Cases - Notebook - Consolidated.docx

1 1. Province of Cebu vs. Heirs of Rufina Morales G.R. No. 170115 February 19, 2008 PROVINCE OF CEBU, petitioner, vs. HEIRS OF RUFINA MORALES, NAMELY: FELOMINA V. PANOPIO, NENITA VILLANUEVA, ERLINDA V. ADRIANO and CATALINA V. QUESADA, respondents. Facts: The Province of Cebu leased a 210-square meter lot to Rufina Morales. Said lot was then donated by Province of Cebu to City of Cebu, which then became a subject of a public auction. Rufina Morales, as an actual occupant, was allowed to match the highest bid, and had acquired the property, paid the deposit and partial payment for the lot. An action for reversion was filed by Province of Cebu, which led to a compromise agreement between petitioner and City of Cebu. Subject lot was then transferred back to petitioner. The heirs of Morales filed a complaint, averring that the award at the public auction was a valid and binding contract entered into by City of Cebu and Morales. The trial court rendered a decision in favor of respondent heirs of Morales, which the Court of Appeals subsequently affirmed, hence this petition.

TOMAS K. CHUA, petitioner, vs. COURT OF APPEALS and ENCARNACION VALDES-CHOY, respondents. Facts: Valdes-Choy advertised for sale her paraphernal house and lot and Chua responded to the advertisement. Chua and Valdes-Choy agreed on a purchase price payable in cash. Chua and Valdes-Choy signed two Deeds of Absolute Sale. Chua showed to Valdes-Choy a PBCom manager's check representing the balance of the purchase price. Chua, however, did not give this PBCom manager's check to Valdes-Choy because the TCT was still registered in the name of Valdes-Choy. Chua required that the Property be registered first in his name before he would turn over the check to Valdes-Choy. This angered Valdes-Choy who tore up the Deeds of Sale, claiming that what Chua required was not part of their agreement. On 15 July 1989, the deadline for the payment of the balance of the purchase price, Valdes-Choy suggested to her counsel that to break the impasse Chua should deposit in the balance. Valdes-Choy was willing to cause the issuance of a new TCT in the name of Chua even without receiving the balance of the purchase price. Chua filed a complaint for specific performance against ValdesChoy. ISSUE: Whether or not there is a perfected contract of sale

Issue: Whether or not the contract between City of Cebu and Morals was a valid sale of contract Held: YES. A sale by public auction is perfected "when the auctioneer announces its perfection by the fall of the hammer or in other customary manner". Consequently, there was a meeting of minds between the City of Cebu and Morales. A contract of sale is a consensual contract and 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 elements of a valid contract of sale under Article 1458 of the Civil Code are: (1) consent or meeting of the minds; (2) determinate subject matter; and (3) price certain in money or its equivalent. All these elements were present in the transaction between the City of Cebu and Morales, despite having no “Contract of Sale and Purchase” executed between said parties. The Statute of Frauds provide that a formal document is not necessary for the sale transaction to be binding. 2. Tomas Chua v. Court of Appeals [G.R. No. 119255. April 9, 2003]

HELD: No. The agreement between Chua and Valdes-Choy, as evidenced by the Receipt, is a contract to sell and not a contract of sale. It is evidenced that if Chua fails to pay the balance, Valdes-Choy has the right to forfeit the earnest money, provided that “all papers are in proper order.” In a contract of sale, the vendor loses ownership over the property and cannot recover it until and unless the contract is resolved or rescinded. In contract to sell, 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. Ownership over the Property was retained by Valdes-Choy and was not to pass to Chua until full payment of the purchase price and the earnest money shall be forfeited in case the buyer fails to pay the balance of the purchase price. This is in the nature of a stipulation reserving ownership in the seller until full payment of the purchase price. Absence of a formal deed of conveyance is a strong indication that the parties did not intend immediate transfer of ownership.

2 #3 Penalosa vs Santos Facts: Penalosa entered into 2 contracts of sale with Santos. The contract is a conditional contract of sale. According to the stipulations of the contract, Penalosa would have to evict the illegal settlers in the lot after which, the sale will be formalised. However, Penalosa failed to pay the purchase price. Santos contends that the contracts are absolutely simulated and therefore, void. Issue: Whether or not the contract of sale was absolutely simulated for want of consideration Ruling; No, the contract of sale was not simulated. The contracts were perfected and the entire requirement for the perfection of a contract of sale were satisfied. The meeting of the minds of Santos and Penalosa perfected the contract despite the failure of Penalosa to pay the purchase price. 4. G.R. No. 112330, August 17, 1999 SPS. HENRY CO AND ELIZABETH CO AND MELODY CO, petitioners, vs. COURT OF APPEALS AND MRS. ADORACION CUSTODIO, represented by her Attorney-in-fact, TRINIDAD KALAGAYAN, respondents. FACTS: Mrs. Adoracion Custodia entered into a verbal contract with spouses Co for the purchase of a house and lot. Custodio initially paid to the Cos earnest money in order to reserve her purchase of the property and will be deducted from the total purchase price. On the dates specified for payments, Custodio was only able to pay partial. A demand was made by the Cos on March 15, 1985 for her failure to pay the balance price. Custodio manifested her interest to pay the balance price; however, the refusal of the spouses to accept the payment and to deliver the property, prompted her to immediately sue for the rescission of the contract of sale and prayed for the return of what was initially paid. The Cos however asserted that Custodio already lost her option over the Beata property and her failure to exercise said option resulted in the forfeiture of any amounts paid by her. ISSUE: Is a contract of sale entered into? HELD: Yes. A contract of sale is a consensual contract and is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price.

In the instant case, all three elements of a contract of sale are present in the transaction between the petitioners and respondent. Custodio’s offer to purchase the property, subject of the sale at a price was accepted by the COS. Even the manner of payment of the price was set forth in the letter. Earnest money was already received by the COS. Under Article 1482 of the Civil Code, earnest money given in a sale transaction is considered part of the purchase price and proof of the perfection of the sale. 5. City of Cebu vs. Heirs of Candido Rubi G.R. No. 128579. April 29, 1999 The CITY OF CEBU, petitioner, vs. HEIRS OF CANDIDO RUBI, namely: MARIA J. RUBI, LINA RUBI BONOAN, HILDA RUBI BORRES, SYLVIA RUBI MACACHOR, respondents. FACTS: The Province of Cebu conveyed by way of donation to the City of Cebu 210 lots among which was Lot 1141 leased to Candido Rubi. The City Council of Cebu then enacted Ordinance No. 522 authorizing the City Mayor to sell at public auction the 210 province-owned lots and among the conditions set forth was that if the lot is leased, the lessee shall be given the right to equal the highest bid on the date of the public bidding and if he so equals the highest bid, he shall be awarded the sale. Exercising this option, the Committee on Award awarded Lot 1141-D to Candido Rubi. He was then furnished a copy of the award and was instructed to make the necessary payment. However, Rubi requested that he be given an extension of time within which to make the said payment. When Candido Rubi died, his heirs tendered the amount to the City Treasurer of Cebu City and filed an action for specific performance. The trial court dismissed the complaint declaring the City of Cebu released of its obligation to sell the property to the plaintiffs stating that the contract entered into between the parties was a mere contract to sell. As there was no absolute acceptance on the part of Candido Rubi of the terms of the Award, the transaction between the parties never ripened into a contract of sale ISSUE: Whether or not a contract of sale is entered into by the parties? HELD: Yes. A contract of sale is a consensual contract and is perfected at the moment there is a 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. In the instant case, all three elements under Article 1458 for a valid contract to be constituted are present in the transaction between the City of Cebu and Candido

3 Rubi. The assumption of both parties that the offer and acceptance was for a bid price in cash, taken together with the fact that there was no expressed or apparent intent to reserve ownership over the lot until full payment was made leads to no other conclusion that Rubi and the City entered into a contract of sale. 6. Toyota Shaw, Inc. v. Court of Appeals G.R. No. L-116650 May 23, 1995 TOYOTA SHAW, INC., Petitioner, v. COURT OF APPEALS and LUNA L. SOSA, Respondents. FACTS: Luna L. Sosa wanted to purchase a Toyota Lite Ace. He contacted Toyota Shaw and met Bernardo, a sales representative. Sosa emphasized to Bernardo that he needed the Lite Ace not later than 17 June 1989 because his family, and a balikbayan guest would use it on 18 June 1989. Bernardo assured Sosa that a unit would be ready for pick up at 10:00 a.m. on 17 June 1989.

FACTS: Visayan sawmill and RHJ Trading entered into a sale involving scrap iron subject to the condition that RHJ will open a letter of credit in favor of Visayan sawmill. This is evidenced by a contract entitled "Purchase and Sale of Scrap Iron" duly signed by both parties. Rhj started to dig and gather scrap iron at the VS premises until May 30 when VS directed to desist the work because of the case filed against Rhj. VS alleged they sent a telegram to RHJ cancelling the contract of sale because of failure of the latter to comply to open a letter of credit. RHJ opened a letter of credit but the transmittal was delayed. On July 19, 1983, RHJ sent a series of telegrams stating that the case filed against him by Pursuelo had been dismissed and demanding that VSs comply with the deed of sale. VSs' lawyer, on July 20, 1983 informed RHJ's lawyer that VS corporation is unwilling to continue with the sale due to RHJ's failure to comply with essential preconditions of the contract. RHJ prayed for judgment ordering VS to comply with the contract by delivering to him the scrap iron and sought for damages. RTC ruled in favor of RHJ. CA Affirmed. ISSUE:

Sosa and his son Gilbert then went to Toyota to deliver the down payment of and met Bernardo who then accomplished a printed Vehicle Sales Proposal which Gilbert signed under the subheading CONFORME. The VSP states that payment is by "installment," to be financed by "B.A. Financing, with the initial cash outlay of P100,000.00. However, on the agreed date, the vehicle was not delivered to Sosa prompting him to file a complaint against Toyota. For its part, Toyota contends that no sale was entered into between it and Sosa. ISSUE: Did Toyota enter a contract of sale with Sosa? HELD: No. Toyota did not enter a contract of sale with Sosa. Under Article 1475 (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. In the present case, the agreement shows the absence of a meeting of minds between Toyota and Sosa. For one thing, Sosa did not even sign it. For another, Sosa was well aware from its title, written in bold letters, viz., AGREEMENTS BETWEEN MR. SOSA & POPONG BERNARDO OF TOYOTA SHAW, INC that he was not dealing with Toyota but with Bernardo and that the latter did not misrepresent that he had the authority to sell any Toyota vehicle.

#7 VISAYAN SAWMILL VS CA G.R. No. 83851 March 3, 1993 VISAYAN SAWMILL COMPANY, INC., and ANG TAY, Petitioners, vs. THE HONORABLE COURT OF APPEALS and RJH TRADING, represented by RAMON J. HIBIONADA , Respondents.

W/N a contract of sale was entered into by the parties. RULING: NO. The Supreme Court ruled that what obtains in the case at bar is a mere contract to sell or promise to sell, and not a contract of sale. In the agreement in question, entitled PURCHASE AND SALE OF SCRAP IRON, the seller bound and promised itself to sell the scrap iron upon the fulfillment by the RHJ of its obligation to make or indorse an irrevocable and unconditional letter of credit in payment of the purchase price. Thus, there was to be no actual sale until the opening, making or indorsing of the irrevocable and unconditional letter of credit. Since what obtains in the case at bar is a mere promise to sell, the failure of the private respondent to comply with the positive suspensive condition cannot even be considered a breach - casual or serious - but simply an event that prevented the obligation of VS corporation to convey title from acquiring binding force. Consequently, the obligation of the VS corporation to sell did not arise; it therefore cannot be compelled by specific performance to comply with its prestation. #8 RIOSA VS TABACO G.R. No. 203786, October 23, 2013 AQUILES RIOSA, PETITIONER, VS. TABACO LA SUERTE CORPORATION, RESPONDENT FACTS: Petitioner Aquiles filed his Complaint for Annulment/Declaration of Nullity of Deed of Absolute Sale and Transfer Certificate of Title against respondent La Suerte before the RTC. In his complaint, Aquiles alleged that he was the owner and in actual possession of a commercial lot acquired through deed of cession and quitclaim executed by his parents. His daughter renovated the commercial building on the and

4 subsequently obtained loans from Sia Ko Pio and as a security of the loans, Sia requested a photocopy of the deed and made Aquiles sign a document. To his surprise, he received a letter from La Suerte informing him that the subject lot was already registered in its name. He, thus, prayed for the nullification of the deed of sale and certificate of title in the name of La Suerte and the reconveyance of the subject property to him. RTC ruled in favor of Aquiles. RTC gave credence to the testimony of Aquiles that he was made to sign an instrument of sale without his knowledge because he trusted Sia Ko Pio and he was of the belief that what he had signed was merely an instrument of indebtedness. CA reversed the RTC decision and upheld the validity of the subject deed of sale in favor of La Suerte. ISSUE: Was there a valid and perfected contract of sale of real property between petitioner and respondent corporation La Suerte Corporation. RULING: NO, the testimony of Aquiles negates any intention on the part of Aquiles to sell the property in exchange for the amounts borrowed. Evidently, it was a series of transactions between Aquiles and Sia Po Ko, but not between the parties. The transactions were between Aquiles, as borrower, and Sia Ko Pio, as lender. It was not a sale between Aquiles, as vendor, and La Suerte, as vendee. Under Article 1475 of the Civil Code, the contract of sale is perfected at the moment there is a meeting of minds on the thing which is the object of the contract and on the price. In this case, there was no clear and convincing evidence that Aquiles 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. #9 TAN VS BENOLIRAO DELFIN TAN VS ERLINDA BENOLIRAO GR. NO. 153820 oCTOBER 16, 2009 FACTS: Spouses Lamberto and Erlinda Benolirao and the Spouses Reynaldo and Norma Taningco were the co-owners of a property who executed a Deed of Conditional Sale over the property in favor of Tan. Pursuant to the Deed of Conditional Sale, Tan issued check as downpayment. On November 6, 1992, Lamberto Benolirao died intestate. Erlinda Benolirao and her children, as heirs of the deceased, executed an extrajudicial settlement. As stated in the Deed of Conditional Sale, Tan had until May 15, 1993 to pay the balance of the purchase price. Tan failed to pay and asked for another extension, which the vendors again granted. Tan again failed to pay. The vendors demanded payment otherwise the contract will be rescinded. RTC rendered judgment ruling that the respondents forfeiture of Tans down payment was proper in accordance with the terms and conditions of the contract

between the parties. CA dismissed the petition and affirmed the ruling of the trial court in toto. ISSUE: Whether or not the contract executed was a contract of sale? RULING: NO, the contract was merely a contract to sell where the vendors retained title and ownership to the property until Tan had fully paid the purchase price. A contract to sell is defined as a bilateral contract whereby the prospective seller, while expressly reserving the ownership of the property despite delivery thereof to the prospective buyer, binds himself to sell the property exclusively to the prospective buyer upon fulfillment of the condition agreed. In the present case, the true nature of the contract is revealed by paragraph D thereof, thus, while the contract is denominated as a Deed of Conditional Sale, the presence of the above-quoted provision identifies the contract as being a mere contract to sell. 10 MANUEL UY & SONS v. VALBUECO G.R. No. 179594 September 11, 2013 PERALTA, J. FACTS: Two Conditional Deeds of Sale were executed by petitioner, in favor of respondent Valbueco as vendee. Respondent was able to pay petitioner partial payment for the two properties. At the same time, petitioner complied with its obligation under the conditional deeds of sale. However, respondent suspended further payment as it was not satisfied with the manner petitioner complied with its obligations under the contract. Consequently, petitioner sent respondent a letter informing respondent of its intention to rescind the conditional deed of sale. Respondent filed a Complaint for specific performance and damages against petitioner. However, the case was dismissed. Five years later, respondent again filed a Complaint for specific performance and damages, seeking to compel petitioner to accept the balance of the purchase price and to execute the corresponding deeds of absolute sale. ISSUE: Whether the Court can direct the Petitioner to execute deeds of absolute sale over the subject lots? HELD: NO, the two conditional deeds of sale entered into are contracts to sell, as they both contained a stipulation that ownership of the properties shall not pass to the vendee until after full payment of the purchase price.

