Villamar vs Mangaoil

VILLAMAR vs MANGAOIL Villamar sold a parcel of land to Mangaoil. Part of the down payment is to be used to pay the loan obtained by the seller from the bank and to cause the release from the said bank of the certificate of title covering the subject property. The amount left shall be used to pay the mortgages. After the release of the TCT, a deed of sale was executed and there shall be transferof the title covering the subject property to be used as a collateral for a loan. However, the buyer backed out from the sale for the failure of the seller to deliver to the former the certificate of title and the possession over the land. Whether or not there can be rescission of contract. The agreement executed by the parties is means that there should be physical delivery of the TCT for how else can the buyer use it as collateral to obtain a loan if the title remains in the seller‟s possession. While the agreement does not expressly impose upon the seller the obligation to eject the mortgagors of the property, the said undertaking is necessarily implied because cessation of occupancy of the subject property is logically expected from the mortgagors upon payment by the seller of the amounts due to them. Notwithstanding the absence of stipulations in the agreement and absolute deed of sale entered into by the seller and the buyer expressly indicating the consequences of the seller's failure to deliver the physical possession of the subject property and the certificate of title covering the same, the buyer is entitled to demand for the rescission of their contract pursuant to Article 1191 of the New Civil Code which provides that “the power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him”.

UNION BK vs MAUNLAD HOMES Union Bank sold the Maunlad Shopping Mall to Maulad Homes, Inc.. The buyer maintained possession of the property based on the Contract to Sell. However, the buyer failed to pay, prompting the seller to rescind the Contract to Sell.When the buyer refused to turn over and vacate the subject premises, the seller required the buyer to pay the equivalent rentals-in-arrears and rentals at present until it vacates the property and to vacate the property. The seller instituted an action for unlawful detainer against the buyer as the demand went unheeded. Whether or not the nonpayment of rentals would make the contract rescissible. The contract between Union Bank and Maunlad Homes shows that the seller promised to execute a deed of absolute sale upon the completion by the buyer of the payment of the price. Thus, the contract between the parties is a mere contract to sell. The Court stressed that in a contract to sell, the full payment of the purchase price is a positive suspensive condition whose non-fulfillment is not a breach of contract, but merely an event that prevents the seller from conveying title to the purchaser. The non-payment of the purchase price renders the contract to sell ineffective and without force and effect. Thus, Maunlad Homes‟ act of withholding the installment payments rendered the contract ineffective and without force and effect.

CANO vda de VIRAY vs USI Mendoza sold parcels of land to Spouses Viray by way of deeds of absolute sale. Subsequently, Mendoza, Vda. de Mallari and Spouses Usi, as co-owners, executed two subdivision agreements to subdivide the land

into smaller lots which were then in the names of other persons. Thus, a petition for Accion Publiciana/Reinvindicatoria was filed by Spouses Usi against Vda. de Viray. Whether or not there is a double sale. A double sale situation arises when the following requisites concur: (a) The two (or more) sales transactions must constitute valid sales; (b) The two (or more) sales transactions must pertain to exactly the same subject matter; (c) The two (or more) buyers at odds over the rightful ownership of the subject matter must each represent conflicting interests; and (d) The two (or more) buyers at odds over the rightful ownership of the subject matter must each have bought from the very same seller. From the facts, the parties did not execute a valid deed of sale conveying and transferring the lots in question to Spouses Usi. What they rely on are two subdivision agreements which do not explicitly chronicle the transfer of said lots to them. The Court finds that said subdivision agreements are not valid legal conveyances of the subject lots due to non-existent meeting of minds between the parties. The cause of the obligation is likewise visibly absent from the two subdivision agreements. The transfer of title to Spouses Usi based on said subdivision agreement is flawed, irregular, null and void. Thus the two subdivision agreements are neither “sales transactions” nor "valid sales" and hence, the first essential element on double sale situation was not satisfied. Given the above perspective, Vda. de Viray has as against the Sps. Usi, superior rights over the disputed lands or portions.

