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BEHTTINA KIM M.

BARRIOS|SALES CASES DIGESTS

2013

ANDRES QUIROGA VS. PARSONS HARDWARE CO. GR N0. 11491 (AUGUST 23, 1918) FACTS In 1911, in the city of manila, a contract was entered by and between Andres quiroga and j. Parsons. The contract stipulates that quiroga grants parsons an exclusive right to sell his beds in the Visayan Islands under the following conditions: Quiroga shall furnish beds of his manufacture to Mr. Parsons for the latter's establishment in Iloilo. Mr. Parsons shall order the beds by the dozen, whether of the same or of different styles. He also provides a discount of 25 per cent of the invoiced prices and another 2 percent deduction for prompt payment which is payable within a period of sixty days from the date of their shipment.

plaintiff for the sale of these beds in Manila, with a discount of from 20 to 25 per cent, according to their class. Payment was to be made at the end of sixty days, or before, at the plaintiff's request, or in cash, if the defendant so preferred, and in these last two cases an additional discount was to be allowed for prompt payment. These are precisely the essential features of a contract of purchase and sale. There was the obligation on the part of the plaintiff to supply the beds, and, on the part of the defendant, to pay their price. These features exclude the legal conception of an agency or order to sell whereby the mandatory or agent received the thing to sell it, and does not pay its price, but delivers to the principal the price he obtains from the sale of the thing to a third person, and if he does not succeed in selling it, he returns it. By virtue of the contract between the plaintiff and the defendant, the latter, on receiving the beds, was necessarily obliged to pay their price within the term fixed, without any other consideration and regardless as to whether he had or had not sold the beds.

Furthermore, Mr. Parsons may sell, or establish branches of his agency for the sale of "Quiroga" beds in all the towns of the Archipelago where there are no exclusive agents, and shall immediately report such action to Mr. Quiroga for his approval. The action filed by the petitioner contending that defendant violated some of the conditions and that the latter is his agent for the sale in Iloilo ISSUE whether the defendant, by reason of the contract hereinbefore transcribed, was a purchaser or an agent of the plaintiff for the sale of his beds. HELD In the contract in question, what was essential, as constituting its cause and subject matter, is that the plaintiff was to furnish the defendant with the beds which the latter might order, at the price stipulated, and that the defendant was to pay the price in the manner stipulated. The price agreed upon was the one determined by the

ENGINEERING AND MACHINERY CORP. VS. CA GR NO. 37831 (NOVEMBER 23 1981) FACTS Pursuant to a contract entered into between petitioner engineering and machinery corp and respondent CA, the former undertook to fabricate, furnish and install air-conditioning system in the latter's building for a consideration. The petitioner was to furninsh the materials, labor, tools and all services required. The system was completed and the respondent paid the petitioner the full price. When the building was sold to NDIC and subsequently re acquired due to non compliance with the terms and conditions of the deed of sales, respondent found out that there are hidden defects in the air conditioning system of the building.

BEHTTINA KIM M. BARRIOS|SALES CASES DIGESTS

2013

Respondent filed an action for damages against petitioner with the CFI. The former alleged that petitioner failed to comply with agreed plans and specifications. Petitioner moved to dismiss the petition alleging the prescriptive period to file had already prescribed pursuant to 1566 and 1567 in relation to 1571 of CC . respondent countered that the contract was not a contract of sale but a contract of piece of work under art 1713 thus in accordance with 1144, the complaint was brought within 10 years prescription period. RTC ruled in favor of the respondent. On appeal, the CA affirmed hence this petition. ISSUE Whether or not the contract entered into by the parties is a contract of sale or a contract for piece of work. HELD A contract for a piece of work, labor and materials may be distinguished from a contract of sale by the inquiry as to whether the thing transferred is one not in existence and which would never have existed but for the order, of the person desiring it. In such case, the contract is one for a piece of work, not a sale. On the other hand, if the thing subject of the contract would have existed and been the subject of a sale to some other person even if the order had not been given, then the contract is one of sale A contract for the delivery at a certain price of an article which the vendor in the ordinary course of his business manufactures or procures for the general market, whether the same is on hand at the time or not is a contract of sale, but if the goods are to be manufactured specially for the customer and upon his special order, and not for the general market, it is a contract for a piece of work (Art. 1467, Civil Code) Clearly, the contract in question is one for a piece of work. It is not petitioner's line of business to manufacture air-conditioning systems to be sold "off-the-shelf." Its business and particular field of expertise is the fabrication and installation of such systems as ordered

by customers and in accordance with the particular plans and specifications provided by the customers Prescriptive period provided in Article 1567 in relation to 1571 of 6 month has no application in the case at bar since the action of the respondent is not to enforce warranties but for the breach of a written contract under 1715. However, inasmuch as this provision does not contain a specific prescriptive period, the general law on prescription, which is Article 1144 of the Civil Code, will apply. Said provision states, inter alia, that actions "upon a written contract" prescribe in ten (10) years