5 In a conditional sale, as in a contract to sell, ownership remains with the vendor and does not pass to the vendee until full payment of the purchase price. The full payment of the purchase price partakes of a suspensive condition, and nonfulfillment of the condition prevents the obligation to sell from arising. To differentiate, a deed of sale is absolute when there is no stipulation in the contract that title to the property remains with the seller until full payment of the purchase price. 11 PILIPINO TELEPHONE CORPORATION v. RADIOMARINE NETWORK (SMARTNET) PHILIPPINES INC. G.R. No. 160322 August 24, 2011 ABAD, J. . FACTS: Petitioner Piltel expressed its willingness, to buy from respondent Smartnet units of various brands of cellular phones and accessories. On the following day, Piltel agreed to sell to Smartnet the Valgoson Property. Smartnet agreed to pay Piltel as down payment with balance to be partly set off against the obligations that Piltel was to incur from its projected purchase of cellular phones and accessories from Smartnet. 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 it would automatically forfeit to Piltel 10% of the down payment and the contract shall be without force and effect. Smartnet failed to pay the balance of the purchase price on or about the date it fell due. On December 19, 1997 Piltel returned to Smartnet, a portion of the down payment that it received. Smartnet later requested Piltel for the return the remaining amount but the latter failed to do so. Smartnet filed a complaint against Piltel for rescission of their contract to sell involving the Valgoson Property or its partial specific performance. Smartnet alleged 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. ISSUE: Whether the contract can be rescinded? HELD: YES, 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. Piltel cannot avoid rescission since it in fact partially abided by rescission’s consequences when it returned to Smartnet a 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 Valgoson Property had reached the point of automatic rescission. Smartnet’s allegations respecting fraud and breach of contract referred to Piltel’s non-binding promise to buy cellular phones and accessories from Smartnet 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. 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.

12 NARCISO DEGAÑOS v. PEOPLE OF THE PHILIPPINES G.R. No. 162826 October 14, 2013 BERSAMIN, J. FACTS: Accused Narciso Degaños and Aida Luz were found to be conspiring, received from Spouses Bordador gold and pieces of jewelry, under express obligation to sell the same on commission and remit the proceeds thereof or return the unsold gold and pieces of jewelry, but the said accused, inspite of repeated demands for compliance therewith, with intent of gain and grave abuse of confidence misapply, misappropriate and convert to their own use and benefit the merchandise and/or the proceeds thereof. Degaños contends that his agreement with the complainants as embodied in the relevant Kasunduan at Katibayan was a sale on credit, not a consignment to sell on commission basis. ISSUE: Whether the transaction between Spouses Bordador and herein accused was a sale on credit? HELD: NO, the transaction was an agency, not a sale on credit. Based on the express terms and tenor of the Kasunduan at Katibayan, the transaction was a consignment under the obligation to account for the proceeds of sale, or to return the unsold items. As such, he was the agent of the complainants in the sale to others of the items listed in the Kasunduan at Katibayan. In contrast, according the first paragraph of Article 1458 of the Civil Code, 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 therefor a price certain in money or its equivalent. Contrary to the

6 contention of Degaños, there was no sale on credit to him because the ownership of the items did not pass to him. #13 [B.M. No. 793. July 30, 2004] IN RE: SUSPENSION FROM THE PRACTICE OF LAW IN THE TERRITORY OF GUAM OF ATTY. LEON G. MAQUERA Facts: Edward Benavente, the creditor of a certain Castro, obtained a judgment against Castro in a civil case. Maquera served as Castros counsel in said case. Castros property subject of the case, was to be sold at a public auction in satisfaction of his obligation to Benavente. Castro, however, retained the right of redemption over the property for one year. At the auction sale, Benavente purchased Castros property the amount which Castro was adjudged to pay him. Castro, in consideration of Maqueras legal services in the civil case involving Benavente, entered into an oral agreement with Maquera and assigned his right of redemption in favor of the latter. On January 8, 1988, Maquera exercised Castro’s right of redemption by paying Benavente. Thereafter, Maquera had the title to the property transferred in his name. Maquera, thereafter, sold the property to C.S. Chang and C.C. On January 15, 1994, the Guam Bar Ethics Committee conducted hearings regarding Maqueras alleged misconduct, contending that he violated the rule that a lawyer shall not enter into a business transaction with a client unless the transaction and the terms governing the lawyers acquisition of such interest are fair and reasonable to the client.

Facts: Daroy submitted in evidence a report of the National Bureau of Investigation, which had examined the deed of sale in favor of Jose Gangay, showing that Daroys signature in the deed of sale had been written by a different hand. In addition, Daroy presented the affidavit of Anita Gangay, wife of Jose Gangay, in which she retracted an earlier affidavit. In the first affidavit, she stated that she had bought the land in question from Regalado Daroy and then sold it to her sister Nena Abecia. Now, in her present affidavit, it is stated that she did not buy the land from Daroy nor later sell it to Nena Abecia and that she really did not know anything about the controversy between Regalado Daroy and Esteban Abecia, both of whom are her brothers-in-law. ISSUE: Whether or not the Sale was valid HELD: The parties were mistaken in thinking that respondent could not validly acquire the land. In Guevara v. Calalang, on facts similar to those in this case, we held that the prohibition in Art. 1491 does not apply to the sale of a parcel of land, acquired by a client to satisfy a judgment in his favor, to his attorney as long as the property was not the subject of the litigation. The prohibition with respect to attorneys in the case extends only to property and rights which may be the object of any litigation in which they may take part by virtue of their profession. #15 Thelma Arcenio vs. Virginia Pagorogon, AM MTJ-89-270, July 5, 1993 THELMA ARCENIO and MARGARITA PONTING, complainants, vs. JUDGE VIRGINIA PAGOROGON, respondent.

Issue: Whether Maquera in exercising his client’s right of redemption in practice of law in a foreign country constitutes as a ground for sanction here in the Philippines Held: Yes, the transaction entered into by Maquera falls under Paragraph 5 of Article 1491 which prohibits the lawyers acquisition by assignment of the clients property which is the subject of the litigation handled by the lawyer. Under Article 1492, the prohibition extends to sales in legal redemption. The Court ruled that the lawyers acquisition of the property of his clients under the circumstances obtaining therein rendered him liable for malpractice. #14 [A.C. No. 3046. October 26, 1998] REGALADO DAROY, complainant, vs. ATTY. ESTEBAN ABECIA, respondent.

FACTS: The report of the Executive Judge disclosed that respondent judge conducted a preliminary examination of a robbery (hold-up) case. Part of the evidence in the case was a black and white renegade type jeepney. The jeep was not turned over to the Provincial Fiscal because the Clerk of Court had no available funds to tow said jeep. The subject vehicle, remained in the premises of the municipal building of San Jose del Monte, Bulacan. The Station Commander of San Jose del Monte requested respondent judge to remove the jeep from the premises of the municipal building as it was becoming as eyesore. Respondent judge then sought the opinion Judge Benjamin de Vega and Provincial Fiscal Liberato L. Reyes and was allegedly advised that since the RTC of Malolos has no impounding area, she should keep and maintain the jeep herself. However, in their sworn affidavits Neither one of

7 the officials confirmed having advised respondent judge to have custody of the subject vehicle. Respondent Judge took possession of the jeep and had an auto mechanic tow it to his, repair and repaint the same from black and white to red. It is for these expenses that respondent judge is seeking reimbursement from the anonymous owner with the threat that unless she is reimbursed "she is to return the jeep to its original condition." On the basis of the evidence in the present case, the investigating Executive Judge found respondent judge guilty of misconduct in that she "exerted undue interest" over the vehicle by spending beyond what the circumstances and the duties of her office called for. Moreover, by having the jeep repainted from its original color, with full knowledge that the jeep constitutes vital evidence in a robbery case, respondent judge tampered with the evidence in a criminal case. ISSUE: Did Pagorogon violate Article 1491 of the New Civil Code? HELD: Yes. The act of respondent judge is not unlike the prohibited acquisition by purchase described in Article 1491 of the New Civil code and is in fact, even worse. In Article 1491 paragraphs 4 and 5, public officers and employees, justices, judges, lawyers and similar persons charged with the administration of justice are prohibited from acquiring by purchase, property the administration of which has been entrusted to them or any other property which is the object of litigation. The mere fact of having whimsically spent for its repairs, automatically appropriated the jeep for her own use and benefit. She took advantages of the powers vested in her office in committing the facts complained of herein. Respondent judge utterly failed to conduct herself in the manner prescribed by Cannon 2 of the code of Judicial Conduct which is to "avoid impropriety and the appearance of impropriety in all activities." #16 ------- PAULINO VALENCIA v. ATTY. ARSENIO FER. CABANTING A.M. Nos. 1302, 1391 and 1543 April 26, 1991 PAULINO VALENCIA, complainant, vs. ATTY. ARSENIO FER CABANTING, respondent. FACTS: Complainant Paulino and his wife Romana allegedly bought a parcel of land, where they built their residential house, from a certain Serapio Raymundo, an heir of Pedro Raymundo the original owner. However, they failed to register the sale or secure a transfer certificate of title in their names.

In a conference held in the house of Atty. Eduardo Jovellanos to settle the land dispute between Serapia, another heir of Pedro Raymundo, and the Valencia spouses since both were relatives and distant kin of Atty. Jovellanos. Serapia was willing to relinquish ownership if the Valencias could show documents evidencing ownership. However, Serapia claimed that the deed covered a different property. Paulino and Serapia were not able to settle their differences. Summoned to plead in Civil Case, the Valencias engaged the services of Atty. Antiniw. Atty. Antiniw advised them to present a notarized deed of sale in lieu of the private document written in Ilocano. The Court of First Instance of Pangasinan, rendered a decision in favor of plaintiff, Serapia Raymundo. The lower court expressed the belief that the said document is not authentic. Paulino, filed a Petition for Certiorari. While the petition was pending, the trial court, on March 9, 1973, issued an order of execution stating that "the decision in this case has already become final and executory" On March 14, 1973, a writ of execution was issued. Serapia, thereafter, sold 40 square meters of the litigated lot to Atty. Jovellanos and the remaining portion she sold to her counsel, Atty. Arsenio Fer Cabanting. Paulino filed a disbarment proceeding against Atty. Cabanting on the ground that said counsel allegedly violated Article 1491 of the New Civil Code, prohibiting the purchase of property under litigation by a counsel. ISSUE: Whether or not Atty. Cabanting purchased the subject property in violation of Art. 1491 of the New Civil Code. HELD: Yes. Under Section 5, Article 1491 of the New Civil Code prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. In the case at bar, while it is true that Atty. Arsenio Fer Cabanting purchased the lot after finality of judgment, there was still a pending certiorari proceeding. A thing is said to be in litigation not only if there is some contest or litigation over it in court, but also from the moment that it becomes subject to the judicial action of the judge. It is not safe to conclude, for purposes under Art. 1491 that the litigation has terminated when the judgment of the trial court become final while a certiorari connected therewith is still in progress. Thus, purchase of the property by Atty. Cabanting in this case constitutes malpractice in violation of Art. 1491 and the Canons of Professional Ethics. Clearly, this malpractice is a ground for suspension. #17 FABILLO VS IAC G.R. No. L-68838 March 11, 1991 FLORENCIO FABILLO and JOSEFA TANA (substituted by their heirs) vs.

8 IAC (Third Civil Case Division) and ALFREDO MURILLO (substituted by his heirs) Facts: Justina Fabillo bequeathed to Florencio a house and lot. After Justina's death, Florencio filed a petition for the probate of said will. On June 2, 1962, the probate court approved the project of partition and the house erected thereon be litigated and determined in a separate proceedings. Two years later, Florencio sought the assistance of lawyer Alfredo M. Murillo in recovering the San Salvador property. Thirteen days later, Florencio and Murillo entered into the following contract of services which entitled murillo 40% of the propertis value if any or both cases shall succeed. The case was terminated when the court declared Fabillo as the lawful owner not only of the San Salvador property but also the Pugahanay parcel of land. Murillo took possession and rights of ownership over 40% of said properties. In 1966, Fabillo claimed exclusive right over the two properties and refused to give Murillo his share of their produce. The defendants stated that the consent to the contract of services of the Fabillo spouses was vitiated by old age and ailment; that Murillo misled them into believing that Special Proceedings No. 843 on the probate of Justina's will was already terminated when actually it was still pending resolution.