LUZON DEVT BK vs ENRIQUEZ Delta Development and Management Services, Inc. mortgaged its several properties to Luzon Development Bank to obtain a loan for the development of a subdivision which was given a certificate of Registration and a License to Sell by the HLURB. On a different date, Delta executed a contract to sell with Angeles Enriquez over a house and lot. A dation in payment was executed by Delta and the bank when the former failed to pay its loan obligation to the latter. However, the house and lot subject of Enriquez‟s contract to sell with Delta was one of the properties assigned to the bank under the dation in payment. Whether or not the contract to sell executed by the seller in favor of the buyer transferred ownership. The Contract to Sell executed by Delta in favor of Enriquez did not transfer ownership Enriquez. A contract to sell is one where the prospective seller reserves the transfer of title to the prospective buyer until the happening of an event, such as full payment of the purchase price. What the seller obliges himself to do is to sell the subject property only when the entire amount of the purchase price has already been delivered to him. “In other words, the full payment of the purchase price partakes of a suspensive condition, the non-fulfillment of which prevents the obligation to sell from arising and thus, ownership is retained by the prospective seller without further remedies by the prospective buyer.” It does not, by itself, transfer ownership to the buyer. In the instant case, the terms of the contract provide for the reservation of Delta‟s ownership until full payment of the purchase price; such that Delta even reserved the right to unilaterally void the contract should Enriquez fail to pay three successive monthly amortizations.

SANTIAGO vs VILLAMOR The spouses Villamor Sr. and relatives mortgaged their land to San Jacinto Bank to obtain a loan. The bank extrajudicially foreclosed the mortgage, bought the land in a bidding when the Villamors failed to pay their loan. The bank then offered the land for sale. Since relatives of the spouses, except the spouses Villamor Sr. themselves, had been in possession and cultivation of the land, they decided, together with their sister Catalina Villamor Ranchez, to acquire the land in four installments from the bank. The spouses

Villamor Sr. obtained a notarized deed of sale from the bank and subsequently, they sold the land to Spouses Santiago as evidenced by a notarized deed of sale. Whether or not there is a constructive delivery upon the execution of the deed of sale. Article 1477 of the Civil Code recognizes that the "ownership of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof." Related to this article is Article 1497 which provides that "the thing sold shall be understood as delivered, when it is placed in the control and possession of the vendee." With respect to incorporeal property, Article 1498 of the Civil Code lays down the general rule: the execution of a public instrument "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." However, the execution of a public instrument gives rise only to a prima facie presumption of delivery, which is negated by the failure of the vendee to take actual possession of the land sold. "A person who does not have actual possession of the thing sold cannot transfer constructive possession by the execution and delivery of a public instrument." In this case, no constructive delivery of the land transpired upon the execution of the deed of sale since it was not the spouses Villamor, Sr. but his relatives who had actual possession of the land. The presumption of constructive delivery is inapplicable and must yield to the reality that the spouses Santiago were not placed in possession and control of the land.

CATUNGCAL vs RODRIGUEZ Spouses Catungcal and Rodriguez entered into a Conditional Deed of Sale over a parcel of land for twenty five million pesos with the initial payment of P500,000.00. The deed stipulates that the payment of the balance of the purchase price is contingent upon the successful negotiation of a road right of way by Rodriguez to the third persons who own the adjacent land and that the buyer has the option to rescind the sale. Spouses Catungcal then demanded Rodriguez to make an additional payment of five million within which the buyer failed to accede. Thus, the seller terminated the contract. Whether or not the Conditional Deed of Sale entered into by Spouses Catungcal with Rodriguez imposes a condition on the perfection of the contract or a condition on the performance of the obligation. The Court held that the Conditional Deed of Sale, stating that the buyer shall pay the balance of the purchase price when he has successfully negotiated and secured a road right of way, is not a condition on the perfection of the contract nor on the validity of the entire contract or its compliance. It is a condition imposed only on the buyer‟s obligation to pay the remainder of the purchase price. Such a condition is not purely potestative. It is not dependent on the sole will of the debtor but also on the will of third persons who own the adjacent land and from whom the road right of way shall be negotiated. Such a condition is likewise dependent on chance as there is no guarantee that respondent and the third party-landowners would come to an agreement regarding the road right of way. This type of mixed condition is expressly allowed. In addition, Rodriguez‟s option to rescind the contract is not purely potestative but rather also subject to the same mixed condition as his obligation to pay the balance of the purchase price – the negotiation of a road right of way. In the event the condition is fulfilled or the negotiation is successful, Rodriguez must pay the balance of the purchase price. In the event the condition is not fulfilled or the negotiation fails, Rodriguez has the choice either to not proceed with the sale and demand return of his downpayment or to waive the condition and still pay the purchase price despite the lack of road access. In any event, even if we assume for the sake of argument that the grant to Rodriguez of an option to rescind is tantamount to a potestative condition, not being a condition affecting the perfection of the contract, only the said condition would be considered void and the rest of the contract will remain valid. Thus, where the so-called „potestative condition‟ is imposed not on the birth of the obligation but on its fulfillment, only the condition is avoided, leaving unaffected the obligation itself.

