Heirs of Amparo del Rosario vs.

Santos 565 SCRA 1 (2008)

FACTS:

Amparo del Rosario filed a complaint against the spouses Andres F. Santos and Aurora O. Santos,
for specific performance and damages allegedly for failure of the latter to execute the Deed of
Confirmation of Sale of an undivided 20,000 square meters of land, in Tanay, Rizal, in malicious
breach of a Deed of Sale

Amparo died and was substituted by the heirs named in her will. Andres also died and was
substituted by his heir

The Deed of Sale is drafted as: Andres Santos, xxx for and in consideration of 2,000, do hereby
sells, conveys, and transfers unto Amparo del Rosario, xxx that certain 20k sq. m.

The parties agree that the vendor shall execute a Deed of Confirmation of Deed of Sale in favour
of the vendee as soon as the title has been released and the subdivision plan of said lot 1 has been
approved by the Land Registration Commissioner

Plaintiff claimed fulfillment of conditions for the execution of the Deed of Confirmation of Sale

Defendants do not contest the words and figures in said deed except in the acknowledgment portion
thereof where certain words were allegedly cancelled and changed without their knowledge and
consent and where, apparently, they appeared before Notary Public Florencio Landrito when, in
fact, they claimed that they did not.

ISSUE: Whether or not the existence of an alleged false notarization of the deed of sale is material

RULING: No. As correctly pointed out by the court a quo, the alleged false notarization of the
deed of sale is of no consequence. For a sale of real property or of an interest therein to be
enforceable under the Statute of Frauds, it is enough that it be in writing. It need not be notarized.
But the vendee may avail of the right under Article 1357 of the New Civil Code to compel the
vendor to observe the form required by law in order that the instrument may be registered in the
Registry of Deeds. Hence, the due execution and genuineness of the deed of sale are not really in
issue in this case. Accordingly, assigned error I is without merit.

While it is true, as appellants argue, that Article 1306 of the New Civil Code provides that "the
contracting parties may establish such stipulations, clauses, terms and conditions as they may deem
convenient, provided that they are not contrary to law, morals, good customs, public order, or
public policy" and that consequently, appellants and appellee could freely enter into an agreement
imposing as conditions thereof the following: that appellee secure the written conformity of
Erlinda Cortez and that she render an accounting of all collections from her, said conditions may
not be proved as they are not embodied in the deed of sale.
The only conditions imposed for the execution of the Deed of Confirmation of Sale by appellants
in favor of appellee are the release of the title and the approval of the subdivision plan. Thus,
appellants may not now introduce other conditions allegedly agreed upon by them because when
they reduced their agreement to writing, it is presumed that "they have made the writing the only
repository and memorial of truth, and whatever is not found in the writing must be understood to
have been waived and abandoned."

By the terms of the Deed of Sale itself, which We find genuine and not infirmed, appellants
declared themselves to be owners of one-half (1/2) interest thereof. But in order to avoid appellee's
claim, they now contend that Plan Psu-206650 where said Lot I appears is in the exclusive name
of Teofilo Custodio as the sole and exclusive owner thereof and that the deed of assignment of
one-half (1/2) interest thereof executed by said Teofilo Custodio in their favor is strictly personal
between them. Notwithstanding the lack of any title to the said lot by appellants at the time of the
execution of the deed of sale in favor of appellee, the said sale may be valid as there can be a sale
of an expected thing, in accordance with Art. 1461, New Civil Code

Heirs of San Miguel vs Court of Appeals | Sept 5, 2001 | J. Pardo

There’s land in Cavite originally claimed by the P’s predecessor-in-interest, Severina

San Miguel. Without her knowledge, Dominador managed to divide the land into 3 lots and
he filed with the CFI of Cavite to issue titles for them over Lot 1 and 2, which was granted.
Severina filed with CFI a petition for review of this decision because she said that the land
registration proceedings made by Dominador were fraudulently hidden from her. The court
found for her and declared the original certificate of title for Dominador null and void.

TC issued an order in favor of Severina’s heirs, but the writ was returned unsatisfied
several times.

