Gateway vs Landbank In 1995, petitioner Gateway Electronics Corporation applied for a loan in the amount of one billion pesos

with respondent Landbank to finance the construction and acquisition of machineries and equipment for a semi-conductor plant at Gateway Business Park in Javalera, General Trias, Cavite. However, Landbank was only able to extend petitioner a loan in the amount of six hundred million pesos (P600,000,000.00). Hence, it offered to assist petitioner in securing additional funding through its investment banking services, which offer petitioner accepted. Thereafter, Landbank released to petitioner the initial amount of P250,000,000.00, with the balance of P350,000,000.00 to be released in June 1996. As security for the said loans, petitioner mortgaged in favor of Landbank two parcels of land3 located in Barangay Jalavera, General Trias, Cavite, the movable properties as well as the machineries to be installed therein. After petitioner's acceptance of Landbank's financial banking services, the latter prepared an Information Memorandum which it disseminated to various banks to attract them into providing additional funding for petitioner. The Information Memorandum stated that the security for the proposed loan syndication will be the "Mortgage Trust Indenture (MTI) on the project assets including land, building and equipment." Philippine Commercial International Bank (PCIB), Union Bank of the Philippines, (UBP), Rizal Commercial Banking Corporation-Trust Investment Division (RCBC), and Asia Trust Bank (Asia Trust) joined the loan syndication and released various loans to petitioner Meanwhile, the negotiations for the execution of an MTI failed because Landbank and the petitioner were unable to agree on the valuation of the equipment and machineries to be acquired by the latter. The petitioner insisted on a 70% valuation, while the former wanted a 50% valuation. To break the impasse, PCIB, RCBC, UBP, and Asiatrust proposed, subject to the approval of their respective Executive Committees or Board of Directors, to execute a Joint Real Estate Mortgage (JREM) On February 27, 1998, Land Bank informed petitioner of its intention not to share collaterals with the other banks. In the meantime, petitioner's loan with PCIB became due because of its failure to comply with the collateral requirement under the MTI or JREM, or to provide acceptable substitute collaterals. ISSUE: Is Landbank bound to share the properties mortgaged to it by respondent with the other creditor banks in the loan syndication? Anent the first issue, the Court finds that Landbank is bound by a perfected contract to share petitioner's collateral with the participating banks in the loan syndication. Article 1305 of the Civil Code defines a contract as a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. A contract undergoes three distinct stages (1) preparation or negotiation; (2) perfection; and (3) consummation. Negotiation begins from the time the prospective contracting parties manifest their interest in the contract and ends at the moment of agreement of the parties. The perfection or birth of the contract takes place when the parties agree upon the essential elements of the contract. The last stage is the consummation of the contract wherein the parties fulfill or perform the terms agreed upon in the contract, culminating in the extinguishment thereof. Article 1315 of the Civil Code, on the other hand, provides that a

