Sales Prelim Cases PDF

VS SALES – Cases 1-29 (Prelims) 1. Riosa v. Tabaco Facts: petitioner filed a complaint before the RTC for an annulment or declaration of nullity of deed of absolute sale and transfer certificate of title, reconveyance and damage against respondent. Petitioner alleged that he was the owner and in actual possession of a 52-square meter commercial lot situated in bar, quinale, tabaco city albay. He obtained a loan from sia ko pio 3 times. Sia ko pio requested him to give him a photocopy of the deed of cession and quitclaim of the said commercial lot. Sia ko pio presented to him a document and without reading the document, he affixed his signature thereon. Sept. 2001 he received a letter from la suerte stating that his property was already registered in its name. Petitioner claimed that by means of fraud, misrepresentation and deceit employed by sia ko pio, he was made to sign the document which he thought was a receipt and undertaking to pay the loan only to find out that it was a document of sale. La suerte answered that it was the actual and lawful owner of the commerce property after purchasing it from the petitioner. RTC ruling: in favor of the petitioner
 CA: reversed Issue: whether there was a perfected and valid contract of sale for the subject property between the petitoner and La Suerte Held: Agrees with the RTC. The elements of a contract of sale are: a] consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price; b] determinate subject matter; and c] price certain in money or its equivalent. In this case, there was no clear and convincing evidence that the petitioner definitely sold the subject property to La Suerte, nor was there evidence that La Suerte authorized its chief executive officer, Sia Ko Pio, to negotiate and conclude a purchase of the property. Petitioner’s narration in open court is clear that he did not intend to transfer ownership of his property.

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2. Degaños vs people Facts:
 - on April 27 1987 until July 20 1987 the petitioner received from spouses atty Jose bordador and Lydia bordador gold and pieces of jewelries under express obligation to sell the same on commission and remit the proceeds or return the unsold gold and pieces of jewelry but the accused inspite of repeated demands for compliance, misappropriated to his own use the proceeds. 
 - a separate civil action for recovery of sum of money was filed and estafa
 - the usual business practice with the accused was for the accused to recieve the jewelry and gold items for and in behalf of his sister Aida luz and for the accused to sign the "kasunduan at katibayan" receipts. 
 - Aida asked the private complainants why they gave so many pieces of jewelry and gold bars to the accused without her permission and told them that she has no

participation in the transactions covered by the receipts (Aida is the original seller of gold for the complainants) 
 - accused categorically admitted that he is the only one who was indebted to the complainants and that he already made partial payments
 - Rtc and ca found accused guilty Issue:
 Whether the agreement between the private complainant and the accused was one of sale on credit Held:
 - transaction was an agency not a sale in credit
 - accused contends that his agreements with the complainants relative to the items of jewelry and gold as embodies in the kasunduan at katibayan was a sale in credit not a consignment to sell on commission basis
 - based on the express terms of they kasunduan at katibayan, accused received and accepted the items under the obligation to sell them in behalf of the complainants and he would be compensated with the overprice as his commission. 
 - the transaction was a consignment under the obligation to account for the proceeds of sale or to return the unsold items
 - he was the agent of the complainants in the sale to others of the items listed in the kasunduan
 - according to 1458, one of the contracting parties in a contract of sale obligates himself to transfer the ownership of and to deliver a determinate thing while the other party obligates himself to pay a price certain in money or its equivalent. There was no sale on credit to him because the ownership of the items did not pass to him.
 - petition denied

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3. Manuel Uy vs Valbueco Inc. Facts: Petitioners are the owners of parcels of lands. Two Conditional Deeds of Sale were executed by petitioner in favor of respondent with the following conditions:
 -the price of the land
 -installment of payment
 -a 30-day grace period to pay for the installments, and if such period passes without the corresponding payment, the contract will be rescinded
 -that the vendor shall free and clear the lands of all adverse occupants or squatters within 100 days upon execution of the conditional deed of sale
 -that the vendor shall see to it that the lands be released from mortgage before May 20, 1974
 -that an Absolute Deed of Sale will be issued once full payment is made
 -that, in case of dispute, the court venue will be in Manila.
 Respondent was able to pay the partial payment and the first installment and petitioner was likewise able to comply with his side of the obligation. However, respondent still suspended payment and petitioner consequently sent a letter for recission. Issue: Whether or not a Deed of Absolute Sale must be executed in favor of respondent

Held: The Supreme Court held that since the contracts entered into by the parties are conditional; thus the ownership of the property will not be transferred to the vendee until full payment of the purchase price. The SC agreed with the CA's application of RA 6552, otherwise known as the Realty Installment Buyer Act which recognizes the right of the seller to cancel the contract upon failure to pay the installment but disagrees with the appelate court in noting that the recission cannot take place since there was failure on the petitioner's part to send a letter intending the same. The SC holds that there was a valid notice of the notarial recission although sent to a different address, since the same was attached to the petitioner's Reply to the first complaint filed.

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4. PILIPINO TELEPHONE CORPORATION vs. RADIOMARINE NETWORK (SMARTNET) PHILIPPINES, INC.G.R. No. 160322 August 24, 2011

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Facts: Petitioner expressed its willingness to buy from respondent 300000units of various brands of cellular phones and accessories. On the following day, Piltel agreed to sell smartnet a 3500sq.m lot for 560M. Smartnet agreed to pay piltel a down payment of 180M w/ the balance of 380M to be partly set off against the obligations that Piltel was to incur from its projected purchase of cellular phones and accessories from Smartnet. Smartnet agreed to this.
 The parties also agreed on a rescission and forfeiture clause which provided that, if Smartnet fails to pay the full price of the land within the stipulated period and within five days after receipt of a notice of delinquency, it would automatically forfeit to Piltel 10% of the P180 million down payment or P18 million and the contract shall be without force and effect. 
 Smartnet failed to pay the 380M balance of the purchase price on or about the date it fell due. Piltel returned 50Mto Smartnet, a portion of the 180M down payment that it received. Smartnet later requested Piltel for the return of the remaining 130M but the latter failed to do so.
 Smartnet filed a complaint against Piltel for rescission of their contract to sell involving said Property or its partial specific performance before the Regional Trial Court (RTC). Smartnet alleged, among other things, that it withheld payment of the balance of the purchase price of the subject property because Piltel reneged on its commitment to purchase from Smartnet 300,000 units of cellular phones and accessories.
 Piltel claimed that the agreement to purchase cellular phones and accessories was not part of its contract with Smartnet for the sale of the Property and that Piltel committed to buy equipment from Smartnet only on a best effort basis. For this reason, Piltel pointed out, Smartnet did not have the power to rescind the contract to sell the Valgoson Property and, hence, cannot invoke that contract’s rescission and forfeiture clause.
 RTC and CA ruled in favor of respondent. It ordered Piltel to return the downpayment. ISSUE: WON the contract to sell is automatically rescinded based on the rescission/ forfeiture clause. RULING: Smartnet’s allegations respecting fraud and breach of contract referred to what appears to be Piltel’s non-binding promise to buy cellular phones and accessories from Smartnet. These are matters independent of the parties’ agreement concerning

Piltel’s sale of the Valgoson Property to Smartnet. The contract to sell of such property was not legally linked or made dependent on the aborted cellular phone deal between the parties.
 All that matters is that since Smartnet failed to pay the balance of the purchase price, automatic rescission set in and this placed Piltel under an obligation to return the down payment it received, less the portion that it forfeited due to Smartnet’s default. Consequently, it is but proper for Piltel to fully abide by such obligation. Piltel cannot avoid rescission since it in fact partially abided by rescission’s consequences when it returned to Smartnet P50 million portion of the down payment it received.
 By returning part of the down payment, it is clear that Piltel recognized that the contract to sell the Property had reached the point of automatic rescission. Piltel is, therefore, in estoppel to deny rescission based on a claim that it had not yet sent a statement of account or a notice of delinquency to Smartnet regarding the latter’s default.
 Piltel argues that Smartnet cannot, as a defaulting buyer, rescind the contract to sell between them by the simple act of refusing to pay. But, Smartnet’s nonpayment of the full price of the property was not an act of rescission. It was but an event that rendered the contract to sell without force and effect. In a contract to sell, the prospective seller binds himself to part with his property only upon fulfillment of the condition agreed, in this case, the payment in full of the purchase price. If this condition is not fulfilled, the seller is then released from his obligation to sell.
 Tthe payment of the purchase price in a contract to sell is a positive suspensive condition, the failure of which is not a breach but a situation that results in the cancellation of the contract. Strictly speaking, therefore, there can be no rescission or resolution of an obligation that is still non-existent due to the non-happening of the suspensive condition. Smartnet obviously cannot demand title to the Valgoson Property because it did not pay the purchase price in full. For its part, Piltel also cannot insist on full payment since Smartnet’s failure to pay resulted in the cancellation of the contract to sell.

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5. Delfin Tan v. Erlind C. Benolirao Facts: 
 Respondent Benolirao and petitioner Tan, are co- owners of a certain property in Tagaytay. They executed a conditional deed of sale overwhich the property will be sold to Tan under the condition that a downpayment shall be given initially, which he did by paying a check in the amount of P200,000.00, and that failure to pay for the remaining balance within the fixed period shall forfeit the down-payment.
 Consequently, Benolirao died intestate. In the settlement of his estate, the title of subject property was annotated. Thereafter, the surviving spouse of the respondent demanded payment of the remaining balance from Tan. However, petitioner desist on the ground that the former cannot give him a “clean” title because the said title is subject to encumberance. Hence, the former filed an action for rescission and recovery of the down-payment. Issue: 
 Whether or not the petitioner can file for an action for rescission and recovery of down-

payment on the ground that the title of the property is subject to encumberance upon its annotation. Held:
 Rescission does not apply in contracts to sell. There is only termination in such contracts.
 The Court ruled that the contract to sell was terminated when the vendors could no longer legally compel Tan to pay the balance of the purchase price as a result of the legal encumbrance which attached to the title of the property. Since Tan’s refusal to pay was due to the supervening event of a legal encumbrance on the property and not through his own fault or negligence, it finds and so hold that the forfeiture of Tan’s down payment was clearly unwarranted.

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6. Heirs of Arturo Reyes vs Elena Socorro-Beltran Facts:
 Elena Socco-Beltran filed an application for the purchase of Lot No. 6-B before the Department of Agrarian Reform (DAR), alleging that it was adjudicated in her favor in the extra-judicial settlement of Constancia Socco’s estate. The heirs of the late Arturo Reyes, filed their protest to respondent’s petition before the DAR on the ground that the subject property was sold by respondent’s brother, Miguel R. Socco, in favor of their father, Arturo Reyes, as evidenced by a Contract to Sell. Petitioners averred that they took physical possession of the subject property and had been uninterrupted in their possession of the said property since then.
 DAR Regional Director dismissed respondent’s petition for issuance of title over the subject property on the ground that respondent was not an actual tiller and had abandoned the said property for 40 years; hence, she had already renounced her right to recover the same. Respondent appealed to the Office of the DAR Secretary. The Office ruled in favor of the respondent approving the application to purchase Lot [No.] 6B of Elena Socco-Beltran. Petitioners sought remedy from the Office of the President by appealing the Decision of the DAR Secretary. The Office of the President rendered affirmed the DAR Secretary’s Decision.
 Consequently, petitioners filed an appeal before the Court of Appeals. Pending the resolution of this case, the DAR already issued a Certificate of Land Ownership Award (CLOA) over the subject property in favor of the respondent’s niece and representative, Myrna Socco-Beltran. CA held that petitioners could not have been actual occupants of the subject property, since actual occupancy requires the positive act of occupying and tilling the land, not just the introduction of an unfinished skeletal structure thereon. The Contract to Sell on which petitioners based their claim over the subject property was executed by Miguel Socco, who was not the owner of the said property and, therefore, had no right to transfer the same. Accordingly, the Court of Appeals affirmed respondent’s right over the subject property, which was derived form the original allocatees thereof. Issue:
 Whether or not petitioners have a better right to the subject property over the respondent.

