ROBERN DEVELOPMENT CORPORATION and RODOLFO M. BERNARDO, JR.

, Petitioners,
vs.
PEOPLE'S LANDLESS ASSOCIATION represented by FLORIDA RAMOS and NARDO
LABORA, Respondent

Facts:
 Al-Amanah owned a 2000-square meter lot located in Magtu-od, Davao City. Al-Amanah
through Officer-in-charge Febe O. Dalig (OIC Dalig) asked some of the members of PELA6 to
desist from building their houses on the lot and to vacate the same, unless they are
interested to buy it.
 The informal settlers thus expressed their interest to buy the lot at ₱100.00 per square
meter, which Al-Amanah turned down for being far below its asking price.
 The informal settlers, through a letter, offered again to purchase the lot for ₱300,000.00, half
of which shall be paid as down payment and the remaining half to be paid within one year.
 In the lower portion of the said letter, Al-Amanah made the following annotation: Subject
offer has been acknowledged/received but processing to take effect upon putting up of the
partial amt. of ₱150,000.00 on or before April 15, 1993.
 ₱150,000.00 as evidenced by four bank receipts.
 PELA members remained in the property and introduced further improvements.
 Al-Amanah wrote PELA President Bonifacio Cuizon, Sr. informing him of the Head Office’s
disapproval of PELA’s offer to buy the said 2,000-square meter lot.
 PELA replied that it had already reached an agreement with Al-Amanah regarding the sale
of the subject lot based on their offered price.
 Al-Amanah issued a Recommendation Sheet indicating therein that Robern is interested to
buy the lot for ₱400,000.00; that it has already deposited 20% of the offered purchase price;
that it is buying the lot on "as is" basis; and, that it is willing to shoulder the relocation of all
informal settlers therein.
 Robern was informed of the acceptance. Al-Amanah stressed that it is Robern’s
responsibility to eject the occupants in the subject lot, if any, as well as the payment of the
remaining amount within 15 days; otherwise, the ₱80,000.00 deposit shall be forfeited.
 Robern informed Al-Amanah that while condition in the sale of property states that the
buyer shall be responsible for ejecting the squatters of the property, the occupants of the
said lot could hardly be categorized as squatters considering the supposed transaction
previously entered by Al-Amanah’s bank with them. They requested definite statement from
the latter’s bank on whether the official receipts being brandished by this group are genuine
or not, and and whether there was a cancellation of your agreement with them.
 To convince Robern that it has no existing contract with PELA, Al-Amanah furnished it with
copies of the Head Office’s rejection letter of PELA’s bid, the demand letters to vacate, and
the proof of consignment of PELA’s ₱150,000.00 deposit to the Regional Trial Court.
 Robern paid the balance of the purchase price. The Deed of Sale over the realty was executed
and the TCT was issued in Robern’s name the following day.
 PELA filed a suit for Annulment and Cancellation of Void Deed of Sale against Al-Amanah
and Robern. It insisted that it has a perfected contract of sale with Al-Amanah.
 Al-Amanah and Engr. Carpizo claimed that the bank has every right to sell its lot to any
interested buyer with the best offer and thus they chose Robern. They clarified that the
₱150,000.00 PELA handed to them is not part of the payment but merely a deposit in
connection with its offer. They asserted that PELA was properly apprised that its offer to
buy was subject to the approval of Al-Amanah’s Head Office. They stressed that Al-Amanah
 never entered into a sale with PELA for there was no perfected agreement as to the price
since the Head Office rejected
 RTC Ruling: The annotation appearing in the bottom part of the said letter could not be
construed as an acceptance because the same is a mere acknowledgment of receipt of the
letter (not the offer) which will still be subject to processing. The RTC likewise ruled that
being a corporation, only Al-Amanah’s board of directors can bind the bank with third
persons involving the sale of its property. Thus, the purported offer made by Al-Amanah’s
OIC, who was never conferred authority by the board of directors to sell the lot, cannot bind
the bank. In contrast, when the Head Office accepted Robern’s offered price, it was duly
approved by the board of directors, giving birth to a perfected contract of sale between Al-
Amanah and Robern.
 CA Ruling: there was already a perfected contract of sale between PELA and Al-Amanah. It
held that the annotationon the lower portion of the March 18, 1993 letter could be
construed to mean that for Al-Amanah to accept PELA’s offer, the sum of ₱150,000.00 must
be first put up.
 Petitioners stressed that there was no sale between PELA and Al-Amanah, for neither a deed
nor any written agreement was executed. They aver that Dalig was a mere OIC of Al-
Amanah’s Davao Branch, who was never vested with authority by the board of directors of
Al-Amanah to sell the lot.
 PELA claimed that Al-Amanah accepted its offered price and the ₱150,000.00, thus barring
the application of the Statute of Frauds as the contract was already partially executed.