contract is perfected by mere consent, which is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contractIn the case at bar, a perfected contract for the sharing of collaterals is evident from the exchange of communications between Landbank and petitioner and the participating banks, as well as in the Memorandum of Understanding executed by petitioner and the participating banks, including Landbank Gomez vs CA Pursuant to the Land for the Landless Program of the City of Manila and in accordance with City Ordinance No. 6880, the Office of City Mayor issued Resolution No. 16-A,3 Series of 1978, dated 17 May 1978, which effectively set guidelines and criteria for the award of city home lots to qualified and deserving applicants. Attached to said resolution and made as integral part thereof was a Contract to Sell4 that further laid down terms and conditions which the lot awardee must comply with. On 30 June 1978, the City of Manila, through the City Tenants Security Committee (CTSC) presently known as the Urban Settlement Office (URBAN), passed Resolution 17-785 which in effect awarded to 46 applicants, 37 homelots in the former Ampil-Gorospe estate located in Tondo, Manila. Luisa Gomez, predecessor-in-interest of herein petitioner Vicente Gomez, was awarded Lot 4, Block 1, subject to the provisions of Resolution No. 3-78 of the CTSC and building, subdivision and zoning rules and regulations. Consequently, a certificate of award6 dated 02 July 1978 was granted by the CTSC in favor of Luisa Gomez, who paid the purchase price of the lot in the amount of P3,556.00 on installment basis,7 said payments being duly covered by official receipts. In 1979, Luisa Gomez traveled to the Unites States of America but returned to the Philippines in the same year. Western Police District, City Hall Detachment, to conduct an investigation regarding reported violations of the terms and conditions of the award committed by the lot awardees. The place was found actually occupied by Mrs. Erlinda Perez and her family together with Mr. Mignony Lorghas and family, who are paying monthly rentals of P210.00 each to Vicente Gomez, brother of awardee. Daniel Gomez is now presently residing in the United States of America and only returns for vacation once in a while as a 'Balikbayan' petitioner anchors his case on the premise, albeit erroneous, that upon full payment of the purchase price of the lot in January 1980, Luisa Gomez, actual awardee, already acquired a vested right over the real property subject of the present controversy. Thus, according to petitioner, upon the death of Luisa Gomez on 09 January 1983, the alleged vested right was transmitted by operation of law to her lawful heirs, pursuant to Article 777 of the Civil Code. Additionally, petitioner submits that by virtue of the affidavit of adjudication with Deed of Donation executed on 01 February 1989 in his favor by the surviving children of Luisa, he, in effect, became the successor-in-interest of Luisa and thus entitled to whatever rights enjoyed by the latter over the property. "In a contract of sale, the title passes to the vendee upon the delivery of the thing sold; whereas in a contract to sell, by agreement, the ownership is reserved in the vendor and is not to pass until the full payment of the price. In a contract of sale, the vendor has lost and cannot recover ownership until and unless the contract is resolved or rescinded; whereas in a contract to sell, title is retained by the vendor until the full payment of the purchase price,

such payment being a positive suspensive condition and failure of which is not a breach but an event that prevents the obligation of the vendor to convey title from being effective. Thus, 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 the 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." To our mind, however, this pronouncement should not curtail the right of the parties in a contract to sell to provide additional stipulations, nor bar them from imposing conditions relative to the transfer of ownership. To be sure, a contract of sale may either be absolute or conditional. One form of conditional sales is what is now popularly termed as a "Contract to Sell", where ownership or title is retained until the fulfillment of a positive suspensive condition normally the payment of the purchase price in the manner agreed upon Under the present circumstances, we see no hindrance that prohibits the parties from stipulating other lawful conditions, aside from full payment of the purchase price, which they pledge to bind themselves and upon which transfer of ownership depends.

WGCC vs PCIB William Golangco Construction Corporation (WGCC) and the Philippine Commercial International Bank (PCIB) entered into a contract for the construction of the extension of PCIB Tower II (denominated as PCIB Tower II, Extension Project [project])2 on October 20, 1989. The project included, among others, the application of a granitite wash-out finish3 on the exterior walls of the building. PCIB, with the concurrence of its consultant TCGI Engineers (TCGI), accepted the turnover of the completed work by WGCC in a letter dated June 1, 1992. To answer for any defect arising within a period of one year, WGCC submitted a guarantee bond dated July 1, 1992 issued by Malayan Insurance Company, Inc. in compliance with the construction contract.4
The controversy arose when portions of the granitite wash-out finish of the exterior of the building began peeling off and falling from the walls in 1993. WGCC made minor repairs after PCIB requested it to rectify the construction defects. In 1994, PCIB entered into another contract with Brains and Brawn Construction and Development Corporation to re-do the entire granitite wash-out finish after WGCC manifested that it was "not in a position to do the new finishing work," though it was willing to share part of the cost. PCIB incurred expenses amounting toP11,665,000 for the repair work.

ISSUE: whether or not petitioner WGCC is liable for defects in the granitite wash-out finish that occurred after the lapse of the one-year defects liability period provided in Art. XI of the construction contract? the CONTRACTOR hereby guarantees the work stipulated in this Contract, and shall make good any defect in materials and workmanship which [becomes] evident within one (1) year after the final acceptance of the work. The provision in the construction contract providing for a defects liability period was not shown as contrary to law, morals, good customs, pubic order or public policy. By the nature of the obligation in such contract, the provision limiting liability for defects and fixing specific guaranty periods was not only fair and equitable; it was also necessary. Without such limitation, the contractor would be expected to make a perpetual guarantee on all materials and workmanship.

