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-50. Nietes v.

CA, 46 SCRA 654 [3]


-51. Vasquez v. CA (GR 83759, 12 July 1991)
-52. Ang Yu v. CA (GR 109125, 2 December 1994)
-53. Equitorial Realty Development v. Mayfair Theater (GR 106063, 21 November 1996)
-54. Villonco v. Bormaheco (GR L-26872, 25 July 1975)
-55. Spouses Doromal v. CA (GR L-36083, 5 September 1975)
-56. Goldenrod v. CA (GR 126812, 24 November 1998)
-57. Dalion v. CA (GR 78903, 28 February 1990)
-58. Yuviengco v. Dacuycuy, 104 SCRA 668 (1981) [4]
-59. First Philippine International Bank v. CA, 252 SCRA (1996) [5]
- 60. Vda. de Jomoc v. CA (GR 92871, 2 August 1991)
-61. Cuyugan v. Santos, 34 PHIL 100 (1916) [6]
-62. Addison v. Felix (GR 12342, 3 August 1918)
-63. Danguilan v. IAC (GR L-69970, 28 November 1988)
-64. Pasagui v. Villablanco (GR L-21998, 10 November 1975)
65. Dy Jr. v. CA (GR 92989, 8 July 1991)

Aquilino Nietes v. Court of Appeals and Dr. Pablo Garcia


G.R. No. L-32873 August 18, 1972
FACTS:
On October 19, 1959, said petitioner and respondent Dr. Pablo C. Garcia entered into a "Contract
of Lease with Option to Buy." Instead of paying the lessor in the manner set forth in the contract,
Nietes paid in various amounts.
On or about July 31, 1964, Dr. Garcia's counsel wrote to Nietes the letterrescinding the contract.
Nietes, thru his counsel, sent his reply stating that he did not violate any terms of the contract and
will exercise his option to purchase the land and building.
On July 26, 1965, Nietes deposited with the branch office of the Agro-Industrial Bank in
Angeles City checks amounting to P84,860.50, as balance of the purchase price of the property,
but he withdrew said sum on August 12, 1965, after the checks had been cleared.
On August 2, 1965, he commenced the present action, in the Court of First Instance of
Pampanga, for specific performance of Dr. Garcia's alleged obligation to execute in his favor a
deed of absolute sale of the leased property.
The Trial Court ruled in favor of the Petitioner. Both parties appealed to the CA. A Special
Division of the CA rendered its decision affirming that of the trial court, except as regard to the
attorney’s fees, which were eliminated. The Special Division of the CA set aside and reversed
the appealed decision of the trial court and dismissed the complaint of Nietes upon the filing of
the motion for reconsideration of Dr. Garcia.
ISSUE:Whether the petitioner has can buy the property.
HELD:
Yes. The contract does not say that Nietes had to pay the stipulated price of P100,000 before
exercising his option to buy the property in question.In the case of an option to buy, the creditor
may validly and effectively exercise his right by merely advising the debtor of the former's
decision to buy and expressing his readiness to pay the stipulated price, provided that the same is
available and actually delivered to the debtor upon execution and delivery by him of the
corresponding deed of sale. Unless and until the debtor shall have done this the creditor is not
and cannot be in default in the discharge of his obligation to pay.
Nietes had validly and effectively exercised his option to buy the property of Dr. Garcia, at least,
on December 13, 1962, when he acknowledged receipt from Mrs. Nietes of the sum of P2,200
then delivered by her "in partial payment on the purchase of the property" described in the
"Contract of Lease with Option to Buy"; that from the aggregate sum of P29,957.00 paid to him
up to that time, the sum of P12,708.33 should be deducted as rental for the period from June
1960 to December 13, 1962, or roughly thirty (30) months and a half, thereby leaving a balance
of P17,248.67, consisting of P12,291.67, representing the rentals for the unused period of the
lease, plus P4,957.00 paid in excess of said rental and advanced solely on account of the
purchase price; that deducting said sum of P17,248.67 from the agreed price of P100,000.00,
there results a balance of P82,751.33 which should be paid by Nietes to Dr. Garcia, upon
execution by the latter of the corresponding deed of absolute sale of the property in question, free
from any lien or encumbrance whatsoever, in favor of Nietes, and the delivery to him of said
deed of sale, as well as of the owner's duplicate of the certificate of title to said property; and that
Dr. Garcia should indemnify Nietes in the sum of P2,500 as and for attorney's fees.
Thus modified, the decision of the Court of First Instance of Pampanga is hereby affirmed in all
other respects, and that of the Court of Appeals reversed.