Issue:
Whether or not there was a perfected contract of sale between PELA and Al-Amanah.

Held:
Yes. A 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. Thus, for a contract of sale to be valid, all of the
following essential elements must concur: "a) consent or meeting of the minds; b) determinate
subject matter; and c) price certain in money or its equivalent."
In the case at bench, there is no controversy anent the determinate subject matter, i.e., the 2,000-
square meter lot. This leaves us to resolve whether there was a concurrence of the remaining
elements.
As for the price, fixing it can never be left to the decision of only one of the contracting parties."But a
price fixed by one of the contracting parties, if accepted by the other, gives rise to a perfected sale.
As regards consent, "when there is merely an offer by one party without acceptance of the other,
there is no contract."
After scrutinizing the testimonial and documentary evidence in the records of the case, we find no
proof of a perfected contract of sale between Al-Amanah and PELA. The parties did not agree on the
price and no consent was given, whether express or implied.
PELA even acknowledged that OIC Dalig made it clear that the acceptance of the offer,
notwithstanding the deposit, is subject to the approval of the Head Office. Recognizing the corporate
nature of the bank and that the power to sell its real properties is lodged in the higher authorities,
OIC Dalig never falsely represented to the bidders that she has authority to sell the bank’s property.
And regardless of PELA’s insistence that she execute a written agreement of the sale, she refused
and told PELA to wait for the decision of the Head Office, making it clear that she has no authority to
execute any deed of sale.
The transaction between Al-Amanah and PELA remained in the negotiation stage. The offer never
materialized into a perfected sale, for no oral or documentary evidence categorically proves that Al-
Amanah expressed amenability to the offered ₱300,000.00 purchase price. Before the lapse of the 1-
year period PELA had set to pay the remaining ‘balance,’ Al-Amanah expressly rejected its offered
purchase price, although it took the latter around seven months to inform the former and this
entitled PELA to award of damages.

HEIRS OF JUAN SAN ANDRES (VICTOR S. ZIGA) and SALVACION S. TRIA, petitioners, vs.
VICENTE RODRIGUEZ, respondent.
G.R. No. 135634 May 31, 2000

Facts:
 Juan andres was the owner of the lot situated in liboton, naga city. The sale was evidenced
by a deed of sale. Upon the death of juan andres, ramon san andres was appointed as
administrator of the estate, and hired geodetic engineer.
 Jose panero prepared a consolidated plan of the estate and also prepared a sketch plan of
the lot sold to respondent. It was found out that respondent had enlarged the area which he
purchased from juan. The administrator sent a letter to the respondent to vacate the said
portion in which the latter refused to do.
 Respondent alleged that apart from the original lot, which had been sold to him, the latter
likewise sold to him the following day the remaining portion of the lot. He alleged that the
payment for such would be affected in 5 years from the eecution of the formal deed of sale
after a survey is conducted. He also alleged that under the consent of juan, he took
possession of the same and introduced improvements thereon.
 Respondent deposited in court the balance of the purchase price amounting to P7,035.00
for the aforesaid 509-square meter lot.
 The trial court rendered judgment in favor of petitioner. It ruled that there was no contract
of sale to speak of for lack of a valid object because there was no sufficient indication to
identify the property subject of the sale, hence, the need to execute a new contract.
 The appellate court held that the object of the contract was determinable, and that there
was a conditional sale with the balance of the purchase price payable within five years from
the execution of the deed of sale.
Issue:
Whether or not there was a valid sale.