DKC vs Bartolome The subject of the controversy is a 14,021 square meter parcel of land located in Malinta, Valenzuela, Metro Manila which was originally owned by private respondent Victor U. Bartolome's deceased mother, Encarnacion Bartolome, under Transfer Certificate of Title No. B-37615 of the Register of Deeds of Metro Manila, District III. This lot was in front of one of the textile plants of petitioner and, as such, was seen by the latter as a potential warehouse site. This lot was in front of one of the textile plants of petitioner and, as such, was seen by the latter as a potential warehouse site. On March 16, 1988, petitioner entered into a Contract of Lease with Option to Buy with Encarnacion Bartolome, whereby petitioner was given the option to lease or lease with purchase the subject land, which option must be exercised within a period of two years counted from the signing of the Contract. In turn, petitioner undertook to pay P3,000.00 a month as consideration for the reservation of its option. Within the two-year period, petitioner shall serve formal written notice upon the lessor Encarnacion Bartolome of its desire to exercise its option. The contract also provided that in case petitioner chose to lease the property, it may take actual possession of the premises. In such an event, the lease shall be for a period of six years, renewable for another six years, and the monthly rental fee shall be P15,000.00 for the first six years and P18,000.00 for the next six years, in case of renewal. Meanwhile, on January 10, 1990, Victor executed an Affidavit of Self-Adjudication over all the properties of Encarnacion, including the subject lot. On March 14, 1990, petitioner served upon Victor, via registered mail, notice that it was exercising its option to lease the property, tendering the amount of P15,000.00 as rent for the month of March. Again, Victor refused to accept the tendered rental fee and to surrender possession of the property to petitioner. Thus, on April 23, 1990, petitioner filed a complaint for specific performance and damages against Victor and the Register of Deeds The issue to be resolved in this case is whether or not the Contract of Lease with Option to Buy entered into by the late Encarnacion Bartolome with petitioner was terminated upon her death or whether it binds her sole heir, Victor, even after her demise. The general rule, therefore, is that heirs are bound by contracts entered into by their predecessors-in-interest except when the rights and obligations arising therefrom are not transmissible by (1) their nature, (2) stipulation or (3) provision of law.

In the case at bar, there is neither contractual stipulation nor legal provision making the rights and obligations under the contract intransmissible. More importantly, the nature of the rights and obligations therein are, by their nature, transmissible. "(W)here acts stipulated in a contract require the exercise of special knowledge, genius, skill, taste, ability, experience, judgment, discretion, integrity, or other personal qualification of one or both parties, the agreement is of a personal nature, and terminates on the death of the party who is required to render such service."

Baring vs Torres Sisters Antonia Torres and Emeteria Baring, herein petitioners, entered into a "joint venture agreement" with Respondent Manuel Torres for the development of a parcel of land into a subdivision. Pursuant to the contract, they executed a Deed of Sale covering the said parcel of land in favor of respondent, who then had it registered in his name. By mortgaging the property, respondent obtained from Equitable Bank a loan of P40,000 which, under the Joint Venture Agreement, was to be used for the development of the subdivision. 4 All three of them also agreed to share the proceeds from the sale of the subdivided lots. Land was foreclosed and the project did not pushed through. Ruling Petitioners deny having formed a partnership with respondent. They contend that the Joint Venture Agreement and the earlier Deed of Sale, both of which were the bases of the appellate court's finding of a partnership, were void. Under Article 1315 of the Civil Code, contracts bind the parties not only to what has been expressly stipulated, but also to all necessary consequences thereof. It is undisputed that petitioners are educated and are thus presumed to have understood the terms of the contract they voluntarily signed. If it was not in consonance with their expectations, they should have objected to it and insisted on the provisions they wanted. Courts are not authorized to extricate parties from the necessary consequences of their acts, and the fact that the contractual stipulations may turn out to be financially disadvantageous will not relieve parties thereto of their obligations. They cannot now disavow the relationship formed from such agreement due to their supposed misunderstanding of its terms.