TOPIC I.

INTRODUCTION CASE TITLE DIZON V CA DIGEST FACTS: Overland entered into a contract if lease with option to buy with Dizon. Dizon wanted to cancel the contract for nonpayment but Overland insists it has a lready made a partial payment for the option to buy with Alice Dizon. HELD: Ther e was no valid payment because Alice Dizon was not authorized by the seller to a ccept any payment. DOCTRINE: Sale us a consensual contract and he who alleges it must show its existence by competent proof. The elements of a contract of sale are consent, object and price in money or its equivalent. The absence of any of these essential elements negates the existence of a perfected contract. FACTS: T here was a barter between Fule(owner of land) and Dr. Cruz(owner of emerald-cut diamond earrings). Fule was given time to inspect the jewelry, being a jeweller himself. When asked if the jewelry was okay, he said yes. He later complained th at the earrings were fake and wants his land back. HELD: there can be no return of properties because the contract had already been perfected. DOCTRINE: A contr act of sale is perfected at the moment there is a meeting of the minds upon the thing to which is the object of the contract and upon the price. FACTS: Celestin o, maker of sash, doors and windows, claim that it should only be assessed 3% co ntractor's tax because its work is based on special order, not the 7% tax for on s ale of manufactured articles. HELD: Celestino cannot avail of the 3% tax because it does not only serve special customers only since any builder may order from them. DOCTRINE: A factory which habitually makes sash, windows and doors, and se lls the goods to the public is a MANUFACTURER. The fact that the windows and doo rs are made by it only when customers place their orders and according to such f orm or combination as suit the fancy of the purchaser does not alter the nature of the establishment. FACTS: Eng'g is engaged in the design installation of centra l air conditioning system, pumping plants and steel fabrications. HELD: Eng'g is n ot a manufacturer but a contractor so it should not be assessed tax for manufact ured goods. DOCTRINE:The distinction between a contract of sale and a contract f or furnishing services, labor and materials is tested by the inquiry whether the thing transferred is one not in existence and which would never have existed bu t for the order of the party desiring to acquire it, or a thing which would have existed and has been the subject of sale to some other persons even if the orde r had not been given. S FACTS: There was a contract between Quiroga and Parsons so Parsons can sell Quiroga beds in Visayas. Quiroga claims that Parsons had vio lated certain obligations implied in agency. HELD: the contract was of purchase and sale and not a contract of agency. Parsons' obligation was to pay the price fo r the beds whether are sold or not. DOCTRINE: In a contract of agency, the agent receives the thing to sell it and does not pay for the prince but delivers to t he principal the price he obtains from the sale of a thing to a third person. If he does not succeed, then he returns the thing to the principal. FACTS: Puyat w as the agent in Manila of Star Piano. Arco contracted with Puyat to purchase sou nd reproducing equipment. FULE V V CA CELESTINO V COLLECTOR COMMISSIONER V ENGINEERING QUIROGA V PARSONS PUYAT V ARCO

Arco later learned that Puyat has a 25% discount with Star Piano and wants Puyat to return the equivalent amount of the discount to them. HELD: Arco is not enti tled to the discount that Puyat enjoyed because Puyat was not an agent of Arco. DOCTRINE: It is well-known that local dealers acting as agents of foreign manufa cturers, aside from obtaining discount from principal, also adds to the price fo r local purchasers. If a purchaser later discovers that it is at the short end, he alone must bear the blame and contract cannot be rescinded. FACTS: Laigo obta ined loan of 11M from Dao Heng Bank, Inc and pledged 3 mortgages as security. La igo failed to settle the obligation and verbally offered to cede to Dao Heng one of the two mortgaged lots by way of dacion en pago. Dao Heng demanded payment a nd filed an application to foreclose all 3 mortgages. HELD: There was no dacion en pago because Dao Heng had not consented. DOCTRINE: Dacion en pago as a mode o f extinguishing an existing obligation partakes of the nature of sale whereby pr operty is alienated to the creditor in satisfaction of a debt in money. It is an objective novation of the obligation, hence, common consent of the parties is r equired in order to extinguish the obligation. FACTS:Myers and Maritime entered into a contract of Conditional Sale (Contract to Sell). Myers reserved the right to cancel contract in case of Maritime's failure to pay installments. Maritime fa iled to pay, hence, Myers cancelled the contract. HELD: (as previously proven) c ontract to sell, not of sale. When payment was not made, contract of sale was no t perfected. DOCTRINE: The distinction between contracts of sale and contract to sell with reserved title has been recognized by this Court in repeated decision s upholding the power of promisors