REPUBLIC vs MARAWI-MARANTAO HOSP The Marawi-Marantao General Hospital, Inc. mortgaged its property to the Social Security System to obtain a loan. The bank extrajudicially foreclosed the mortgage and bought the land in a bidding when the MMGHI failed to pay its loan. Then, the Social Security Commission approved the proposal of Atty. Mangondato, a representative of MMGHI, to redeem the property. A deed of conditional sale was executed between the Atty. Angondato and Atty. Sison for SSC. Atty. Mangondato then demanded the SSS to immediately implement the transfer of the subject property in his favor for he has already paid the purchase price in full. However, SSS reasoned that SSC declared the conditional sale is null. Whether or not the buyer validly redeemed the property. When SSC approved the proposal of Atty. Mangondato to “redeem/repurchase” the property, the SSC is deemed to have waived, or even agreed to extend, the original limited period of redemption. Allowing a redemption after the lapse of the statutory period, when the buyer at the foreclosure does not object but even consents to the redemption, will uphold the policy of the law. It is also worthy to note that the grounds mentioned in the Resolution as basis for the declaration of nullity of the deed of conditional sale did not include the alleged expiration of the redemption period. Clearly, the inclusion of that ground has been belatedly made and appears to be a mere afterthought. Furthermore, assuming that Atty. Sison lacked authority when he signed the deed of conditional sale, the SSS ratified his act when it accepted the P2.7 million payment made by MMGHI and Atty. Mangondato. In view of the validity of the redemption made by MMGHI and Atty. Mangondato through the contract of conditional sale between the parties, the SSS must faithfully comply with its obligations under the said contract. This is in accordance with the principle of obligatoriness of contracts, that obligations arising from contract have the force of law between the parties and should be complied with in good faith. The SSS acknowledges that the purchase price had already been paid in full. Pursuant to the deed of conditional sale and the nature of the parties‟ agreement as a contract to sell, therefore, the SSS has the obligation to execute a deed of absolute sale in favor of MMGHI/Atty. Mangondato.

MONASTERIO-PE vs TONG Monasterio – Pe entered into a deed of sale with Tong over the land. The Monasterio-Pe remained in possession of the property by mere tolerance of Tong. Then Tong demanded that Monasterio-Pe to vacate the house but they refused to vacate the same. Whether or not the execution of the contract of sale amounts to delivery. Article 1498 of the Civil Code provides that when the sale is made through a public instrument, 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 the instant case, Monasterio – Pe failed to present any evidence to show that they had no intention of delivering the subject lots to Tong when they executed the said deed of sale. Hence, Monasterio - Pe's execution of the deed of sale is tantamount to a delivery of the lots to Tong. The fact that Monasterio – Pe remained in possession of the disputed properties does not prove that there was no delivery since such possession is only by Tong's mere tolerance.

CARABEO vs DINGCO Carabeo sold a parcel of unregistered land to Spouses Dingco for P38, 000.00 with the initial payment of P10,000.00. The buyer was also able to give P9,100.00 to the seller. The buyer offered to pay the balance but the seller declined upon the registration of land to the seller‟s name. Whether or not the sale was void since it lacks an object which is certain. The kasunduan between the parties did not specify the technical boundaries of the property did not render the sale a nullity. The requirement that a sale must have for its object a determinate thing is satisfied as long as, at the time the contract is entered into, the object of the sale is capable of being made determinate without the necessity of a new or further agreement between the parties. As the kasunduan shows, there is no doubt that the object of the sale is determinate.