Spouses Cipriano Vasquez and ValerianaGayanelo v. Court of Appeals and Spouses Martin
Vallejera and Apolonia Olea
G.R. No. 83759 July 12, 1991
FACTS:
On January 15, 1975, the spouses Vallejeraplaintiffs-spouses (respondents herein) filed this
action against the Spouses Vasquez defendants-spouses (petitioners herein) seeking to redeem
Lot No. 1860 of the HimamaylanCadastre which was previously sold by respondents to
petitioners on September 21, 1964.
The said lot was registered in the name of the respondents. On October 1959, the same was
leased by respondents to the petitioners up to crop year 1966-67, which was extended to crop
year 1968-69. After the execution of the lease, repondents took possession of the lot, up to now
and devoted the same to the cultivation of sugar.
On September 21, 1964, the respondents sold the lot to the petitioners under a Deed of Sale for
the amount of P9,000.00. The Deed of Sale was duly ratified and notarized. On the same day and
along with the execution of the Deed of Sale, a separate instrument, denominated as Right to
Repurchase was executed by the parties granting respondents the right to repurchase the lot for
P12,000.00, likewise duly ratified and notarized. By virtue of the sale, petitioners secured TCT
No. T-58898 in their name.
On January 2, 1969, respondents sold the same lot to Benito Derrama, Jr., after securing the
petitioners' title, for the sum of P12,000.00. Upon the protestations of petitioners, assisted by
counsel, the said second sale was cancelled after the payment of P12,000.00 by the petitioners to
Derrama.
petitioners resisted this action for redemption on the premise that the Right to Repurchase is just
an option to buy since it is not embodied in the same document of sale but in a separate
document, and since such option is not supported by a consideration distinct from the price, said
deed for right to repurchase is not binding upon them.
After trial, the court rendered judgment against the petitioners, ordering them to resell the lot of
the HimamaylanCadastre to the respondents for the repurchase price of P24,000.00, which
amount combines the price paid for the first sale and the price paid by defendants to Benito
Derrama, Jr.
Petitioners moved for, but were denied reconsideration.
ISSUE: Whether there is a sale with right to repurchase between the parties.
HELD:
No. The nature of the transaction between the parties is not a sale with right to repurchase.
Conventional redemption takes place "when the vendor reserves the right to repurchase the thing
sold, with the obligation to comply with the provisions of Article 1616 and other stipulations
which may have been agreed upon. (Article 1601, Civil Code).
In this case, there was no reservation made by the vendor. Thus, it was more of an option to buy
or a mere promise on the part of the vendee to resell the property to the vendor.
The right of repurchase is not a right granted the vendor by the vendee in a subsequent
instrument, but is a right reserved by the vendor in the same instrument of sale as one of the
stipulations of the contract. Once the instrument of absolute sale is executed, the vendor can no
longer reserve the right to repurchase, and any right thereafter granted the vendor by the vendee
in a separate instrument cannot be a right of repurchase but some other right like the option to
buy in the instant case.
In the instant case, since the transaction between the petitioners and private respondents was not
a sale with right to repurchase, the private respondents cannot avail of Article 1601 of the Civil
Code which provides for conventional redemption.

Ang Yu Asuncion, Arthur Go and Keh Tiong v. Court of Appeals and Buen Realty Development
Corporation
G.R. No. 109125 December 2, 1994
FACTS:
On July 29, 1987, an amended Complaint for Specific Performance was filed by petitioners Ang
Yu Asuncion and others against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan before
RTC.Petitioners (Ang Yu) alleged that:
1. they are the tenants or lessees of residential and commercial spaces owned by Bobby
Unijeng and others located in Binondo, Manila, since 1935;
2. that on several occasions before October 9, 1986, the lessors informed the lessees
(petitioners) that they are offering to sell the premises and are giving them priority to
acquire the same;
3. that during the negotiations, Bobby Cu Unjieng offered a price of six million while they
made a counter offer of P5-million; and
4. that they wrote them on October 24, 1986 asking that they specify the terms and
conditions of the offer to sell; that when plaintiffs did not receive any reply, they sent
another letter dated January 28, 1987 with the same request;
The RTC found that Cu Unjiengs’ offer to sell was never accepted by the petitioners for the
reason that they did not agree upon the terms and conditions of the proposed sale, hence, there
was no contract of sale at all. The Court of Appeals affirmed the decision of the lower court. This
decision was brought to the Supreme Court by petition for review on certiorari which
subsequently denied the appealfor insufficiency in form and substance.
On November 15, 1990,while the case was pending consideration by the Supreme Court, the Cu
Unjieng spouses executed a Deed of Sale transferring the subject property to petitioner Buen
Realty and Development Corporation.
Petitioner Buen Realty and Development Corporation, as the new owner of the subject property,
wrote a letter to the lessees demanding that the latter vacate the premises.
On August 30, 1991, the RTC ordered the Cu Unjiengs to execute the necessary Deed of Sale of
the property in litigation in favor of Ang Yu Asuncion, Keh Tiong and Arthur Go for the
consideration of P15 Million pesos in recognition of petitioners’ right of first refusal and that a
new Transfer Certificate of Title be issued in favor of the buyer. The court also set aside the title
issued to Buen Realty Corporation for having been executed in bad faith. On September 22,
1991, the Judge issued a writ of execution.
The CA reversed the RTC ruling.
ISSUE: Whether the right of first refusal is deemed as a perfected contract of sale and whether
the filing of the writ of execution is a proper remedy.
HELD:
No. In the law on sales, the so-called "right of first refusal" is an innovative juridical relation.
Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the
Civil Code. Neither can the right of first refusal, understood in its normal concept, per se be
brought within the purview of an option under the second paragraph of Article 1479,
aforequoted, or possibly of an offer under Article 13199 of the same Code.An option or an offer
would require, among other things, a clear certainty on both the object and the cause or
consideration of the envisioned contract.
In a right of first refusal, while the object might be made determinate, the exercise of the right,
however, would be dependent not only on the grantor's eventual intention to enter into a binding
juridical relation with another but also on terms, including the price, that obviously are yet to be
later firmed up. Prior thereto, it can at best be so described as merely belonging to a class of
preparatory juridical relations governed not by contracts (since the essential elements to establish
the vinculum juris would still be indefinite and inconclusive) but by, among other laws of
general application, the pertinent scattered provisions of the Civil Code on human conduct.
Even on the premise that such right of first refusal has been decreed under a final judgment, like
here, its breach cannot justify correspondingly an issuance of a writ of execution under a
judgment that merely recognizes its existence, nor would it sanction an action for specific
performance without thereby negating the indispensable element of consensuality in the
perfection of contracts.
The final judgment in the case has merely accorded a "right of first refusal" in favor of
petitioners. The consequence of such a declaration entails no more than what has been said. In
fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private
respondents to honor the right of first refusal, the remedy is not a writ of execution on the
judgment, since there is none to execute, but an action for damages in a proper forum for the
purpose.