under contracts to sell in case of failure of the other party to complete payment, to extrajudicially terminate the operation of the contract, refuse conveyance and retain the sums or installments already received, where such rights are expressly provided for, as in this case. FACTS: Dignos sold their land to Jabil payable in 2 instalment, w/ assumption of indebt edness. Jabil paid and it was acknowledge by the spouses in a deed. Later, Digno s spouses also sold the same land to Cabigas, a deed of absolute sale was execut ed. HELD: The property belongs to Jabil since when Dignos sold the land to Cabig as, the could not validly do so since they no longer were the owners. DOCTRINE: Difference between contract to sell and contract of sale: sell reserves ownershi p subject to fulfilment of condition i.e. full payment, and ownership does not p ass to the buyer despite delivery of the thing until said condition is fulfilled ; sale does not reserve ownership over the thing sold and ownership is transferr ed immediately upon actual or constructive delivery of the thing. FACTS:Fernando Canullas and Mercedes Calimlim-Canullas were married and begot 5 children. Fern ando abandoned his family and lived with his concubine. Fernando sold the land a s well as the house where his wife and children resided to Daguines for P2,000. Daguines initiated a complaint for quieting of title against Mercedes. DOCTRINE: The sale was contrary to law morals and public policy, and thus is null and voi d. The sale was subversive to the stability of the family, a basic social instit ution which public policy cherishes and protects. The prohibition of donations a nd sale DAO HENG BANK V LAIGO LUZON BROKERAGE V MARITIME DIGNOS V CA II. PARTIES TO A CONTRACT OF SALE CALIMLIMCANULLAS V FORTUN

CRUZ V CA between spouses apply to common-law relationships, otherwise, the condition of th ose who incurred guilt would turn out to be better than those is legal union. FAC TS:Gloria Cruz and Romeo Suzara lived together as husband and wife without the b enefit of marriage. Out of love and affection, Cruz executed a deed of absolute sale over her lot in favour of Suzara without any monetary consideration. Suzara subsequently mortgaged it and was it was foreclosed because he however failed t o pay. Cruz paid the bank partially to restructure the loan in order to extend r edemption period. Suzara redeemed the property and sold it to a 3 rd person DOCT RINE: While Art. 1490, which prohibits the husband and wife from selling propert y to each other, was extended to common-law relationships, Cruz can no longer se ek reconveyance of the property when it has already been acquired by 3 rd person in good faith and for value. The real purpose of the Torrens system of registra tion is to quiet title to land and to put to a stop to any question of legality of the title except claims which have been recorded in the certificate of title at the time of registration or which may arise subsequent thereto. A purchaser i s not required to explore further what the Torrens title on its face indicates i n quest for hidden defect or inchoate right that may subsequently defeat his rig ht thereto. PHILIPPINE TRUST CO V ROLDAN FACTS: When father died, Mariano, inherited 17 parcels of land from him. His ste pmom Roldan, was appointed his guardian through guardianship proceedings. Roldan sold the land to her brother-in-law Ramos allegedly to invest the money in a ho use in Manila. The next day, Ramos executed in favor of Roldan a deed of conveya nce covering the same 17 parcels. DOCTRINE:Roldan purchased her ward's property th rough her brother-in-law. She planned to get them for herself, evident from the amount of time that lapsed between the two sales (8d). Only ONE DAY had passed f rom the time the guardianship court judicially confirmed the sale. From both leg al and equitable standpoints, the sales cannot be sustained. The sales from Mari ano, by Roldan, to Ramos, and then from Ramos to Mariano, are void for violation of 1459. FACTS: Francisco Militante claimed ownership over land to which he fil ed an application for registration of title. The application was opposed by the Director of Lands. Pending litigation, Militante sold the land to Domingo Rubias , his son-in-law and a lawyer by profession. Rubias declared the land for taxati on purposes under various tax declarations and land taxes. DOCTRINE:Aside from a cquiring nothing from Francisco Militante, since his application for registratio n was denied by the land registration court as affirmed with finality by the CA. Assuming in arguendo that Militante had anything to sell, the deed of sale exec uted in 1956 by him in favor of plaintiff at a time when plaintiff was concededl y his counsel of record in the land registration case involving the very land in dispute was void. The purchase by a lawyer of the property in litigation from h is client is categorically prohibited by Article 1491, paragraph (5) of the Civi l Code RUBIAS V BATILLER MACARIOLA V ASUNCION FACTS:Judge Asuncion purchased a property from Dr. Galapon, who acquired the sai d property from the parties in a partition case previously handled by Judge Asun cion.