Held:
 Petitioner’s claim over the subject property is anchored on the Contract to Sell executed between Miguel Socco and Arturo Reyes. Petitioners additionally allege that they and their predecessor-in-interest, Arturo Reyes, have been in possession of the subject lot for an uninterrupted period of more than 40 years. The Court is unconvinced. Petitioners cannot derive title to the subject property by virtue of the Contract to Sell. It was unmistakably stated in the Contract and made clear to both parties thereto that the vendor, Miguel R. Socco, was not yet the owner of the subject property and was merely expecting to inherit the same as his share as a co-heir of Constancia’s estate. It was also declared in the Contract itself that Miguel R. Socco’s conveyance of the subject to the buyer, Arturo Reyes, was a conditional sale. It is, therefore, apparent that the sale of the subject property in favor of Arturo Reyes was conditioned upon the event that Miguel Socco would actually inherit and become the owner of the said property. Absent such occurrence, Miguel R. Socco never acquired ownership of the subject property which he could validly transfer to Arturo Reyes. Under Article 1459 of the Civil Code on contracts of sale, “The thing must be licit and the vendor must have a right to transfer ownership thereof at the time it is delivered.” The law specifically requires that the vendor must have ownership of the property at the time it is delivered. Petitioners claim that the property was constructively delivered to them by virtue of the Contract to Sell. However, as already pointed out by this Court, it was explicit in the Contract itself that, at the time it was executed, Miguel R. Socco was not yet the owner of the property and was only expecting to inherit it. Hence, there was no valid sale from which ownership of the subject property could have transferred from Miguel Socco to Arturo Reyes. Without acquiring ownership of the subject property, Arturo Reyes also could not have conveyed the same to his heirs, herein petitioners.

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7.) Rogelia Daclag vs. Elino Macahilig FACTS:
 Spouses Candido and Gregoria Macahilig were the owners of seven parcels of land, all located in Numancia, Aklan. Maxima the daughter of the spouses, entered into a Deed of Extra-judicial Partition with the heirs of her deceased brothers (Mario and Eusebio Macahilig), over the seven parcels of land. One of the properties partitioned in the deed was a parcel of irrigated Riceland located at Poblacion, Aklan declared in the name of Maxima and denominated as “Parcel One”. This Parcel One was divided between the heirs of Mario Macahilig whom were given the one half southern portion and to the heirs of Eusebio Macahilig who got the one half northern portion. 
 Maxima sold Parcel One to spouses Adelino and Rogelia Daclag as evidenced by a Deed of Sale. The heirs of spouses Macahilig filed a complaint for recovery of possession and ownership against Maxima and Rogelia Daclag. The heirs of spouses Macahilig alleged that they were the lawful owners and previous possessors of the northern portion of Parcel One by virtue of the Deed of Extra-judicial Partition. Petitioners contended that Rogelia had been the registered owner of the property since 1984, and that they purchased the subject land in good faith. RTC ruled in favor of the

respondent heirs and ordered the reconveyance in favor of the heirs since the deed of sale executed by Maxima in favor of Rogelia Daclag is null and void, thus the heirs are the true and lawful owner of the northern portion of Parcel One. CA dismissed the appeal and affirmed the RTC decision. ISSUE:
 Whether or not it was a valid contract of sale that was executed by Maxima in favor of Rogelia Daclag. HELD:
 NO.
 Maxima’s possession of the subject land was by reason of her request to her daughter to farm the land so that she could have a share in the produce, to which the heirs acceded out of pity. Maxima was not the owner of the land she sold to petitioners and had no right to dispose the land and thus, she had no right to convey the same. Under Article 1458 of the Civil Code, the principal obligation of the seller is to transfer ownership of the property sold and that the thing must be licit and the vendor must have the right to transfer ownership at the time it is delivered. 
 Maxima’s execution of the deed of sale selling Parcel One was not valid and did not transfer ownership of the land to petitioners, as Maxima had no title or interest to transfer. Maxima’s possession of the land was not in the concept of an owner. Moreover, their possession of a certificate of title alone does not necessarily make them the true owners of the property.

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8. heirs of amparo del rosario vs. aurora santos FACTS:
 Amparo Del Rosario entered into a contract with Atty. Andres Santos and his wifeAurora Santos whereby the latter sold to the former a 20,000 sq. m. of land which is to besegregated from Lot 1. Said lot forms part of the several lots belonging to a certain Teofilo
 Custodio, of which lots, Attorney Santos, by agreement with the latter, as his attorney’s fees,owns ½ interests thereof. Parties agreed that spouses Andres shall thereafter execute a
 Deed of Confirmation of Sale in favor of Del Rosario as soon as the title has been releasedand the subdivision plan of said Lot 1 has been approved by the Land RegistrationCommissioner. Due to the failure of the spouses Andres to execute the deed after thefulfilment of the condition, Del Rosario claims malicious breach of a Deed of Sale. Defendantthereafter filed a motion to dismiss setting up the defenses of lack of jurisdiction of thecourt over the subject of the action lack of cause of action as well as the defense of prescription. They further alleged that the deed of sale was only an accommodationgraciously extended, out of close friendship between the defendants and the plaintiff, hence,tantamount to waiver, abandonment or otherwise extinguishment of the demand set forthin the complaint. Finally, defendants alleged that the claim on which the action or suit isfounded is unenforceable under the statute of frauds and that the cause or object of thecontract did not exist at the time of the transaction. The lower court resolved to deny themotion to dismiss. After actions by respective parties, the

lower court ordered thedefendants to execute and convey to plaintiff the 200,000 sq. m. of land to be taken eitherfrom Lot 4 or from Lot 5-
 A of Custodio’s lots, which defendants own ½ interest thereof.
 Aggrieved by the aforesaid decision, the defendants filed an appeal with the Court of Appeals which certified the records of the case to the Supreme Court for final determination.


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ISSUE: WON THE SALE IS VALID AS TO THE CAUSE OR OBJECT OF THE CONTRACT. HELD:
 Yes. The Supreme Court held that the execution of the Deed of Sale is validnotwithstanding the lack of any title to the lot by appellants at the time of execution of theDeed of Sale in favor of appellee as there can be a sale of an expected thing in accordance
 with Article 1461 of the NCC: “Article 1461: Things having a potential existence may be the
 object of the contract of sale. The efficacy of the sale of a mere hope of expectancy isdeemed subject to the condition that the thing will come into existence. The sale of a vainhope or expectancy
 is void.” The case at bar is not a case of a vain hope or expectancy
 which is void under the law. The expectant right came into existence or materialized for theappellants actually derived titles from Lot 1which subsequently became the object of subdivision.

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9. Javier v. Court of Appeals Facts: private respondent leonardo tiro is a holder of an ordinary timber license covering 2,535 hectares in the town of medina, masamis oriental. He executed a deed of assignment in favor of the petitioners on feb.15, 1966 stating that the petitioners will pay him 120,000 after the assigning, transferring and conveyance of rights over his stocks in timberwealth corporation. At the time of the execution of the said deed of assignment, tiro had a pending application for an additional forest concession covering an area of 2,000 hectares southwest of and ajoining the area of the concession subject of the deed of assignment. Tiro and petitioners entered into another agreement on feb.28, 1966 stating that tiro agrees and binds himself to transfer, cede and convey whatever rights he may acquire to timberwealth corporation over a forest concession which is pending, and that after the transfer of rights, the petitioners will pay him 30,000. The petitioners failed to pay the balance due under the 2 deeds of assignment. Tiro filed an action against them while the petitioners invoke the nullity of contract for the reason that tiro failed to comply with his contractual obligations. Lower court dismissed tiro's complaint. The court of appeals reversed the decision of the lower court. Issue: whether the two deeds of assignment were null and void. Held: The petitioners contend that the agreement was null and void since the assignment conveyed to them was the shares of stocks of tiro in the timberwealth corporation. Since the said corporation never came into existence there was no stock

that was transferred to them. The court look into the intention of the contracting parties and meaning of the agreement. They did not agree beacause the true cause or consideration of said deed was the transfer of forest concession. Also, both parties at the time of execution of deeds knew the non-existent of the corporation and that the petitioners after the execution of deed assumed the operation of the logging concessions and entered into forest consolidation agreement with other holders of forest concessions. The court agreed to the petitioners regarding the nullity of the 2nd deed because the petitioners did not acquire rights over the additional area of forest concession for the reason that tiro's application was not appoved. The court said that if the contract is subject to a suspensive condition, its birth can take place only if and when the event which constitues the condition happens or is fulfilled. If the suspensive condition does not take place, the parties would stand as if the conditional obligation had never existed.

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10. Danguilan vs iac Facts: 
 - on jan 29 1962 resp filed a complaint against pet in cfi Cagayan for recovery of a farm lot and residential lot which she claimed she purchased from domingo melad in 1943 and now unlawfully withheld by the defendant
 - pet denied the allegation and said he was the owner of the said lots of which he had been in possession having acquired them from Domingo melad in 1941 and 1943
 - resp presented a deed of sale dated dec 4 1943 purportedly signed by Domingo melad and duly notarized which conveyed the properties to her for the sum of 80. She claimed to be the illegitimate daughter of Domingo with whom she was living when he died in 1945. She moved out if the farm only when in 1946 pet approached her and asked permission to cultivate the land and to stay therein. She had agreed on the condition that he would deliver part of the harvest from the farm to her
 - pet testified that he was the husband of Isidra melad, Domingo's niece, whom Domingo had taken into their home as their ward. He helped Domingo with the cultivation of the farm. Domingo melad signed in 1941 a private Instrument in which he gave the pet the farm and in 1943 the residential lot in another private document on the understanding that the latter would take care of the grantor would bury him upon his death. 
 - Tc ruled in favor of pet and held that the pet was more believable and that the resp's evidence was unconvincing. It held that the resp's own declaration that she moved out of the property in 1946 and left it in the possession of the defendant was contradictory to her claim of ownership
 - iac held that the instruments presented by pet was null and void because they are donations of real property and should be in a public instrument Issue:
 Donation or contract of sale? Held: 
 - from the language of the two instruments, Domingo did intend to donate the properties to pet. However the conveyances were onerous donations as the properties were given

to the pet in exchange for his obligation to take care of the donee for the rest of his life and provide for his burial hence it was not covered by art 749 requiring donations if real properties to be effected through a public instrument
 - the private resp argues that there was no equivalence bet the value of the lands donated and the services for which thy were being exchanged. That the transactions should be considered as gratuitous and should be in a public doc 
 - both Tc and iac affirmed that pet did take care of Domingo and later on arranged his burial and that he died when he was almost 100yo. Which would woman that the pet farmed the land by himself and so provided for the donee. We may assume that there was a fair exchange bet the donor and donee that made the transaction an onerous donation 
 - the deed of sale of the resp was allegedly executed when the resp was only three years old and the consideration was supposedly paid by her mother 
 - even assuming the validity of the deed of sale the record shows that the resp did not take possession of the properties and waited until 1962 to file this action for recovery. 
 - ownership does not pass by mere stipulation but only delivery
 - code imposes upon the vendor the obligation to deliver the thing sold. The thing considered to be delivered when it is placed in the hands and possession of the vendee
 - there is no dispute that it is the pet and not the resp who is in actual possession of the properties 
 - petition granted