RESTITUTA V. VDA DE GORDON VS. COURT FO APPEALS GR NO. 37831 (NOVEMBER 23,1981) FACTS Two parcel of land was sold at a public auction at the Quezon City hall due to non payment of taxes in year of 1953 to 1963. The sale was advertised to satisfy the taxes, penalties and costs. On 1964, the land was sold to Rosario Duazo for the amount of 10,500 representing the taxes, penalties and costs. The certificate of sales was executed and duly registered in the Registry of dees; upon the failure to redeem the land within one year, a final deed of sale of lands and the improvements thereof was also registered in the office of register of deeds. ISSUE 1. Whether the price is grossly inadequate as to justify the setting aside of public sale 2. Whether the oppositor( Gordon) is entitled to redeem the two parcel of land in question HELD The combined assessed value of the two parcels of land is P16,800.00. . The residential house on the land is assessed at P45,580.00. The price paid at the public sale is P10,500.00. But the

BEHTTINA KIM M. BARRIOS|SALES CASES DIGESTS

2013

assessment was made in 1961. The present value of the residential house must be much less now considering the depreciation for over ten years. While the price of P10,500.00 is less than the total assessed value of the land and the improvement thereon, said price cannot be considered so grossly inadequate as to be shocking to the conscience of the court In the case at bar, the price of P10,500.00 is about one sixth of the total assessed value of the two parcels of land in question and the residential house thereon. The finding of the lower court that the house and land in question have a fair market value of not less than P200,000.00 has no factual basis. It cannot be said, therefore, that the price of P10,500.00 is so inadequate as to be shocking to the conscience of the court. Mere inadequacy of the price alone is not sufficient ground to annul the public sale. As the Court has held in Velasquez vs. Coronet alleged gross inadequacy of price is not material "when the law gives the owner the right to redeem as when a sale is made at public auction, upon the theory that the lesser the price the easier it is for the owner to effect the redemption." ORDUNA VS. FUENTABELLA GR NO. 176841 (JUNE 29, 2010)
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Cids for PhP 80,000. Then to Benjamin, and finally to Eduardo. Eduardo sent a letter addressed to the residence of Gabriel Jr. demanding that all persons residing on or physically occupying the subject lot vacate the premises or face the prospect of being ejected. When the petitioners found out about the sale, he went to Gabriel jr's house. There he found the latter's wife teresita, who informed them that her husband forged her signature in the deed of sale petitioners, joined by Teresita, filed a Complaint for Annulment of Title, Reconveyance with Damages against the respondents before the RTC, specifically praying that TCT No. T-3276 dated May 16, 2000 in the name of Eduardo be annulled. the RTC ruled for the respondents stating that Eduardo was a purchaser in good faith and Under Arts. 1356 and 1358 of the Code, conveyance of real property must be in the proper form, else it is unenforceable and The verbal sale had no adequate consideration. the appellate court rendered the assailed Decision affirming the RTC decision ISSUE whether or not such sale has adequate consideration HELD According to the SC "the trial court held that the petitioners cannot sue upon the oral sale since in its own words: "x x x for more than a decade, [petitioners] have not paid in full Armando Gabriel, Sr. or his estate, so that the sale transaction between Armando Gabriel Sr. and [petitioners] [has] no adequate consideration" Is patently flawed. They equated incomplete payment of the purchase price with inadequacy of price. the first being a ground to rescind an otherwise valid and enforceable contract. Perceived inadequacy of price, on the other hand, is not a sufficient ground for setting aside a sale freely entered into, save perhaps when the inadequacy is shocking to the conscience. fact that the contracting parties to the 1995 or 1996 sale agreed to a purchase price of PhP 125,000 payable on installments. But the original lot owner, Gabriel Sr., died before full payment can be effected. Nevertheless, petitioners continued remitting payments to Gabriel, Jr. who sold the same for only 50,000. Thus, it is clear that what Antonita agreed to pay Gabriel, Sr., albeit in installment, was

S o m e t i m e i n 1 9 9 6 , Gabriel Sr. sold the subject lot to petitioner Antonita Ordua (Antonita), but no formal deed was executed to document the sale. The contract price was apparently payable in installments as Antonita remitted from time to time and Gabriel Sr. accepted partial payments and was later on paid to Gabriel JR. after Gabriel SR.'s death. Gabriel Jr. acknowledged that petitioner had so far made an aggregate payment of PhP 65,000, leaving an outstanding balance of PhP 60,000 Despite all those payments made for the subject lot, Gabriel Jr. would later sell it to Bernard Banta (Bernard) obviously without the knowledge of petitioners. Subsequently the land was sold to Marcos