Severina’s heirs decided to not pursue the writs of possession and demolition, and
entered into a compromise with Dominador et. al. According to the compromise, Severina’s
heirs were to sell the lots to Dominador for 1.5 million with the delivery of the TCT, conditioned
upon the purchase of another lot which wasn’t titled yet at an additional sum of 300k.

Dominador did not pay 300k but they expected that the TCT should be delivered to
them. Their reason is that Severina’s heirs did not present any proof of ownership over the
untitled parcel of land (Lot 3). Apparently, that part of the land is declared in the name of a 3rd
party.

Severina’s heirs said that Dominador said in their kasunduan that they owned that
land, dispensing with the requirement that the heirs produce actual proof of title over it. Since
Dominador hasn’t paid the 300k, then they were justified in withholding the TCT.

TC – heirs of Severina were ordered to surrender the TCT to heirs of Dominador

CA – affirmed decision of TC
 Issue: W/N Dominador et. al. may be compelled to pay the 300k as agreed upon in
the kasunduan as a pre-requisite for the release of TCT despite Severina’s heirs lack o
evidence of ownership over the parcel of land contested.

Holding: No. Under the facts of the case, Severina’s heirs are not in a position to
transfer title. No proof of ownership in favor of Severina’s heirs. To insist that Dominador pay
the price under such circumstances would result in the Severina heir’s unjust enrichment.

Goldenrod v CA – G.R. No. 126812

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:

Should Goldenrod be paid back the 1 million pesos?

Held:

Yes. Rescission creates the obligation to return the things which were the object of the contract
together with the fruits and interest. 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.

Chua vs. CA and Hao G.R. No. 150793 November 19, 2004

Facts: PR Lydia Hao, treasurer of Siena Realty Corporation, filed a complaint-affidavit against
petitioner for committing acts of falsification by falsifying the Minutes of the Annual Stockholders
meeting of the Board of Directors by causing it to appear in said Minutes that LYDIA HAO CHUA
was present and has participated in said proceedings, when in truth and in fact, as the said
accused fully well knew that said Lydia Hao was never present during the meeting.
Petitioner alleges that respondent Lydia Hao has no the authority to bring a suit in behalf of the
Corporation since there was no Board Resolution authorizing her to file the suit. For her part,
respondent Hao claimed that the suit was brought under the concept of a derivative suit.

Issue: (1) Is the criminal complaint in the nature of a derivative suit? (2) Is Siena Realty
Corporation a proper petitioner in SCA No. 99-94846?

Held: Under Section 36 of the Corporation Code, read in relation to Section 23, where a
corporation is an injured party, its power to sue is lodged with its board of directors or trustees.
An individual stockholder is permitted to institute a derivative suit on behalf of the corporation
wherein he holds stocks in order to protect or vindicate corporate rights, whenever the officials of
the corporation refuse to sue, or are the ones to be sued, or hold the control of the corporation.
In such actions, the suing stockholder is regarded as a nominal party, with the corporation as the
real party in interest.

A derivative action is a suit by a shareholder to enforce a corporate cause of action. The

corporation is a necessary party to the suit. And the relief which is granted is a judgment against
a third person in favor of the corporation. Similarly, if a corporation has a defense to an action
against it and is not asserting it, a stockholder may intervene and defend on behalf of the
corporation.

In the Criminal Case, the complaint was instituted by respondent against petitioner for falsifying
corporate documents whose subject concerns corporate projects of Siena Realty Corporation.
Clearly, SRC is an offended party. Hence, SRC has a cause of action. And the civil case for the
corporate cause of action is deemed instituted in the criminal action.

However, the board of directors of the corporation in this case did not institute the action against
petitioner. Private respondent was the one who instituted the action. Private respondent asserts
that she filed a derivative suit in behalf of the corporation. This assertion is inaccurate. Not every
suit filed in behalf of the corporation is a derivative suit. For a derivative suit to prosper, it is
required that the minority stockholder suing for and on behalf of the corporation must allege in his
complaint that he is suing on a derivative cause of action on behalf of the corporation and all other
stockholders similarly situated who may wish to join him in the suit. It is a condition sine qua non
that the corporation be impleaded as a party because not only is the corporation an indispensable
party, but it is also the present rule that it must be served with process. The judgment must be
made binding upon the corporation in order that the corporation may get the benefit of the suit
and may not bring subsequent suit against the same defendants for the same cause of action. In
other words, the corporation must be joined as party because it is its cause of action that is being
litigated and because judgment must be a res adjudicata against it.