III. SUBJECT MATTER MARTINEZ V CA DOCTRINE:The prohibition in the NCC on acquisition of properties by judges cover s only acquisitions taking place during the pendency of the litigation involving those properties. The case handled by Judge Asuncion had long been final. He di dn't buy the lot directly from the plaintiffs either. However, his acts invited su spicion of impropriety & distrust thus he was reminded to be discreet in his pri vate/business affairs. FACTS: A parcel of land, ownership of w/c changed hands u ntil it landed to spouses Martinez, was being contested by the municipality as a river and thus form part of public domain. The dispute was referred to the Comm ittee of Rivers and Streams which conducted an investigation. The report submitt ed stated that Parcel No. 2 was not a public river but a private fishpond owned by the spouses. The municipal officials of Lubao refused to recognize the Subcom mittee's decision. DOCTRINE:Parcel No. 2 is a river of the public domain as eviden ced by its technical description which states that it is bounded on all sides by rivers. Said parcel is a branch of the main river that has been covered with wa ter since time immemorial and thus part of the public domain. It is incapable of private appropriation or acquisition by prescription. The spouses' title does not include the river. Simple possession of a certificate of title under the Torren s system does not necessarily make the possessor a true owner of all the propert y described therein. The incontestable and indefeasible character of a Torrens c ertificate of title does not operate when the land covered is not capable of reg istration. FACTS:Melliza sold under a deed several tracts of land to the then Mu nicipality of Iloilo, including lots 1214-C and 1214-D. The instrument of sale d id not mention lot 1214-B, although it was contiguous to the other two lots, but stipulated that the area being sold shall include the area needed for the constr uction of the city hall site, avenues and parks according to the Arellano plan. T he Arellano plan had long been in existence before the execution of the deed. DO CTRINE:The requirement that a sale must have for its object a determinate thing is fulfilled as long as, at the time the contract is entered into, the object of the sale is capable of being made determinate without the necessity of a new or further agreement between the parties. The requirement was deemed fulfilled und er the contract of sale because it specifically referred to such other portions of the lots required by the Arellano plan, which had long been in existence and it specifically provided for the land areas needed for the city hall site. Therefo re, at the time of the perfection of the contract, the exact area of the land ne eded, which was the subject matter of the sale, could be determined by simply re ferring to the Arellano plan, without the parties needing to draw-up a new contr act, nor even to clarify matters or explain their intentions. FACTS:Eulogio Atil ano II brought parcel of land from his brother Eulogio Atilano I. Heirs of E. At ilano II claim that upon resurvey of the subject land, it was discovered that th e land sold to them designated as Lot No. 535-E was in fact Lot No. 535-A which was the one presently occupied by heirs of Atilano I. SO, Atilano II bought 535E but is now occupying 535-A (1,808 square-meter) and Atilano II retained 535-A but is now occupying 535-E (2,612 square meters). Atilano II of course wants to get the other bigger parcel. DOCTRINE:When one sells or buys real property - a p iece of land, for example - one sells or buys the property as he sees it, in its actual setting and by its physical metes and bounds, and not by the mere lot nu mber assigned to it in the certificate of title. The real issue here is not adve rse possession, but the real intention of the parties to that sale. The object o f sale, as intended and understood by the parties, was that specific portion whe re the vendee was then already residing, where he reconstructed his house where his heirs continued to reside. : namely, lot No. 535-A; and that its designation as lot No. 535-E in the deed of sale was a simple mistake in the drafting of th e document. MELLIZA V CITY OF ILOILO

ATILANO V ATILANO