Equitorial Realty Development v. Mayfair Theater


G.R. No. 106063 November 21, 1996
FACTS:
Carmelo &Bauermann, Inc. owned a land, together with two 2-storey buildings at Claro M.
Recto Avenue, Manila, and covered by TCT No. 18529.
On June 1, 1967, Carmelo entered into a Contract of Lease with Mayfair Theater Inc. fpr 20
years. The lease covered a portion of the second floor and mezzanine of a two-storey building
with about 1,610 square meters of floor area, which respondent used as Maxim Theater.
Two years later, on March 31, 1969, Mayfair entered into a second Lease with Carmelo for
another portion of the latter’s property this time, a part of the second floor of the two-storey
building, and two store spaces on the ground floor. In that space, Mayfair put up another movie
house known as Miramar Theater. The Contract of Lease was likewise for a period of 20 years.
Both leases contained a clause giving Mayfair a right of first refusal to purchase the subject
properties. Sadly, on July 30, 1978 - within the 20-year-lease term -- the subject properties were
sold by Carmelo to Equatorial Realty Development, Inc. for eleven million smackers, without
their first being offered to Mayfair.
As a result of the sale of the subject properties to Equatorial, Mayfair filed a Complaint before
the Regional Trial Court of Manila for the recission of the Deed of Absolute Sale between
Carmelo and Equatorial, specific performance, and damages. RTC decided for Carmelo and
Equatorial. Tsk tsk.
CA reversed and ruled for Mayfair. The SC denied a petition questioning the CA decision. What
happened is that the contract did get rescinded, Equatorial got its money back and asserted that
Mayfair have the right to purchase the lots for 11 million bucks.
Decision became final and executory, so Mayfair deposited with the clerk the 11M (less
847grand withholding) payment for the properties (Carmelo somehow disappeared).
Meanwhile, on Sept 18, 1997, barely five months after Mayfair submitted its Motion for
Execution, Equatorial demanded from Mayfair backrentals and reasonable compensation for the
Mayfair’s continued use of the subject premises after its lease contracts expired. Remember that
Mayfair was still occupying the premises during all this hullabaloo.
ISSUE: Whether or not the option clause in the contracts of lease is actually a right of first
refusal proviso.
HELD:
Yes. The aforecited contractual stipulation provides for a right of first refusal in favor of
Mayfair. It is not an option clause or an option contract. It is a contract of a right of first refusal.
In his Law Dictionary, edition of 1897, Bouvier defines an option as a contract, in the following
language:
A contract by virtue of which A, in consideration of the payment of a certain sum to B, acquires
the privilege of buying from, or selling to B, certain securities or properties within a limited time
at a specified price.
The rule so early established in this jurisdiction is that the deed of option or the option clause in a
contract, in order to be valid and enforceable, must, among other things, indicate the definite
price at which the person granting the option, is willing to sell.
By a contract of sale, “one of the contracting parties obligates himself to transfer ownership of
and to deliver a determinate thing and the other to pay therefor a price certain in money or its
equivalent.” Ownership of the thing sold is a real right, which the buyer acquires only upon
delivery of the thing to him “in any of the ways specified in Articles 1497 to 1501, or in any
other manner signifying an agreement that the possession is transferred from the vendor to the
vendee.” This right is transferred, not by contract alone, but by tradition or delivery. Non
nudispactissedtraditionedominia rerum transferantur.
There is said to be delivery if and when the thing sold “is placed in the control and possession of
the vendee.” Thus, it has been held that while the execution of a public instrument of sale is
recognized by law as equivalent to the delivery of the thing sold, such constructive or symbolic
delivery, being merely presumptive, is deemed negated by the failure of the vendee to take actual
possession of the land sold. Delivery has been described as a composite act, a thing in which
both parties must join and the minds of both parties concur. It is an act by which one party parts
with the title to and the possession of the property, and the other acquires the right to and the
possession of the same. In its natural sense, delivery means something in addition to the delivery
of property or title; it means transfer of possession. In the Law on Sales, delivery may be either
actual or constructive, but both forms of delivery contemplate “the absolute giving up of the
control and custody of the property on the part of the vendor, and the assumption of the same by
the vendee.”