Administration proceedings initiated, w/ Felix Leong appointed as administrator and had Atty. Villegas served as Leong's lawyer. Lease contract was executed between Leong and the Heirs of Jose Villegas represented by brother in law of Atty. Villegas involving sugar lands. 2 years after, Hijos De Jose Villegas was formed among the heirs of Jose Villegas. Another lease contract entered between Leong and Hijos De Jose Villegas but as representative brother in law is already dead, Atty. Villegas was the appointed manager. Lease contract again renewed, but now Atty. Villegas is the representative of the Hijos De Jose Villegas. And he signed for the partnership for at least 3 times. ISSUE #2 W/N ATTY. Villegas SHOULD STILL BE SUBJECTED TO DISCIPLINARY SANCTION? YES -violated Art 1646, NCC and Art 1491: prohibited from leasing, either in person or through mediation of another Thus, even if the parties designated as lessees in the assailed lease contracts were the "Heirs of Jose Villegas" and the partnership HIJOS DE JOSE VILLEGAS, and respondent signed merely as an agent of the latter, the Court rules that the lease contracts are covered by the prohibition against any acquisition or lease by a lawyer of properties involved in litigation in which he takes part. On alleged acquiescence and consent of the heirs: even with that, still prohibited from having any interest in the properties under litigation under Art 1491 and 1646, NCC, and as a lawyer, should uphold the laws of the land

ISSUE: W/N the contract of service is in violation of paragraph 5 of art 1491 of the Civil Code. RULING: NO. The contract of services did not violate said provision of law. Article 1491 of the Civil Code, specifically paragraph 5 thereof, prohibits lawyers from acquiring by purchase even at a public or judicial auction, properties and rights which are the objects of litigation in which they may take part by virtue of their profession. The said prohibition, however, applies only if the sale or assignment of the property takes place during the pendency of the litigation. Hence, a contract between a lawyer and his client stipulating a contingent fee is not covered by said prohibition under Article 1491 (5) of the Civil Code because the payment of said fee is not made during the pendency of the litigation but only after judgment has been rendered in the case handled by the lawyer. #18 A.M. No. 2430 August 30, 1990 MAURO P. MANANQUIL vs. ATTY. CRISOSTOMO C. VILLEGAS

19 PATERNO R. CANLAS v. HON. COURT OF APPEALS G.R. No. L-77691 August 8, 1988 SARMIENTO, J. FACTS: The private respondent own several parcels of land for which he secured loans from L and R corporations and executed deeds of mortgage over the parcels of land for the security of the same. Upon the maturity of said loans, the firm initiated an extrajudicial foreclosure of the properties, the private respondent filed a complaint for injunction over the said parcels of land. Two years after, private respondent and L and R corporation entered into a compromise agreement included in the stipulations were the attorney's fees. T$e private respondent however, unable to pay and secure the attorney's fees, more so the redemption liability. Allegations were made by the private respondent claiming the parcels of land to his name but without prior notice, the properties were already registered under the petitioner's name.

FACTS:gg ISSUE:

9 PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ELIZABETH GANGUSO Y DECENA, accused-appellant.

Whether or not the conveyance in favor of the petitioner is subject to the ban on acquisition by attorneys of things in litigation? HELD: NO, Art. 1491. Provides that the prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession. In the instant case, the Court observes that the "Deed of Sale and Transfer of Rights of Equity of Redemption and/or to Redeem" was executed following the finality of the decision approving the compromise agreement. It is actually a new contract not one in pursuance of what had been agreed upon on compromise. By virtue of such a subsequent agreement, the lands had ceased to be properties which are "the object of any litigation." The transfer, therefore, is not subject to the injunction of Article 1491 of the Civil Code.

Facts: At about 7:30 in the evening of November 26, 1992, Major Juvenile Sulapas, Officer-in-charge of Pasay City Police Station, received confidential report from an informant about rampant trafficking of drugs by a certain "Beth Tomboy". A buy-bust operation during the operation "Beth Tomboy", handed an aluminum packet to PO3 Vermug who, upon executing a pre-arranged signal to his companions arrested the suspect The suspect, who turned out to be Elizabeth Ganguso y Decena, was brought to Headquarters and accordingly charged of drug pushing and illegal possession of firearm. Appellant questions the certainty of the evidence presented against her. Issue: Whether or not there was a valid sale

20 ANGEL L. BAUTISTA v. ATTY. RAMON A. GONZALES A.M. No. 1625 February 12, 1990 FACTS: A complaint was filed by Angel L. Bautista against respondent Ramon A. Gonzales charging the latter with malpractice and violation of lawyer’s oath, alleging that respondent prepared a document entitled "Transfer of Rights" which was signed by the Fortunados. The document assigned to respondent one-half (1/2) of the properties of the Fortunados for and in consideration of his legal services to the latter. At the time the document was executed, respondent knew that the above mentioned properties were the subject of a civil case, since he was acting as counsel for the Fortunados in said case. Respondent filed an answer denying the accusations against him. ISSUE: Whether respondent as counsel to a litigation can transfer part of the subject property to himself as Attorney's fees? HELD: NO, In executing the document transferring one-half (1/2) of the subject properties to himself, respondent violated the law expressly prohibiting a lawyer from acquiring his client’s property or interest involved in any litigation in which he may take part by virtue of his profession [Article 1491, New Civil Code]. This Court has held that the purchase by a lawyer of his client’s property or interest in litigation is a breach of professional ethics and constitutes malpractice.

Held: Yes. When SPO Vermug offered to buy P500.00 worth of "S" and the appellant got the money without asking what "S" meant, it was apparent that she already understood what "S" stood for. There was, therefore, a meeting of minds upon a definite object and upon the price. The appellant's acceptance of the payment was an indication that she had given her consent to the contract of sale. It was a clear evidence that the contract between her and Vermug was perfected and was even partially fulfilled and executed. #22 G.R. No. 176474, November 27, 2008 HEIRS OF ARTURO REYES, represented by Evelyn R. San Buenaventura, Petitioners, - versus ELENA SOCCO-BELTRAN, Respondent. Facts: The subject property in this case is a parcel of land. It was originally allocated to the Spouses Laquian, who paid for the same with Japanese money. When Marcelo died, the property was left to his wife Constancia. Upon Constancias subsequent death, she left the original parcel of land, pursuant to an unnotarized document entitled Extrajudicial Settlement of the Estate of the Deceased Constancia R. Socco, executed by Constancias heirs sometime in 1965, the parcel of land was partitioned into three lots. The subject property, Lot No. 6-B, was adjudicated to respondent, but no title had been issued in her name. On 25 June 1998, respondent Elena Socco-Beltran filed an application for the purchase of lot alleging that it was adjudicated in her favor in the extra-judicial settlement of Constancia Soccos estate.

#21 G.R. No. 115430

November 23, 1995

Issue:

10 Was the sale between Reyes and Miguel Socco consummated? Held: NO, petitioners claim that the property was constructively delivered to them in 1954 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. #23 ------G.R. No. 159578 July 28, 2008 ROGELIA DACLAG and ADELINO DACLAG (deceased) Substituted by RODEL M. DACLAG and ADRIAN M. DACLAG, Petitioners, vs. ELINO MACAHILIG, ADELA MACAHILIG CONRADO MACAHILIG, LORENZA HABER and BENITA DEL ROSARIO, Respondents.

FACTS: Maxima entered into a Deed of Extra-judicial Partition with the heirs of her two deceased brothers over seven parcels of land. Parcel One was the irrigated riceland and was divided between the heirs of Mario and Eusebio. Maxima affixed her thumbmark to the Deed. Said parcel of riceland was later on sold by Maxima to Rogelia Daclag. Thereafter, Elino Macahilig, filed a complaint for recovery of possession and ownership, cancellation of documents and damages against Maxima and petitioners ISSUE: Can Maxima sell the Riceland? HELD: No. In a contract of sale, it is essential that the seller is the owner of the property he is selling. Under Article 1458 of the Civil Code, the principal obligation of a seller is to transfer the ownership of the property sold. In the present case, Maxima's execution of the Deed of Sale selling Parcel One, part of which is respondents' one half northern portion, was not valid and did not transfer ownership of the land to petitioners, as Maxima had no title or interest to transfer. #24 ------G.R. No. 135634 May 31, 2000 HEIRS OF JUAN SAN ANDRES (VICTOR S. ZIGA) and SALVACION S. TRIA, petitioners, vs. VICENTE RODRIGUEZ, respondent. FACTS:

Juan San Andres sold a portion of a lot to respondent Rodriguez evidenced by a Deed of Sale. Upon Juan’s death, Ramon San Andres was appointed as administrator. A consolidated plan of the estate was done and from the result of the survey, it was found that respondent had enlarged the area. Accordingly, Ramon sent a letter to respondent demanding that the latter vacate the portion allegedly encroached by him. However, Vicente refused to do so, claiming he had purchased the same from the late Juan San Andres. The trial court rendered judgment in favor of petitioner. It ruled that there was no sufficient indication in Exhibit 2 to identify the property subject of the sale, hence, the need to execute a new contract. ISSUE: Was the object of contract determinate? HELD: Yes. 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. In the present case, 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. #25 ------HEIRS OF AMPARO DEL ROSARIO vs. AURORA O. SANTOS G.R. No. L-46892 September 30, 1981 FACTS: Amparo entered into a contract with Atty. Andres Santos whereby the latter sold to the former a land which is to be segregated from Lot 1. 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 released. Due to the failure of the spouses Andres to execute the deed after the fulfilment of the condition, Del Rosario claims malicious breach of a Deed of Sale. Defendant thereafter filed a motion to dismiss setting up the defenses of lack of jurisdiction of the court over the subject of the action. The lower court resolved to deny the motion to dismiss. After actions by respective parties, the lower court ordered the defendants to execute and convey to plaintiff the land. ISSUE: W/N 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 valid notwithstanding the lack of any title to the lot by appellants at the time of

11 execution of the Deed of Sale in favor of appellee as there can be a sale of an expected thing in accordance with Article 1461 of the NCC. 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. #26 ------G.R. No. L-48194 March 15, 1990 JOSE M. JAVIER and ESTRELLA F. JAVIER vs. COURT OF APPEALS and LEONARDO TIRO FACTS: Tiro is a holder of an ordinary timber license. On February 15, 1966 he executed a "Deed of Assignment" in favor of Javier. At the time the said deed of assignment was executed, Tiro had a pending application for an additional forest concession, hence, private respondent and petitioners entered into another "Agreement". For failure of Javier to pay the balance due under the two deeds of assignment, Tiro filed an action against Javier. Javier filed their answer admitting the due execution of the contracts but interposing the special defense of nullity thereof since Tiro failed to comply with his contractual obligations and, further, that the conditions for the enforceability of the obligations of the parties failed to materialize. ISSUE: Whether the deed of assignment are null and void? RULING: NO. The true cause or consideration of said deed was the transfer of the forest concession of Tiro to Javier. The aforesaid contemporaneous and subsequent acts of petitioners and private respondent reveal that the cause stated in the questioned deed of assignment is false. The parties' practical construction of their contract has been characterized as a clue or index to, or as evidence of, their intention or meaning and as an important, significant, convincing, persuasive, or influential factor in determining the proper construction of the agreement.

27 ONAPAL PHILIPPINES COMMODITIES, INC., v. COURT OF APPEALS G.R. No. 90707 February 1, 1993 CAMPOS, JR., J FACTS: The petitioner, ONAPAL is a duly organized and existing corporation, licensed as commission merchant/broker by the SEC, to engage in commodity futures trading in Cebu City. On April 27, 1983, petitioner and private respondent concluded a “Trading Contract”. Like all customers of the petitioner, private respondent was furnished regularly with “Commodities Daily Quotations”. If the transaction, either buying or selling commodity futures, is consummated by the

principal, the petitioner issues a document known as “Confirmation of Contract and Balance Sheet” to the customer. The trading contract signed by private respondent and Albert Chiam, is a contract for the sale of products for future delivery, in which either seller or buyer may elect to make or demand delivery of goods agreed to be bought and sold, but where no such delivery is actually made. ISSUE: Whether their agreement is illegal? HELD: YES, the written trading contract in question is not illegal but the transaction between the petitioner and the private respondent purportedly to implement the contract is in the nature of a gambling agreement. Article 1462 of the New Civil Code does not govern this case. The said article requires that there be delivery of goods, actual or constructive, to be applicable. In the transaction in question, there was no such delivery; neither was there any intention to deliver a determinate thing 28 FELIX DANGUILAN v. INTERMEDIATE APPELLATE COURT G.R. No. L-69970 November 28, 1988 Cruz, J FACTS: Respondent filed a complaint against the petitioner for recovery of a lot which she claimed she had purchased from Domingo Melad and were now being unlawfully withheld by the defendant. In his answer, the petitioner denied the allegation and averred that he was the owner of the said lots of which he had been in open, continuous and adverse possession, having acquired them from Domingo Melad. For his part, the defendant testified that Domingo Melad signed in 1941 a private instrument in which he gave the defendant the subject property on the understanding that the latter would take care of the grantor and would bury him upon his death. Issue: Whether there was a valid deed of sale between private respondent and Domingo Melad? Held: NO, private respondent failed to show that she consummated the contract of sale by actual delivery of the properties to her and her actual possession thereof in concept of purchaser-owner. The thing is considered to be delivered when it is placed ‘in the hands and possession of the vendee.’ (Civil Code, art. 1462). It is not enough to confer upon

12 the purchaser the ownership and the right of possession. The thing sold must be placed in his control. 29 [G.R. No. 126376. November 20, 2003] SPOUSES BERNARDO BUENAVENTURA and CONSOLACION JOAQUIN, SPOUSES JUANITO EDRA and NORA JOAQUIN, SPOUSES RUFINO VALDOZ and EMMA JOAQUIN, and NATIVIDAD JOAQUIN, petitioners, vs. COURT OF APPEALS, SPOUSES LEONARDO JOAQUIN and FELICIANA LANDRITO, SPOUSES FIDEL JOAQUIN, etc. Facts: Petitioners are children of the respondents Leonardo and Feliciana Landrito. They challenged the validity of the deed of sale executed by their parents in favor of their other children, contending that the price was simulated considering that the price stipulated is much lower than the actual value of the subject land, and that said simulated sale was to deprive them of their legitime. Respondents aver the complaint, saying that petitioners have no cause of action to question the sale as they were not parties of the sale thereof. Issue: Whether or not the deed of sale is void due to inadequacy of the price? Held: NO. Petitioners failed to prove any of the instances mentioned in Articles 1355 and 1470 of the Civil Code which would invalidate, or even affect, the Deeds of Sale. Indeed, there is no requirement that the price be equal to the exact value of the subject matter of sale. All the respondents believed that they received the commutative value of what they gave. 30 G.R. No. 130115 July 16, 2008 FELIX TING HO, JR., MERLA TING HO BRADEN, JUANA TING HO & LYDIA TING HO BELENZO, Petitioners, vs. VICENTE TENG GUI, Respondent. FACTS: Long before the death their father Felix Ting Ho, he executed a Deed of Absolute Sale of a house in favor of Victoria Cabasal his sister-in-law. On the same date, he also sold another building, in favor of Gregorio Fontela. In turn Victoria Cabasal and her husband Gregorio Fontela sold to Vicente Teng Gui the buildings which were bought by them from Felix Ting Ho. Hence, the father of the parties Felix Ting Ho executed an Affidavit of Transfer in favor of his eldest son the defendant Vicente Teng Gui ISSUE: Was the sale valid? HELD:

No. The series of transactions resorted to by the deceased were simulated in order to preserve the properties in the hands of the family. Article 1471 of the Civil Code provides, 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. In the present case, 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. 31. LABAGALA VS SANTIAGO Facts: -Jose Santiago owned a parcel of land and is now being alleged that he fraudulently registered it in his name alone -Jose then died intestate so R now files recovery of title as against P to recover the 1/3 portion of Jose-R say that the sale of Jose to P was executed through Ps machinations and that the deed of sale was a forgery Issue: -W/N P is entitled to 1/3 portion of the property. Ruling: Lower Court: - There is no valid sale since Jose did not have the right of ownership of the entire property of the 2/3 lot belonging to sisters o P could not have given consent since he was a minor it cannot also be said that there was a donation since it lacks the acceptance of done #32 HYATT ELEVATORS and ESCALATORS CORPORATION, vs. CATHEDRAL HEIGHTS BUILDING COMPLEX ASSOCIATION, INC., G.R. No. 173881 December 1, 2010 PERALTA, J.: Facts: Petitioner Hyatt Elevators and Escalators Corporation entered into a Service Agreement with respondent Cathedral Heights Building where petitioner was contracted to maintain four passenger elevators installed in respondent's building. Petitioner claims that during the period of April 1997 to July 1998 it had incurred expenses in the maintenance and repair of the four elevators. Respondent, however, refused to pay the amount. Petitioner filed with the RTC, a Complaint for sum of money against respondent. Issue:

13 Whether there is a perfected contract of sale between petitioner and respondent with regards to the spare parts delivered and installed by petitioner?