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11. Spouses Bernardo Buenaventura vs. Court of Appeals Facts: Petitoners seek to nullify certain deeds of sale of real property by respondents issued in favor of their co-defendant children on the grounds that there was no actual valid consideration for the deed of sale, and if there was, the value of the property is three-fold times more valuable than that appearing in the deed of sale, that the same does not reflect the true intentions of the parties, and that the sale was the result of a deliberate conspiracy to deprive them of their legitimes as compulsary heirs. Issue: Whether or not the deed of sales are void for lack of consideration
 Whether or not the deeds of sale are void for gross inadequacy of price Held: The SC held that a contract of sale is not a real contract, but a consensual contract. As such, the contract of sale becomes a binding and valid contract upon the meeting of the minds as to the price. So as long as there is a meeting of the minds as to the price, the contract of sale is valid, despite the manner of payment or even a breach on the manner of payment. However, if there is no meeting of the minds as to the price because it is simulated, it is void according to Art. 1471 of the Civil Code. The SC holds that it is not the act of payment of price that determines the validity of a contract of sale; there is a difference between failure to pay consideration and lack of consideration. The first results in the right to demand the cancellation or fulfillment of the contract while the second prevents the existence of a valid contract. On the second issue, the law provides certain instances in Articles 1355 and 1470 where the contract may be invalidated which the petitioners have failed to prove.

! 12. Felix Ting Ho jr. vs. Vicente Teng Gui
 FACTS: The instant case traces its origin to an action for partition filed by petitioners against their brother, respondent Vicente Teng Gui. The controversy revolves around a parcel of land, and the improvements established thereon, which, according to petitioners, should form part of the estate of their deceased father, Felix Ting Ho, and should be partitioned equally among each of the siblings.
 Petitioners alleged that their father Felix Ting Ho died intestate and left upon his death an estate. According to petitioners, the said lot and properties were titled and tax declared under trust in the name of respondent Vicente Teng Gui for the benefit of the deceased Felix Ting Ho who, being a Chinese citizen, was then disqualified to own public lands in the Philippines; and that upon the death of Felix Ting Ho, the respondent took possession of the same for his own exclusive use and benefit to their exclusion and prejudice.
 In his answer, the respondent countered that Felix Ting Ho sold the commercial and residential buildings to his sister-in-law, Victoria Cabasal, and the bakery to his brotherin-law, Gregorio Fontela. He alleged that he acquired said properties from the respective buyers and has since then been in possession of subject properties in the concept of an owner; and that an Original Certificate of Title covering the subject lot was issued to him pursuant to a miscellaneous sales patent granted to him. The father of the parties Felix Ting Ho executed an Affidavit of Transfer, Relinquishment and Renouncement of Rights and Interest including Improvements on Land in favor of his eldest son the defendant Vicente Teng Gui. On the basis of the said document the defendant who then chose Filipino citizenship filed a miscellaneous sales application with the Bureau of Lands. Thereafter, an orginal certificate of title was issued to respondent. 
 The RTC found that Felix Ting Ho, being a Chinese citizen and the father of the petitioners and respondent, resorted to a series of simulated transactions in order to preserve the right to the lot and the properties thereon in the hands of the family. However, it ruled that pursuant to Article 1471 of the New Civil Code it can be assumed that the intention of Felix Ting Ho in such transaction was to give and donate the improvements to respondent. ISSUE: WON the deceased donated the improvements to respondent thus, not entitling petitioners a portion of their father’s properties. RULING: The Court agrees with the finding of the trial court, as affirmed by the appellate court, that the series of transactions resorted to by the deceased were simulated in order to preserve the properties in the hands of the family. The records show that during all the time that the properties were allegedly sold to the spouses Victoria Cabasal and Gregorio Fontela and the subsequent sale of the same to respondent in, the petitioners and respondent, along with their parents, remained in possession and continued to live in said properties. 
 Art. 1471. If the price is simulated, the sale is void, but the act may be shown to have been in reality a donation, or some other act or contract.
 The Court holds that the reliance of the trial court on the provisions of Article 1471 of the Civil Code to conclude that the simulated sales were a valid donation to the respondent

is misplaced because its finding was based on a mere assumption when the law requires positive proof.
 The respondent was unable to show, and the records are bereft of any evidence, that the simulated sales of the properties were intended by the deceased to be a donation to him. Thus, the Court holds that the two-storey residential house, two-storey residential building and sari-sari store form part of the estate of the late spouses Felix Ting Ho and Leonila Cabasal, entitling the petitioners to a four-fifths (4/5) share thereof.

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13) IDA C. LABAGALA vs NICOLASA T. SANTIAGO Facts:
 Sisters of Jose Santiago, who are respondents in the case, sued Jose for the recovery of 2/3 share of the property alleging that he registered it in his name alone. The trial court ruled in their favour and so Register of Deeds included them in the certificate of title.
 When Jose died , they alleged that Jose’s share belong to them by operation of law since they are only the legal heirs and that the sale made by Jose to Lagabala was a forgery because Jose never put his thumb mark on documents he executed but always signed his name in full and also because Lagabala could not have afforded to buy the property since she is unemployed and have no means of livelihood.
 Lagabala on the other hand claimed that her true name is Ida Santiago, a child of Jose and argued that the purported sale was in fact a donation.
 Trial court ruled that the following evidence shows petitioner to be the daughter of Jose (1) the decisions in the two ejectment cases filed by respondents which stated that petitioner is Jose's daughter, and (2) Jose's income tax return which listed petitioner as his daughter.
 Court of Appeals reversed the decision stating that birth certificate of Ida Labagala presented by respondents showed that Ida was born of different parents, not Jose and his wife. It also took into account the statement made by Jose in Civil Case that he did not have any child. Issue: whether or not petitioner is entitled to Jose's 1/3 portion of the property he coowned with respondents, through succession, sale, or donation. Ruling:
 Clearly, there is no valid sale in this case. Jose did not have the right to transfer ownership of the entire property to petitioner since 2/3 thereof belonged to his sisters. Petitioner could not have given her consent to the contract, being a minor at the time. Consent of the contracting parties is among the essential requisites of a contract, including one of sale, absent which there can be no valid contract. Moreover, petitioner admittedly did not pay any centavo for the property, which makes the sale void. Article 1471 of the Civil Code provides:
 Art. 1471. If the price is simulated, the sale is void, but the act may be shown to have been in reality a donation, or some other act or contract.
 Neither may the purported deed of sale be a valid deed of donation. Again, as explained by the Court of Appeals:
 ...Even assuming that the deed is genuine, it cannot be a valid donation. It lacks the

acceptance of the donee required by Art. 725 of the Civil Code. Being a minor in 1979, the acceptance of the donation should have been made by her father, Leon Labagala or [her] mother Cornelia Cabrigas or her legal representative pursuant to Art. 741 of the same Code. No one of those mentioned in the law - in fact no one at all - accepted the "donation" for Ida.
 In sum, we find no reversible error attributable to the assailed decision of the Court of Appeals, hence it must be upheld.
 Petition Denied

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14. Hyatt Elevators and Escalators Corp. vs Cathedral Heights Building Complex Assoc., Inc. Facts:
 Petitioner Hyatt Elevators and Escalators Corporation entered into an "Agreement to Service Elevators" (Service Agreement) with respondent Cathedral Heights Building Complex Association, Inc., where petitioner was contracted to maintain four passenger elevators installed in respondent's building. Under the Service Agreement, the duties and obligations of petitioner included monthly inspection, adjustment and lubrication of machinery, motors, control parts and accessory equipments, including switches and electrical wirings. Section D (2) of the Service Agreement provides that respondent shall pay for the additional charges incurred in connection with the repair and supply of parts.
 Petitioner claims that during the period of April 1997 to July 1998 it had incurred expenses amounting to Php 1,161,933.47 in the maintenance and repair of the four elevators as itemized in a statement of account. Petitioner demanded from respondent the payment of the aforesaid amount allegedly through a series of demand letters. Respondent, however, refused to pay the amount.
 Petitioner claims that during the period of April 1997 to July 1998, it had used parts in the maintenance and repair of the four elevators in the total amount of P1,161,933.47 as itemized in a statement of account and supported by sales invoices, delivery receipts, trouble call reports and maintenance and checking reports. Respondent, however, refuses to pay the said amount arguing that petitioner had not complied with the Standard Operating Procedure (SOP) following a breakdown of an elevator. Issue:
 WHETHER OR NOT THERE IS A PERFECTED CONTRACT OF SALE BETWEEN PETITIONER AND RESPONDENT WITH REGARDS TO THE SPARE PARTS DELIVERED AND INSTALLED BY PETITIONER ON THE FOUR ELEVATORS OF RESPONDENT AT ITS HOSPITAL UNDER THE AGREEMENT TO SERVICE ELEVATORS AS TO RENDER RESPONDENT LIABLE FOR THEIR PRICES? Held:
 By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. The absence of any of the essential elements will negate the existence of a perfected contract of sale. In the case at bar, the CA ruled that there was no perfected contract of sale between petitioner and respondent, to wit:

Aside from the absence of consent, there was no perfected contract of sale because there was no meeting of minds upon the price. As the law provides, the fixing of the price can never be left to the discretion of one of the contracting parties. In this case, the absence of agreement as to the price is evidenced by the lack of purchase orders issued by CHBCAI where the quantity, quality and price of the spare parts needed for the repair of the elevators are stated. In these purchase orders, it would show that the quotation of the cost of the spare parts earlier informed by Hyatt is acceptable to CHBCAI. However, as revealed by the records, it was only Hyatt who determined the price, without the acceptance or conformity of CHBCAI. From the moment the determination of the price is left to the judgment of one of the contracting parties, it cannot be said that there has been an arrangement on the price since it is not possible for the other contracting party to agree on something of which he does not know beforehand. There would have been a perfected contract of sale had respondent accepted the price dictated by petitioner even if such assent was given after the services were rendered. There is, however, no proof of such acceptance on the part of respondent.