Villonco Realty Company v. Bormaheco


G.R. No. L-26872 July 25, 1975
FACTS:
Francisco N. Cervantes and his wife, Rosario P. Navarra-Cervantes, are the owners of Lots 3, 15
and 16 located at 245 Buendia Avenue, Makati, Rizal with a total area of 3,500 sq.ms. The lots
were mortgaged to the Development Bank of the Philippines (DBP) as security for a loan of
P441,000. The mortgage debt was fully paid.
Cervantes is the president of Bormaheco, Inc., a dealer and importer of industrial and agricultural
machinery. The entire three lots are occupied by the building, machinery and equipment of
Bormaheco, Inc. and are adjacent to the property of Villonco Realty Company situated at 219
Buendia Avenue.
There were negotiations for the sale of the said lots and the improvements thereon between
Romeo Villonco of Villonco Realty Company “and Bormaheco, Inc., represented by its
president, Francisco N. Cervantes, through the intervention of Edith Perez de Tagle, a real estate-
broker”. In the course of the negotiations, the brothers Romeo and Teofilo Villonco conferred
with Cervantes in his office to discuss the price and terms of the sale. Later, Cervantes went to
see Villonco for the same reason until some agreement was arrived at.
On a subsequent occasion, Cervantes, accompanied by Edith Perez de Tagle, discussed again the
terms of the sale with Villonco. During the negotiations, Villonco Realty Company assumed that
the lots belonged to Bormaheco and that Cervantes was duly authorized to sell the same.
Cervantes did not disclose to the broker and to Villonco Realty that the lots were conjugal
properties of himself and his wife and that they were mortgaged to the DBP. Bormaheco,
through Cervantes, made a written offer to Romeo Villonco for the sale of the property. The
property mentioned in Bormaheco’s letter was the land of the National Shipyards & Steel
Corporation (Nassco). At the bidding that land was awarded to Bormaheco, the highest bidder.
The Nassco Board of Directors in its resolution authorized the General Manager to sign the
necessary contract. The Nassco Acting General Manager wrote a letter to the Economic
Coordinator, requesting approval of that resolution. The Acting Economic Coordinator approved
the resolution.
Meanwhile, Bormaheco and Villonco Realty continued their negotiations for the sale of the
Buendia Avenue property. Cervantes and Teofilo Villonco had a final conference and as a result
of that conference, Villonco Realty, in its letter made a revised counter-offer (Romeo Villonco’s
first counter-offer) for the purchase of the property.
The counter-offer was accepted by Cervantes. Enclosed to it was a MBTC Check as earnest
money. The check was delivered by Perez de Tagle to Bormaheco and was received by
Cervantes. In the voucher-receipt evidencing the delivery the broker indicated in her handwriting
that the earnest money was subject to the terms and conditions embodied in Bormaheco’s letter
and Villonco Realty Company’s letter.
Unexpectedly, Cervantes returned the earnest money, with interest. Cervantes cited as an excuse
the circumstance that despite the lapse of 45 days there is no certainty yet for the acquisition of
the Punta property. Villonco Realty Company refused to accept the letter and the checks of
Bormaheco. Cervantes sent them by registered mail. When he rescinded the contract, he was
already aware that the Punta lot had been awarded to Bormaheco.
Edith Perez de Tagle, the broker, articulated her shock and surprise at Bormaheco’s turnabout.
Cervantes in his letter of 6 April 1964, a reply to Miss Tagle’s letter, alleged that the 45 day
period had already expired and the sale to Bormaheco, Inc. of the Punta property had not been
consummated. Cervantes said that his letter was a “manifestation that we are no longer interested
to sell” the Buendia Avenue property to Villonco Realty. The latter was furnished with a copy of
that letter.
In a letter, Villonco Realty Company returned the two checks to Bormaheco, Inc., stating that the
condition for the cancellation of the contract had not arisen and at the same time announcing that
an action for breach of contract would be filed against Bormaheco. On that same date, Villonco
Realty filed the complaint for specific performance against Bormaheco. A notice of lis pendens
was annotated on the titles of the said lots.
ISSUE: Whether there is a perfected contract of Sales
HELD:
YES. There was a perfected contract of sale. The alleged changes made in the counter-offer are
immaterial and are mere clarifications. The changes of the words “Sta. Ana property” to another
property as well as the insertion of the number “12” in the date, and the words “per annum” in
the interest are trivial. There is no incompatibility in the offer and counter-offer. Cervantes
assented to the interest and he, in fact, paid the same. Also, earnest money constitutes proof of
the perfection of the contract of sale and forms part of the consideration. The condition regarding
the acquisition of the Sta. Ana property was likewise fulfilled; there is thus no ground for the
refusal of Cervantes to consummate the sale.

Spouses Doromal v. Court of Appeals and Filomena Javellana


G.R. No. L-36083 September 5, 1975
FACTS:
A parcel of land in Iloilo were co-owned by seven (7) siblings all surnamed Horilleno. Five (5)
of the siblings gave an SPA to their niece Mary Jimenez, who succeeded her father as a co-
owner, for the sale of the land to father and son Doromal. One of the co-owner, herein petitioner,
Filomena Javellana however did not gave her consent to the sale even though her siblings
executed an SPA for her signature. The co-owners went on with the sale of 6/7 part of the land
and a new title for the Doromals were issued.
Respondent offered to repurchase the land for 30K as stated in the deed of sale but petitioners
declined invoking lapse in time for the right of repurchase. Petitioner also contend that the 30K
price was only placed in the deed of sale to minimize payment of fees and taxes and as such,
respondent should pay the real price paid which was P115, 250.
ISSUE: Whether the period to repurchase of petitioner has already lapsed.
HELD:
No. The period of repurchase has not yet lapsed because the respondent was not notified of the
sale. The 30-day period for the right of repurchase starts only after actual notice not only of a
perfected sale but of actual execution and delivery of the deed of sale.
The letter sent to the respondent by the other co-owners cannot be considered as actual notice
because the letter was only to inform her of the intention to sell the property but not its actual
sale. As such, the 30-day period has not yet commenced and the respondent can still exercise his
right to repurchase.
The respondent should also pay only the 30K stipulated in the deed of sale because a
redemptioner’s right is to be subrogated by the same terms and conditions stipulated in the
contract.