Held:
Yes. Civil Code provides that By the contract of sale one of the contracting parties obligates himself
to transfer the ownership of and to deliver a determinate thing, and the other to pay therefor a price
certain in money or its equivalent.
A contract of sale may be absolute or conditional.
As thus defined, the essential elements of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership in exchange for the price;
b) Determinate subject matter; and,
c) Price certain in money or its equivalent. 12
As shown in the receipt, dated September 29, 1964, the late Juan San Andres received P500.00 from
respondent as "advance payment for the residential lot adjoining his previously paid lot on three
sides excepting on the frontage; the agreed purchase price was P15.00 per square meter; and the
full amount of the purchase price was to be based on the results of a survey and would be due and
payable in five (5) years from the execution of a deed of sale.
Petitioner's contention is without merit. There is no dispute that respondent purchased a portion of
Lot 1914-B-2 consisting of 345 square meters. This portion is located in the middle of Lot 1914-B-2,
which has a total area of 854 square meters, and is clearly what was referred to in the receipt as the
"previously paid lot." Since the lot subsequently sold to respondent is said to adjoin the "previously
paid lot" on three sides thereof, the subject lot is capable of being determined without the need of
any new contract. The fact that the exact area of these adjoining residential lots is subject to the
result of a survey does not detract from the fact that they are determinate or determinable. As the
Court of Appeals explained:
Concomitantly, the object of the sale is certain and determinate. Under Article 1460 of the New Civil
Code, a thing sold is determinate if at the time the contract is entered into, the thing is capable of
being determinate without necessity of a new or further agreement between the parties. Here, this
definition finds realization.
Thus, all of the essential elements of a contract of sale are present, i.e., that there was a meeting of
the minds between the parties, by virtue of which the late Juan San Andres undertook to transfer
ownership of and to deliver a determinate thing for a price certain in money. As Art. 1475 of the
Civil Code provides:
The contract of sale is perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price. . . .That the contract of sale is perfected was confirmed
by the former administrator of the estates, Ramon San Andres, who wrote a letter to respondent on
March 30, 1966 asking for P300.00 as partial payment for the subject lot. As the Court of Appeals
observed:
Without any doubt, the receipt profoundly speaks of a meeting of the mind between San Andres and
Rodriguez for the sale. Evidently, this is a perfected contract of sale on a deferred payment of the
purchase price. All the pre-requisite elements for a valid purchase transaction are present.
There is a need, however, to clarify what the Court of Appeals said is a conditional contract of sale.
Apparently, the appellate court considered as a "condition" the stipulation of the parties that the full
consideration, based on a survey of the lot, would be due and payable within five (5) years from the
execution of a formal deed of sale. It is evident from the stipulations in the receipt that the vendor
Juan San Andres sold the residential lot in question to respondent and undertook to transfer the
ownership thereof to respondent without any qualification, reservation or condition.
A deed of sale is considered absolute in nature where there is neither a stipulation in the deed that
title to the property sold is reserved in the seller until full payment of the price, nor one giving the
vendor the right to unilaterally resolve the contract the moment the buyer fails to pay within a fixed
period.
Applying these principles to this case, it cannot be gainsaid that the contract of sale between the
parties is absolute, not conditional. There is no reservation of ownership nor a stipulation providing
for a unilateral rescission by either party. In fact, the sale was consummated upon the delivery of
the lot to respondent. 20 Thus, Art. 1477 provides that the ownership of the thing sold shall be
transferred to the vendee upon the actual or constructive delivery thereof.
The stipulation that the "payment of the full consideration based on a survey shall be due and
payable in five (5) years from the execution of a formal deed of sale" is not a condition which affects
the efficacy of the contract of sale. It merely provides the manner by which the full consideration is
to be computed and the time within which the same is to be paid. But it does not affect in any
manner the effectivity of the contract. Consequently, the contention that the absence of a formal
deed of sale stipulated in the receipt prevents the happening of a sale has no merit.