FRANCISCO vs CHEMICAL BULK CARRIERS, INC. Francisco owned a Caltex station. Bacsa offered to sell to Francisco certain quantity of CBCI‟s diesel fuel. Bacsa claimed to be an employee of CBCI. Francisco agreed to purchase the fuel after checking Bacsa‟s identification card. Thus, Petron sold diesel fuel to CBCI. Diesel were delivered to and received by Francisco who sold the fuel to third persons whom he received payment. CBCI demanded payment from Francisco but he refused to pay. Whether or not Bacsa validly transferred title to Franciso. The general principle is that a seller without title cannot transfer a better title than he has. Only the owner of the goods or one authorized by the owner to sell can transfer title to the buyer. Therefore, a person can sell only what he owns or is authorized to sell and the buyer can, as a consequence, acquire no more than what the seller can legally transfer. Moreover, the owner of the goods who has been unlawfully deprived of it may recover it even from a purchaser in good faith. Thus, the purchaser of property which has been stolen from the owner has been held to acquire no title to it even though he purchased for value and in good faith. The exception from the general principle is the doctrine of estoppel where the owner of the goods is precluded from denying the seller‟s authority to sell. But in order that there may be estoppel, the owner must, by word or conduct, have caused or allowed it to appear that title or authority to sell is with the seller and the buyer must have been misled to his damage. In this case, it is clear that Bacsa was not the owner of the diesel fuel. Francisco was aware of this but he claimed that Bacsa was authorized by CBCI to sell the diesel fuel. However, Francisco‟s claim that Bacsa was authorized is not supported by any evidence except his self-serving testimony. First, Francisco did not even confirm with CBCI if it was indeed selling its diesel fuel since it is not one of the oil companies known in the market to be selling petroleum products. This fact alone should have put Francisco on guard. Second, it does not appear that CBCI, by some direct and equivocal act, has clothed Bacsa with the indicia of ownership or apparent authority to sell CBCI‟s diesel fuel. Francisco did not state if the identification card presented by Bacsa indicated that he was CBCI‟s agent or a mere employee. Third, the receipt issued by Bacsa was typewritten on a half sheet of plain bond paper. There was no letterhead or any indication that it came from CBCI. We agree with the Court of Appeals that this was a personal receipt issued by Bacsa and not an official receipt issued by CBCI.

REYES vs TUPARAN

Reyes mortgaged her real properties to Farmers Savings Bank and Loan Bank, Inc. to secure a loan. Subsequently, Reyes sold her properties to Tuparan and to assume the bank loan. The assumption of Reyes‟ bank account by Tuparan was approved by the bank. Then the bank, Reyes and Tuparan executed a Deed of Conditional Sale of Real Properties with Assumption of Mortgage under which Tuparan is bound to pay Reyes P1,200,000.00 on three installments. Tuparan then defaulted in the payment of her obligations. WON there is rescission of contracts.