PICHEL V ALONZO FACTS:Alonzo was awarded a parcel of land by the Government as homestead, of cou rse w/ prohibition from encumbrance. Alonzo sold to Pichel through a deed of sale all the fruits of the coconut trees which may be harvested in the land for the p eriod 15 September 1968 to 1 January 1976, in consideration of P4,200.Alonzo fil ed an action for the annulment of a Deed of Sale because the contract actually is, for all legal intents and purposes, a contract of lease of the land itself; an encumbrance prohibited under RA 477. DOCTRINE:The document in question expresses a valid contract of sale. It has the essential elements of a contract of sale a s defined under Article 1485 of the New Civil Code. The subject matter of the co ntract of sale in question are the fruits of the coconut trees on the land durin g the years from September 15, 1968 up to January 1, 1976, which subject matter is a determinate thing. Under Article 1461 of the New Civil Code, things having a potential existence may be the object of the contract of sale. Pending crops w hich have potential existence may be the subject matter of the sale. YU TEK V GONZALES FACTS:A written contract was executed between Basilio Gonzalez and Yu Tek & Co f or Gonzalez to provide Yu Tek with 600 piculs of sugar of the first and the seco nd grade according to the result of the polarization within three months for a c onsideration of P3000. Yu Tek paid Gonzalez P3000 but the latter was not able to deliver the sugar because of the almost total failure of his crop. The contract of sale being valid, the loss of the thing must be borne by the buyer. DOCTRINE :A contract of sale is not perfected until the parties have agreed upon the pric e and the thing sold. There is a perfected sale with regard to the thing being sol d when it had already been physically segregated from all other articles. In the case at bar, what was designated was the generic name sugar. There was no appropri ation of any particular lot of sugar. Thus, the contract between Gonzalez and Yu Tek was merely an executory agreement; a promise of sale and not a sale. As ther e was no perfected sale, it is clear that articles 1452, 1096 and 1182 are not a pplicable. FACTS:Domingo Hernaez's parents died. He sold his interests to the undi vided estate of both parents to his son, Vicente. Notwithstanding that fact, and in connivance with Vicente, he executed a document of sale all his interest to his father's estate and 1/18of his mother's to Alejandro Montelibano. He also execut ed a document of sale, on the same day, to Jose Montelibano Uy-Cana, selling 4/1 8 of his interest in his mother's estate. Jose Montelibano Uy-Cana then sold his i nterest to Alejandro. After that, Vicente sold his interest to his uncle Rosendo . DOCTRINE:Vicente is estopped from asserting his title as against either Montel ibano or Uy-Cana, even though he had actually purchased all of his father's intere st. Where the true owner of property, for however short a time, holds out anothe r, or, with knowledge of his own right, allows another to appear as the owner of or as having full power of disposition over the property, the same being in the latter's actual possession, and innocent third parties are thus led into dealing with such apparent owner, they will be protected. FACTS:Ranft was given quedans as document of his title to bales of hemp he had purchased. However, without pay ing for the hemp yet, he offered the quedans as security for his preexisting deb ts to HSBC. He died without paying Siy for the hemp. Siy wanted to get the queda ns from HSBC as these were not yet paid for. DOCTRINE:Siy is estopped from denyi ng that the bank had a valid title to the quedans for the reason that Siy itself had voluntarily clothed Ranft with all the attributes of ownership. The bank, w ithout knowing of the arrangement between the IV. OBLIGATION OF SELLER TO TRANSFER OWNERSHIP HERNAEZ V HERNAEZ SIY CONG BIENG V HSBC

JALBUENA V LIZARRAGA parties, relied upon the apparent ownership in good faith FACTS:Salvador Lizarra ga, as judgment creditor, caused the sheriff to levy upon an old sugar-mill as t he property of Ildefonso Doronila, the judgment debtor and husband of Jalbuena. At the time of the levy Doronila stated to the sheriff that the mill belonged to him. DOCTRINE: Jalbuena is estopped. Where the true owner of property, for howe ver short a time, holds out another, or, with knowledge of his own right, allows another to appear, as the owner of or as having full power of disposition over the property, the same being in the latters actual possession, and innocent thi rd parties are thus led into dealing with some [such] apparent owner, they will be protected. FACTS: Sun Bros delivered to Francisco Lopez an Admiral refrigerat or. Lopez paid only the down payment of P500. Lopez sold the ref to Velasco. The following day, Velasco sold the ref to Co Kang Chiu, after displaying the ref a t his store. Co Kang Chiu paid P985 in cash. The ref was delivered to Co Kang Ch iu. Sun Bros filed a complaint for replevin. DOCTRINE:This is a case of an imper fect or void title ripening into a valid one, as a result of some intervening ca uses. The policy of the law from w/c we do not feel justified to deviate, has al ways been that where the rights & interests of a vendor comes into clash w/ that of an innocent buyer for value, the latter must be protected. Ruling this way w ould facilitate commercials on movable & give stability to business transactions . This rule is