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15.) Boston Bank of the Philippines (formerly Bank of Commerce) vs. Perla Manalo and Carlos Manalo. FACTS:
 Xavierville Estate, Inc. (XEI) sold to the Overseas Bank of Manila (OBM) some residential lots in Xavierville subdivision. Later on, XEI continued selling the residential lots in the subdivision as agent of OBM. Carlos Manalo, Jr. proposed to XEI, through its President Emerito Ramos, to purchase two lots in the Xavierville subdivision and offered as part of the down payment the P34,887.66 that Ramos owed him when he installed the water pump at Ramos’ residence. Ramos agreed and confirmed the reservation of the lots. In the letter he also attached the price of the lots at P348,060 with a 20% down payment of the purchase price amounting to P69,612.00 (less the P34,887.66 owing from Ramos), payable as soon as XEI resumes its selling operations. The corresponding Contract of Conditional Sale would then be signed on or before the same date. After such agreement, the spouses constructed a house on the property. The spouses were notified of XEI’s resumption of selling operations. However, they did not pay the balance of the down payment because XEI failed to prepare a contract of conditional sale and transmit the same to them. XEI also billed them for unpaid interests which they also refused to pay.
 XEI turned over its selling operations to OBM and subsequently the Commercial Bank of Manila (CBM) acquired the Xavierville Estate from OBM. CBM requested Perla Manalo to stop any on-going construction on the property since CBM was the owner of the lot and she had no permission for such construction. Perla informed them that her husband had a contract with OBM, through XEI, to purchase the property and promised to send CBM the documents. However, she failed to do so. Thus, CBM filed a complaint for unlawful detainer against the spouses. But later on, CBM moved to withdraw its complaint because of the issues raised. In the meantime, CBM was renamed the Boston Bank of the Philippines. Then, the spouses filed a complaint for specific performance and damages against the bank before the RTC. The spouses alleged that

they had always been ready and willing to pay the installments on the lots sold to them but no contract was made. The spouses further alleged that upon their partial payment of the down payment, they were entitled to the execution and delivery of a Deed of Absolute Sale covering the subject lots. 
 RTC ordered the petitioner to execute a Deed of Absolute Sale in favor of the spouses upon the payment of the spouses of the balance of the purchase price. It ruled that under the August 22,1972 letter agreement of XEI and the spouses, the parties had a "complete contract to sell" over the lots, and that they had already partially consummated the same. CA sustained the ruling of the RTC, but declared that the balance of the purchase price of the property was payable in fixed amounts on a monthly basis for 120 months, based on the deeds of conditional sale executed by XEI in favor of other lot buyers. Boston Bank filed a MR of the decision alleging that there was no perfected contract to sell the two lots, as there was no agreement between XEI and the respondents on the manner of payment as well as the other terms and conditions of the sale. Boston Bank alleges that there is no factual basis for the CA ruling that the terms and conditions relating to the payment of the balance of the purchase price of the property (as agreed upon by XEI and other lot buyers in the same subdivision) were also applicable to the contract entered into between the petitioner and the respondents. CA denied the MR. ISSUE:
 Whether or not there was a perfected contract to sell the property HELD: NO. 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 down payment. 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 down payment or portion thereof, such payment cannot be considered as sufficient proof of the perfection of any purchase and sale between the parties. 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. 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. Based on the records, including Ramos’ February 8, 1972 and August 22,1972 letters to respondents and find that said parties confined themselves to agreeing on the price of the property (P348,060.00), the 20% down payment of the purchase price (P69,612.00), and credited respondents for the P34,887.00 owing from Ramos as part of the 20% down payment. Based on these two letters, 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 contract of conditional sale. As 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.

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16 Juan san Andres vs Vicente Rodriguez Juan San Andres was the registered owner of Lot in Liboton, Naga City. On September 28, 1964, he sold a portion thereof, consisting of 345 square meters, to respondent Vicente S. Rodriguez for P2,415.00. The sale is evidenced by a Deed of Sale. Upon the death of Juan San Andres on May 5, 1965, Ramon San Andres was appointed judicial administrator of the decedent’s estate. Ramon San Andres engaged the services of a geodetic engineer, Jose Peñero, to prepare a consolidated plan) of the estate. From the result of the survey, it was found that respondent had enlarged the area which he purchased from the late Juan San Andres by 509 square meters. Accordingly, the judicial administrator sent a letter, dated July 27, 1987, to respondent demanding that the latter vacate the portion allegedly encroached by him. However, respondent refused to do so, claiming he had purchased the same from the late Juan San Andres. Thereafter, on November 24, 1987, the judicial administrator brought an action, in behalf of the estate of Juan San Andres, for recovery of possession of the 509-square meter lot. respondent alleged that apart from the 345-square meter lot which had been sold to him by Juan San Andres on September 28, 1964, the latter likewise sold to him the following day the remaining portion of the lot consisting of 509 square meters, with both parties treating the two lots as one whole parcel with a total area of 854 square meters. Furthermore, he alleged that payment for such would be affected in 5 years from the execution of the formal deed of sale after a survey is conducted. also, under the consent of Juan he took possession of the same and introduced improvements thereon as early as 1964.
 Respondent deposited in court the balance of the purchase price amounting to 7035.00 for the said portion. ISSUE:
 WON there is a valid sale Held: There is no dispute that respondent purchased a portion of consisting of 345 square meters. This portion is located in the middle of Lot 1914-B-2, which has a total area of 854 square meters, and is clearly what was referred to in the receipt as the "previously paid lot." Since the lot subsequently sold to respondent is said to adjoin the "previously paid lot" on three sides thereof, the subject lot is capable of being determined without the need of any new contract. The fact that the exact area of these adjoining residential lots is subject to the result of a survey does not detract from the fact that they are determinate or determinable. As the Court of Appeals explained: Concomitantly, the object of the sale is certain and determinate. Under Article 1460 of the New Civil Code, a thing sold is determinate if at the time the contract is entered into, the thing is capable of being determinate without necessity of a new or further agreement between the parties. Here, this definition finds realization. Thus, all of the essential elements of a contract of sale are present, i.e., that there was a meeting of the minds between the parties, by virtue of which the late Juan San Andres

undertook to transfer ownership of and to deliver a determinate thing for a price certain in money. As Art. 1475 of the Civil Code provides: Xlaw The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. . . . That the contract of sale is perfected was confirmed by the former administrator of the estates, Ramon San Andres, who wrote a letter to respondent on March 30, 1966 asking for P300.00 as partial payment for the subject lot. As the Court of Appeals observed: Without any doubt, the receipt profoundly speaks of a meeting of the mind between San Andres and Rodriguez for the sale of the property adjoining the 345 square meter portion previously sold to Rodriguez on its three (3) sides excepting the frontage. The price is certain, which is P15.00 per square meter. Evidently, this is a perfected contract of sale on a deferred payment of the purchase price. All the pre-requisite elements for a valid purchase transaction are present. Sale does not require any formal document for its existence and validity. And delivery of possession of land sold is a consummation of the sale (Galar vs. Husain, 20 SCRA 186 [1967]). A private deed of sale is a valid contract between the parties (Carbonell v. CA, 69 SCRA 99 [1976]). In the same vein, after the late Juan R. San Andres received the P500.00 downpayment on March 30, 1966, Ramon R. San Andres wrote a letter to Rodriguez and received from Rodriguez the amount of P100.00 (although P300.00 was being requested) deductible from the purchase price of the subject portion. Enrique del Castillo, Ramon’s authorized agent, correspondingly signed the receipt for the P100.00. Surely, this is explicitly a veritable proof of the sale over the remaining portion of Lot 1914-B-2 and a confirmation by Ramon San Andres of the existence thereof.

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17. Regina Dizon v. CA *Facts: On May 23, 1974, private respondent Overland Express Lines, Inc. entered into a Contract of Lease with Option to Buy with petitioners involving a parcel of land situated at corner MacArthur Highway and South "H" Street, Diliman, Quezon City. The term of the lease was for 1 year. During this period, private respondent was granted an option to purchase for the amount of P3,000.00 per square meter. Thereafter, the lease shall be on a per month basis with a monthly rental of P3,000.00. For failure of private respondent to pay the increased rental of P8,000.00 per month effective June 1976, petitioners filed an action for ejectment before the City Court (MTC) of Quezon City. The City Court rendered judgment ordering private respondent to vacate the leased premises. Private respondent filed before the RTC of Quezon City an action for Specific Performance and Fixing of Period for Obligation. It sought to compel the execution of a deed of sale pursuant to the option to purchase and the receipt of the partial payment, and to fix the period to pay the balance. Private respondent filed another case, a complaint for Annulment of and Relief from Judgment with injunction and damages. The trial court dismissed both complaints. The CA concluded that there was a perfected contract of sale between the parties on the leased premises and that pursuant to the

option to buy agreement, private respondent had acquired the rights of a vendee in a contract of sale. *Issue: Whether or not there was a perfected contract of sale between the parties. *Held: There was no perfected contract of sale between petitioners and private respondent. Private respondent argued that it delivered the check of P300,000.00 to Alice A. Dizon who acted as agent of petitioners pursuant to the supposed authority given by petitioner Fidela Dizon. It insisted that the payment of P300,000.00 as partial payment of the purchase price constituted a valid exercise of the option to buy. Under Article 1475 of the New Civil Code, "the contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts." Thus, the elements of a contract of sale are consent, object, and price in money or its equivalent. It bears stressing that the absence of any of these essential elements negates the existence of a perfected contract of sale. Sale is a consensual contract and he who alleges it must show its existence by competent proof. In an attempt to resurrect the lapsed option, private respondent gave P300,000.00 to petitioners thru Alice A. Dizon on the erroneous presumption that the said amount tendered would constitute a perfected contract of sale. There was no valid consent by the petitioners on the supposed sale entered into by Alice A. Dizon, as petitioners' alleged agent, and private respondent. As provided in Article 1868 of the New Civil Code, there was no showing that petitioners neither consented to the act of Alice A. Dizon nor authorized her to act on their behalf with regard to her transaction with private respondent.

! 18.Leon Co v. CA Facts: On September 3, 1976 private respondent Benito Ngo purchased from Nazario Gonzales a parcel of land known as Lots nos 7-A and 7-B. Antonio Ong, claimed to have purchased Lots nos 7-A and 7-B from Gonzales through his attorney-in-fact, filed an action before the CFI for annulment of sale and conveyance and damages. A Filipino-Chinese Chambers of Commerce of Naga City and of Iriga City held a joint meeting was held to amicably settle the controversy. The Chambers jointly issued a resolution to the effect that Ong To should give up his occupancy for a compensation of P40,000.00; that Buenaventura and Melecio Ngo, brothers of Benito Ngo, should each give Ong To P15,000.00, while petitioner Leon Co, brother-in-law of Benito Ngo, would pay P10,000.00 to Ong To who would vacate Lot No. 7-B and deliver it to Benito Ngo.

On April 23, 1979, Ong and Ngo executed an amicable settlement. Lot no 7-A would belong to Ong and Lot no. 7-B to Benito Ngo. However, before the same could be approved, a complaint-in-intervention was filed by petitioner Leon Co alleging that in the joint conference between the Filipino-Chinese Chamber of Commerce of Naga City and the Filipino-Chinese Chamber of Commerce of Iriga City it was agreed that Lot No. 7-B would go to him after paying respondent Benito Ngo P49,500.00 for the lot. Respondent Ngo vehemently denied having entered into such agreement, much less having received any amount therefor. RTC-Ngo Reconveyance lot no. 7-B to Leon plus damages CA-petitioners motion for reconsideration, CA ordered the dismissal of the complaint-inintervention of petitioner. Petitioner presented as sole documentary basis of the alleged sale of the property the Minutes of the special meeting of the Filipino- Chinese Chambers of Commerce held on 11 March 1979. However, the said document does not speaks of any agreement bet. Petitioner and private respondent. In the absence of any other document showing the alleged sale, petitioner tried to prove his claim through testimonial evidence but it did not prosper. Petitioner claimed to have made payments for the said lot. However, respondent Ngo crossed out the checks which destroyed their efficacy. Respondent Ngo contends that the payment by petitioner in his favor was not for the purchase price of the property but for another purpose, i.e., for the liquidation of their 1978 accounts. WON there was the meeting of the minds No. Under Art. 1475 of the Code, "the contract of sale is perfected at the moment there is meeting of the minds upon the thing which is the object of the contract and upon the price. From that moment the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts." A definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale. Petitioner’s testimonial and documentary evidence did not establish any definitive agreement or meeting of the minds between the parties concerning the price or term of payment. The contention of petitioner that the agreement of sale between him and private respondent was forged during the arbitration meeting of 11 March 1979 is contradicted by the Minutes of such meeting. Based thereon, there was nothing whatsoever that transpired to indicate that the sale occurred between the parties. The admission of petitioner himself that when he issued the checks amounting to P19,500.00 in favor of respondent Benito Ngo, supposedly as partial payment of the purchase price, the latter destroyed the checks, thereby negating the existence of the meeting of the minds of the parties on the sale. The non-encashment of the checks by respondent Ngo is indicative more of his nonacceptance of the offer of petitioner to buy the property. There was also no showing that petitioner complied with the terms and conditions of the alleged sale, including the payment of the alleged complete purchase price of P49,500.00 for the property.