FELIX L. GONZALES, petitioner, vs. THE HEIRS OF THOMAS and PAULA CRUZ, herein
represented by ELENA C. TALENS, respondents.
Facts:
 On December 1, 1983, Paula Ao Cruz together with the plaintiffs heirs of Thomas and Paula
Cruz, entered into a Contract of Lease/Purchase with the defendant, Felix L. Gonzales, of a
certain parcel of land.
  The terms of the Contract is for a period of one year upon the signing thereof. After the
period of this Contract, the LESSEE shall purchase the property on the agreeable price of
One Million Pesos (P1,000,000.00) payable within Two (2) Years period with an interest of
12% per annum.
 It was agreed upon that lessors-plaintiffs shall obtain a Transfer Certificate of Title in the
name of the lessee within 4 years before a new contract is to be entered into under the same
terms and conditions as the original Contract of Lease/Purchase. Thus, before a deed of Sale
can be entered into between the plaintiffs and the defendant, the plaintiffs have to obtain
the Transfer Certificate of Title in favor of the defendant. (Paragraph 9)
 The defendant Gonzales paid the annual rental on the half-portion of the property covered
by Transfer Certificate of Title No. and thereafter took possession of the property, installing
thereon the defendant Jesus Sambrano as his caretaker. T
 he defendant Gonzales did not, however, exercise his option to purchase the property
immediately after the expiration of the one-year lease. He remained in possession of the
property without paying the purchase price provided for in the Contract of Lease/Purchase
and without paying any further rentals thereon.
 A letter was sent by one of the plaintiffs-heirs to the defendant Gonzales informing him of
the lessors decision to rescind the Contract of Lease/Purchase due to a breach thereof
committed by the defendant which also served as a demand on the defendant to vacate the
premises within 10 days from receipt of said letter. However, the defendant refused to
vacate the property and continued possession thereof.
 Alleging breach of the provisions of the Contract of Lease/Purchase, the plaintiffs filed a
complaint for recovery of possession of the property – subject of the contract with damages,
both moral and compensatory and attorney’s fees and litigation expenses.
 The defendant Gonzales filed his answer praying for a dismissal of the complaint filed
against him. He argued that he could not be compelled to purchase the property, because
respondents have not complied with paragraph nine, which obligates them to obtain a
separate and distinct title in their names. He contended that paragraph nine was a condition
precedent to the purchase of the property.
 The trial court rendered a decision in favor of the defendant. It held that the failure of the
plaintiffs to secure the Transfer Certificate of Title, as provided for in the contract, does not
entitle them to rescind the contract.
 CA: The transfer of title to the property in the appellees name cannot be interpreted as a
condition precedent to the payment of the agreed purchase price because such
interpretation not only runs counter to the explicit provisions of the contract but also is
contrary to the normal course of things anent the sale of real properties. The terms of the
contract [are] explicit and require no interpretation. Upon the expiration of the lease, the
lessee shall purchase the property. Besides, the normal course of things anent the sale of
real properties dictates that there must first be payment of the agreed purchase
price before transfer of title to the vendees name can be made.

Issue:
Whether or not the express stipulation of the contract which is to secure the Transfer Certificate of
Title a condition precedent before the petitioner could exercise his option to buy the property.

Held:
Yes. Because the ninth clause required respondents to obtain a separate and distinct TCT in their
names and not in the name of petitioner, it logically follows that such undertaking was a condition
precedent to the latters obligation to purchase and pay for the land. Petitioner’s obligation to
purchase the land is a conditional one and is governed by Article 1181 of the Civil Code
The record shows that at the time the contract was executed, the land in question was still
registered in the name of Bernardina Calixto and Severo Cruz, respondents predecessors-in-
interest. There is no showing whether respondents were the only heirs of Severo Cruz or whether
the other half of the land in the name of Bernardina Calixto was adjudicated to them by any
means. In fact, they admit that extrajudicial proceedings were still ongoing. Hence, when the
Contract of Lease/Purchase was executed, there was no assurance that the respondents were
indeed the owners of the specific portion of the lot that petitioner wanted to buy, and if so, in what
concept and to what extent. Thus, the clear intent of the ninth paragraph was for respondents to
obtain a separate and distinct TCT in their names. This was necessary to enable them to show their
ownership of the stipulated portion of the land and their concomitant right to dispose of it. Absent
any title in their names, they could not have sold the disputed parcel of land.
Condition has been defined as every future and uncertain event upon which an obligation or
provision is made to depend. It is a future and uncertain event upon which the acquisition or
resolution of rights is made to depend by those who execute the juridical act. [
Without it, the sale of the property under the Contract cannot be perfected, and petitioner cannot
be obliged to purchase the property. When the consent of a party to a contract is given subject to the
fulfillment of a suspensive condition, the contract is not perfected unless that condition is first
complied with.
The Court has held that when the obligation assumed by a party to a contract is expressly subjected
to a condition, the obligation cannot be enforced against him unless the condition is complied with.
The obligation of the petitioner to buy the land cannot be enforced unless respondents comply with
the suspensive condition that they acquire first a separate and distinct TCT in their names. The
suspensive condition not having been fulfilled, then the obligation of the petitioner to purchase the
land has not arisen.

VIRGILIO R. ROMERO, petitioner,

vs.
HON. COURT OF APPEALS and ENRIQUETA CHUA VDA. DE ONGSIONG, respondents.