necessary in a country such as ours where free enterprise prevail s, for buyers can't be reasonably expected to look behind the title of every artic le when he buys at a store. The doctrine of caveat emptor is now rarely applied, and if it is mentioned it is more of an XPN that the GR SUN BROS. V VELASCO MASICLAT V CENTENO TAGATAC V JIMENEZ FACTS: DOCTRINE: FACTS:Tagatac was induced by fraud(pretending he had lots of mo ney) to sell and deliver his car to Feist for which she was given a post-dated c heck. The check was dishonored and the car was subsequently sold from one person to another until it was displayed in a car exchange where it was discovered by the plaintiff. She brought an action to recover the car. DOCTRINE:Accdg to A559 CC, although possession of movable property acquired in good faith is equivalent to a title, one who has lost any movable or has been unlawfully deprived thereo f, may nevertheless recover it from the person in possession of it. There was a valid transmission of ownership from Tagatac to Feist by virtue of the sale and delivery of the car to the swindler. The fraud and deceit practiced on her earma rked the sale as a voidable contract. As long as no action was taken for annulme nt, the contract remained binding. As the car was again sold to another, the tit le acquired by the subsequent purchaser was an indefeasible one, even as against the original owner. FACTS:A diamond ring was stolen from Guevara's house. While s he was talking to Garcia, an owner of a restaurant, she recognized the ring on t he latter's finger and asked how she acquired the same. Garcia averred that she bo ught it from her comadre. It was ascertained the ring was indeed Guevarra's but de spite written demands, Garcia refused to return the ring. DOCTRINE:The possessio n of movable property acquired in good faith is equivalent to a title. Neverthel ess, one who has lost any movable or has been unlawfully deprived thereof may re cover it from the person in possession of the same. If the DE GARCIA V CA

EDCA PUBLISHING V SANTOS possessor of a movable lost of which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor.The title of the possessor is not th at of ownership, but is merely a presumptive title sufficient to serve as a basi s of acquisitive prescription. FACTS:An impostor(alias Jose Cruz ) buys books from EDCA through telephone. EDCA delivers the books, is paid through personal check , and issues a sales invoice. Impostor sells books to Santos who buys in good fa ith. The check to EDCA bounces, EDCA discovers the fraud of the impostor, and se eks to recover ownership of the books from Santos. DOCTRINE:Ownership shall pass from the vendor to the vendee upon the actual or constructive delivery of the t hing sold even if the purchase price has not yet been paid.There was a perfected contract of sale. De La Pena acquired ownership over the books which he could t hen validly transfer to the Leonor Santos. First sentence of Art 559 CC the posse ssion of movable property acquired in good faith is equivalent to a title. Santos acquired possession of the movables (the books) in good faith, thus she has tit le to them as owner. AZNAR V YAPDIANGCO FACTS:To get purchase price for car, Marella said they had to go to his sister's h ouse to borrow money. Marella also requested the registration papers and copy of deed from Irineo, Santos' son, on the pretext that he would show it to his lawyer . Irineo handed the documents to Marella. They alighted while an unidentified co mpanion of De Dios stayed behind in the car. Once inside the house, Irineo was a sked to wait in the sala while De Dios went inside a room. De Dios did not come out of the room. The car was also not there outside anymore. He inquired from a woman he saw for L. De Dios and he was told that no such name lived or was even known there. DOCTRINE:Article 559 of the Civil Code applies in this case, for un der it, the rule is to the effect that if the owner has lost a thing, or if he h as been unlawfully deprived of it, he has a right to recover it, not only from t he finder, thief or robber, but also from third persons who may have acquired it in good faith from such finder, thief or robber. It establishes two exceptions to the general rule of irrevindicability, to wit, when the owner (1) has lost th e thing, or (2) has been unlawfully deprived thereof. In these cases, the posses sor cannot retain the thing as against the owner, who may recover it without pay ing any indemnity, except when the possessor acquired it in a public sale. FACTS :Illiterate spouses were tricked into signing a deed of donation of the eastern portion of the land to Maximo, the brother of the owner of the land. The documen t signed by the spouses was actually a deed of sale conveying the WHOLE property to Maximo. Maximo sold the whole lot to the Narcisos. DOCTRINE:A contract of pu rchase and