had been living in the land since his marriage to Isidra and had remained in possession thereof after Domingo Melad’s death in 1945. Two of said witnesses declared that neither the plaintiff nor her mother lived in the land with Domingo Melad. The trial court believed Daguilan and rendered a decision based mainly on the issue of possession. ISSUE: Whether there was delivery in favor of respondent in alleged sale. HELD:

 No. No constructive delivery allowed if property is in actual and adverse possession of a third  person. In our jurisdiction, it is a fundamental and elementary principle that ownership does not  pass be mere stipulation but only by delivery and the execution of a public document does not constitute sufficient delivery where the property involved is in the actual and adverse possession of third persons. Therefore, in our Civil Code it is a fundamental principle in all matters of contracts and a wellknown doctrine of law that "non mudis pactis sed traditione dominia rerum transferuntur". In conformity with said doctrine as established in paragraph 2 of article 609 of said code, that "the ownership and other property rights are acquired and transmitted by law, by gift, by testate or intestate succession, and, in consequence of certain contracts, by tradition". In accordance with such disposition and provisions the delivery of a thing constitutes a necessary and indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a contract. One who is in possession is presumed to be the owner. In this case, there no dispute that it is Danguilan and not Melad who is in actual possession of the litigated properties. And even if the claim of petitioner and respondent are weak, judgment must be in favor of the Danguilan for one who is in possession is presumed to be the owner, and cannot be obliged to show or prove a  better right.

Calixto Pasagui and Fausta Mosar v. Ester T. Villablanca, Zosimo Villablanca, Eustaquia Bocar and Catalina Bocar G.R. No. L-21998

November 10, 1975

FACTS: On 4 February 1963, Calixto Pasagui and Fausta Mosar filed a complaint with the CFI Tacloban City, alleging that on 15 November 1962, for and in consideration of P2,800, they bought from Eustaquia Bocar and Catalina Bocar a parcel of agricultural land with an area of 2.6814 hectares, situated in Hamindangon, Pastrana, Leyte; that the corresponding document of sale was executed, notarized on the same date, and recorded in the Registry of Deeds of Tacloban, Leyte on 16 November 1962; that during the first week of February 1963, spouses Ester T. Villablanca and Zosimo Villablanca, “illegally and without any right,  whatsoever, took possession of the  property harvesting coconuts from the coconut plantation thereon, thus depriving Pasaqui and Mosar of its possession; that despite demands made by Pasagui and Mosar upon the Villablancas “to surrender to them the property and its possession” the latter failed or refused to return said  parcel of land to the former, causing them damage; and that Eustaquia and Catalina Bocar, vendors of the property, are included defendants in the complaint by virtue of the warranty clause contained in the document of sale. ISSUE: Whether public instrument amounts to delivery. HELD: The execution of the deed of absolute sale in a public instrument is equivalent to delivery of the land subject of the sale. This presumptive delivery only holds true when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee. It can be negated by the reality that the vendees actually failed to obtain material  possession of the land subject of the sale. In the present case, Pasagui and Mosar had not acquired physical possession of the land since its purchase on 12 November 1962. As a matter of fact, their purpose in filing the complaint in Civil Case 3285 is precisely to “get the possession of the property.”

Perfecto Dy, Jr. v. Court Of Appeals, Gelac Trading Inc., and Antonio V. Gonzales G.R. No. 92989 July 8, 1991 FACTS: Wilfredo Dy purchased a truck and a farm tractor through LIBRA which was also mortgaged with the latter, as a security to the loan. Petitioner, expresses his desire to purchase his brother’s tractor in a letter to LIBRA which also includes his intention to shoulder its mortgage. LIBRA approved the request. At the time that Wilfredo Dy executed a deed of absolute sale in favor of petitioner, the tractor and truck were in the possession of LIBRA for his failure to pay the amortization. When petitioner finally fulfilled its obligation to pay the tractor, LIBRA would only release the same only if he would also pay for the truck. In order to fulfil LIBRA’s condition, petitioner convinced his sister to pay for the remaining truck, to which she released a check amounting to P22,000. LIBRA however, insisted that the check must be first cleared before it delivers the truck and tractor. Meanwhile, another case penned “GELAC Trading Inc vs. Wilfredo Dy” was pending in Cebu as a case to recover for a sum of money (P12,269.80). By a writ of execution the court in Cebu ordered to seize and levy the tractor which was in the premise of LIBRA, it was sold in a public auction to which it was purchased by GELAC. The latter then sold the tractor to Antonio Gonzales. ISSUE: Whether the ownership of the farm tractor had already passed to petitioner when said tractor was levied on by the sheriff pursuant to an alias writ of execution issued in another case in favor of GELAC. HELD: Yes. The mortgagor who gave the property as security under a chattel mortgage did not part with the ownership over the same. He had the right to sell it although he was under the obligation to secure the written consent of the mortgagee or he lays himself open to criminal prosecution under the provision of Article 319 par. 2 of the Revised Penal Code. And even if no consent was obtained from the mortgagee, the validity of the sale would still not be affected. There is no reason why Wifredo Dy, as the chattel mortgagor cannot sell the subject tractor. There is no dispute that the consent of Libra Finance was obtained in the instant case. Libra allowed the petitioner to purchase the tractor and assume the mortgage debt of his brother. The sale between the brothers was therefore valid and binding as between them and to the mortgagee, as well. Article 1496 of the Civil Code states that the ownership of the thing sold is acquired by the vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to 1501 or in any other manner signifying an agreement that the possession is transferred from the vendor to the vendee. We agree with the petitioner that Articles 1498 and 1499 are applicable in the case at bar. In the instant case, actual delivery of the subject tractor could not be made. However, there was constructive delivery already upon the execution of the public instrument pursuant to Article 1498 and upon the consent or agreement of the parties when the thing sold cannot be immediately transferred to the possession of the vendee (Article 1499).

The payment of the check was actually intended to extinguish the mortgage obligation so that the tractor could be released to the petitioner. It was never intended nor could it be considered as  payment of the purchase price because the relationship between Libra and the petitioner is not one of sale but still a mortgage. The clearing or encashment of the check which produced the effect of payment determined the full payment of the money obligation and the release of the chattel mortgage. It was not determinative of the consummation of the sale. The transaction  between the brothers is distinct and apart from the transaction between Libra and the petitioner. The contention, therefore, that the consummation of the sale depended upon the encashment of the check is untenable.