In the criminal complaint filed by herein respondent, nowhere is it stated that she is filing the same
in behalf and for the benefit of the corporation. Thus, the criminal complaint including the civil
aspect thereof could not be deemed in the nature of a derivative suit.

SERRANO VS CAGUIAT517 SCRA 57FACTS:Spouses Serrano agreed to sell in favor of

respondent Caguiat aparcel of land at 1,500.00 per square meter. Caguiat partiallypaid
petitioners 100, 000.00 as evidenced by a receipt issuedby petitioners indicating therein
respondents promise to pay theremaining balance. Respondent, after making known
hisreadiness to pay the balance, requested from petitioners thepreparation of the necessary
Deed of Sale. When petitionerscancelled the transaction and intended to return to Caguiat
hispartial payment, respondent filed a complaint for specificperformance and damages. The
trial court relying on Article 1482of the Civil Code ruled that the payment of 100, 000.00
beingan earnest money signified the perfection of the contract of sale. The Court of Appeals
denied petitioners motion forreconsideration in affirmation of the lower courts
decision.ISSUE:Whether or not the partial payment constitutes an earnestmoney as
manifested in Article 1482 of the Civil CodeHELD:No. Article 1482 applies only to earnest
money given in acontract of sale. It was apparent that the earnest money in thecase at bar
was given in lieu of a contract to sell. Unlike in acontract of sale, the ownership of the parcel
of land was retainedby the Spouses Serrano and shall only be passed to Caguiat uponfull
payment of the purchase price as evidenced by the receipt.Relatively, no Deed of Sale has
been executed as proof of theintention of the parties to immediately transfer the ownership of
the parcel of land. Spouses Serrano also retained ownership of the certificate of title of the
lot, thereby indicating no actual orconstructive delivery of the ownership of the property.
Finally,should the transaction pushed through, Caguiats payment of theremaining balance
would have been a suspensive condition sincethe transfer of ownership was subordinated to
the happening of afuture and uncertain event.

PROVINCE OF CEBU v. HEIRS OF RUFINA MORALES, GR No. 170115, 2008-02-19

Facts:

On September 27, 1961, petitioner Province of Cebu leased[4] in favor of Rufina Morales a 210-
square meter lot which formed part of Lot No. 646-A of the Banilad Estate. Subsequently or
sometime in 1964, petitioner donated several parcels of land to the City... of Cebu.

On July 19, 1965, the city sold Lot No. 646-A-3 as well as the other donated lots at public
auction in order to raise money for infrastructure projects. The highest bidder for Lot No. 646-
A-3 was Hever Bascon but Morales was allowed to match the highest bid since she had a...
preferential right to the lot as actual occupant thereof.

Morales thus paid the required deposit and partial payment for the lot.

In the meantime, petitioner filed an action for reversion of donation against the City of Cebu

On May 7, 1974, petitioner and the City of Cebu entered into a compromise agreement

The agreement provided for the return of the donated lots to petitioner except those that have
already been utilized by the City of Cebu.

Quesada, together with the other nieces of Morales namely, respondents Nenita Villanueva and
Erlinda V. Adriano, as well as Morales' sister, Felomina V. Panopio, filed an action for specific
performance and reconveyance of property against... petitioner

Issues:
the award at public auction of the lot to Morales was a valid and binding contract

Ruling:

The City of Cebu was the owner of the lot when it awarded the same to... respondents'
predecessor-in-interest, Morales, who later became its owner before the same was erroneously
returned to petitioner under the compromise judgment.

The award is tantamount to a perfected contract of sale between Morales and the City of Cebu,
while partial... payment of the purchase price and actual occupation of the property by Morales
and respondents effectively transferred ownership of the lot to the latter.

This is true notwithstanding the failure of Morales and respondents to pay the balance of the
purchase price.

There is no merit in petitioner's assertion that there was no perfected contract of sale because no
"Contract of Purchase and Sale" was ever executed by the parties.