sale is null and void and produces no effect whatsoever where the sam e is without cause or consideration in that the purchase price which appears the reon as paid has in fact never been paid by the purchaser to the vendor. The dee d of sale is governed by the Old Civil Code. If it is w/o consideration, it is i nexistent. If it is only w/ a false consideration, it is voidable. In this case, the consideration of P500 was totally absent. The inexistence of a contract is permanent and incurable and cannot be the subject of prescription. FACTS: Ong ex ecuted a quitclaim deed in favour of Maruzo(minor) transferring, releasing, assi gning and forever quitclaimed of parcel of land for a consideration of 1 peso and other valuable consideration. HELD: The quitclaim was valid because the consider ation was no one person alone but also other valuable considerations. V. PRICE MAPALO V MAPALO ONG V ONG

BAGNAS V CA DOCTRINE: Apparent inadequacy in price is of no moment since it is the usual pra ctice in deeds of conveyance to place a nominal amount although there is a more valuable consideration. FACTS:Hilario Mateum died without ascendants or descenda nts, and survived only by 2 sets of collateral relatives. 1 set claims that the lands were sold to them as depicted in a deed for the consideration of P1.00 and services rendered, being rendered, and to be rendered for my benefit. DOCTRINE:S ale of land is VOID AB INITIO for having false and fictitious consideration (P1 in the deed compared to P10,500 as valued in the tax declaration), since no othe r true and lawful cause was shown. Upon the consideration alone that the apparen t gross, not to say enormous, disproportion between: STIPULATED PRICE: P1.00 (in each deed) plus unspecified and unquantified services VALUE: At least P10,500.0 0 (based on assessments for tax purposes) FACTS:Montinola sold his lot to Reyes using a second owner's duplicate of the TCT for only P1.00. Reyes, in turn, sold t he lot to the Abellas again for P1.00. The Abellas subsequently sold it to the D eseo. Apparently, the first owner's duplicate copy was not lost or was either foun d by Montinola, was used by him to sell the lot again to Morales Development. Mo rales claims to have a better right over the property because of the suspicious price paid for the sales. DOCTRINE:Where the contract of sale states that the co nsideration is P1.00, the consideration may have been much more, as the assignor's liberality may be a sufficient cause for a valid contract. It is not unusual in deeds of conveyance adhering to the Anglo-Saxon practice of stating that the co nsideration given is the sum of P1.00 although the actual consideration may have much more. FACTS: The Republic of the Philippines, in representation of the Bur eau of Prisons, instituted against Macario Apostol a civil complaint. PDRC moved to intervene. The complaint says that sometime prior to Apostol's transactions th e corporation had some goods deposited in a warehouse. Apostol, then the preside nt of PDRC, but without the knowledge or consent of the stockholders thereof, di sposed of said goods by delivering the same to the Bureau of Prisons in an attem pt to settle his personal debts. DOCTRINE: PRDC has legal interest in the case b ecause A1458 provides that the purchaser may pay a price certain in money or its equivalent, which means payment of the price need not be in money. Whether the go ods claimed by PRDC belong to it and delivered to the Bureau of Prisons by Apost ol in payment of his account is sufficient payment therefore, is for the court t o pass upon and decide after hearing all the parties in the case. ***VILLANUEVA NOTES This case is not at all authority to say that under A1458, as it defines a contract of sale, the term equivalent of price can cover other than money or othe r media of exchange, since this case covers not the perfection stage of a contra ct of sale, but rather the consummation stage where the price agreed upon can be paid under the mutual arrangements agreed upon by the parties to the contract o f sale, even by dation in payment, as is the case herein. FACTS: Luna wanted to buy Toyota Lite Ace, met w/ a sales rep ad emphasized that he needed the Lite Ac e not later than June 17, 1989 because he, his family and a balikbayan guest wou ld use it on June 18 to go to his home province where he would celebrate his bir thday. He also intimated that if he does not arrive in his hometown with a new c ar, he would become a laughing MORALES V CA REPUBLIC V PHIL RESOURCES TOYOTA SHAW V CA