Goldenrod, Inc. v. Court of Appeals, Pio Barreto and Sons, Inc.,


G.R. No. 126812 November 24, 1998
FACTS:
Barretto owned parcels of land which were mortgaged to UCPB. Barretto failed to pay; the
properties were foreclosed. Goldenrod made an offer to Barretto that it would buy the properties
and pay off the remaining balance of Barretto’s loan with UCPB. It paid Barretto 1 million pesos
as part of the purchase price. The remaining balance would be paid once Barretto had
consolidated the titles. On the date that Goldenrod was supposed to pay, Goldenrod asked for an
extension. UCPB agreed. When the extension date arrived, Goldenrod asked for another
extension. UCPB refused. Barretto successfully consolidated the titles. Goldenrod informed
Barretto that it would not be able to push through with their agreement. It asked Barretto to
return the 1 million pesos. Barretto did not give in to Goldenrod’s rescission. Instead, it sold the
property that was part of their agreement to Asiaworld.
ISSUE: Whether Goldenrod should be paid back its payment.
HELD:
Yes. Art. 1385 of the Civil Code provides that rescission creates the obligation to return the
things which were the object of the contract together with the fruits and interest. The vendor is
therefore obliged to return the purchase price paid to him by the buyer if the latter rescinds the
sale, or when the transaction was called off and the subject property had already been sold to a
third person, as what obtained in this case.
Barretto is obliged to pay Goldenrod back because 1) Goldenrod decided to rescind the sale; 2)
the transaction was called off and; 3) the property was sold to a third person. By virtue of the
extrajudicial rescission of the contract to sell by Goldenrod, without opposition from Barretto,
who in turn sold it to a third person, Barretto had the obligation to return the 1 million pesos plus
legal interest from the date it received the notice of rescission.

Spouses Dalion v. Court of Appeals and Ruperto Sabesaje, Jr.


G.R. No. 78903 February 28, 1990
FACTS:
A land in Southern Leyte was declared in the name of Segundo Dalion. Sabesaje sued to recover
ownership of the land based on a private deed of absolute sale, allegedly executed by Dalion.
The spouses denied the claims of Sabesaje and claims that his signature in the document was
forged.
Spouses Dalion admitted of administering five parcels of land in Southern Leyte, which
belonged to Leonardo Sabesaje, grandfather of the respondent. The spouses Dalion never
received their agreed 10% and 15% commission on the sales of copra and abaca.
ISSUE: Whether the contract of sale is valid.
HELD:
Yes. The authenticity of the signature of Dalion was proven by the testimony of several
witnesses including the person who made the deed of sale. Dalion never presented any evidence
or witness to prove his claim of forgery.
Dallion’s claim that the sale is invalid because it was not made in a public document is
misplaced. The provision of Art. 1358 on the necessity of a public document is only for
convenience, not for validity or enforceability. It is not a requirement for the validity of a
contract of sale of a parcel of land that this be embodied in a public instrument. Sale is perfected
upon meeting of the minds of both parties.

Suga Sotto Yuvienco, Britania Sotto, and Marcelino Sotto v. Hon. Auxencio Dacuycuy et al
G.R. No. L-55048 May 27, 1981
FACTS:
Petitioners own a property in Tacloban City which they intend to sell for 6.5M. They gave the
respondents the right to purchase the property. Respondents replied that they agree to buy the
property and they will negotiate for details. Petitioner sent another telegram informing
respondents that their proposal is accepted and a contract will be prepared.
Atty. Pedro Gamboa arrived bringing a contact with an altered mode of payment which says that
the balance payment should be paid within 30 days instead of the former 90 days. (Original
terms: P2M payment upon execution and P4.5M after 90 days)
ISSUE: Whether there is a valid contract of sale between the parties.
HELD:
No. The contract of sale between parties was not perfected because both parties are still under
negotiation. Thus, there was no meeting of the minds. Atty. Gamboa even went to the
respondents to negotiate for the sale. Even though there was an agreement on the terms of
payment, there was no absolute acceptance because respondents still insisted on further details.
With regard to the alleged violation of terms of payment, there was no written document to prove
that the respondents agreed to pay not in cash but in instalment. In sale of real property, payment
of instalment must be in requisite of a note under the statute of frauds.
First Philippine International Bank And Mercurio Rivera v. Court Of Appeals, Carlos Ejercito
G.R. No. 115849. January 24, 1996
FACTS:
Producers Bank (now called First Philippine International Bank), which has been under
conservatorship since 1984, is the owner of 6 parcels of land. The Bank had an agreement with
Demetrio Demetria and Jose Janolo for the two to purchase the parcels of land for a purchase
price of P5.5 million pesos. The said agreement was made by Demetria and Janolo with the
Bank’s manager, Mercurio Rivera. Later however, the Bank, through its conservator, Leonida
Encarnacion, sought the repudiation of the agreement as it alleged that Rivera was not authorized
to enter into such an agreement, hence there was no valid contract of sale. Subsequently,
Demetria and Janolo sued Producers Bank. The regional trial court ruled in favor of Demetria et
al. The Bank filed an appeal with the Court of Appeals.
Meanwhile, Henry Co, who holds 80% shares of stocks with the said Bank, filed a motion for
intervention with the trial court. The trial court denied the motion since the trial has been
concluded already and the case is now pending appeal. Subsequently, Co, assisted by ACCRA
law office, filed a separate civil case against Carlos Ejercito as successor-in-interest (assignee) of
Demetria and Janolo seeking to have the purported contract of sale be declared unenforceable
against the Bank. Ejercito et al argued that the second case constitutes forum shopping.
ISSUE: Whether or not there is forum shopping.
HELD:
Yes. There is forum shopping because there is identity of interest and parties between the first
case and the second case. There is identity of interest because both cases sought to have the
agreement, which involves the same property, be declared unenforceable as against the Bank.
There is identity of parties even though the first case is in the name of the bank as defendant, and
the second case is in the name of Henry Co as plaintiff. There is still forum shopping here
because Henry Co essentially represents the bank. Both cases aim to have the bank escape
liability from the agreement it entered into with Demetria et al.
The Supreme Court also discussed that to combat forum shopping, which originated as a concept
in international law, the principle of forum non conveniens was developed. The doctrine of
forum non conveniens provides that a court, in conflicts of law cases, may refuse impositions on
its jurisdiction where it is not the most “convenient” or available forum and the parties are not
precluded from seeking remedies elsewhere.