Subject to the provisions of the Statute of Frauds, a formal document is not necessary for the sale
transaction to acquire binding effect.

the fact that there was an agreed price... for the lot proves that a contract of sale was indeed
perfected between the parties. Failure to pay the balance of the purchase price did not render the
sale inexistent or invalid, but merely gave rise to a right in favor of the vendor to either demand
specific performance... or rescission of the contract of sale.

In this case, respondents' predecessor had undoubtedly commenced performing her obligation by
making a down payment on the purchase price.

respondents could still tender payment of the full purchase price as no demand for rescission had
been made upon them, either judicially or through notarial act.

Principles:

Whether Morales, as actual occupant and/or lessee of the lot, was qualified and had the right to
match the highest bid is... a foregone matter that could have been questioned when the award
was made. When the City of Cebu awarded the lot to Morales, it is assumed that she met all
qualifications to match the highest bid.

It does not matter that Morales merely matched the bid of the highest bidder at the said auction...
sale. The contract of sale was nevertheless perfected as to Morales, since she merely stepped
into the shoes of the highest bidder.

For as long as the essential elements of a contract of... sale are proved to exist in a given
transaction, the contract is deemed perfected regardless of the absence of a formal deed
evidencing the same.
The stages of a contract of sale are as follows: (1) negotiation, covering the period from the time
the prospective contracting parties indicate interest in the contract to the time the contract is
perfected; (2) perfection, which takes place upon the concurrence... of the essential elements of
the sale which are the meeting of the minds of the parties as to the object of the contract and
upon the price; and (3) consummation, which begins when the parties perform their respective
undertakings under the contract of sale, culminating... in the extinguishment thereof

Article 1592 allows the vendee to pay as long as no demand for rescission has been made.

Mapalo v. Mapalo

G.R. Nos. L-21489 & L-21628; 19 May 1966

Bengzo, JP, J.

PRICE | Meeting of minds as to price

FACTS:

Spouses Miguel Mapalo and Candida Quiba, simple illiterate farmers, were registered owners of
a residential land in Manaoag, Pangasinan. Said spouses out of love for Maximo Mapalo —
Miguel’s brother who was about to get married — decided to donate the eastern half of the land to
him. As a result, in 1936, they were deceived into signing a deed of absolute sale over the entire
land in Maximo’s favor. The document of sale stated a consideration of P500.00 which Spouses
Mapalo did not receive anything. Following the execution of document, Miguel and Candida built
a fence of permanent structure in the middle of the land segregating the eastern portion from its
western portion. 13 years later, Maximo sold for P2,500.00 the entire land in favor of the Narcicos
and they registered the same. Narcisos filed to be declared owners of the entire land with
possession of its western portion. Spouses Mapalo contend that the deed of sale of 1936 was
procured with fraud and the Narcicos were buyers in bad faith. Also, it was invoked that the deeds
of sale be declared null and void as to the western half of said land for being fictitious. In reversing
the ruling of the CFI, the CA averred that having obtained the deed of sale by fraud, the same was
voidable, not void ab initio and the action to annul the same had already prescribed which was
within 4 years of notice of fraud. While they are definitely victims, they lost their right by
prescription.

ISSUE:

Does the contract involve ‘no consideration’ or ‘false consideration’?

HELD:

The rule under the Civil Code, be it the old or the new, is that contracts without a cause or
consideration produce no effect whatsoever. Nonetheless, under the Old Civil Code, the statement
of a false consideration renders the contract voidable, unless it is proven that it is supported by
another real and licit consideration. And it is further provided by the Old Civil Code that the action
for annulment of a contract on the ground of falsity of consideration shall last 4 years, the term to
run from the date of the consummation of the contract. In the present case, the contract of sale has
no consideration and therefore it is void and inexistent for the said consideration of P500.00 was
totally absent. Purchase price which appears thereon as paid has in fact never been paid by the
purchaser to vendor. This is contrary to what is meant by a contract that states a false consideration
is one that has in fact a real consideration but the same is not the one stated in the document.
Needless to add, the inexistence of a contract is permanent and incurable and cannot be the subject
of prescription.