They entered a contract which provides that if the LESSOR should desire to sell the leased premises, the LESSEE shall be given 30-days exclusive option to purchase the same.

Held: No, 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.

33. ANG YU ASUNCION VS. COURT OF APPEALS 238 SCRA 602 FACTS: The plaintiffs were tenants or lessees of residential and commercial spaces owned by defendants. On several conditions defendants informed the plaintiffs that they are offering to sell the premises and are giving them priority to acquire the same. During negotiations, Bobby Cu Unjieng offered a price of P6-million while plaintiffs made a counter of offer of P5-million. Since defendants failed to specify the terms and conditions of the offer to sell and because of information received that the defendants were about to sell the property, plaintiffs were compelled to file the complaint to compel defendants to sell the property to them.

Carmelo informed Mayfair that it will sell the property to Equatorial. Mayfair made known its interest to buy the property but only to the extent of the leased premises. Notwithstanding Mayfair’s intention, Carmelo sold the property to Equatorial. ISSUE: WON the sale of the property to Equatorial is valid. HELD: The sale of the property should be rescinded because Mayfair has the right of first refusal. Both Equatorial and Carmelo are in bad faith because they knew of the stipulation in the contract regarding the right of first refusal. The stipulation is a not an option contract but a right of first refusal and as such the requirement of a separate consideration for the option, has no applicability in the instant case. The consideration is built in the reciprocal obligation of the parties.

35. ROBERTO D. TUAZON, Petitioner, v. LOURDES Q. DEL ROSARIOSUAREZ, CATALINA R. SUAREZ-DE LEON, WILFREDO DE LEON, MIGUEL LUIS S. DE LEON, ROMMEL LEE S. DE LEON, and GUILLERMA L. SANDICO-SILVA, as attorney-in-fact of the defendants, except Lourdes Q. Del Rosario-Suarez, Respondents.

ISSUE: Can Buen Realty be bound by the writ of execution by virtue of the notice of lis pendens?

DELCASTILLO,J.: FACTS:

RULING: No. An obligation is a juridical necessity to give, to do or not to do (Art. 1156, Civil Code). In sales, the contract is perfected when a person, called the seller, obligates himself, for a price certain, to deliver and to transfer ownership of a thing or right to another, called the buyer, over which the latter agrees. Therefore, Buen Realty cannot be held subject to the writ of execution issued by the respondent Judge, let alone ousted from the ownership and possession of the property, without first being duly afforded its day in court. 34. EQUATORIAL REALTY V. MAYFAIR (November 21, 1996) FACTS: Petitioner Carmelo and Bauermann Inc. leased its parcel of land with 2-storey building to respondent Mayfair Theater Inc.

Petitioner Roberto D. Tuazon and Lourdes executed a Contract of Lease over the parcel of land for a period of three years. 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 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 evidenced by a Deed of Absolute Sale. 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 MTC against him. ISSUE: Whether or not Lourdes violated Roberto’s right to buy the 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. HELD: No, an option contract is entirely different and distinct from a right of first refusal in that in the former, the option granted to the offeree is for a fixed period

14 and at a determined price.Lacking these two essential requisites, what is involved is only a right of first refusal. 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. Robertos act of negotiating for a much lower price was a counter-offer and is therefore not an acceptance of the offer of Lourdes. Article 1319 of the Civil Code provides: 36. [G.R. No. 137552. June 16, 2000] ROBERTO Z. LAFORTEZA, GONZALO Z. LAFORTEZA, MICHAEL Z. LAFORTEZA, DENNIS Z. LAFORTEZA, and LEA Z. LAFORTEZA, petitioners, vs. ALONZO MACHUCA, respondent.

One lot was formerly owned by Victorio Nool has an area of 1 hectare, because they are in dire need of money, they obtained a loan DBP. Since the plaintiffs failed to pay the said loan, the mortgage was foreclosed; within the period of redemption, the plaintiffs contacted Anacleto Nool for the latter to redeem the foreclosed properties from DBP, which the latter did. Mallorca, authorized officer of DBP, certified that the one-year redemption period was from March 16, 1982 up to March 15, 1983 and that the Mortgagors right of redemption was not exercised within this period. Hence, DBP became the absolute owner of said parcels of land for which it was issued new certificates of title. Issue: Whether there was a valid option to sell/repurchase?

Facts: Held: Roberto Laforteza and Gonzalo Laforteza, Jr., in their capacities as attorneys-infact of Dennis Laforteza, entered Contract to Sell with Alonzo Machuca over a house and lot. Machuca was able to pay the earnest money but however failed to pay the balance on time. Upon a request of an extension of time, Machuca informed petitioner heirs that the balance was already covered, but petitioners refused to accept the balance and told Machuca that the subject property is no longer for sale. The petitioners contend that the Memorandum of Agreement is merely a lease agreement with “option to purchase”; hence, it only gave the respondent a right to purchase the subject property within a limited period without imposing upon them any obligation to purchase it. Issue: (1) WON the tender of payment after the lapse of the option agreement gave rise to the perfection of a contract of sale? Held: (1) YES. A perusal of the Memorandum Agreement shows that the transaction between the petitioners and the respondent was one of sale and lease. In the case at bench, there was a perfected agreement between the petitioners and the respondent whereby the petitioners obligated themselves to transfer the ownership of and deliver the house and lot located at 7757 Sherwood St., Marcelo Green Village, Paraaque and the respondent to pay the price amounting to six hundred thousand pesos (P600,000.00). All the elements of a contract of sale were thus present.

37. CONCHITA NOOL and GAUDENCIO ALMOJERA vs.CA GR No. 116635 July 24, 1997 Facts:

No. In seeking to enforce her alleged right to repurchase the parcels of land, Conchita invokes Article 1370 of the Civil Code which mandates that if the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control. Hence, petitioners contend that the Court of Appeals erred in affirming the trial courts finding and conclusion that said Exhibits C and D were not merely voidable but utterly void and inexistent. 38. G.R. No. 104373 December 22, 1994 LUZ ARDENA SALAME AND RAMON A. SALAME, petitioners,vs. COURT OF APPEALS AND SPOUSES ATILA BALGOS AND TEODORICA ASIS, respondents. FACTS: On November 10, 1962, Vicenta executed a "Contract of Sale of Undivided Share by Installment with Right of Repurchase" in favor of respondent spouses with a stipulation on the seller's right to repurchase said property within eight years, and with an automatic grace period of another two years from the expiration of the eight-year period. Vicenta died on January 20, 1968. In December 1974, petitioners asked to be allowed to repurchase the property for the amount of P9,000.00, but private respondents refused on the ground that they were now the legal and absolute owners of the said property. Petitioners then filed a complaint with the Regional Trial Court of Roxas City for "Reconveyance and Damages" against private respondents. ISSUE: Did the party enter into an equitable mortgage? HELD:

15 NO. All the three documents presented are separate and independent from each other although they refer to a common property. Having been duly acknowledged before a notary public the same have in their favor the presumption of regularity. In the present case, when the Deed of Absolute Sale was executed by Vicenta, the right of repurchase given to her was terminated and her successors-ininterest could no longer exercise the same after her death in 1968. Clearly, the "Promise to Sell" was a separate transaction, distinct from the right of repurchase under Deed of Sale of Undivided Share by Installment with Right of Repurchase. 39. G.R. No. 103338 January 4, 1994 FEDERICO SERRA, petitioner, vs. THE HON. COURT OF APPEALS AND RIZAL COMMERCIAL BANKING CORPORATION, respondents. Andres R. Amante, Jr. for petitioner. R.C. Domingo, Jr. & Associates for private respondent. NOCON, J.: FACTS: Federico Serra is the owner of a 374 square meter parcel of land. Sometime in 1975, respondent bank, negotiated with petitioner for the purchase of the then unregistered property in order to put up a branch in Masbate. On May 20, 1975, a contract of LEASE WITH OPTION TO BUY was instead forged by the parties subscribed before Notary Public Romeo F. Natividad. Serra alleges that as soon as he had the property registered, he kept on pursuing the manager of the RCBC branch to effect the sale of the lot as per their agreement. It was not until September 4, 1984, however, when RCBC decided to exercise its option and informed Serra of its intention to buy the property. But Serra replied that he is no longer selling the property ISSUE: Is the promise to sell binding upon Serra and is the option to buy supported by any consideration distinct from the price? HELD: YES. Article 1479 of the Civil Code provides that an accepted unilateral promise to buy and sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price. In the present case, the consideration is even more onerous on the part of the lessee since it entails transferring of the building and/or improvements on the property to petitioner, should respondent bank fail to exercise its option within the period stipulated. The contract of "LEASE WITH OPTION TO BUY" between Serra and RCBC is valid, effective and enforceable, the price being certain and that there was consideration distinct from the price to support the option given to the lessee

40. San Miguel Properties Phil. vs. Alfredo Huang [G.R. No. 137290. July 31, 2000] SAN MIGUEL PROPERTIES PHILIPPINES, INC., petitioner, vs. SPOUSES ALFREDO HUANG and GRACE HUANG, respondents. FACTS: San Miguel Properties Philippines, Inc. is domestic corporation engaged in the purchase and sale of real properties. It owned two parcels of land totalling 1, 738 square meters covered by TCT Nos. PT-82395 and PT-82396 of the Register of Deeds of Pasig City. However, after a series of negotiations, Federico Gonzales (President and CEO), informed Atty Dauz that because the parties failed to agree on the terms and conditions of the sale despite the numerous extensions asked, SMPPI is returning the amount of P1 million given as "earnest-deposit." ISSUE: 1. Was the contract of sale perfected? HELD: 1. NO. In the present case, the parties never got past the negotiation stage. The alleged "indubitable evidence" of a perfected sale cited by the appellate court was nothing more than offers and counter-offers which did not amount to any final arrangement containing the essential elements of a contract of sale. 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 petitioner. 41. Goldenrod, Inc. vs. Court of Appeals G.R. No. 126812 November 24, 1998 GOLDENROD, INC., petitioner, vs. COURT OF APPEALS, PIO BARRETO & SONS, INC., PIO BARRETO REALTY DEVELOPMENT, INC. and ANTHONY QUE, respondents. BELLOSILLO, J.: FACTS: Goldenrod, Inc. (GOLDENROD) offered to buy the property from BARRETO & SONS. However, Goldenrod failed to pay UCPB the P24.5 million loan obligation of BARRETO REALTY on the deadline set for the payment; instead, it asked for numerous extensions which were subsequently denied by the bank. Thus, on August 30, 1988, Alicia P. Logarta, President of LOGARTA REALTY, which acted as agent and broker of Goldenrod, wrote Anthony Que informing him on behalf of petitioner that it could not go through with the purchase of the property due to circumstances beyond its fault.

16

ISSUE: Should the earnest money be returned? HELD: YES. 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. Goldenrod 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. 42. Lino R. Topacio vs. Court of Appeals G.R. No. 102606 July 3, 1992 LINO R. TOPACIO, petitioner, vs. HON. COURT OF APPEALS, BPI INVESTMENT CORP., respondents. PARAS, J.: FACTS: Spouses Juan P. de Villa, Jr. and Rosalia de Villa, were the parents-in-law of Lino Topacio. They were the former owners of Lot No. 13, Block 21-A, covered by TCT No. 280808 of the Registry of Deeds of Quezon City. The property was previously mortgaged to the Ayala Investment and Development Corporation to secure an obligation. For failure of the said mortgagors to pay upon maturity, the mortgage was foreclosed and consequently, BPI acquired the property as highest bidder in the auction sale, following the foreclosure. Topacio negotiated to purchase the property from BPI.

buyer was really in earnest, and given to the seller to bind the bargain. The P375,000.00 given by the petitioner representing 30% of the purchase price is earnest money. The payment by petitioner of P375,000.00 on November 28, 1991 which respondent accepted, and for which an official receipt was issued was the operative act that gave rise to a perfected contract of sale between the parties. Furthermore, Article 1475 of the Civil Code states: The 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 upon the price. From the moment, the parties may reciprocally demand performance, subject to the provisions of the law governing the form of contracts. Based on the aforecited article, the parties have agreed on the object of the contract which is the house and lot located at No. 32 Whitefield St., White Plains, Quezon City and even before November 27, 1985, (the date petitioner sent his letter together with the 30% downpayment), the parties have agreed on the price which is P1,250,000.00. Nowhere in the transaction indicates that BPI reserved its title property nor did it provide for any automatic rescission in case of default. So when petitioner failed to pay the balance of P875,000.00 despite several extensions given by private respondent, the latter could not validly rescind the contract without complying with the provision of Article 1592 or Article 1191 on notarial or judicial rescission respectively. BPI cannot just consider the sale cancelled by simply returning the downpayment which petitioner refused to accept.

43 – 47 – MIRANDA #48 JAIME D. ANG v. COURT OF APPEALS AND BRUNO SOLEDAD G.R. No. 177874 September 29, 2008 CARPIO MORALES, J.:

For not having been able to meet BPI's deadline (June 30, 1986), BPI wrote a letter to Topacio declaring itself (BPI) free to sell the property to other buyers and informing Topacio that he could already claim his initial payment of P375,000.00. In response, Topacio asked for an extension of another six (6) months, within which to pay the balance of P875,000.00. BPI denied Topacio’s request and asked him again to get back his P375,000.00.

Facts:

ISSUE: Was the contract of sale perfected?