stock. Sales rep informed them that the vehicle was being readied for delivery b ut after about 1 hour, Bernardo told them that the car could not be delivered si nce nasulot ang unit ng ibang malakas. DOCTRINE: No obligation on Toyota's part to t ransfer ownership of a determinate thing to Sosa and no correlative obligation o n Sosa's part to pay a price certain appears therein. Nothing was mentioned about the full purchase price and the manner the instalments were to be paid. A defini te agreement on the manner of payment of the price is an essential element in th e formation of a binding and enforceable contract of sale. A disagreement on the manner of payment is tantamount to a failure to agree on the price. FACTS: Vela sco and Magdalena Estate entered into a contract of sale of a parcel of land. St ipulation in the contract says: the balance of P70,000 shall be paid by the plain tiff to the defendant in 10 years from November 29, 1962. Xxx That the time with in which the full down payment of the P30,000 was to be completed was not specif ied by the parties. DOCTRINE: A definite agreement on the manner of payment of th e purchase price is an essential element in the formation of a binding and enfor ceable contract of sale. Velascos admit that they and Magdalena still had to mee t and agree on how and when the down payment and the installment payments were t o be paid. No definite agreement on the manner of payment so no perfected contra ct since the terms of payment still had to be mutually covenanted. FACTS: Agreee ment between Limson and seller de Vera to buy parcel of land. Limson gave the su m of P20,000 to de Vera as "earnest money;" and de Vera signed a receipt giving her a 10-day option period to purchase the property. She agreed to pay the balan ce of purchase price so mortgage may be released. They were not able to do so be c of failure of de Vera to appear on meeting places. Limson later found out that " de Vera sold to Sunvar the property. DOCTRINE: Earnest money and option money Earnest money" and "option money" are not the same but distinguished thus; o Ear nest money is part of the purchase price, while option money is the money given as a distinct consideration for an option contract; o Earnest money given only w here there is already a sale, while option money applies to a sale not yet perfe cted; and, o When earnest money is given, the buyer is bound to pay the balance, while when the would-be buyer gives option money, he is not required to buy, bu t may even forfeit it depending on the terms of the option. Not Earnest Money!! Nothing in the Receipt which indicates that the P20,000 was part of the purchase price. It was not shown that there was a perfected sale between the parties whe re earnest money was given. Finally, when Limson gave the "earnest money" the Re ceipt did not reveal that she was bound to pay the balance of the purchase price . FACTS: SMPPI was selling several lots in Pasig for P52M. Huang offered to buy the property, enclosing P1M representing earnest-deposit money subject to the cond itions. They met several times to negotiate the payment terms but could not come to an agreement. SMPPI returned the P1M given as "earnest-deposit". Huang deman ded that SMPPI execute a deed of sale covering the properties. DOCTRINE: Huang d id not give the P1M as "earnest money" as provided by Art. 1482 of the Civil Cod e. They presented the VELASCO V CA LIMSON V CA SAN MIGUEL V HUANG

VI. FORMATION OF CONTRACT OF SALE VILLONCO V BORMAHECO amount merely as a deposit of what would eventually become the earnest money or down-payment should a contract of sale be made by them. The amount was thus give n not as a part of the purchase price and as proof of the perfection of the cont ract of sale but only as a guarantee that respondents would not back out of the sale. At the time when SMPPI accepted, their contract had not yet been perfected . FACTS: Sale of property was made subject to condition that Bormaheco will acqu ire the property in Sta. Ana. There was a series of negotiations between the par ties. In the counter-offer of buyer Villonco, seller Bormaheco made certain chan ges 1. Crossed out the word NASSCO and 2. Inserted the words per annum instead of p.a. DOCTRINE: An acceptance with contains changes in the offer but does not ESS ENTIALLY change the terms of the offer does not constitute a counter-offer. So l ong as it is clear that the meaning of acceptance is positively and unequivocall y to accept the offer. Changes made were so trivial, there being no incompatibil ity before and after the changes were made. FACTS: Cuison Lumber obtained loans w/ Traders Bank and offered a payment arrangement. The bank replied through a le tter of its resolution to grant to grant repurchase to the foreclosed property. Cuison Lumber did not make an express acceptance. DOCTRINE: A contract is perfec ted from the moment there is a meeting of the offer and acceptance upon the thin g and the cause that constitute the contract. The offer must be certain and the acceptance absolute and unqualified. The ascertainment whether there is a meetin g of minds depends on the circumstances surrounding the case. In this case, the contract was perfected as evince by subsequent