Cavite Development Bank vs. Lim

Socialize Us

Facts:

Petitioners Cavite Development Bank (CDB) and Far East Bank and Trust Company
(FEBTC) are banking institutions duly organized and existing under Philippine laws. On or
about June 15, 1983, a certain Rodolfo Guansing obtained a loan in the amount of
P90,000.00 from CDB, to secure which he mortgaged a parcel of land situated at No. 63
Calavite Street, La Loma, Quezon City and covered by TCT No. 300809 registered in his
name. As Guansing defaulted in the payment of his loan, CDB foreclosed the mortgage.

At the foreclosure sale held on March 15, 1984, the mortgaged property was sold to
CDB as the highest bidder. Guansing failed to redeem, and on March 2, 1987, CDB
consolidated title to the property in its name. TCT No. 300809 in the name of Guansing was
cancelled and, in lieu thereof, TCT No. 355588 was issued in the name of CDB.1âwphi1.nêt

On June 16, 1988, private respondent Lolita Chan Lim, assisted by a broker named
Remedios Gatpandan, offered to purchase the property from CDB.

Pursuant to the foregoing terms and conditions of the offer, Lim paid CDB P30,000.00
as Option Money, for which she was issued Official Receipt No. 3160, dated June 17, 1988,
by CDB. However, after some time following up the sale, Lim discovered that the subject
property was originally registered in the name of Perfecto Guansing, father of mortgagor
Rodolfo Guansing, under TCT No. 91148.

Aggrieved by what she considered a serious misrepresentation by CDB and its

mother-company, FEBTC, on their ability to sell the subject property, Lim, joined by her
husband, filed on August 29, 1989 an action for specific performance and damages against
petitioners in the Regional Trial Court.

On March 10, 1993, the trial court rendered a decision in favor of the Lim spouses.
Petitioners brought the matter to the Court of Appeals, which, on October 14, 1997, affirmed
in toto the decision of the Regional Trial Court.

Issue: WON there was a valid sale.

Held: NO.

In this case, the sale by CDB to Lim of the property mortgaged in 1983 by Rodolfo
Guansing must, therefore, be deemed a nullity for CDB did not have a valid title to the said
property. To be sure, CDB never acquired a valid title to the property because the foreclosure
sale, by virtue of which, the property had been awarded to CDB as highest bidder, is likewise
void since the mortgagor was not the owner of the property foreclosed.

A foreclosure sale, though essentially a "forced sale," is still a sale in accordance with
Art. 1458 of the Civil Code, under which the mortgagor in default, the forced seller, becomes
obliged to transfer the ownership of the thing sold to the highest bidder who, in turn, is obliged
to pay therefor the bid price in money or its equivalent. Being a sale, the rule that the seller
must be the owner of the thing sold also applies in a foreclosure sale. This is the reason Art.
2085 of the Civil Code, in providing for the essential requisites of the contract of mortgage
and pledge, requires, among other things, that the mortgagor or pledgor be the absolute
owner of the thing pledged or mortgaged, in anticipation of a possible foreclosure sale should
the mortgagor default in the payment of the loan.

There is, however, a situation where, despite the fact that the mortgagor is not the
owner of the mortgaged property, his title being fraudulent, the mortgage contract and any
foreclosure sale arising therefrom are given effect by reason of public policy. This is the
doctrine of "the mortgagee in good faith" based on the rule that all persons dealing with
property covered by a Torrens Certificate of Title, as buyers or mortgagees, are not required
to go beyond what appears on the face of the title. The public interest in upholding the
indefeasibility of a certificate of title, as evidence of the lawful ownership of the land or of any
encumbrance thereon, protects a buyer or mortgagee who, in good faith, relied upon what
appears on the face of the certificate of title.
 This principle is cited by petitioners in claiming that, as a mortgagee bank, it is not
required to make a detailed investigation of the history of the title of the property given as
security before accepting a mortgage.

We are not convinced, however, that under the circumstances of this case, CDB can
be considered a mortgagee in good faith. While petitioners are not expected to conduct an
exhaustive investigation on the history of the mortgagor's title, they cannot be excused from
the duty of exercising the due diligence required of banking institutions. In Tomas v. Tomas,
we noted that it is standard practice for banks, before approving a loan, to send
representatives to the premises of the land offered as collateral and to investigate who are
real owners thereof, noting that banks are expected to exercise more care and prudence than
private individuals in their dealings, even those involving registered lands, for their business
is affected with public interest.