Under a "car-swapping" scheme, respondent Soledad and petitioner Ang entered a Deed of Absolute Sale.

HELD:

The vehicle was eventually sold to a certain Bugash, by Deed of Absolute Sale. Before the deed could be registered in Bugash’s name, the vehicle was seized by virtue of a writ of replevin, on account of the alleged failure of Ronaldo Panes, the owner of the vehicle prior to Soledad, to pay the mortgage constituted thereon.

YES. Art. 1482, Civil Code, provides “whenever earnest money is given in a contract of sale, it shall be considered as part of the price and as proof of the perfection of the contract.” Earnest money is something of value to show that the

17 June 8, 2000 QUISUMBING, J.:

To secure the release of the vehicle, Ang paid BA Finance. Soledad refused to reimburse the said amount, despite repeated demands, drawing Ang to charge him for Estafa with abuse of confidence. Facts: Issue: Whether the cause of action had prescribed when he filed the complaint?

Petitioner and private respondent executed an order agreement whereby private respondent bound itself to deliver to petitioner 3,450 reams of printing paper.

Held: Yes, since what Soledad, as seller, gave was an implied warranty, the prescriptive period to file a breach thereof is six months after the delivery of the vehicle, following Art. 1571. When he filed the complaint subject of the present petition, the action had prescribed, it having been filed 16 months after July 28, 1992, the date of delivery of the vehicle. In this case, n declaring that he owned and had clean title to the vehicle at the time the Deed of Absolute Sale was forged, Soledad gave an implied warranty of title. #49 JON AND MARISSA DE YSASI vs. ARTURO AND ESTELA ARCEO G.R. No. 136586 November 22, 2001 MENDOZA, J.: Facts: Petitioner spouses Jon and Marissa de Ysasi leased from Respondent spouses Arturo and Estela Arceo, the latter's premises to carry on their business. Due to heavy rains, the roof of the building leaked and the premises were flooded. Petitioners asked respondents to make the necessary repairs; the latter repaired only a portion of the leased premises. Consequently, petitioners stopped paying rent up to the time they vacated the leased premises.

Later, petitioner entered into a contract Philacor to print three volumes of books. Petitioner alleged it wrote private respondent to immediately deliver the balance. However, petitioner encountered difficulties paying private respondent said amount. Private respondent made a formal demand upon petitioner to settle the outstanding account. Issue: Whether private respondent violated the order agreement? Held: No, transaction between the parties is a contract of sale whereby private respondent (seller) obligates itself to deliver printing paper to petitioner (buyer) which, in turn, binds itself to pay therefor a sum of money or its equivalent (price). Both parties concede that the order agreement gives rise to a reciprocal obligations such that the obligation of one is dependent upon the obligation of the other. Reciprocal obligations are to be performed simultaneously, so that the performance of one is conditioned upon the simultaneous fulfillment of the other.

#51 CENTRAL BANK OF THE PHILIPPINES v. ALFONSO BICHARA G.R. No. 131074 March 27, 2000 DE LEON, JR., J.

Issue: Whether the respondent spouses are liable for hidden defects? Facts: Held: No, Petitioner Jon de Ysasi admitted that he inspected the premises three or four times before signing the lease contract. During his inspection, he noticed the rotten plywood. Yet, he decided to go through with the lease agreement. Accordingly, private respondents cannot be held liable for the alleged warranty against defects under Art. 1561 of the Civil Code. Under Arts. 1561 and 1653 of the Civil Code, the lessor is responsible for warranty against hidden defects, but he is not answerable for patent defects or those which are visible. #50 INTEGRATED PACKAGING CORP. vs. COURT OF APPEALS G.R. No. 115117

Respondents sold the two properties to petitioner. Despite the issuance of the title, petitioner failed to pay respondent. Respondents did not fill up the lot with escombro which is one of the terms of the contract. Respondents commenced Civil Case. Petitioner tendered payment to respondents. Respondents refused the tender, however, in view of their complaint for rescission. Petitioner filed its answer averring that it was justified in delaying payment of the purchase price in view of respondents' breach of several conditions. Issue:

18 Whether private respondent did not comply with their obligation to CBP, thus, they are not entitled of rescission? Held: Yes, 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. Respondents were guilty of non-performance of said stipulation. Respondents should not be allowed to rescind the contract where they themselves did not perform their essential obligation thereunder. A contract of sale involves reciprocity between the parties. Since respondents were in bad faith, they may not seek the rescission of the agreement they themselves breached. #52 MANUEL UY & SONS, INC. v. VALBUECO, INCORPORATED G.R. No. 179594 September 11, 2013 PERALTA, J. Facts: Manuel Uy & Sons, Inc., the registered owner executed two Conditional DOS in favor of VALBUECO, Incorporated. However, respondent suspended further payment. Consequently, petitioner sent respondent a letter informing respondent of its intention to rescind the contract. Five years later, respondent again filed a Complaint for specific performance and damages, seeking to compel petitioner to accept the balance of the purchase price for the two conditional deeds of sale and to execute the corresponding deeds of absolute sale. Issues: II. Whether or not the action has already prescribed Held: II. Yes. The actions has prescribed Article 1144 of the Civil Code provides that actions based upon a written contract must be brought within ten years from the time the right of action accrues. Non-fulfillment of the obligation to pay on the last due date, that is, on November 15, 1974, would give rise to an action by the vendor. The vendee, respondent herein, filed this case on March 16, 2001, which is clearly beyond the 10-year prescriptive period; hence, the action has prescribed.

53 – 55 – ALANO 56. [G.R. No. 144576. May 28, 2004] SPOUSES ISABELO and ERLINDA PAYONGAYONG, petitioners, vs. HON. COURT OF APPEALS, SPOUSES CLEMENTE and ROSALIA SALVADOR, respondents. DECISION CARPIO MORALES, J.: Spouses Isabelo and Erlinda Payongayong (petitioners) filed a complaint for annulment of deed of absolute sale and transfer certificate of title with recovery of possession and damages against Eduardo Mendoza, his wife Sally Mendoza, and respondent spouses Clemente and Rosalia Salvador. In their complaint, petitioners alleged that the spouses Mendoza maliciously sold to respondents the property which was priorly sold to them and that respondents acted in bad faith in acquiring it, the latter having had knowledge of the existence of the Deed of Absolute Sale with Assumption of Mortgage between them (petitioners) and Mendoza. Mendoza was the registered owner of a two hundred square meter parcel of land situated in Barrio San Bartolome, Caloocan, covered by Transfer Certificate of Title No. 329509. On April 18, 1985, Mendoza mortgaged the parcel of land to the Meralco Employees Savings and Loan Association (MESALA) to secure a loan in the amount of P81,700.00. The mortgage was duly annotated on the title as Primary Entry No. 2872 on April 23, 1985. On July 11, 1987, Mendoza executed a Deed of Sale with Assumption of Mortgage over the parcel of land together with all the improvements thereon (hereinafter referred to as the property) in favor of petitioners in consideration of P50,000.00. It is stated in the deed that petitioners bound themselves to assume payment of the balance of the mortgage indebtedness of Mendoza to MESALA. On December 7, 1987, Mendoza, without the knowledge of petitioners, mortgaged the same property to MESALA to secure a loan in the amount of P758,000.00. On even date, the second mortgage was duly annotated as Primary Entry No. 8697 on Mendozas title. On November 28, 1991, Mendoza executed a Deed of Absolute Sale over still the same property in favor of spouses Salvador in consideration of P50,000.00. The sale was duly annotated as Primary Entry No. 1005 on Mendozas title. On even date, MESALA issued a Cancellation of Mortgage acknowledging that for sufficient and valuable consideration which it received from Mendoza, it was cancelling and releasing the real estate mortgage over the property. The cancellation was annotated as Primary Entry No. 1003 on Mendozas title. Salvador caused the cancellation of Mendozas title and the issuance of Transfer Certificate Title No. 67432 in their name. Branch 217 of the Quezon City RTC, by Order of December 3, 1993, archived the case in view of the failure to determine the whereabouts of the spouses Mendoza. A motion for the revival of the case as against respondents and its dismissal as against the spouses Mendoza was later filed on December 17, 1993 by

19 petitioners, which motion was granted by the trial court by Order of December 27, 1993. By Decision of February 5, 1996, the trial court found for respondents. Dissatisfied, petitioners appealed the decision to the Court of Appeals (CA) which, as stated early on, affirmed the same. ISSUES: Whether or not the sale was simulated Whether or not the Salvadors are innocent purchasers of value HELD: ISSUE 1 NO. Simulation occurs when an apparent contract is a declaration of a fictitious will, deliberately made by agreement of the parties, in order to produce, for the purpose of deception, the appearance of a juridical act which does not exist or is different from that which was really executed. Its requisites are: a) an outward declaration of will different from the will of the parties; b) the false appearance must have been intended by mutual agreement; and c) the purpose is to deceive third persons. The basic characteristic then of a simulated contract is that it is not really desired or intended to produce legal effects or does not in any way alter the juridical situation of the parties. The cancellation of Mendozas certificate of title over the property and the procurement of one in its stead in the name of respondents, which acts were directed towards the fulfillment of the purpose of the contract, unmistakably show the parties intention to give effect to their agreement. The claim of simulation does not thus lie. ISSUE 2 Yes. Respondent spouses are innocent purchasers of value. UnderArt. 1544 of the Civil Code. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property.Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property.Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. Here petitioners did not cause the cancellation of the certificate of title of Mendoza and procure one in their names is not disputed. Nor that they had their claims annotated on the same title. Thus, at the time of the sale of the property to the spouses Salvador on November 28, 1991, only the mortgages in favor of MESALA appeared on the annotations of encumbrances on Mendozas title.In respondents case, they did not only rely upon Mendozas title. Rosalia personally inspected the property and verified with the Registry of Deeds of Quezon City if Mendoza was indeed the registered owner. Given this factual backdrop, respondents did indeed purchase the property in good faith and accordingly acquired valid and indefeasible title thereto. There being double sale of an immovable property, as the above-quoted provision instructs, ownership shall be transferred (1) to the person acquiring it

who in good faith first recorded it in the Registry of Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in default thereof, to the person who presents the oldest title, provided there is good faith. Where innocent third persons rely upon the correctness of a certificate of title and acquire rights over the property, the court cannot just disregard such rights. Otherwise, public confidence in the certificate of title, and ultimately, the Torrens system, would be impaired, for everyone dealing with registered property would still have to inquire at every instance whether the title has been regularly or irregularly issued. The trial and appellate courts thus correctly accorded preferential rights to respondents who had the sale registered in their favor. 57. SECOND DIVISION [G.R. No. 105902. February 9, 2000] SEVERINO BARICUATRO, JR., petitioner, vs. COURT OF APPEALS, TENTH DIVISION, MARIANO B. NEMENIO AND FELISA V. NEMENIO, CONSTANTINO M. GALEOS AND EUGENIO V. AMORES, respondents. On October 16, 1968, Severino Baricuatro, Jr., now deceased and substituted by his legal heirs, bought two lots (Lots 9 and 10) on an installment basis from Constantino M. Galeos for P3,320.00 and P4,515.00, respectively. After the sale, petitioner introduced certain improvements on the said lots and started to reside therein in 1970. Since then petitioner has been in actual and physical possession of the two (2) lots. Baricuatro, however, was unable to pay the full amount to Galeos. At the time the original action for quieting of title was filed in the trial court, petitioner had an unpaid balance of P1,000.00 as to Lot No. 9 and P3,020.00 as to Lot No. 10. The titles to the said lots remained in the name of respondent Galeos. However, on December 7, 1968, about two (2) months from the date of the previous sale to petitioner, Galeos sold the entire subdivision, including the two (2) lots, to Eugenio Amores. Baricuatro was informed by respondent Galeos about the sale to respondent Amores and was advised to pay the balance of the purchase price of the two (2) lots directly to Amores. Amores registered the deed of sale covering the entire subdivision on February 13, 1969, secured the transfer of the title to the same in his name, subdivided the entire land, and acquired individual titles to the subdivided lots in his name, including the title of the two (2) lots. TCT No. 20016 was issued for Lot No. 9 and TCT No. 20017 for Lot No. 10, both in his name. On December 27, 1974, Amores sold the two (2) lots to the spouses Mariano and Felisa Nemenio. Prior to the sale, Baricuatro was informed through a letter by Amores about the impending sale of the two (2) lots but the former failed to respond. The respondent spouses Nemenio caused the transfer of the titles to the said lots and the issuance of tax declarations in their names. Thereafter, the respondent spouses Nemenio demanded from petitioner to vacate the said lots but the latter refused to do so. A complaint for quieting of title was filed by spouses Nemenio and on November 27, 1986, the trial court declared the latter as the owners of Lot Nos. 9 and 10. On appeal to the respondent court, petitioner assailed the findings of the trial court that third-party defendant and respondent Amores validly acquired

20 ownership of the two (2) lots and registered the same in good faith, and that respondent spouses Nemenio are purchasers in good faith. For their part, Spouses Nemenio asserted that the Torrens system of land registration should be upheld by this Court, and that an innocent purchaser for value, relying solely on an unencumbered title, should be protected. ISSUE: Is Amores an innocent purchaser for value? Are spouses Nemenio innocent purchasers for value? HELD: No. Amores and spouses Nemenio are not innocent purchasers for value. Under article 1544, the ownership of an immovable property shall belong to the purchaser who in good faith registers it first in the registry of property. ART. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith." AMORES For a second buyer to successfully invoke the protection provided by article 1544 of the Civil Code, he must possess good faith from the time of acquisition of the property until the registration of the deed of conveyance covering the same. In the instant case, both lower courts attributed good faith to respondent Amores, the second buyer of the disputed lots because at the time of the sale in December 1968 Galeos’ title to the lots was clean and unencumbered and that Amores came to know of the sale by installment executed between Galeos and Baricuatro only after the sale of said lots to him. However, there is no showing in the assailed decision that he continued to act in good faith until the title to the property was transferred to him by registration in the Register of Deeds on February 13, 1969, as required by Article 1544 because the preponderance of evidence supports the finding that he already had knowledge of the previous sale of the disputed lots to petitioner. Such knowledge tainted his registration with bad faith. To merit protection under article 1544, the second buyer must act in good faith from the time of the sale until the registration of the same. Amores had knowledge of the previous sale to petitioner when he entered into a contract of sale with respondent Galeos on December 7, 1968 and cannot therefore be considered as a purchaser in good faith. 2. NEMENIO December 27, 1974 – bought the subject property Early 1975 – Nemenio visited the property August 30, 1976 – Registered the property No. As held in the case of Philippine Stock Exchange, Inc. vs. Court of Appeals, the inscription in the registry, to be effective, must be made in good faith. The

defense of indefeasibility of a Torrens Title does not extend to a transferee who takes the certificate of title with notice of a flaw. A holder in bad faith of a certificate of title is not entitled to the protection of the law, for the law cannot be used as a shield for frauds. It may be deduced from the foregoing inquisition that having visited petitioners residence in early 1975, respondent spouses Nemenio cannot claim to be purchasers in good faith when they registered their title to the disputed lots on August 30, 1976. The registration by the respondent spouses Nemenio was done in bad faith, hence, it amounted to no "inscription" at all.