Maria P. Vda. De Jomoc, Et al. V. The Court of Appeals, Regional Trial Court of Misamis
Oriental
G.R. No. 92860 August 2, 1991
FACTS:
A parcel of land in CDO owned by late Pantaleon Jomoc was fictitiously sold to third persons in
which the last transferee are the spouses Mariano and Maria So. Maria Vda de Jomoc filed suit to
recover the property and won.
While pending appeal, Vda de Jomoc executed executed a Deed of Extrajudicial Settlement and
Sale of Land with private respondent for P300,000.00. The document was not yet signed by all
the parties nor notarized but in the meantime, Maura So had made partial payments amounting to
P49,000.00.
So demanded from the heirs of Jomoc for the execution of final deed of conveyance but the latter
did no comply. As such, So filed a civil case and a notice of lis pendens were placed in the title
of the land.
On the same date, the heirs of Jomoc executed another extra-judicial settlement with absolute
sale in favor of intervenors Lim Leong Kang and Lim Pue claiming that they believe that So
already backed-out from the agreement.
ISSUE: Whether the sale is enforceable.
HELD:
Since petitioners admit the existence of the extra-judicial settlement, the court finds that there
was meeting of the minds between the parties and hence, there is a valid contract that has been
partly executed.
The contract of sale of real property even if not complete in form, so long as the essential
requisites of consent of the contracting parties, object, and cause of the obligation concur and
they were clearly established to be present, is valid and effective as between the parties. Public
document is only needed to bind third persons.
The payment made by So is a clear proof of her intention to acquire the property and the
petitioners cannot claim about the respondent backing out. The sale to the intervenors Lim
cannot be recognized because when they bought the property, there was already a notice of lis
pendens and the sale cannot be said to be in good faith.

Eutiquiano Ciyugan v. Isidoro Santos


G.R. No. 10265 March 3, 1916
FACTS:
Eutiquiyano Cuyugan filed an action to compel Santos to enforce his right to repurchase in the
deed of sale entered into by his late mother, Guillerma, with the defendant. Allegedly, a deed of
sale of the subject land was entered into by Guillerma, and Santos with a right to repurchase the
land in a stipulated period of time, although this deed of sale is executed as a security for a loan
that Guillerma have with Santos. In the deed of sale, it further stated that Guillerma shall
continue to have possession of the land, and pay an annual rental of Php 420 per annum which is
the amount equal to the loan’s interest. That after sometime, Guillerma paid 1,000 pesos on the
loan, which then reduced the amount of the annual rental from 400 to 320 php. When Guillerma
died, Santos sent Cuyugan a notice to comply with the 420 php rental, which was agreed upon
prior to the payment of 1000php or he will eject Cuyugan from the land. Cuyugan then offered to
pay the balance that his mother owes Santos by virtue of the right to repurchase agreed upon on
the deed of sale, but Santos refused to do so.
ISSUE: Whether there is a valid sale.
HELD:
No. The Supreme Court held that what should be given force is the intention of the parties, and
not the provisions of the instrument on its face. Under the provisions of contracts, for a valid
contract to exist, there should be:
1) consent
2) cause
3) consideration.
Thus, in the present case, what is consented by both parties is that this deed of sale is only in
consideration for a loan, or by a nature of a contract of mortgage. Moreover, by way of evidence
it was established by the court that the parties indeed treat such as a contract of loan rather than a
deed of sale when Santos, when given by Guillerma 1000 php in favor of such contract, lowered
the payment of the rental from 400-320 php. Since the agreement was the 400 be equal to the
interest per annum, when the loan was reduced, the interest as well reduced. This transaction
proved that the treatment and the intention of the parties was indeed as a security for the loan,
and not as a deed of sale appearing before the face of the contract.