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19) Coronel vs ca 


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Facts: Petitioners Romulo Coronel executed a document entitled "Receipt of Down Payment" in favor of respondent Ramona Patricia Alcaraz. The document stated that petitioners received from respondent P50,000 in partial consideration of the house and lot of petitioners. The conditions of the sale indicate that the sown payment shall be effected upon execution of said document and that the Coronels will effect the transfer in their names the title of the property registered in the name of their deceased father upon respondent's down payment and upon transfer of title in their names, a deed of absolute sale will be issued in favor of respondent and the latter will pay the remaining balance of the price. Respondent's mother eventually paid the down payment and the title to the land was subsequently transferred in their names. However, the petitioners sold the property to a Catalina Mabanag, cancelling the contract with respondents but depositing the down payment paid by the latter in the bank in trust for Ramona. Respondent thereafter filed a complaint for specific performance against petitioners and caused the annotation of a lis pendens at the back of the title of the disputed land. The trial court ruled in favor of the respondents and the CA likewise affirmed the lower court's decision. Issue: WON the document was a contract of sale or a contract to sell Held: The Supreme Court ruled that what is clearly established by the plain language of the subject document is that when the said “Receipt of Down Payment” was prepared and signed by petitioners Romulo A. Coronel, et. al., the parties had agreed to a conditional contract of sale, consummation of which is subject only to the successful transfer of the certificate of title from the name of petitioners’ father, Constancio P. Coronel, to their names.
 The Court significantly notes that this suspensive condition was, in fact, fulfilled on February 6, 1985. Thus, on said date, the conditional contract of sale between petitioners and private respondent Ramona P. Alcaraz became obligatory, the only act required for the consummation thereof being the delivery of the property by means of the execution of the deed of absolute sale in a public instrument, which petitioners unequivocally committed themselves to do as evidenced by the “Receipt of Down Payment.” Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the case at bench. Thus, Art. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. Art. 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition.

Since the condition contemplated by the parties which is the issuance of a certificate of title in petitioner’s names was fulfilled on February 6, 1985, the respective obligations of the parties under the contract of sale became mutually demandable, that is, petitioners, as sellers, were obliged to present the transfer certificate of title already in their names to private respondent Ramona P. Alcaraz, the buyer, and to immediately execute the deed of absolute sale, while the buyer on her part, was obliged to forthwith pay the balance of the purchase price amounting to P1,190,000.00. It is also significant to note that in the first paragraph in page 9 of their petition, petitioners conclusively admitted that: 3. The petitioners-sellers Coronel bound themselves “to effect the transfer in our names from our deceased father Constancio P. Coronel, the transfer certificate of title immediately upon receipt of the downpayment above-stated". The sale was still subject to this suspensive condition. Petitioners themselves recognized that they entered into a contract of sale subject to a suspensive condition. Only, they contend, continuing in the same paragraph, that: . . . Had petitioners-sellers not complied with this condition of first transferring the title to the property under their names, there could be no perfected contract of sale. Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz, perfected on February 6, 1985, prior to that between petitioners and Catalina B. Mabanag on February 18, 1985, was correctly upheld by both the courts below.

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20. Limketkai sons milling inc vs. CA, BPI and NBS 
 FACTS: Philippine Remnants Co., Inc. constituted BPI as its trustee to manage, administer, and sell its real estate property. One such piece of property placed under trust was the disputed lot. Revilla jr, a real estate broker, was given formal authority of BPI to sell the lot at P1,000 sq.m. The arrangement was concurred by PH Remnants. 
 The broker contacted Alfonso Lim of petitioner company who agreed to buy the lot. Petitioner’s officials and broker were given permission by the asst.VP of BPI to enter and view the property they were buying. The petitioner agreed to purchase the said lot. The officers of petitioner company confirmed the sale. After negotiations, it was later agreed that the lot would be sold at P1000 sq.m to be paid in cash. Since the authority to sell was on a first come, first served and non-exclusive basis, it may be mentioned at this juncture that there is no dispute over petitioner's being the first comer and the buyer to be first served. 
 Notwithstanding the final agreement to pay P1,000.00 per square meter on a cash basis, Alfonso Lim asked if it was possible to pay on terms. The bank officials stated that there was no harm in trying to ask for payment on terms because in previous transactions, the same had been allowed. It was the understanding, however, that should the term payment be disapproved, then the price shall be paid in cash.
 It was Albano(VP of BPI) who dictated the terms under which the installment payment may be approved, and acting thereon, Lim, on the same date,wrote BPI through Albano embodying the payment initially of 10% and the remaining 90% within a period of 90

days.
 Two or three days later, petitioner learned that its offer to pay on terms had been frozen. Lim went to BPI on July 18, 1988 and tendered the full payment of P33,056,000.00 to Albano. The payment was refused because Albano stated that the authority to sell that particular piece of property in Pasig had been withdrawn from his unit. 
 An action for specific performance with damages was thereupon filed by petitioner against BPI. In the course of the trial, BPI informed the trial court that it had sold the property under litigation to NBS.
 Respondents contend that there was no perfection of the contract of sale. The arguments of respondents center on two propositions: that the VP had no authority to bind BPI on this particular transaction and the subsequent attempts of petitioner to pay under terms instead of full payment in cash constitutes a counter-offer which negates the existence of a perfected contract.
 ISSUE:WON the contract of sale is perfected. RULING: The negotiation or preparation stage started with the authority given by Philippine Remnants to BPI to sell the lot, followed by (a) the authority given by BPI and confirmed by Philippine Remnants to broker Revilla to sell the property, (b) the offer to sell to Limketkai, (c) the inspection of the property and finally (d) the negotiations with Aromin and Albano (BPI VPs) at the BPI offices. 
 The perfection of the contract took place when Aromin and Albano, acting for BPI, agreed to sell and Alfonso Lim with Albino Limketkai, acting for petitioner Limketkai, agreed to buy the disputed lot at P1,000.00 per square meter. Aside from this there was the earlier agreement between petitioner and the authorized broker. There was a concurrence of offer and acceptance, on the object, and on the cause thereof. In jurisprudence the court states that “The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price. From that moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts.”
 The phases that a contract goes through may be summarized as follows: (a.) preparation, conception or generation, which is the period of negotiation and bargaining, ending at the moment of agreement of the parties; (b.) perfection or birth of the contract, which is the moment when the parties come to agree on the terms of the contract; and (c.) consummation or death, which is the fulfillment or performance of the terms agreed upon in the contract.

! 21) LAGRIMAS A. BOY vs COURT OF APPEALS !

Facts:
 Spouses Ramos, owners of the land and house, filed and ejectment suit in MCTC against Lagrimas who sold the same to them, when he refused to vacate the subject premises.
 Lagrimas borrowed P15,000 from the spouses Ramos, who asked for the subject property as collateral and then caused her to sign a Deed of Absolute Sale purporting to show that she sold the property in question to them for the sum of P31,000. Erlinda Ramos and Lagrimas executed an agreement (Kasunduan) acknowledging that the

subject parcel of land, together with the upper portion of the house thereon, had been sold by Lagrimas to the spouses Ramos for P31,000. It was stipulated that possession of the property would be transferred to the spouses Ramos only upon full payment of the purchase price.
 Lagrimas’ defense that the spouses Ramos still had to pay the amount of P16,000 to complete the full consideration of P31,000 but since Lagrimas borrowed P26,200 from private respondents, court did not give credence to the Kasunduan.
 Metc ruled in favor of Spouses ramos but RTC reversed and held that the Kasunduan was binding between the parties.
 CA reversed Issue: whether the Court of Appeals correctly ruled that private respondents have a right of material possession over the disputed property. Ruling:
 It has been established that petitioner sold the subject property to private respondents for the price of P31,000, 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 P31,000. 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.
 A person who occupies the land of another at the latter’s tolerance or permission, without any contract between them, is bound by an implied promise that he will vacate the same upon demand, failing which a summary action for ejectment is the proper remedy against him.
 Decision of CA is Affirmed.

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22. Sps Emma and Ramon Reyes vs Dominador Salvador, et al Facts:
 • The controversy is about a parcel of unregistered land located in Tungtong, Las Piñas designated as Lot 1 of Plan Psu-205035 with an area of 19,545 sq m which previously form part of a bigger parcel of agriculturas land first declared in the name of Domingo Lozada in the year 1906 under a tax dec.
 • Domingo was married twice. He had two children with his first wife. After the death of his first wife, he married Graciana and they had 2 children, Nicomedes and Pablo.


• When Domingo and Graciana died, Nicomedes and the heirs of Pablo entered into Extrajudicial Settlement of the Estate of their parents. Accdg to the settlement, the entire parcel of land declared in the name of Domingo was divided into 2. Lot 1 was adjudicated to Nicomedes, while Lot 2 was given to the heirs of Pablo.
 • Nicomedes executed a Deed of Conditional Sale over subj property (Lot 1) in favor of Emma Ver Reyes, which provides that the subj property is a paraphernal property of the vendor, the same having been inherited by him from his deceased mother, Graciana, but was declared for taxation in the name of his deceased father, Domingo; that the vendor will pay in 3 installments: (a) 25% of total price on the date of the signing of the contract, b) 25% upon issuance of the title for the land & c) 50% within 1yr fr the issuance of the said title); that if the vender fails to pay the vendor the b and c, w/in the period stipulated and after grace period of 1 mo for each payment, the contract shall automatically be null and void and the vendor shall have the full and exclusive right to sell, transfer and convey absolutely the property to any person, but the vendor shall return to the vendee all the amt paid to him by reason of this contract w/o interest upon the sale of the said property to another person;
 • Deed of conditional sale was registered in the Registry of Property for Unregistered Lands in August 1965.
 • Emma was only able to pay the first installment
 • Nicomedes entered into another contract involving the subj property w/ Rosario D. Bondoc. Designated as Agreement of Purchase and Sale with terms and conditions that the buyer shall pay P15,000 upon the execution of the agreement, P37,705 upon the delivery by the seller to the buyer of the title and the execution of the final deed of sale, and the final balance of P123,200 1yr from the date of execution of the final deed of sale all without interest; that if the buyer fails to pay any of the amt, the contract shall, by mere fact of non-payment expire itself & shall be considered automatically cancelled, or of no value and effect and the seller shall return to the buyer the sum of money he had received from the buyer w/o interest; and that the seller warrants the useful and peaceful possession and occupation of the lot by the buyer.
 • The said agreement was register w/ the Registry of Deeds on March 1969.
 • only the first installment was paid by Rosario.
 • Nicomedes executed a third contract, a Deed of Absolute Sale of Unregistered Land involving A PORTION of the subj property measuring 2k sq m in favor of Maria Cristobal. Said deed was registered only on Feb 1973, 7 mos after Nicomedes' death (June 1972)
 • Nicomedes's heirs (children fr 1st wife and 2nd wife) and surviving 2nd spouse executed a Deed of Extrajudicial Settlement of the Estate of the Late Nicomedes Lozada with Ratification of a Certain Deed of Absolute Sale of Unregistered Land. The heir ratified the dale in favor of Maria but they clarified that the actual area sold was 2,287 sq m. The heirs claimed equal pro indiviso shares in the remaining portion of the property (17,258 sq m). They collectively sold their shares in favor of Dulos Realty & Dev't Corp via Deed of Absolute Sale of an Unregistered Land. Said deed was not registered. • After executing a Deed of Conditional Sale in favor of Emma, Nicomedes filed an application for registration of the subject lot the CFI of Pasig. The grandchildren of Domingo by his former marriage opposed the application for registration. Emma and her