The Court agrees with the ruling of the courts below that the subject Deed of Conditional Sale with Assumption of Mortgage entered into by and among the two parties and FSL Bank on November 26, 1990 is a contract to sell and not a contract of sale. Based on the above provisions, the title and ownership of the subject properties remains with the petitioner until the respondent fully pays the balance of the purchase price and the assumed mortgage obligation. Thereafter, FSL Bank shall then issue the corresponding deed of cancellation of mortgage and the petitioner shall execute the corresponding deed of absolute sale in favor of the respondent. Accordingly, the petitioner‟s obligation to sell the subject properties becomes demandable only upon the happening of the positive suspensive condition, which is the respondent‟s full payment of the purchase price. Without respondent‟s full payment, there can be no breach of contract to speak of because petitioner has no obligation yet to turn over the title. Respondent‟s failure to pay in full the purchase price is not the breach of contract contemplated under Article 1191 of the New Civil Code but rather just an eventthat prevents the petitioner from being bound to convey title to the respondent. In a contract to sell, title is retained by the vendor until full payment of the price. In the latter contract, payment of the price is a positive suspensive condition, failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from becoming effective.Thus, the Court fully agrees with the CA when it resolved: “Considering, however, that the Deed of Conditional Sale was not cancelled by Vendor Reyes (petitioner) and that out of the total purchase price of the subject property in the amount of ₱4,200,000.00, the remaining unpaid balance of Tuparan (respondent) is only ₱805,000.00, a substantial amount of the purchase price has already been paid. It is only right and just to allow Tuparan to pay the said unpaid balance of the purchase price to Reyes. MAHUSAY VS BE SAN DIEGO Spouses Mahusay entered into two contracts to sell with B.E. San Diego. The buyers stopped paying the amortizations leaving an unpaid balance. A Compromise Agreement was executed to give the buyers a final chance to pay their obligations. However, the terms of the agreement were again breached by the buyers. The Compromise Agreement was subsequently nullified by the Court of Appeals but held the buyers liable for the payment of all the unpaid amortizations. The CA was silent on the payment of the interest/penalty for the delay in payments. WON payment of balance and amortizations is proper. Finally, the Court notes that this case has dragged on for many years since 1978. In order to writ finis to this protracted litigation between the parties, we resolve the case in accordance with jurisprudence on the matter. Undeniably, the instant case is a sale of real property where the purchase price is not paid in full. The unpaid seller‟s remedy is either an action to collect the balance or to rescind the contract within the time allowed by law. Since rescission is no longer an option considering that petitioners have been in possession of the properties for a considerable period of time, substantial justice dictates that respondent be entitled to receive the unpaid balance of the purchase price, plus legal interest thereon. DUARTE vs DURAN

Duran offered to sell a laptop computer to Duarte which is to be paid on installment wherein Duran agreed. There were initial payment and a second installment already made. However, the buyer did not want to pay the remaining balance. WON there a contract of sale exists. As to whether there was a contract of sale between the parties, we hold that there was, and the absence of a written contract of sale does not mean otherwise. A contract of sale is perfected the moment the parties agree upon the object of the sale, the price, and the terms of payment.[60] Once perfected, the parties are bound by it whether the contract is verbal or in writing because no form is required.[61] Contrary to the view of petitioner, the Statute of Frauds does not apply in the present case as this provision applies only to executory, and not to completed, executed or partially executed contracts.[62] In this case, the contract of sale had been partially executed because the possession of the laptop was already transferred to petitioner and the partial payments had been made by her. Thus, the absence of a written contract is not fatal to respondent‟s case. Respondent only needed to show by a preponderance of evidence that there was an oral contract of sale, which he did by submitting in evidence his own affidavit, the affidavit of his witness Dy, the receipt dated February 18, 2002 and the demand letter dated July 29, 2002.

CALILAP-ASMERON vs DBP Calilap-Asmeron and Calilap mortgaged their parcels of lands to DBP which were subsequently foreclosed and sold to DBP as the highest bidder. Calilap-Asmeron expressed her intentions to buy the foreclosed properties. A down payment was made and the balance is to be paid in five years. For failure of the buyer to pay her six monthly amortizations, the DBP has rescinded the deed of conditional sale.

WON the rescission is valid. Firstly, a contract is the law between the parties. Absent any allegation and proof that the contract is contrary to law, morals, good customs, public order or public policy, it should be complied with in good faith.43 As such, the petitioner, being one of the parties in the deed of conditional sale, could not be allowed to conveniently renounce the stipulations that she had knowingly and freely agreed to. Secondly, the issue of whether or not DBP validly exercised the right to rescind is a factual one that the RTC and the CA already passed upon and determined. The Court, which is not a trier of facts, adopts their findings, and sustains the exercise by DBP of its right to rescind following the petitioner‟s failure to pay her six monthly amortizations, and after her being given due notice of the notarial rescission.44 As a consequence of the valid rescission, DBP had the legal right to thereafter sell the property to a person other than the petitioner, like Cruz. In turn, Cruz could validly sell the property to Cabantog and Trinidad, which he did. And, thirdly, Article 1191 of the Civil Code did not prohibit the parties from entering into an agreement whereby a violation of the terms of the contract would result to its cancellation.