58.CECILIA AMODIA VDA. DE MELENCION, VENERANDA AMODIA, FELIPE AMODIA, EUTIQUIO AMODIA and GO KIM CHUAN, Petitioners, - versus HONORABLE COURT OF APPEALS and AZNAR BROTHERS REALTY COMPANY, Respondents. G.R. No. 148846 FACTS: The subject property is a 30,351 square meter parcel of land (Lot No. 3368) in the name of the Go Kim Chuan. The entire property was originally owned by Esteban Bonghanoy who had only one child, Juana Bonghanoy-Amodia, mother of the late Leoncia Amodia and petitioners Cecilia Amodia Vda. de Melencion, Veneranda Amodia, Felipe Amodia, and Eutiquio Amodia (the Amodias). The entire property was brought under the operation of the Torrens System. However, the title thereto was lost during the Second World War. On July 10, 1964, the Amodias allegedly executed an Extra-Judicial Partition of Real Estate with Deed of Absolute Sale whereby they extra-judicially settled the estate of Esteban Bonghanoy and conveyed the subject property to respondent Aznar Brothers Realty Company (AZNAR) for a consideration of P10,200.00. On August 10, 1964, the said Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under Act 3344 as there was no title on file at the Register of Deeds of Lapu-Lapu City (Register of Deeds). On February 18, 1989, the Amodias executed a Deed of Extra-Judicial Settlement with Absolute Sale, conveying the subject property in favor of Go Kim Chuan for and in consideration of P70,000.00. The lost title covering the subject property was reconstituted pursuant to Republic Act (RA) No. 26. A reconstituted title particularly designated as Original Certificate of Title (OCT) No. RO-2899 was issued in the name of Esteban Bonghanoy and, subsequently, a derivative title (TCT No. 20626) was issued in the name of Go Kim Chuan on December 1, 1989. Thereafter, Go Kim Chuan exercised control and dominion over the subject property in an adverse and continuous manner and in the concept of an owner. On February 14, 1990, AZNAR wrote a letter to petitioners Amodias asking the latter to withdraw and/or nullify the sale entered into between them and Go Kim Chuan. On the same date, a Notice of Adverse Claim was annotated by AZNAR on TCT No. 20626. Because petitioners did not heed AZNAR's demand, on April 25, 1990, AZNAR filed a case against petitioners Amodias and Go Kim Chuan for Annulment of Sale and Cancellation of TCT No. 20626 alleging that the sale to

21 Go Kim Chuan was an invalid second sale of the subject property which had earlier been sold to it. The Amodias denied that they executed the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale in favor of AZNAR, claiming that their purported signatures thereon were forged. ISSUES: 1. Who between Go Kim Chuan and AZNAR has the better right over the subject property? 2. Is Go Kim Chuan a buyer in good faith? HELD: The Supreme Court resolved that Go Kim Chuan has a better right over the subject property. The court held that registration must be done in the proper registry in order to bind the same as provided for under Article 1544 of the New Civil Code which provides: ART. 1544. If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in good faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first recorded it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith. Registration contemplated in this provision refers to registration under the Torrens System, which considers the act of registration as the operative act that gives validity to the transfer or creates a lien upon the land. This rule precisely applies to cases involving conflicting rights over registered property and those of innocent transferees who relied on the clean title of the properties. In the present case, the subject property was under the operation of the Torrens System even before the respective conveyances to AZNAR and Go Kim Chuan were made. AZNAR knew of this, and admits this as fact. Yet, despite this knowledge, AZNAR registered the sale in its favor under Act 3344 on the contention that at the time of sale, there was no title on file. Such contention is untenable. The fact that the certificate of title over the registered land is lost does not convert it into unregistered land.

not whether the second buyer is a buyer in good faith, but whether he registers the second sale in good faith, meaning, he does so without knowledge of any defect in the title over the property sold. Inscription of an adverse claim serves as a warning to third parties dealing with a piece of real property that someone claims an interest therein or that there is a right superior to that of the titled owner. However, as pointed out by petitioners and as admitted by AZNAR, the Notice of Adverse Claim was annotated on TCT No. 20626 only on February 4, 1990, after the lost certificate of title was reconstituted and after the issuance of said TCT in the name of Go Kim Chuan on December 1, 1989. It is, therefore, absurd to say that Go Kim Chuan should be bound by an adverse claim which was not previously annotated on the lost title or on the new one, or be shackled by a claim which he did not have any knowledge of. Given these antecedents, good faith on the part of Go Kim Chuan cannot be doubted. Before buying the subject property, Go Kim Chuan made verifications with the Office of the City Assessor of Lapu-Lapu City and the Register of Deeds. He likewise visited the premises of the subject property and found that nobody interposed any adverse claim against the Amodias. After he decided to buy the subject property, he paid all taxes in arrears, caused the publication of the Deed of Extra-Judicial Settlement with Absolute Sale in a newspaper of general circulation, caused the reconstitution of the lost certificate of title and caused the issuance of the assailed TCT in his name. Given these antecedents, good faith on the part of Go Kim Chuan cannot be doubted.

A certificate of title is merely an evidence of ownership or title over the particular property described therein. Therefore AZNAR should have availed itself of the legal remedy of reconstitution of the lost certificate of title, instead of registration under Act 3344. Act 3344 provides for the system of recording of transactions or claims over unregistered real estate without prejudice to a third party with a better right. But if the land is registered under the Land Registration Act (and therefore has a Torrens Title), and it is sold and the sale is registered not under the Land Registration Act but under Act 3344, as amended, such sale is not considered registered, as the term is used under Art. 1544 of the New Civil Code. ISSUE 2 Yes Go Kim Chuan is a purchaser in good faith. To be able to enjoy priority status under Article 1544, the second purchaser must be in good faith, i.e., he must have no knowledge of the previous alienation of the property by the vendor to another. Notably, what is important for this purpose is

Petitioner Raymundo sold three parcels of land to respondent Benita T. Ong. As these properties were mortgaged to Real Savings and Loan Association, Incorporated, petitioner and respondent executed a notarized deed of absolute sale with assumption of mortgage.

59 – 61 – MIRANDA #62 RAYMUNDO S. DE LEON v. BENITA T. ONG G.R. No. 170405 February 2, 2010 CORONA, J. Facts:

Subsequently, respondent learned that petitioner again sold the same properties to one Leona Viloria. Respondent thus proceeded to RSLAI to inquire. However, she was informed that petitioner had already paid the amount due and had taken back the certificates of title. Issue: Whether there is a void sale or double sale?

22 Held:

SPS. ESMERALDO and ARSENIA VALLIDO v. SPS. ELMER and JULIET PONO G.R. No. 200173 April 15, 2013 MENDOZA, J.:

This case involves a double sale as the disputed properties were sold validly on two separate occasions by the same seller to the two different buyers in good faith. Article 1544 clearly states that the rules on double or multiple sales apply only to purchasers in good faith. Needless to say, it disqualifies any purchaser in bad faith.

Facts:

Petitioner delivered the properties to respondent when he executed the notarized deed and handed over to respondent the keys to the properties. For this reason, respondent took actual possession and exercised control thereof by making repairs and improvements thereon. Clearly, the sale was perfected and consummated, thus, respondent became the lawful owner of the properties.

Martino, sold a portion of property to respondent Purificacion. Purificacion sold her portion of the subject property to respondent Marianito. Martino sold the whole subject property to his grandson, petitioner Esmeraldo. Considering that Martino had delivered OCT to Purificacion in 1960, he no longer had any certificate of title to hand over to Esmeraldo.

#63 MARIA LOURDES TAMANI et. al v. ROMAN SALVADOR et al G.R. No. 171497 April 4, 201 PERALTA, J.

Subsequently, the petitioners filed before the RTC a complaint for quieting of title against the respondents. Issue: Whether the petitioners are buyers and registrants in good faith?

Facts: Held: A Complaint for quieting of title was filed by respondent spouses against petitioners over a parcel of land. The Spouses Tamani allegedly sold the disputed property to Cruz as evidenced by a Deed of Absolute Sale. Cruz sold the disputed property to respondents through a Deed of Absolute Sale. Petitioners filed an Answer wherein they argued that they were the lawful owners of the disputed property. Petitioners contend that the signature of their parents were forged.

No, petitioners cannot be considered buyers in good faith. There are several indicia that should have placed the petitioners on guard and prompted them to investigate or inspect the property being sold to them. Failure of a prospective buyer to take such precautionary steps would mean negligence on his part and would preclude him from claiming or invoking the rights of a "purchaser in good faith." 66. G.R. No. 45158

Issue: Whether Respondents be considered buyers in good faith having purchased the property in dispute of Cruz?

June 2, 1994

ZENAIDA M. PALMA, Petitioner, v. HONORABLE COURT OF APPEALS AND PRODUCTS, INC., Respondents. ________________________________________

Held: No, a purchaser in good faith is one who buys the property of another, without notice that some other person has a right to, or interest in, such property, and pays the full and fair price for it at the time of such purchase or before he has notice of the claim or interest of some other persons in the property. In the case at bar, respondents were neighbors of petitioners and even co-owners of land. Thus, it is inconceivable for respondents not to know that petitioners had been exercising open, continuous and notorious possession over the property. #64

Facts: Reynaldo S. Palma and his wife, purchased from private respondent two Hino Diesel Trucks payable in installments. The Palmas executed two promissory notes in favor of private. Hence, private respondent filed a complaint with prayer for the issuance of a writ of preliminary attachment. The trial court subsequently issued an order of attachment against the property, both real and personal, of the Palmas. Issue: Whether the amount declared in the judgement of the trial court should have deducted the value of the two trucks which were already attached

23 Held: No, under Article 1484, private respondent opted for the first remedy and brought an action for collection of the unpaid balance. A judgment in an action for specific performance, as in this case, may be executed on all personal and real properties of the vendee which are not exempt from execution and which are sufficient to satisfy such judgment. 67. G.R. No. 74553

June 8, 1989

SERVICEWIDE SPECIALISTS, INCORPORATED, petitioner, vs. THE HONORABLE INTERMEDIATE APPELLATE COURT, GALICANO SITON AND JUDGE JUSTINIANO DE DUMO respondents. ________________________________________

No. In choosing, through replevin, the petitioner waived its right to bring an action to recover unpaid rentals on the said leased items pursuant to paragraph (3), Article 1484 in relation to Article 1485 of the Civil Code. By virtue of the writ of seizure the petitioner has deprived respondent of their use which in turn precludes the former from maintaining an action for recovery of accrued rentals or the recovery of the balance of the purchase price plus interest. 69.SECOND DIVISION [G.R. No. 109966. May 31, 1999] ELISCO TOOL MANUFACTURING CORPORATION, petitioner, vs. COURT OF APPEALS, ROLANDO LANTAN, and RINA LANTAN, respondents FACTS:

Facts: Galicano Siton purchased from Car Traders Philippines, Inc. a vehicle and paid a downpayment of the price. Siton executed a promissory note in favor of Car Traders Philippines, Inc. Subsequently, Filinvest Credit Corporation likewise reassigned said credit in favor of petitioner Servicewide Specialists, Inc. When Siton failed to pay, Servicewide Specialists filed this action against Galicano Siton and “John Doe.”

Private respondent Rolando entered into a lease agreement with the company involving a Colt Lancer. In 1981, Elisco Tool ceased operations, Rolando Lantan was laid off. Nonetheless, was able to make payments for the car. Elisco filed a complaint, entitled replevin plus sum of money, against Rolando Lantan and alleged that respondents failed to pay the monthly rentals.

Issue: Whether or not the refusal to issue the Writ of Replevin was proper. Held: YES. Article 1484 of the New Civil Code prescribes three remedies which a vendor may pursue in a contract of sale of personal property the price of which is payable in installments. It is clear from the prayer of petitioner that it had chosen the remedy of fulfillment when it asked to order private respondents to pay the remaining unpaid sums. By having done so, it has deemed waived the third remedy of foreclosure, and it cannot therefore ask at the same time for a Writ of Replevin. 68. PCI LEASING AND FINANCE, INC., Petitioner, - versus GIRAFFE-X CREATIVE IMAGING, INC., Respondent. G.R. No. 142618 FACTS: PCI LEASING and respondent GIRAFFE entered into a Lease Agreement. A year into the life of the Lease Agreement, GIRAFFE defaulted in its monthly rental-payment obligations. PCI LEASING, addressed a formal pay-or-surrenderequipment type of demand letter. The demand went unheeded. Hence PCI LEASING instituted the instant case against GIRAFFE praying for the issuance of a writ of replevin for the recovery of the leased property and payment of the balance of rental/obligation in the total amount. ISSUE: 2. Can PCI recover the unpaid balance? HELD:

ISSUES: 2. Can Elisco recover the remaining balance? HELD: No, 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 under ART. 1484. By virtue of the writ of seizure issued by the trial court, the deputy sheriff seized the vehicle on August 6, 1986 and thereby deprived private respondents of its use. The remedies provided for in Art. 1484 are alternative, not cumulative. The exercise of one bars the exercise of the others. 70. DANIEL L. BORBON II AND FRANCISCO L. BORBON vs. SERVICEWIDE SPECIALISTS, INC. & HON. COURT OF APPEALS G.R. No. 106418. July 11, 1996 FACTS: The Borbons signed a promissory note where they jointly and severally promised to pay Pangasinan Auto Mart, Inc. To secure the Promissory Note, they executed a Chattel Mortgage. The rights of PAMI was later assigned to Filinvest with notice to the Borbons. Because the Borbons did not pay their monthly installments, Filinvest demanded from the defendants the payment of their installments due by telegram. The Borbons claim that the vehicle that they bought was not delivered. Instead, through misrepresentation and machination, the PAMI delivered an Isuzu crew cab.