husband filed their intervention.
 • Five years later, Domingo's grandchildren from his first marriage, Dominador, et al. filed an application of title to the subj prop
 • Rosario, assisted by her husband Mariano Bondoc, invoking the Agreement of Purchase and Sale executed in her favor by Nicomedes on 14 June 1968, filed a Complaint before the CFI of Rizal for the declaration in her favor of ownership over the subject property, with an application for a temporary restraining order or preliminary injunction, against Trinidad Lozada (one of Domingo’s heirs from his first marriage who applied for registration of the subject property) and two other persons, who allegedly trespassed into the subject property.
 • The case filed by Dominadot et al. and Rosario were consolidated and transferred to and decided by the RTC of Pasay
 • RTC - declared that Maria and Dulos Realty have the registrable title, confirming title and decreeing the title over the subj property (19,545 sq.m.), 2, 287 sq. m. to Maria and the remaining portion to Dulos. The subject property constituted Domingo’s share in the conjugal properties of his second marriage to Graciana San Jose and, therefore, properly pertained to Nicomedes as one of his sons in said marriage. Being Domingo’s heirs from his first marriage, Dominador, et al., were not entitled to the subject property. 
 • The lower court also found that neither Emma nor Rosario acquired a better title to the subject property as against Maria and Dulos Realty. No final deed of sale over the subject property was executed in favor of Emma or Rosario, while the sales of portions of the same property in favor of Maria and of the rest to Dulos Realty were fully consummated as evidenced by the absolute deeds of sale 
 • Dominador, et al., Emma and her spouse Ramon Reyes (Ramon), and Rosario separately appealed to the Court of Appeals.
 • CA - Rendered confirming title to Rosario. Under the Deed of Conditional Sale [to Emma], there was no provision that possession would be, in case of rescission, returned to the vendor, thereby implying that possession remained with him (vendor). Such being the case, it appears to be a contract to sell. Whereas under the Agreement of Purchase and Sale [with Rosario], the provision that in case of rescission, any improvements introduced by the vendee would become the vendor’s implies that possession was transferred to the vendee and, therefore, it appears to be a contract of sale.
 • Given the fact that the contract in Emma’s favor is a mere contract to sell, as against Rosario’s contract which, as demonstrated above is one of sale and, in any event, independently of Emma’s contract to sell, she has no claim of a better right unlike Rosario who has, not to mention the fact that she (Rosario) registered her contract earlier than Emma’s, Rosario must prevail. The lot having been previously sold to Rosario, there was no lot or portion thereof to be later sold to Maria and to Dulos Realty. Issue: 
 In consideration of all the contracts executed by Nicomedes and/or his heirs involving the subject property, which party acquired valid and registrable title to the same. 
 Held:


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. Even in the absence of an express stipulation to such effect, the intention of the parties to execute a contract to sell may be implied from the provisions of the contract. While Article 1478 of the Civil Code recognizes the right of the parties to agree that the ownership of the thing shall not pass to the purchaser until he has fully paid the price therefore, the same statutory provision does not require that such be expressly stipulated in the contract. The Deed of Conditional Sale executed by Nicomedes in favor of Emma is unmistakably a mere contract to sell. A simple reading of the terms of the Deed of Conditional Sale readily discloses that it contains stipulations characteristic of a contract to sell. The Deed in question clearly states that Nicomedes will issue a final deed of absolute sale only upon the full payment of the purchase price for the subject property. The terms of the Deeds reveal the evident intention of the parties to reserve ownership over the subject property to Nicomedes pending payment by Emma of the full purchase price for the same. This Court also finds that, contrary to the ruling of the Court of Appeals, the Agreement of Purchase and Sale executed by Nicomedes in favor of Rosario is likewise a mere contract to sell. The Agreement itself categorically states that Nicomedes only undertakes to sell the subject property to Rosario upon the payment of the stipulated purchase price and that an absolute deed of sale is yet to be executed between the parties. The Agreement additionally grants Nicomedes the right to automatically cancel the same in the event of nonpayment by Rosario of any of the specified sums therein and any improvement introduced in the subject property shall thereby accrue to Nicomedes. Only the rights to possess the property and construct improvements thereon have been evidently given to Rosario. The provisions of the Agreement do not in any way indicate that the ownership of the subject property has likewise been transferred to Rosario. The Court concludes that the Deed of Conditional Sale in favor of Emma and the Agreement of Purchase and Sale in favor of Rosario were mere contracts to sell. As both contracts remained unperfected by reason of the non-compliance with conditions thereof by all of the parties thereto, Nicomedes can still validly convey the subject property to another buyer. This fact, however, is without prejudice to the rights of Emma and Rosario to seek relief by way of damages against the estate and heirs of Nicomedes to the extent that the latter were benefited by the sale to succeeding buyers. Thus, the Deeds of Absolute Sale in favor of Maria and Dulos Realty were the only conveyances of the subject property in this case that can be the source of a valid and registrable title. Both contracts were designated as absolute sales and the provisions thereof leave no doubt that the same were true contracts of sale. Maria and Dulos Realty acquired their title to the property in separate deeds of absolute sale executed in their favor by Nicomedes and his heirs. Upon the execution of these deeds, the

ownership of the subject property was vested unto the said buyers instantly, unlike the contracts to sell executed in favor of Emma and Rosario. Consequently, the rights to the subject property of Maria and Dulos Realty, acquired through the contracts of sale in their favor, are undeniably better or superior to those of Emma or Rosario, and can thus be confirmed by registration. In sum, this Court recognizes the valid and registrable rights of Maria and Dulos Realty to the subject property, but without prejudice to the rights of Emma and Rosario to seek damages against the estate and heirs of Nicomedes.

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23 RoBerto Tuazon vs Lourdes del Rosario Lourdes was the owner of a parcel of land, containing more or less an area of 1,211 square meters located along Tandang Sora Street, Barangay Old Balara, Quezon City and previously covered by Transfer Certificate of Title (TCT) No. RT-561184 issued by the Registry of Deeds of Quezon City. On June 24, 1994, petitioner Roberto and Lourdes executed a Contract of Lease5 over the abovementioned parcel of land for a period of three years. The lease commenced in March 1994 and ended in February 1997. During the effectivity of the lease, Lourdes sent a letter to roberto where she offered to sell to the latter subject parcel of land. She pegged the price at P37,541,000.00 and gave him two years from January 2, 1995 to decide on the said offer. On June 19, 1997, or more than four months after the expiration of the Contract of Lease, Lourdes sold subject parcel of land to her only child, Catalina Suarez-De Leon, her son-in-law Wilfredo De Leon, and her two grandsons, Miguel Luis S. De Leon and Rommel S. De Leon (the De Leons), for a total consideration of only P2,750,000.00 as evidenced by a Deed of Absolute Sale7 executed by the parties. TCT No. 1779868 was then issued by the Registry of Deeds of Quezon City in the name of the De Leons. The new owners through their attorney-in-fact, Guillerma S. Silva, notified Roberto to vacate the premises. Roberto refused hence, the De Leons filed a complaint for Unlawful Detainer before the Metropolitan Trial Court (MeTC) of Quezon City against him. On August 30, 2000, the MeTC rendered a Decision9 ordering Roberto to vacate the property for non-payment of rentals and expiration of the contract. ISSUE: WON Lourdes violated his right to buy subject property under the principle of "right of first refusal" by not giving him "notice" and the opportunity to buy the property under the same terms and conditions or specifically based on the much lower price paid by the De Leons. HELD:
 NO This case involves an option contract and not a contract of a right of first refusal "an option to sell," or "a promise to buy or to sell," as used in said article, to be valid must be "supported by a consideration distinct from the price." This is clearly inferred

from the context of said article that a unilateral promise to buy or to sell, even if accepted, is only binding if supported by consideration. In other words, "an accepted unilateral promise can only have a binding effect if supported by a consideration, which means that the option can still be withdrawn, even if accepted, if the same is not supported by any consideration. Hence, it is not disputed that the option is without consideration. It can therefore be withdrawn notwithstanding the acceptance made of it by appellee. In this case, it is undisputed that Roberto did not accept the terms stated in the letter of Lourdes as he negotiated for a much lower price. Roberto’s act of negotiating for a much lower price was a counter-offer and is therefore not an acceptance of the offer of Lourdes. The counter-offer of Roberto for a much lower price was not accepted by Lourdes. There is therefore no contract that was perfected between them with regard to the sale of subject property. Roberto, thus, does not have any right to demand that the property be sold to him at the price for which it was sold to the De Leons neither does he have the right to demand that said sale to the De Leons be annulled. Moreover, even if the offer of Lourdes was accepted by Roberto, still the former is not bound thereby because of the absence of a consideration distinct and separate from the price. The argument of Roberto that the separate consideration was the liberality on the part of Lourdes cannot stand. A perusal of the letter-offer of Lourdes would show that what drove her to offer the property to Roberto was her immediate need for funds as she was already very old. Offering the property to Roberto was not an act of liberality on the part of Lourdes but was a simple matter of convenience and practicality as he was the one most likely to buy the property at that time as he was then leasing the same.