A. A. Addison, v. Marciana Felix and Balbino Tioco


G.R. No. L-12342 August 3, 1918
FACTS:
Four (4) parcels of land as describe in a public instrument was subject of a contract of sale
between the petitioner and the defendant. Defendant paid 3000 upon the execution of deeds and
promised to pay 2000 on July 15, 1914 and another 5000 (30) days after the issuance of her
certificate of title
The contract was stipulated as follows:
That the defendant is to pay P10 within ten years for trees in bearing and P5 for trees not in
bearing with the condition that it will not exceed the amount of P85,000.
That the purchaser shall deliver 25% of the value of the products "from the moment she takes
possession of them until the Torrens certificate of title be issued in her favor."
Further stipulated was that "within one year from the date of the certificate of title in favor of
Marciana Felix, this latter may rescind the present contract of purchase and sale, in which case
Marciana Felix shall be obliged to return to me, A. A. Addison, the net value of all the products
of the four parcels sold, and I shall obliged to return to her, Marciana Felix, all the sums that she
may have paid me, together with interest at the rate of 10 per cent per annum."
In 1915, Addison filed a suit to compel the defendant to pay him the P2000 with interest as in the
accordance of the terms of the contract. However, in a form of special defense, Felix alleges that
the petitioner failed to do his obligation of the contract by failing to deliver the parcels of land.
That out of the 4 parcels of land only 2 of it where delivered and that 2/3 of the other half were in
the possession of a third person. She then filed for a declaration of the rescission of the contract,
whereby she prayed that petitioner return her P3000 plus interest and indemnity.
ISSUE: Whether delivery of the public instrument is equivalent to the delivery of the subject
matter of the sale.
HELD:
No. The Code imposes upon the vendor the obligation to deliver the thing sold. The thing is
considered to be delivered when it is placed "in the hands and possession of the vendee." (Civ.
Code, art. 1462.) It is true that the same article declares that the execution of a public instruments
is equivalent to the delivery of the thing which is the object of the contract, but, in order that this
symbolic delivery may produce the effect of tradition, it is necessary that the vendor shall have
had such control over the thing sold that, at the moment of the sale, its material delivery could
have been made. It is not enough to confer upon the purchaser the ownership and the right of
possession. The thing sold must be placed in his control. When there is no impediment whatever
to prevent the thing sold passing into the tenancy of the purchaser by the sole will of the vendor,
symbolic delivery through the execution of a public instrument is sufficient. But if,
notwithstanding the execution of the instrument, the purchaser cannot have the enjoyment and
material tenancy of the thing and make use of it himself or through another in his name, because
such tenancy and enjoyment are opposed by the interposition of another will, then fiction yields
to reality — the delivery has not been effected.
The execution of a public instrument is sufficient for the purposes of the abandonment made by
the vendor; but it is not always sufficient to permit of the apprehension of the thing by the
purchaser.
It is evident, then, in the case at bar, that the mere execution of the instrument was not a
fulfillment of the vendors' obligation to deliver the thing sold, and that from such non-fulfillment
arises the purchaser's right to demand, as she has demanded, the rescission of the sale and the
return of the price. (Civ. Code, arts. 1506 and 1124.)
Inasmuch as the rescission is made by virtue of the provisions of law and not by contractual
agreement, it is not the conventional but the legal interest that is demandable.

Felix Danguilan v. Intermediate Appellate Court, Apolonia Melad, assisted by her husband, Jose
Tagacay
G.R. No. L-69970 November 28, 1988
Two lots were owned by Domingo Melad. The lots are claimed by both Felix Daguilan and
Apolonia Melad (and her husband Jose Tagacay). On 29 January 1962, Apolonia Melad filed a
complaint against Daguilan in the then CFI Cagayan for recovery of a farm lot and a residential
lot which she claimed she had purchased from Domingo Melad in 1943 and were now being
unlawfully withheld by Daguilan. In his answer, Daguilan denied the allegation and averred that
he was the owner of the said lots of which he had been in open, continuous and adverse
possession, having acquired them from Domingo Melad in 1941 and 1943. The case was
dismissed for failure to prosecute but was refiled in 1967. At the trial, Melad presented a deed of
sale dated 4 December 1943, purportedly signed by Domingo Melad and duly notarized, which
conveyed the said properties to her for the sum of P80.00. She said the amount was earned by her
mother as a worker at the Tabacalera factory. She claimed to be the illegitimate daughter of
Domingo Melad, with whom she and her mother were living when he died in 1945. She moved
out of the farm only when in 1946 Felix Danguilan approached her and asked permission to
cultivate the land and to stay therein. She had agreed on condition that he would deliver part of
the harvest from the farm to her, which he did from that year to 1958. The deliveries having
stopped, she then consulted the municipal judge who advised her to file the complaint against
Danguilan. Melad’s mother, her only other witness, corroborated this testimony. Daguilan
testified that he was the husband of Isidra Melad, Domingo’s niece, whom Domingo Melad and
his wife Juana Malupang had taken into their home as their ward as they had no children of their
own. He and his wife lived with the couple in their house on the residential lot and helped
Domingo with the cultivation of the farm. Domingo Melad signed in 1941 a private instrument in
which he gave Daguilan the farm and in 1943 another private instrument in which he also gave
him the residential lot, on the understanding that the latter would take care of the grantor and
would bury him upon his death. Danguilan presented three other witnesses to corroborate his
statements and to prove that he had been living in the land since his marriage to Isidra and had
remained in possession thereof after Domingo Melad’s death in 1945. Two of said witnesses
declared that neither the plaintiff nor her mother lived in the land with Domingo Melad. The trial
court believed Daguilan and rendered a decision based mainly on the issue of possession.
ISSUE: Whether there was delivery in favor of respondent in alleged sale.
HELD:
No. No constructive delivery allowed if property is in actual and adverse possession of a third
person. In our jurisdiction, it is a fundamental and elementary principle that ownership does not
pass be mere stipulation but only by delivery and the execution of a public document does not
constitute sufficient delivery where the property involved is in the actual and adverse possession
of third persons.
Therefore, in our Civil Code it is a fundamental principle in all matters of contracts and a well-
known doctrine of law that "non mudis pactis sed traditione dominia rerum transferuntur". In
conformity with said doctrine as established in paragraph 2 of article 609 of said code, that "the
ownership and other property rights are acquired and transmitted by law, by gift, by testate or
intestate succession, and, in consequence of certain contracts, by tradition".
In accordance with such disposition and provisions the delivery of a thing constitutes a necessary
and indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a
contract.
One who is in possession is presumed to be the owner. In this case, there no dispute that it is
Danguilan and not Melad who is in actual possession of the litigated properties. And even if the
claim of petitioner and respondent are weak, judgment must be in favor of the Danguilan for one
who is in possession is presumed to be the owner, and cannot be obliged to show or prove a
better right.