BEHTTINA KIM M. BARRIOS|SALES CASES DIGESTS

2013

very much more than what his son, for the same lot, received from his buyer

HELD According to Article 1352 of the Civil Code, contracts without cause produce no effect whatsoever. A contract of sale with a simulated price is void (Article 1471; also Article 1409 [3]]), and an action for the declaration of its nullity does not prescribe. However, The burden of proof in showing that contracts lack consideration rests on he who alleged it. The degree of proof becomes more stringent where the documents themselves show that the vendor acknowledged receipt of the price, and more so where the documents were notarized, as in the case at bar. Secondly, neither may the contract be declared void because of alleged inadequacy of price. To begin with, there was no showing that the prices were grossly inadequate. Gross inadequacy of price alone does not affect a contract of sale, except that it may indicate a defect in the consent, or that the parties really intended a donation or some other act or contract . and there is nothing in the records at all to indicate any defect in Emilio Jocson's consent

MOISES JOCSON VS. COURT OF APPEALS GR NO. L-55322 (FEBRUARY 16, 1989) FACTS Petitioner Moises Jocson and respondent Agustina JocsonVasquez are the only surviving offsprings of the spouses Emilio Jocson and Alejandra Poblete. Alejandra Poblete predeceased her husband without her intestate estate being settled. Subsequently, Emilio Jocson also died intestate. The present controversy concerns the validity of three (3) documents executed by Emilio Jocson during his lifetime. The petitioner contended that the defendants, through fraud, deceit, undue pressure and influence and other illegal machinations, were able to induce, led, and procured their father ... to sign [the] contract of sale ..., for the simulated price of P10,000.00 for six (6) parcels of land, 5,000 for two rice mills and a camarin and 8,000 for their father's share of estate of his wife which considerations that is shocking to the conscience of ordinary man. Petitioner Moises Jocson assails these documents and prays that they be declared null and void . The RTC sustained the foregoing contentions of petitioner It declared that the considerations mentioned in the documents were merely simulated and fictitious . however the CA reversed the decision of RTC contending that the contracts are not simulated or fictitious contracts, since Emilio Jocson actually and really intended them to be effective and . ISSUE whether or not the three documents purporting to be a contract of sale is null and void for being simulated or fictitious or whose cause is contrary to law, morals and good customs

FELIX DANGUILAN VS. INTERMEDIATE APPELLATE COURT GR. NO. 69970 (NOV. 28 1988) FACTS The respondent filed a complaint against the petitioner in the then Court of First Instance of Cagayan for recovery of a farm lot and a residential lot which she claimed she had purchased from Domingo Melad in 1943 and were now being unlawfully withheld by the defendant The defendant testified He and his wife lived with the Domingo in their house and helped Domingo with the cultivation of the farm. Domingo Melad signed in 1941 a private instrument in which he gave the defendant the farm and in 1943 another private instrument in which he also gave him the residential lot, on the understanding that the latter would take care of the grantor and would bury him upon his death.

BEHTTINA KIM M. BARRIOS|SALES CASES DIGESTS

2013

The RTC ruled in favor of defendant Felix Danguilan. It held that defendant was more believable and that the plaintiff's evidence was "unpersuasive and unconvincing." On appeal, respondent court reversed the decision of RTC. contending that the conveyance of the land to petitioner is null and void. The reason was that they were donations of real property and as such should have been effected through a public instrument. ISSUE Whether or not the defendant is the rightful possessor of the land HELD

It is in the view of this court that Domingo Melad did intend to donate the properties to the petitioner, as the private respondent contends. While truly donations, the conveyances were onerous donations as the properties were given to the petitioner in exchange for his obligation to take care of the donee for the rest of his life and provide for his burial. Regarding the private respondent's claim, the record shows that the private respondent did not take possession of the disputed properties and indeed waited until 1962 to file this action for recovery of the lands from the petitioner. If she did have possession, she transferred the same to the petitioner in 1946, by her own sworn admission. Thus, There is no dispute that it is the petitioner and not the private respondent who is in actual possession of the litigated properties it is a fundamental and elementary principle that ownership does not pass by mere stipulation but only by delivery (Civil Code, Art. 1095) and the execution of a public document (deed of sale in favor of respondent) does not constitute sufficient delivery where the property involved is in the actual and adverse possession of third persons. Even if the respective claims of the parties were both to be discarded as being inherently weak, the decision should still incline in favor of the petitioner for the latter being in possession is presumed to be the owner, and cannot be obliged to show or prove a better right.

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