Facts:
 Buyer Virgilio Romero together with his foreign partners decided to put up a central
warehouse in Metro Manila. They contacted several real estate brokers and thereafter, were
contacted by Alfonso Flores and spouse to offer a parcel of land of the seller Enriqueta
Ongsiong . Romero found the property suitable for a warehouse, except for the presence of
squatters in the area.
 A Deed of Conditional Sale was executed between Romero and Ongsiong where they agreed
that the seller has the obligation to remove the squatters from the property. While Ongsiong
got a favorable judgment on her eviction case against the squatters, she did so at a much
later date than the agreed upon 60-day period in the contract. She offered to return the
down payment to Romero, but he refused to accept and instead offer to underwrite the
expenses for the execution of the writ.
 On the expiry of the grace period, Romero reminded Onsiong of her obligation to which
Ongsiong responded that the Deed of Conditional Sale had been rendered null and void by
virtue of her failure to evict the squatters from the premises.
 Romero responded that the contract of sale between the parties was perfected from the very
moment that there was a meeting of the minds upon the subject lot and the price. The
contract had already been partially fulfilled and executed upon receipt of the down
 payment. Ongsiong is precluded from rejecting its binding effects relying upon her inability
to eject the squatters from the premises of subject property during the agreed period.
Furthermore, the provisions in the contract do not grant Ongsiong the option or prerogative
to rescind and retain the property should she fail to comply with the obligation she has
assumed under the contract. The contract clearly shows that the right to rescind and to
demand the return/reimbursement of the down payment is granted to Romero for his
protection.
 Instead of availing of the power to rescind the contract and demand the return of the down
payment, Romero had opted to assume the ejectment of the squatters from the premises.
And he pointed out that it is basic under the law on contracts that the power to rescind is
given to the injured party.
 Finally, Romero told Ongsiong that she has not complied with her obligation under their
contract in good faith. It is undeniable that she deliberately refused to exert efforts to eject
the squatters and retain the property because of the sudden increase in the value of
properties in the surrounding areas.
 The lower court held that Ongsiong had no right to rescind the contract since it was she who
"violated her obligation to eject the squatters from the subject property" and that Romero,
being the injured party, was the party who could, under Article 1191 of the Civil Code,
rescind the agreement. The court further ruled that the provision calling for the
reimbursement of the down payment amounted to a "penalty clause".
 But the decision was reversed on appeal where the court decided that the agreement was a
contract with a resolutory condition.

Issue
Whether or not the vendor may demand the rescission of a contract for the sale of a parcel
of land for a cause traceable to his/her own failure.

Ruling:
No. Ongsiong's action for rescission is not warranted because she is not the injured party. The right
of resolution of a party to an obligation under Article 1191 of the Civil Code is predicated on a
breach of faith by the other party that violates the reciprocity between them. It is Ongsiong who has
failed in her obligation under the contract.
Where, of course, the condition is imposed upon the perfection of the contract itself, the failure of
such condition would prevent the juridical relation itself from coming into existence.
The term "condition" in a perfected contract of sale pertains to the compliance to a prestation by
one party and upon fulfillment, the demand of the reciprocal prestation by the other party. The
reciprocal obligations referred to would normally be, in the case of Romero, the payment of the
agreed purchase price and, in the case of the Ongsiong, the fulfillment of certain express warranties
(which, in this case, is the timely eviction of the squatters on the property).
From the moment the contract is perfected, the parties are bound not only to the fulfillment of what
has been expressly stipulated but also to all the consequences which, according to their nature, may
be in keeping with good faith, usage and law.
Under the agreement, private respondent is obligated to evict the squatters on the property. The
ejectment of the squatters is a condition the operative act of which sets into motion the period of
compliance by petitioner of his own obligation, i.e., to pay the balance of the purchase price. Private
respondent's failure "to remove the squatters from the property" within the stipulated period gives
petitioner the right to either refuse to proceed with the agreement or waive that condition in
consonance with Article 1545 of the Civil Code. This option clearly belongs to petitioner and not to
private respondent.
The undertaking required of private respondent does not constitute a "potestative condition
dependent solely on his will" that might, otherwise, be void in accordance with Article 1182 of the
Civil Code but a "mixed" condition "dependent not on the will of the vendor alone but also of third
persons like the squatters and government agencies and personnel concerned. The so-called
"potestative condition" is imposed not on the birth of the obligation but on its fulfillment, only the
obligation is avoided, leaving unaffected the obligation itself.