Calixto Pasagui and Fausta Mosar v. Ester T. Villablanca, Zosimo Villablanca, Eustaquia Bocar
and Catalina Bocar
G.R. No. L-21998 November 10, 1975
FACTS:
On 4 February 1963, Calixto Pasagui and Fausta Mosar filed a complaint with the CFI Tacloban
City, alleging that on 15 November 1962, for and in consideration of P2,800, they bought from
Eustaquia Bocar and Catalina Bocar a parcel of agricultural land with an area of 2.6814 hectares,
situated in Hamindangon, Pastrana, Leyte; that the corresponding document of sale was
executed, notarized on the same date, and recorded in the Registry of Deeds of Tacloban, Leyte
on 16 November 1962; that during the first week of February 1963, spouses Ester T. Villablanca
and Zosimo Villablanca, “illegally and without any right, whatsoever, took possession of the
property harvesting coconuts from the coconut plantation thereon, thus depriving Pasaqui and
Mosar of its possession; that despite demands made by Pasagui and Mosar upon the Villablancas
“to surrender to them the property and its possession” the latter failed or refused to return said
parcel of land to the former, causing them damage; and that Eustaquia and Catalina Bocar,
vendors of the property, are included defendants in the complaint by virtue of the warranty
clause contained in the document of sale.

ISSUE: Whether public instrument amounts to delivery.


HELD:
The execution of the deed of absolute sale in a public instrument is equivalent to delivery of the
land subject of the sale. This presumptive delivery only holds true when there is no impediment
that may prevent the passing of the property from the hands of the vendor into those of the
vendee. It can be negated by the reality that the vendees actually failed to obtain material
possession of the land subject of the sale. In the present case, Pasagui and Mosar had not
acquired physical possession of the land since its purchase on 12 November 1962. As a matter of
fact, their purpose in filing the complaint in Civil Case 3285 is precisely to “get the possession of
the property.”
Perfecto Dy, Jr. v. Court Of Appeals, Gelac Trading Inc., and Antonio V. Gonzales
G.R. No. 92989 July 8, 1991
FACTS:
Wilfredo Dy purchased a truck and a farm tractor through LIBRA which was also mortgaged
with the latter, as a security to the loan.
Petitioner, expresses his desire to purchase his brother’s tractor in a letter to LIBRA which also
includes his intention to shoulder its mortgage. LIBRA approved the request. At the time that
Wilfredo Dy executed a deed of absolute sale in favor of petitioner, the tractor and truck were in
the possession of LIBRA for his failure to pay the amortization.
When petitioner finally fulfilled its obligation to pay the tractor, LIBRA would only release the
same only if he would also pay for the truck. In order to fulfil LIBRA’s condition, petitioner
convinced his sister to pay for the remaining truck, to which she released a check amounting to
P22,000. LIBRA however, insisted that the check must be first cleared before it delivers the
truck and tractor.
Meanwhile, another case penned “GELAC Trading Inc vs. Wilfredo Dy” was pending in Cebu as
a case to recover for a sum of money (P12,269.80). By a writ of execution the court in Cebu
ordered to seize and levy the tractor which was in the premise of LIBRA, it was sold in a public
auction to which it was purchased by GELAC. The latter then sold the tractor to Antonio
Gonzales.
ISSUE: Whether the ownership of the farm tractor had already passed to petitioner when said
tractor was levied on by the sheriff pursuant to an alias writ of execution issued in another case
in favor of GELAC.
HELD:
Yes. The mortgagor who gave the property as security under a chattel mortgage did not part with
the ownership over the same. He had the right to sell it although he was under the obligation to
secure the written consent of the mortgagee or he lays himself open to criminal prosecution
under the provision of Article 319 par. 2 of the Revised Penal Code. And even if no consent was
obtained from the mortgagee, the validity of the sale would still not be affected.
There is no reason why Wifredo Dy, as the chattel mortgagor cannot sell the subject tractor.
There is no dispute that the consent of Libra Finance was obtained in the instant case. Libra
allowed the petitioner to purchase the tractor and assume the mortgage debt of his brother. The
sale between the brothers was therefore valid and binding as between them and to the mortgagee,
as well.
Article 1496 of the Civil Code states that the ownership of the thing sold is acquired by the
vendee from the moment it is delivered to him in any of the ways specified in Articles 1497 to
1501 or in any other manner signifying an agreement that the possession is transferred from the
vendor to the vendee. We agree with the petitioner that Articles 1498 and 1499 are applicable in
the case at bar.
In the instant case, actual delivery of the subject tractor could not be made. However, there was
constructive delivery already upon the execution of the public instrument pursuant to Article
1498 and upon the consent or agreement of the parties when the thing sold cannot be
immediately transferred to the possession of the vendee (Article 1499).
The payment of the check was actually intended to extinguish the mortgage obligation so that the
tractor could be released to the petitioner. It was never intended nor could it be considered as
payment of the purchase price because the relationship between Libra and the petitioner is not
one of sale but still a mortgage. The clearing or encashment of the check which produced the
effect of payment determined the full payment of the money obligation and the release of the
chattel mortgage. It was not determinative of the consummation of the sale. The transaction
between the brothers is distinct and apart from the transaction between Libra and the petitioner.
The contention, therefore, that the consummation of the sale depended upon the encashment of
the check is untenable.