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24. Spouses Amparo and Onnie Serano v. Godofredo Caguiat *Facts: Spouses Onnie and Amparo Herrera are the registered owners of a lot located in Las Piñas, Metro Manila. On March 1990, Godofredo Caguiat offered to buy the lot. Petitioners agreed to sell it at P1,500.00 per square meter. Respondent then gave petitioners P100,000.00 as partial payment. In turn, petitioners gave respondent the corresponding receipt stating that respondent promised to pay the balance of the purchase price on or before March 23, 1990. On March 28, 1990, respondent wrote petitioners informing them of his readiness to pay the balance of the contract price and requesting them to prepare the final deed of sale. On April 4, petitioners sent a letter to the respondent stating that petitioner Amparo Herrera is leaving for abroad on or before April 15 and that they are canceling the transaction and informed him also that he can recover the earnest money of P100,000.00 anytime. On April 6, petitioners wrote respondent stating that they delivered to Philippine National Bank Manager’s Check No. 790537 dated April 6, 1990 in the amount of P100,000.00 payable to him. Respondent filed with the RTC of Makati City a complaint against them for specific performance and

damages. The trial court rendered its Decision finding there was a perfected contract of sale between the parties and ordering petitioners to execute a final deed of sale in favor of respondent. The CA affirmed the trial court’s decision. *Issue: Whether o not the document entitled “Receipt for Partial Payment” signed by both parties earlier mentioned is a contract to sell or a contract of sale. *Held: It is a contract to sell. The “Receipt for Partial Payment” shows that the true agreement between the parties is a contract to sell. First, ownership over the property was retained by petitioners and was not to pass to respondent until full payment of the purchase price. Thus, petitioners need not push through with the sale should respondent fail to remit the balance of the purchase price before the deadline on March 23, 1990. In effect, petitioners have the right to rescind unilaterally the contract the moment respondent fails to pay within the fixed period. Second, the agreement between the parties was not embodied in a deed of sale. The absence of a formal deed of conveyance is a strong indication that the parties did not intend immediate transfer of ownership, but only a transfer after full payment of the purchase price. Third, petitioners retained possession of the certificate of title of the lot. This is an additional indication that the agreement did not transfer to respondent, either by actual or constructive delivery, ownership of the property. It is true that Article 1482 of the Civil Code provides that “Whenever earnest money is given in a contract of sale, it shall be considered as part of the price and proof of the perfection of the contract.” However, this article speaks of earnest money given in a contract of sale. In this case, the earnest money was given in a contract to sell. The earnest money forms part of the consideration only if the sale is consummated upon full payment of the purchase price. Now, since the earnest money was given in a contract to sell, Article 1482, which speaks of a contract of sale, does not apply. Also, the suspensive condition (payment of the balance by respondent) did not take place. Clearly, respondent cannot compel petitioners to transfer ownership of the property to him. 25. San mig prop Phil inc vs spouses Alfredo and grace huang Facts:
 - pet owned two parcels of land which was offered for sale for P52,140,000. Offer was made to atty Helena dauz who was acting for resp as undisclosed principals. In a letter, atty dauz signified her clients' interest in purchasing the properties, with the terms of: the sum of P1M would represent as earnest-deposit money, that they would be given the exclusive option to purchase the property within 30 days from acceptance of offer and that in the event that parties do not come to an agreement on this transaction, the said amount of P1M shall be refunded to spouses in full upon demand
 - sobrecarey, pet's vp and operations manager for corporate real estate indicated his

conformity to the offer by affixing the signature to the letter and accepted the "earnestdeposit" of P1M.
 - pet wrote atty dauz informing her that because the parties failed to agree on the terms and conditions if the sale despite the extension granted by pet, the latter was returning the "earnest-deposit" 
 - spouses wrote pet demanding the execution within five days of a deed of sale covering the properties. Resp attempted to return the "earnest-deposit" but pet refused on the ground that resp's option to purchase had already expired. 
 - spouses filed a complaint for specific performance against pet before the Rtc pasig. Pet filed a motion to dismiss alleging that the "exclusive option" of resp lacked a consideration separate and distinct from the purchase price and was thus unenforceable and that there was no cause of action because there was no meeting of the minds bet the parties thus no perfected contact of sale.
 - Tc granted pet's motion and dismissed the action. Ca reversed and held that all the requisites of a contract of sale had been complied with as the offer in connection with which the earnest money in the amount of P1m was tendered by resp, had already been accepted by pet. Art 1482 whenever earnest money is given in a contact of sale, it shall be considered as part of the price and as proof of the perfection of the contract. The fact the parties had not agreed on the mode of payment did not affect the contact as such is not an essential element for its validity. Issue: whether or not there was a perfected contract of sale between the parties Held: - pet contends that the letter of resp which pet accepted merely resulted in an option contact and that it was unenforceable for lack of distinct consideration. - court holds that resp did not give the P1M as "earnest money". The amount was merely a deposit of what would eventually become the earnest money or down payment should a contract if sale be made by them. The amount was only a guarantee that resps would not back out of the sale - P1M could not have been given as earnest money because at the time when pet accepted the terms of resp's offer, their contact had not yet been perfected. This is evident from the conditions attached by resp to their letter 1) that they be given the exclusive option to our chase the property within 30 days from the acceptance of the offer 2) that during the option period, the parties would negotiate the terms and conditions of the purchase 3) pet would secure the necessary approvals while resps would handle the documentation - acceptance of this condition did not give rise to a perfected sale but merely to an option or an accepted unilateral promise on the part of reps to buy the properties within 30 days from the date of the acceptance of the offer. Such option giving resp the exclusive right to buy the prop within the period agreed upon is separate and distinct from the contract of sale which the parties may enter. All that resp had was just the option to buy the prop which privilege was not exercised by them bec there was a failure to agree on the terms of payment. No contact of sale may this be enforced by resp - even the option secured by resp from pet was defective. Under the second par of art 1479 an accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promise only if the promise is supported by a distinct consideration.

Consideration in an option contact may be anything of value, unlike in sale where it must be the price certain in money or its equivalent. There is no showing here of any consideration for the option. Lacking any proof of such consideration, the option is unenforceable. - proof of the absence of a perfected sale is the second condition That during the option period, the parties would negotiate the terms and conditions of the purchase. The parties never got past the negotiation stage. While the parties already agreed on the real properties which were the objects of the sale and on the purchase price, the fact remains that they failed to arrive at mutually acceptable terms of payment despite the 45-day extension given by pet - it is not the giving of the earnest money but the prof of the concurrence of all essential elements of the contact of sale which establishes the existence of a perfected sale - ca reversed

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26) Glodenrod Inc. vs. CA Facts: Private respondent Pio Barretto and Sons, Inc. (BARRETTO & SONS) owned forty-three (43) parcels of registered land which were mortgaged to UCPB. Said properties are on the verge of foreclosure due to the unpaid obligations of the said company with the said bank. Petitioner Goldenrod Inc. offered to but the said properties of respondent with such intention made known through a letter which likewise contained the earnest money of P1M. The remaining balance of the purchase price was to be delivered upon the execution of the necessary documents for the reconsolidation of the lots. Among the stipulations in their agreement, petitioner agreed to pay for the obligation of respondent with UCPB worth P24.5M. However, it was not able to pay UCPB and therefore asked for an extension which the bank granted but upon the second time it asked for another extension, the bank demurred, as well as in the third time that the petitioner asked for more time. In the meantime, respondent was already able to reconsolidate all 43 lots into 2 titles covering lots 1 and 2. Eventually, petitioner informed respondent that it could no longer continue with the purchase of the property due to circumstances beyond its fault; its failure to acquire an extension to pay UCPB. And so, respondent sold lot 2 to Asiaworld Trade Center Phils., Inc. and lot 1 was transferred in favor of UCPB as dacion. Petitioner now demands that respondent give back the earnest money it paid but respondent refused which prompted the former to file a complaint with the RTC which ruled in its favor. respondents however contend that it was the agreement of the parties that the earnest money of P1 million would be forfeited to answer for losses and damages that might be suffered by private respondents in case of failure by petitioner to comply with the terms of their purchase agreement. The CA however ruled to the contrary. Issue: WON petitioner is entitled to the reimbursement of its earnest money Held: Under Art. 1482 of the Civil Code, whenever earnest money is given in a contract of sale, it shall be considered as part of the purchase price and as proof of the perfection of the contract. Petitioner clearly stated without any objection from private respondents that the earnest money was intended to form part of the purchase price. It was an advance payment which must be deducted from the total price. Hence, the parties could not have intended that the earnest money or advance payment would be

forfeited when the buyer should fail to pay the balance of the price, especially in the absence of a clear and express agreement thereon. By reason of its failure to make payment petitioner, through its agent, informed private respondents that it would no longer push through with the sale. In other words, petitioner resorted to extrajudicial rescission of its agreement with private respondents. Private respondents did not interpose any objection to the rescission by petitioner of the agreement. As found by the Court of Appeals, private respondent BARRETTO REALTY even sold Lot 2 of the subject consolidated lots to another buyer, ASIAWORLD, one day after its President Anthony Que received the broker's letter rescinding the sale. Subsequently, on 13 October 1988 respondent BARRETTO REALTY also conveyed ownership over Lot 1 to UCPB which, in turn, sold the same to ASIAWORLD. Therefore, by virtue of the extrajudicial rescission of the contract to sell by petitioner without opposition from private respondents who, in turn, sold the property to other persons, private respondent BARRETTO REALTY, as the vendor, had the obligation to return the earnest money of P1,000,000.00 plus legal interest from the date it received notice of rescission from petitioner, i.e., 30 August 1988, up to the date of the return or payment. It would be most inequitable if respondent BARRETTO REALTY would be allowed to retain petitioner’s payment of P1,000,000.00 and at the same time appropriate the proceeds of the second sale made to another.

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27. PCI leasing and finance inc. v. Giraffe-X creative
 FACTS: petitioner PCI LEASING and respondent GIRAFFE entered into a Lease Agreement. PCI leased out to giraffe a set of silicon high impact graphics and accessories and an oxberry cinescan. 
 In connection with this agreement, the parties subsequently signed 2 separate documents, each 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) and that giraffe also executed for each of the leased equipment.
 By the terms, too, of the Lease Agreement, giraffe undertook to remit a certain amount by way of 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.
 A year into the life of the Lease Agreement, giraffe defaulted in its monthly rentalpayment obligations. And following a three-month default, PCI , through one Atty. Florecita R. Gonzales, addressed a formal pay-or-surrender-equipment type of demand letter to giraffe. The demand went unheeded.
 PCI instituted a case against giraffe for the issuance of a writ ofreplevin for the recovery of the leased property and to pay the balance of the rental. Giraffe filed a Motion to Dismiss, arguing that the seizure of the 2 leased equipment stripped PCI of its cause of action. Giraffe argues that, pursuant to Article 1484 of the Civil Code on installment sales of personal property, PCI is barred from further pursuing any claim arising from the lease agreement and the companion contract documents, adding that the agreement between the parties is in reality a lease of movables with option to buy. It is thus giraffe’s posture that the art.1484 applies to its contractual relation with PCI

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. Consequently, so GIRAFFE argues, upon the seizure of the leased equipment pursuant to the writ of replevin, which seizure is equivalent to foreclosure, PCI has no further recourse against it. In brief, GIRAFFE asserts in its Motion to Dismiss that the civil complaint filed by PCI LEASING is proscribed by the application to the case of Articles 1484 and 1485. ISSUE: WON the underlying Lease Agreement, Lease Schedules and the Disclosure Statements that embody the financial leasing arrangement between the parties are covered by and subject to the consequences of Articles 1484 and 1485 RULING: YES. “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: (1) Exact fulfillment of the obligation, should the vendee fail to pay; (2) Cancel the sale, should the vendee's failure to pay cover two or more installments; (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. “
 In the present case, petitioner acquired the office equipment in question for their subsequent lease to the respondent, with the latter undertaking to pay a monthly fixed rental. As a measure of good faith, the respondent even made a guarantee deposit. The basic agreement provides that in the event the respondent fails to pay any rental due or is in a default situation, then the petitioner shall have cumulative remedies, such as, but not limited to, the following: (1) Obtain possession of the property/equipment;(2) Retain all amounts paid to it. In addition, the guaranty deposit may be applied towards the payment of "liquidated damages";(3) Recover all accrued and unpaid rentals;(4) Recover all rentals for the remaining term of the lease had it not been cancelled, as additional penalty;(5) Recovery of any and all amounts advanced by PCI for GIRAFFE’s account xxx;(6). Recover all expenses incurred in repossessing, removing, repairing and storing the property; and,(7) Recover all damages suffered by PCI by reason of the default.
 When PCI demanded for payment of the balance, it made a demand for either of the choices. Either to pay the balance hence giraffe can keep the equipment of surrender them if he cannot. The so-called monthly rentals were in fact monthly amortizations of the price of the leased office equipment. 
 The imperatives of equity, the contractual stipulations and that actuations of the parties, the SC has treated a purported financial lease as actually a sale of movable prop on installments and prevented recover. The lease agreement is in reality a lease w/ an option to purchase the equipment. This has been made manifest by the actions of PCI itself. In choosing replevin, PCI waived its right to bring an action to recover unpaid rentals.