24 ISSUE: WON the petitioners may recover the deficiency? RULING: No. When the seller assigns his credit, the latter is likewise bound by the same law. Accordingly, when the assignee forecloses on the mortgage, there can be no further recovery of the deficiency. A contrario, in the event of the sellermortgagee first seeks the enforcement of the additional mortgages he must be then be held to have lost by waiver his lien on the chattel mortgage of the personal property sold by and mortgaged back to him. 71. People’s Industrial and Commercial Corp vs Court of Appeals PEOPLE'S INDUSTRIAL AND COMMERCIAL CORPORATION, petitioner, vs. COURT OF APPEALS and MAR-ICK INVESTMENT CORPORATION, respondents. G.R. No. 112733 October 24, 1997

Tomas Alano mortgaged the properties in favor of Renato Gepty. Gepty demanded that Tomas pay the loan. Tomas, however, did not have money at that time so he sought help from his niece, petitioner Mary Ann DehezaInamarga. After Tomas had passed away, respondents Celenia went to petitioner to redeem the property. Petitioner, however, told them that she had mortgaged the property to the Rural Bank of Libacao. Issue: Whether the transaction between petitioner and the Spouses Alano is one of sale or equitable mortgage? Held: Yes, an equitable mortgage is one which, although lacking in some formality, or form, or words, or other requisites demanded by a statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains nothing impossible or contrary to law.

Facts: Private respondent Mar-ick Investment Corporation entered into 6 agreements with petitioner People's Industrial whereby it agreed to sell to petitioner 6 subdivision lots. After the lapse of ten years, petitioner still had not fully paid for the six lots. Siatianum who signed the new agreements for PICC, issued checks. Mar-ick received but did not encash the checks. Instead, it filed in the RTC of Antipolo, Rizal, a complaint for accion publiciana de posesion against PICC and Tomas Siatianum, as president and majority stockholder. Issue: Whether there was justification for the grant of rentals and the award of attorneys fees in favor of Mar-ick. Ruling: YES. 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.

73. ALEXANDER and JEAN J. BACUNGAN v. COURT OF APPEALS and SPS. NAPOLEON and VICTORIA VELO G.R. No. 170282 December 18, 2008 Tinga, J. Facts: Respondents filed a complaint alleging that they were the registered owners of 18 parcels of land. Respondents claimed that they had experienced business reversals and had sought assistance from petitioners in securing a loan. Petitioners allegedly proposed that they would obtain the loan from the bank. However, respondents claimed that after petitioners had obtained the new titles, they never applied for a loan with the bank but had secretly negotiated for the sale of the properties to third parties. Issue: Whether the deeds of sale embody the real agreement of the parties?

PICC enclosed the area with a fence and made construction thereon. It is, therefore, not unconscionable to allow Mar-ick the rentals on the lots which are correctly decreed by the lower court. 72. MARY ANN DEHEZA-INAMARGA v. CELENIA C. ALANO G.R. No. 171321 December 18, 2008 Quisumbing, J Facts:

Held: No, the Court finds that the deeds of absolute sale do not embody the real intention of the parties. This kind of arrangement, where the ownership of the land is supposedly transferred to the buyer who provides for the funds to redeem the property from the bank but nonetheless allows the seller to later on buy back the properties, is in the nature of an equitable mortgage governed by Articles 1602 and 1604 of the Civil Code. 74. [ G.R. No. 173002, July 04, 2008 ]

25 BENJAMIN BAUTISTA, PETITIONER, VS. SHIRLEY G. UNANGST AND OTHER UNKNOWN PERSONS, RESPONDENTS. FACTS: Hamilton Salak rented a car from BAUTISTA who failed to return the car after three (3) days prompting the latter to file a complaint against him. Salak and UNANGST, expressed willingness to pay but since they were then short on cash, they sold to BAUTISTA a house and lot with right to repurchase. UNANGST failed to repurchase the property within the stipulated period. As a result, BAUTISTA filed a complaint for specific performance or recovery of possession, for sum of money, for consolidation of ownership and damages against UNANGST. ISSUE: Should the deed of sale with right to repurchase executed by the parties be construed as an equitable mortgage? HELD: Yes, in a contract of sale with pacto de retro, the legal title to the property is immediately transferred to the vendee, subject to the vendor's right to redeem. Retention, by the vendor of the possession of the property is inconsistent with the vendee's acquisition of the right of ownership under a true sale. The true intention of the parties is to secure the payment of said debts. The decisive factor in determining the true nature of the transaction between the parties is the intent of the parties.

No. 75 | G.R. No. 174240

March 20, 2013

performance of any other obligation." In the instant case, it has been established that the intent of both petitioners and respondent is that the subject property shall serve as security for the latter's obligation to the former. The circumstances surrounding the execution of the disputed Deed of Transfer would show that the said document was executed to circumvent the terms of the original agreement and deprive respondent of her mortgaged property without the requisite foreclosure. No. 76 LUMAYAG V. NEMEÑO (2007) [ G.R. NO. 162112, JULY 03, 2007 ] Facts: Spouses Nemeño are predecessors-in-interest of the herein respondent heirs, owned two (2) parcels of coconut land. Thereafter, the spouses Lumayag filed with the RTC a petition for the reconstitution of the owner’s duplicate copy. The petition was opposed by the other heirs of Jacinto and Dalmacia who claimed that the owner’s duplicate copy of the same OCT was actually in the possession and custody of their brother Meliton Nemeño, the administrator of the property. Issue: WON The Pacto de Retro Sale is an Equitable mortgage? Held: Yes, in the instant case, for one, the supposed price for the sale with pacto de retro is unusually inadequate for the two (2) parcels of land. Respondent’s heirs remained in possession of the subject properties even after the execution of the subject instrument. The parties intended to enter into an equitable mortgage is further accentuated by respondents’ continued payment of the real property taxes subsequent to the alleged sale.

SPOUSES LEHNER and LUDY MARTIRES, Petitioners, vs. MENELIA CHUA, Respondent. Sorry Guys! Respondent borrowed from petitioner amount of money. The loan was secured by a real estate mortgage over the abovementioned property. Respondent failed to fully settle her obligation. Subsequently, without foreclosure of the mortgage, ownership of the subject lots were transferred in the name of petitioners via a Deed of Transfer. Respondent filed with the RTC a Complaint against petitioners.

77 ROBERTS v PAPIO FACTS: The Spouses Papio they executed a real estate mortgage on the property in order to secure loan from the Amparo Investments Corp. Since the couple needed money to redeem the property they executed a Deed of Absolute Sale over the property in favor of Martin Papio’s cousin,Amelia Roberts A new TCT was issued in the name of Amelia Roberts as owner. Martin Papio then failed to pay rentals, but he and his family nevertheless remained in possession of the property.* Roberts reminded Papio that he failed to pay monthly rentals and upon failure demanded that Papio vacate the property.

Issue: whether the contract executed is an equitable mortgage Ruling: Yes, Under Article 1602 of the Civil Code, where a contract shall be presumed to be an equitable mortgage, is "where it may be fairly inferred that the real intention of the parties is that the transaction shall secure the payment of a debt or the

ISSUE: W/N THE DEED OF ABSOLUTE SALE AND CONTRACT OF LEASE EXECUTED BY THE PARTIES IS AN EQUITABLE MORTGAGE OVER THE PROPERTY RULING:

26

NO. An equitable mortgage is one that, although lacking in some formality nevertheless reveals the intention of the parties to charge a real property as security for a debt and contain nothing impossible or contrary to law. The decisive factor is the intention of the parties. In an equitable mortgage, the mortgagor retains ownership over the property but subject to foreclosure and sale at public auction upon failure of the mortgagor to pay his obligation. 78. SPS. DIZON - versus AIDA G. DIZON, Respondent. G.R. No. 172771 Promulgated: January 31, 2008 DECISION CARPIO MORALES, J.: FACTS: Aida G. Dizon mortgaged to Monte de Piedad a parcel of land. However, she failed to settle the loan. Petitioner Elizabeth, on behalf of respondent, paid for the property. Monte de Piedad thereupon executed a deed of sale in favor of respondent who, in turn executed a deed of sale in favor of Elizabeth. Respondent and petitioners executed an agreement giving respondent the option to buy back the property within three (3) months. Three months having elapsed without respondent repurchasing the property. ISSUE: Is the transaction an equitable mortgage? HELD: No. The presumption of equitable mortgage created in Article 1602 of the Civil Code is not conclusive. In the case at bar, ample evidence supports petitioners claim that the transaction between them and respondent was one of sale with option to repurchase. While after the sale of the property respondent remained therein, her stay was not in the concept of an owner. 79. HEIRS REYES -versus AMANDA S. REYES G.R. No. 158377 August 13, 2010 BERSAMIN, J.: FACTS: Leoncia and her three sons executed a deed in favor of Spouses Francia subject to the vendors right to repurchase for the same amount. Nonetheless, Teofilo remained in possession of the property.

Alejandro executed a Kasulatan wherein he declared that he had acquired all the rights and interests of the heirs of the Spouses Francia. Respondent Amanda Reyes asked the heirs of Teofilo and Jose, Jr., to vacate the property because she and her children already needed it. ISSUE: Is the transaction an equitable mortgage? HELD: Yes. The CA correctly concluded that the true agreement of the parties was an equitable mortgage, not a pacto de retro sale. There was no dispute that the purported vendors had continued in the possession of the property even after the execution of the agreement; and that the property had remained declared for taxation purposes under Leoncias name despite the execution of the agreement. 80. PIDLAOAN v. EUFEMIA G.R. No. 196470 April 20, 2016 BRION, J.: FACTS: Elma bought a parcel of land and Rosario caused the construction of a house on. Elma mortgaged the house. When the properties were about to be foreclosed, Elma asked for help from Eufemia Eufemia who likewise called her daughter Normita, to lend money to Elma. Elma tried to sell the land but when she failed to find a buyer, she offered the same to Eufemia or her daughter. Rosario found out about what happened when she returned to the country a year or two after the transaction. ISSUES: Is the transaction an equitable mortgage? HELD: ISSUE 1 No. Articles 1602 and 1604 of the Civil Code provide that a contract of absolute sale shall be presumed an equitable mortgage if any of the circumstances listed in Article 1602 is attendant. In the present case, the unnotarized contract of sale contents show an unconditional sale of property between Elma and Normita. The document shows no intention to secure a debt or to grant a right to repurchase. 81. REPUBLIC OF THE PHILIPPINES, vs. INTERMEDIATE APPELLATE COURT, LUTGARDA PASILIAO THIRD DIVISION G.R. No. 74830 July 5, 1993 REPUBLIC OF THE PHILIPPINES, petitioner, vs.

27 INTERMEDIATE APPELLATE COURT, LUTGARDA PASILIAO, ERNESTO BROSAS, BIENVENIDO CLAUDIO and TOMAS PASILIAO, respondents. The Solicitor General for petitioner. Gregorio R. Mindaro for private respondent. ROMERO, J.:

property within five (5) years from the date of the document by paying and redeeming back to spouses (herein petitioners) the same amount of P1,000.00.

FACTS: Rufina went to Manila and offered for sale the parcel of land to Dionisia Estrada vda. de Memije and her husband who was then still alive. Several councilors convinced Mrs. Memije into selling the property for the use of the high school.

FACTS: Nueva, sold under a pacto de retro, a parcel of land to Agan. The parties agreed that the Nuevas are granted the right to repurchase the property sold, within six (6) months. Petitioners failed to repurchase the property within the stipulated sixmonth period.

Tomas as heirs of Antonio Pasiliao, endeavoured to prove that they are the rightful owners of the property involved. The defendants disclaimed the alleged sale. ISSUES: What is the nature of the transaction? HELD: ISSUE 1 Art. 1603 of the Civil Code stating that in case of doubt, a contract purporting to be a sale with right to repurchase shall be construed as an equitable mortgage, should be applied. As such, the contract. should be deemed an equitable mortgage and, therefore, ownership of Mrs. Memije of the property would not have been consolidated until after foreclosure of the mortgage had been undertaken. 82 – ULIT

84. Agan vs. Heirs of Nuevo

Upon the death of Nueva, the property was extrajudicially partitioned. Agan filed a petition for consolidation of ownership against Spouses Andres. However, the vendors can still exercise the right to repurchase said property within thirty (30) days. ISSUE: Whether vendors can still exercise their right to repurchase? RULING: No, by express provision, Article 1606 grants the vendor a retro thirty (30) days from the time final judgment was rendered, not from the defendant’s receipt of the judgment. The Court has construed final judgment to mean one that has become final and executory. 85. Sps. Alexander and Adelaida Cruz vs Eleuterio Leis

83. Pangilinan vs Ramos Facts: Spouses Quiambao executed and signed a Deed of Absolute Sale in favor of Leocadio. Leocadio sold the same parcel of land to plaintiff Ramos, who later sold to defendant Lintag. The same deed of sale with conventional redemption also provides that Ramos has the power to redeem said property within five (5) years. About four or five years Ramos tried to redeem the parcel of land in question but defendants informed her that Ramos should be the one to redeem the property. ISSUE: whether or not the property in question is still subject to a right of repurchase. RULING: Under the circumstances, the subject property is undoubtedly redeemable. It is very clear from the terms of the contract that the agreement entered into between the parties is one of a sale with conventional redemption. As categorically provided therein, the vendor has the power to redeem the said

FACTS: Isidro acquired from the Department of Agriculture and Natural Resources a parcel of land, which was titled in her name. Isidro secured a loan from Cruz secured by a mortgage on the land from DANR, but failed to pay on due date. When Isidro died, Cruz demanded her heirs to vacate the premises. The heirs then filed a complaint with the RTC averring that the land was conjugal property having been purchased during their marriage. ISSUE: Can the heirs still has the right to repurchase? RULING: No. Article 1607 of the Civil Code requires a judicial hearing before registration of the property in the name of petitioners.. A judicial order is necessary in order to determine the true nature of the transaction and to prevent the interposition of buyers in good faith while the determination is being made. #86

28 BPI FAMILY SAVINGS BANK, INC. vs. SPS. JANUARIO ANTONIO VELOSO AND NATIVIDAD VELOSO G.R. No. 141974 August 9, 2004 CORONA, J. Facts: Respondent spouses Veloso obtained a loan from petitioner’s predecessorin-interest Family Bank and Trust Company. To secure payment of the loan, veloso executed in favor of the bank a deed of mortgage over three parcels of land. Veloso, through counsel, wrote BPI offering to redeem the foreclosed properties. This was, however, rejected by BPI. VELOSO filed in the RTC of Quezon City, Branch 94, a complaint for annulment of foreclosure, with consignation and prayer for damages. Issue: Whether respondent spouses VELOSO comply with all the requirements for the redemption of the subject properties? Held: No, The general rule in redemption is that it is not sufficient that a person offering to redeem manifests his desire to do so. It must be accompanied by an actual and simultaneous tender of payment. This constitutes the exercise of the right to repurchase. The right to repurchase was held to have been properly exercised, there was an unequivocal tender of payment for the full amount of the repurchase price.

Whether the provisions under Article 1621 and 1623 are applicable in this case? Held: Yes, Article 1621 of the Civil Code expresses that the right of redemption it grants to an adjoining owner of the property conveyed may be defeated if it can be shown that the buyer or grantee does not own any other rural land. The appellate court, sustaining the trial court, has said that there has been no evidence proffered to show that respondents VALENCIA are not themselves owners of rural lands for the exclusionary clause of the law to apply.

#88 SEN PO EK MARKETING CORPORATION vs. TEODORA PRICE MARTINEZ, JUANITO TIU UYPING, JR., NELSON TIU UYPING and LEONCIO TIU UYPING G.R. No. 134117 February 9, 2000 DE LEON, JR., J. Facts: Sofia leased the lots to Yu Siong. It required the lessee to construct a commercial building on the leased property which shall become the property of Sofia upon the expiration of the lease. After the lease contract expired, it was no longer renewed by the parties. Teodora sent a letter to petitioner Sen Po Ek informing it of her intention to sell the leased premises. Petitioner Sen Po Ek filed a verified complaint against Teodora for the annulment of the Deed of Sale executed by her mother, Sofia.

#87 PRIMARY STRUCTURES CORP. vs. SPS. ANTHONY S. VALENCIA and SUSAN T. VALENCIA G.R. No. 150060 August 19, 2003 VITUG, J. Facts: Adjacent to the lot of petitioner PRIMARY STRUCTURED are parcels of land. The three lots, have been sold by Hermogenes Mendoza to respondent spouses VALENCIA. Petitioner sent another letter to respondents tendering payment of the price paid to Mendoza by respondents for the lots. Respondents, in response, informed petitioner that they had no intention of selling the parcels. Issue:

Issue: Whether Petitioner Sen Po Ek have a right of first refusal? Held: No, Petitioner Sen Po Ek does not have a right of first refusal. The right of first refusal may be provided for in a lease contract. However in this case, such right was never stipulated in any of the several lease contracts between petitioner and Sofia. Such grant of the right of first refusal must be clearly embodied in a written contract, but there is none in the present case.

#89 NELSON CABALES and RITO CABALES vs. COURT OF APPEALS

29 G.R. No. 162421 August 31, 2007 PUNO, C.J.

At the same time, petitioner complied with its obligation under the conditional deeds of sale, as follows: (1) the mortgages over the land were released; (2) the unlawful occupants of the lots surrendered their possession and use of the said lots in consideration of the amount, and their shanties demolished (3) the mortgage with Philippine Trust Company over one property was discharged.

Albino and Alberto sold the subject property to Dr. Cayetano with right to repurchase within eight (8) years. Within the eight-year redemption period, Bonifacio and Albino tendered their payment to Dr. Corrompido.

However, respondent suspended further payment as it was not satisfied with the manner petitioner complied with its obligations under the conditional deeds of sale. Consequently, on March 17, 1978, petitioner sent respondent a letter informing respondent of its intention to rescind the conditional deeds of sale and attaching therewith the original copy of the respective notarial rescission.

Facts:

Petitioner Nelson, went back to his father’s hometown. That same year, he learned from his uncle, petitioner Rito, of the sale of subject property. In 1993, he signified his intention to redeem the subject land. Issue: Whether petitioners redeem the subject land from respondents-spouses? Held: No, under Articles 1088 and 1623 of the New Civil Code, legal redemption may only be exercised by the co-owner or co-owners who did not part with his or their pro-indiviso share in the property held in common. As demonstrated, the sale as to the undivided share of petitioner Rito became valid and binding upon his ratification on July 24, 1986. As a result, he lost his right to redeem subject property.

There was a previous case. On November 28, 1994, respondent filed a Complaint for specific performance and damages against petitioner with the RTC of Antipolo City. However, on January 15, 1996, the case was dismissed without prejudice for lack of interest, as respondent's counsel failed to attend the pre-trial conference. Five years later, or on March 16, 2001, respondent again filed with the RTC of Manila a Complaint for specific performance and damages, seeking to compel petitioner to accept the balance of the purchase price for the two conditional deeds of sale and to execute the corresponding deeds of absolute sale. Applying the Maceda Law, Petitioner contended that it could not be compelled to execute any deed of absolute sale, because respondent failed to pay in full the purchase price of the subject lots. Petitioner claimed that it gave respondent a notice of notarial rescission of both conditional deeds of sale that would take effect 30 days from receipt thereof.

90. G.R. No. 179594

September 11, 2013

MANUEL UY & SONS, INC., Petitioner, vs. VALBUECO, INCORPORATED, Respondent.

Respondent, however, denied that it received the alleged notice of notarial rescission.

Facts:

The trial court ruled in favor of the petitioner, and dismissed the complaint of the respondent. The Court of Appeals, however, rendered a Decision, reversing and setting aside the Decision of the trial court. It reinstated the complaint of respondent, and directed petitioner to execute deeds of absolute sale in favor of respondent after payment of the balance of the purchase price of the subject lots.

Petitioner Manuel Uy & Sons, Inc. is the registered owner of parcels of land located in Teresa, Rizal covered by multiple TCTs.

Issues: Whether or not RA6552 (Maceda Law) may apply in a conditional sale?

Two Conditional Deeds of Sale were executed by petitioner, as vendor, in favor of respondent Valbueco, Incorporated, as vendee, over the lots in Rizal. Such sale was that of an installment.

Held: 1) YES. The Court of Appeals correctly held that R.A. No. 6552, otherwise known as the Realty Installment Buyer Act, applies to the subject contracts to sell. R.A. No. 6552 recognizes in conditional sales of all kinds of real estate (industrial, commercial, residential) the right of the seller to cancel the contract upon nonpayment of an installment by the buyer, which is simply an event that prevents the obligation of the vendor to convey title from acquiring binding force

Respondent was able to pay petitioner the amount as partial payment for the two properties corresponding to the initial payments and the first installments of the said properties.

30 91. SPOUSES NOYNAY V. CITIHOMES BUILDER SECOND DIVISION G.R. No. 204160 September 22, 2014 SPOUSES MICHELLE M. NOYNAY and NOEL S. NOYNAY, Petitioners, vs. CITIHOMES BUILDER AND DEVELOPMENT, INC., Respondent. DECISION MENDOZA, J.:

FACTS: On December 29, 2004, Citihomes and Spouses Noynay executed a contract to sell covering the sale of a house and lot. Under the terms of the contract, the price of the property was fixed at ₱915,895.00, with a downpayment of ₱183,179.00, and the remaining balance to be paid in 120 equal monthly installments with an annual interest rate of 21% commencing on February 8, 2005 and every 8th day of the month thereafter. Subsequently, on May 12, 2005, Citihomes executed the Deed of Assignment of Claims and Accounts (Assignment) in favor of United Coconut Planters Bank (UCPB) on May 12, 2005. Under the said agreement, UCPB purchased from Citihomes various accounts, including the account of Spouses Noynay, for a consideration of ₱100,000,000.00. In turn, Citihomes assigned its rights, titles, interests, and participation in various contracts to sell with its buyers to UCPB. In February of 2007, Spouses Noynay started to default in their payments. Months later, Citihomes decided to declare Spouses Noynay delinquent and to cancel the contract considering that nine months of agreed amortizations were left unpaid. On December 8, 2007, the notarized Notice of Delinquency and Cancellation of the Contract To Sell, dated November 21, 2007, was received by Spouses Noynay. They were given 30 days within which to pay the arrears and failure to do so would authorize Citihomes to consider the contract as cancelled. On June 15, 2009, Citihomes sent its final demand letter asking Spouses Noynay to vacate the premises due to their continued failure to pay the arrears. Spouses Noynay did not heed the demand, forcing Citihomes to file the complaint for unlawful detainer before the MTCC on July 29, 2009. In the said complaint, Citihomes alleged that as per Statement of Account as of March 18, 2009, Spouses Noynay had a total arrears in the amount of ₱272,477.00, inclusive of penalties. Thus, Citihomes prayed that Spouses Noynay be ordered to vacate the subject property and pay the amount of ₱8,715.97 a month as a reasonable compensation for the use and occupancy to commence from January 8, 2007 until Spouses Noynay vacate the same. The MTCC dismissed the complaint. It considered the annotation in the certificate of title, which was dated prior to the filing of the complaint, which showed that Citihomes had executed the Assignment favor of UCPB, as having the legal effect of divesting Citihomes of its interest and right over the subject

property. As far as the MTCC was concerned, Citihomes did not have a cause of action against Spouses Noynay. The RTC, however, reversed the ruling of the MTCC and stated that the MTCC erred in interpreting the deed of assignment as having the effect of relinquishing all of Citihomes’ rights over the subject property. The RTC explained that the assignment was limited only to the installment accounts receivables due from Spouses Noynay and did not include the transfer of title or ownership over the property. It pointed out that Citihomes remained as the registered owner of the subject property, and so it had the right to ask for the eviction of Spouses Noynay. Spouses Noynay then went to the CA but the CA affirmed the conclusion of the RTC that Citihomes still had the right and interest over the property in its capacity as the registered owner. Moreover, the issue on who, between the parties had a better possessory right over the property, was resolved in favor of Citihomes. In disposing the issue of possession, the CA primarily recognized the relevance of Republic Act (R.A.)No. 6552, otherwise known as the Realty Installment Buyer Act (Maceda Law), in determining the limits of the right to possess of Spouses Noynay in their capacity as defaulting buyers in a realty installment scheme. Under the said law, the cancellation of a contract would only follow if the requirements set forth therein had been complied with, particularly the giving of a "notice of delinquency and cancellation of the contract" to the defaulting party and,in some cases, the payment to the buyer of the cash surrender value if at least two years of installments had been paid. The CA noted that Spouses Noynay failed to complete the minimum two (2) years of installment, despite the allegation that three (3) years of amortizations had already been paid. As an effect, the CA pronounced that the termination of the contract was validly effected by the expiration of the 30-day period from the time the notice of cancellation was received by Spouses Noynay. From that moment, the CA treated Spouses Noynay to have lost the right to possess the property. In addition, the CA made Spouses Noynay liable for the payment of monthly rentals from the time their possession became illegal. Spouses Noynay moved for reconsideration, but the CA denied their motion. ISSUE: Does Citihomes have a cause of action for ejectment against Spouses Noynay? HELD: No. Evident from the tenor of the agreement was the intent on the part of Citihomes, as assignor, to assign all of its rights and benefits in favor of UCPB. Specifically, what Citihomes did was an assignment or transfer of all contractual rights arising from various contracts to sell, including the subject contract to sell, with all the rights, obligations and benefits appurtenant thereto in favor of UCPB for a consideration of ₱100,000,000.00. Indeed, the intent was more than just an assignment of credit. This intent to assign all rights under the contract to sell was

31 even fortified by the delivery of documents such as the pertinent contracts to sell and the TCTs. Had it been the intent of Citihomes to assign merely its interest in the receivables due from Spouses Noynay, the tenor of the deed of assignment would have been couched in very specific terms. Included in those matters which were handed over to UCPB were the provisions outlined in Section 6 of the Contract to Sell. In the said provision, Citihomes, as the seller has been given the right to cancel the contract to sell in cases of continuing default by Spouses Noynay, to wit: SECTION 6. If for any reason, whatsoever, the BUYER fails to pay three (3) consecutive monthly installments, the provision of RA No. 6552 shall apply. Where the BUYER has paid less than two (2) years of installments and defaults in the payment of three (3) consecutive monthly installment, he shall be given a grace period of not less than sixty (60) days from the date the installment payments became due and payable within which to pay the installments and/or make payments in arrears together with the installments corresponding to the months of the grace period. In the event the BUYER continues to default in the payment of the installments within or at the expiration of the grace period herein provided, the SELLER shall have the right to cancel this agreement thirty (30) days from the BUYER’s receipt of the notice of cancellation or demand for rescission by a notarial act. Thereafter, the SELLER may dispose of the residential house and lot subject of this agreement in favor of other persons as if this agreement had never been entered into. WHERE the BUYER has paid at least two (2) years of installments and he defaults in the payment of three (3) consecutive monthly installments, the SELLER shall be entitled: a. To pay, without additional interest, the unpaid installment due within the total grace period earned by the BUYER which is fixed at the rate of one (1) month grace period for every one (1) year of installment payment made; Provided, that this right shall be exercised by the BUYER only once for every five (5) years of the life of this agreement. b. If this agreement is cancelled, the SELLER shall refund to the BUYER the cash surrender value of the payments equivalent to fifty percent thereof and, after five years of installments, an additional five percent (5%) for every year but not to exceed ninety (90%) of the total payments made; Provided, that the actual cancellation of this agreement shall take place after thirty (30) days from receipt by the BUYER of the notice of cancellation or demand for rescission by a notarial act and upon full payment of the cash surrender value to the BUYER.

Well-established is the rule that the assignee is deemed subrogated to the rights as well as to the obligations of the seller/assignor. By virtue of the deed of assignment, the assignee is deemed subrogated to the rights and obligations of the assignor and is bound by exactly the same conditions as those which bound the assignor. What can be inferred from here is the effect on the status of the assignor relative to the relations established by a contract which has been

subsequently assigned; that is, the assignor becomes a complete stranger to all the matters that have been conferred to the assignee. In this case, the execution of the Assignment in favor of UCPB relegated Citihomes to the status of a mere stranger to the jural relations established under the contract to sell. With UCPB as the assignee, it is clear that Citihomes has ceased to have any right to cancel the contract to sell with Spouses Noynay. Without this right,which has been vested in UCPB, Citihomes undoubtedly had no cause of action against Spouses Noynay.

Other Jurisprudence Without the valid cancellation of the contract, there is no basis to treat the possession of the property by Spouses Noynay as illegal. In AMOSUP-PTGWOITF v. Decena, the Court essentially held that such similar failure' to validly cancel the contract, meant that the possessor therein, similar to Spouses Noynay in this case, remained entitled to the possession of the property. In the said case, the Court stated: In the parallel case of Pagtalunan v. Dela Cruz Vda. De Manzano, which likewise originated as an action for unlawful detainer, we affirmed the finding of the appellate court that, since the contract to sell was not validly cancelled or rescinded under Section 3(b) of R.A. No. 6552, the respondent therein had the right to continue occupying unmolested the property subject thereof. 92. SPOUSES GARCIA, GALVEZ VS CA; dela CRUZ AND BARTOLOME FACTS: Spouses entered into a Contract to Sell wherein Cruz agreed to sell the 5 parcels of land. On its due date, plaintiffs failed to pay the last installment and offered to pay the balance delayed by one and a half year, which dela Cruz refused to accept. In order to compel dela Cruz to accept payment and execute the transfer, plaintiffs filed before the RTC a complaint for specific performance. ISSUE: Is the Maceda Law applies in this case? RULING: NO, since the subject land do not comprise residential real estate within the contemplation of the Maceda Law. Even if Maceda Law will be applied, plaintiffs offer of payment to Dela Cruz was made a year and a half after the stipulated date. This is beyond the sixty-day grace period under Section 4 of the Maceda Law.

93 – NENARIA 94 - ALANO

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