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28) ELISCO TOOL MANUFACTURING CORPORATION vs COURT OF APPEALS

Facts:
 Rolando Lantan, employee of Elisco, entered into a lease rental agreement with the company a Colt Lancer that will be deducted from his salary and at the end of 5 year period or upon payment of the 60th monthly rental, EMPLOYEE may exercise the option to purchase the motor vehicle. In case of default, Rolando agreed to pay as liquidated damages 2% of the amount due and unpaid for every thirty (30) days of default. Rolando was able to make payments for the car in the total amount of P61,070.94.
 Elisco alleging that Rolanda failed to pay for his monthly rentals, prayed for 1)Ordering the defendant Rolando Lantan to pay the plaintiff an amount equivalent to twenty-five percent (25%) of his outstanding obligation, for and as attorney's fees; 2) Ordering defendants to pay the cost or expenses of collection, repossession, bonding fees and other incidental expenses to be proved during the trial; and 3) Ordering defendants to pay the costs of suit.
 By virtue of the writ of seizure issued by the trial court, the deputy sheriff seized the vehicle on and thereby deprived private respondents of its use in favour of Elisco.
 Rolando said that their true agreement was "to buy and sell and not lease with option to buy" the car in question while Elisco maintained that it was lease with option to purchase.
 Trial court sustained Rolando’s claim that the agreement in question was one of sale and held that the latter had fully paid the price of the car. Not content with recovering possession of the said car, plaintiff still asks that defendants should pay it the sum of P39,054.86, allegedly representing the rentals due on the car from the time of the last payment made by defendants to its repossession thereof. This is indeed a classic case of one having his cake and eating it too, citing Recto law which states that the vendor who repossesses the goods sold on installments, has no right to sue the vendee for the unpaid balance thereof.
 CA affirmed. Issue: On the assumption that the Lease Agreement with option to buy in this case may be treated as a sale on installments, the respondent Court of Appeals nonetheless erred in not finding that the parties have validly agreed that the Elisco as seller may [i] cancel the contract upon the respondent's default on three or more installments, [ii] retake possession of the personality, and [iii] keep the rents already paid. Ruling: The remedies provided for in Art. 1484 are alternative, not cumulative. The exercise of one bars the exercise of the others. This limitation applies to contracts purporting to be leases of personal property with option to buy. Petitioner prayed that private respondents be made to pay the sum of P39,054.86, the amount that they were supposed to pay as of May 1986, plus interest at the legal rate. At the same time, it prayed for the issuance of a writ of replevin or the delivery to it of the motor vehicle "complete with accessories and equipment." In the event the car could not be delivered to petitioner, it was prayed that private respondent Rolando Lantan be made to pay petitioner the amount of P60,000.00, the "estimated actual value" of the car, "plus accrued monthly rentals thereof with interests at the rate of fourteen percent (14%) per annum until fully paid." This prayer of course cannot be granted, even

assuming that private respondents have defaulted in the payment of their obligation. This led the trial court to say that petitioner wanted to eat its cake and have it too. Notwithstanding this impossibility in petitioner's choice of remedy, this case should be considered as one for specific performance, pursuant to Art. 1484(1), consistent with its prayer with respect to the unpaid installments as of May 1986. In this view, the prayer for the issuance of a writ of replevin is only for the purpose of insuring specific performance by private respondents. Decision of CA Affirmed.

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29. PEOPLE’S INDUSTRIAL AND COMMERCIAL CORPORATION vs. COURT OF APPEALS AND MAR-ICK INVESTMENT CORPORATION Facts: Private respondents Mar-ick Investment Corporation is the exclusive and registered owner of Mar-ick Subdivision in Barrio Buli, Cainta, Rizal. On May 29, 1961, private respondents entered into six (6) agreements with petitioner People’s Industrial and Commercial Corporation whereby it agreed to sell to petitioner six (6) subdivision lots. Five of the agreements, similarly stipulate that the petitioner agreed to pay private respondents for each lot, the amount of P 7,333.20 with a down payment of P 480.00. The balance of P 6,853.20 shall be payable in 120 equal monthly installments of P 57.11 every 30th of the month, for a period of ten years. With respect to Lot No. 8, the parties agreed to the purchase price of P7,730.00. With a down payment of P506.00 and equal monthly installments of P60.20. After the lapse of ten years, however, petitioner still had not fully paid for the six lots; It had paid only the down payment and eight (8) installments, even after private respondents had given petitioner a grace period of four months to pay the arrears. After a series of negotiations between the parties, they agreed to enter into a new contract to sell. The contract stipulates that the previous contracts involving the same lots (actually minus Lot No.2) “have been cancelled due to the failure of the PURCHASER to pay the stipulated installments.” It states further that the new contract was entered into “to avoid litigation, considering that the PURCHASER has already made use of the premises since 1981 to the present without paying the stipulated installments.” The new contract bears the date of October 11, 1983 but neither of the parties signed it. Thereafter, Tomas Siatianum issued the following checks in the total amount of P37,642.72 to private respondent. Private respondent received but did not encash those checks. Instead, it filed in the Regional Trial Court of Antipolo, Rizal, a complaint for accion publicianan de posesion against petitioner and Tomas Siatianum, as president and majority stockholder of petitioner. It prayed that petitioner be ordered to removed the wall on the premises and to surrender in possession of lots Nos. 2 to 8 of Block 11 of the Mar-ick subdivision, and that petitioner and Tomas Siatianum be ordered to pay: (a) P259,074.00 as reasonable rentals for the use of the lots from 1961,” plus P1,680,074.00 per month from July 1, 1984 up to and until the premises shall have been vacated and the wall demolished”; (b) P10,000.00 as attorney’s fees; (c) moral and exemplary damages, and (d)costs of suit. In the alternative , the complaint prayed that should the agreements be deemed not automatically cancelled, the same agreements should be declared null and void.

The lower court rendered a decision finding that the original agreements of the parties were validly cancelled in accordance with provision No.9 of each agreement. The parties did not enter into a new contract in accordance with Art. 1403 (2) of the Civil Code as the parties did not sign the draft contract. Receipt by private respondent of the five checks could not amount to perfection of the contract because private respondent never encash and benefited from those checks. Furthermore, there was no meeting of the minds between the parties because Art 1475 of the Civil Code should be read with the Statute of Frauds that requires the embodiment of the contract in a note or memorandum. What was clearly proven was that both parties negotiated a new contract after the termination of the first. Thus, the fact that the parties tried to negotiate a new contract indicated that they considered that first contract as already cancelled. Petitioner elevated the case to the Court of Appeals. However, the Court of Appeals affirmed in toto the lower court’s decision. Petitioner’s motion for reconsideration denied. Issue:
 whether or not there was a perfected and enforceable contract of sale (sic) on October 11, 1983 which modified the earlier contracts to sell which had not been validly rescinded; Held: Petition denied. Affirmed CA.
 The contracts to sell of 1961 were cancelled in virtue of provision No. 9 thereof to which the parties voluntarily bound themselves. Consequently, when petitioner failed to abide by its obligation to pay the installments in accordance with the contracts to sell, provision No. 9 which states "that should the purchaser fail to make payment of any of the monthly installments as agreed herein, this contract shall, by mere fact of nonpayment, expire by itself and become null and void", automatically took effect. At this juncture, it is apropos to stress that the 1961 agreements are contracts to sell and not contracts of sale. The distinction between these contracts is graphically depicted in Adelfa Properties, Inc. v. Court of Appeals, "in a contract of sale, the title passes to the vendee upon the delivery of the thing sold; whereas in a contract to sell, by agreement the ownership is reserved in the vendor and is not to pass until the full payment of the price. In a contract of sale, the vendor is not to pass until the full payment of the price. In a contract of sale, the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded; whereas, in a contract to sell, title is retained by the vendor until the full payment of the price , such payment being a positive suspensive condition and failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective. Thus, a deed of sale is considered absolute in nature where there is neither a stipulation in the deed that title to the property sold is reserved in the seller until the full payment of the price, nor one giving the vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. Being contracts to sell, article 592 of the Civil Code which requires rescission either by judicial action or notarial act is not applicable. Petitioner alleges that there was a “new perfected and enforceable 
 contract of sale" between the parties in October 1983. Under the law, there is a binding contract between the parties whose minds met on a certain matter notwithstanding that

they did not affix their signature to its written form. In the case at the bar, it was private respondent’s company lawyer and sole witness, Atty. Manuel Villamayor, who volunteered that after the cancellation of the 1961 agreements. However, there was a hitch in the negotiations because after he had drafted the contract and sent it to the petitioner, the latter “deposited a check for down payment” but its representative refused to sign the prepared contract. Private respondent even offered the contract to sell. In the absence of proof to the contrary, this draft contract may be deemed to embody the agreement of the parties. Moreover, when Tomas Siatianun, petitioner president, testified, private respondent cross-examined him as regards to the October 1983 contract. Private respondents did not and has not denied the existence of that contract. Under these facts, therefore, the parties may ideally be considered as having perfected the contract of October 1983. Justice and equity, however, will not be served by a positive ruling on the perfection and performance of the contract to sell. There are facts on record proving that, after all, the parties had not arrived at a definite agreement. By Atty. Villamayor’s admission, the checks were not encashed because Tomas Siatianun did not sign the draft contract that he had prepared. On his part, Tomac Siatianun explained that he did not sign the contract because it covered seven (7) lots while their agreement was only for six (6) lots. According to him, private respondent had conceded that Lot No. 2 was meant for petitioner’s right of way and, therefore, it could not have been part of the properties it wanted to buy. The number of lots to be sold is a material component of the contract to sell. Without an agreement on the matter, the parties may not in any way be considered as having arrived at a contract under the law. As earlier noted, petitioner did not lift a finger towards the performance of the contract other than the tender of down payment. There is no record that it even bothered to tender payment of the installments or to amend the contract to reflect the true intention of the parties as regards the number of lots to be sold. Indeed, by petitioner’s inaction, private respondents may not be judicially enjoined to validate a contract that the former appeared to have taken for granted. As in the earlier agreements, petitioner ignored opportunities to resuscitate a contract to sell that was rendered moribund and inoperative by it’s inaction. The the installment paid by the petitioner on the land should be deemed rentals in accordance with provision No.9, as well as by law. Article 1486 of the Civil Code provides that a stipulation that the installments or rents paid shall not be returned to the vendee or lessee shall be valid insofar as the same may not be unconscionable under the circumstances.