acts of the parties: Cuison Lumbe r paid continuously and even asked for extensions. FACTS: DMC was sold 18th floo r by Citibank because it built the Citibank Tower, but sale was subject to confo rmity. DMC decided to sell the unit to XYST Corp but consent of Citibank must be obtained. Citibank gave pro-forma contract and XYST proposed amendments. DOCTRI NE: A contract is perfected by mere consent. The essence of consent is the confo rmity of the parties on the terms of the contract that is, the acceptance by one of the offer made by the other. Acceptance must be absolute otherwise the same constitutes a counter-offer and has the effect of rejecting the offer. By introd ucing amendments, XYST introduced counter-offer w/c DMC did not agree. FACTS: Za yco and Serra executed a contract for an option to buy Palma Central for 1M but no stipulation was made as to how much the first payment would be and when it sh ould be paid. Zayco wrote to Serra accepting the contract tendering P100,000 as his first payment before the option period expired. Zayco later learned that Ser ra had already sold the property to Whitaker and Concepcion. DOCTRINE: In order for an acceptance to have the effect of converting an offer to sell into a perfe ct contract, it must be plain and unconditional. It will not be so if it involve s any new proposition for in that case, it will not be the acceptant's conformity with the offer w/c is what gives rise to the birth of the contract. In this case , there was no concurrence of offer and acceptance. Serra's offer did not state th e amount of first payment. When Zayco accepted the offer, tendering the sum of P 100,000 as first payment, his acceptance involved a proposal, not contained in t he offer, that this precisely, and not any other, should be the amount of the fi rst payment. FACTS: Antonio Diaz granted an option to Antonio Enriquez de la Cav ada to purchase his hacienda at Pitogo. On the same day, De la Cavada accepted t he offer, on condition that the property shall be surveyed and registered under the Torrens system, and that he would pay the price after the title has been app roved. The counter-offer was accepted by Diaz. TRADERS ROYAL BANK V CUISON LUMBER XYST CORP V DMC URBAN PROPERTIES ZAYCO V SERRA

DE LA CAVADA V DIAZ

SORIANO V BAUTISTA DOCTRINE: An OPTIONAL CONTRACT is a privilege existing in one person, for which he had paid a consideration, which gives him the right to buy, for example, cert ain merchandise of certain specified property, from another person, if he choose s, at any time within the agreed period, at a fixed price. The contract of optio n is a separate and distinct contract from the contract which the parties may en ter into upon the consummation of the option. A consideration for an optional co ntract is just as important as the consideration for any other kind of contract. FACTS: Bautista mortgage land to Soriano with an option for Soriano to purchase the land within the 2-year period of the mortgage. Within 2 years, Soriano info rmed Bautista of intent to purchase the land. Bautista refused to sell the land. DOCTRINE: Mortgagors(Bautista's) promise to sell is supported by the same consid eration as that of the mortgage itself, which is distinct from that which would support the sale, an additional amount having been agreed upon to make up the en tire price of P3, 900.00, should the option be exercised. The mortgagors promis e was in the nature of a continuing offer, non-withdrawable during a period of t wo years, which upon acceptance by the mortgagees gave rise to a perfected contr act of purchase and sale. FACTS: Carceller and SIHI entered into a lease contrac t with option to purchase two parcels of land. 3 weeks before expiration of leas e contract, SIHI notified Carcellar. Carcellar requested for six-month extension of the lease contract, alleging that he needs ample time to raise sufficient fu nds in order to exercise the option. SIHI replied that thes request was disappro ved. Carceller notified SIHI of his decision to exercise the option to purchase the property. DOCTRINE: An option may be exercised validly even though in a way not in accord with that stated in the contract, if it would be consistent with t he primary intent of the parties. The letter of Carceller to SIHI is fair notice of the intent to exercise the option, despite the request for the extension of the lease contract. FACTS: Reyes sold half of her land to Villamor. She also exe cuted a Deed of Option in favor of Villamor for the remaining portion of the lot. Later however, Reyes offered to repurchase the lot in but it was refused by Vill amor, who instead expressed their desire to purchase the remaining portion of th e lot but the Reyeses ignored them. DOCTRINE: The option offered by Reyes had be en accepted by the Villamor, the promises, in the same document. The acceptance of an offer to sell for a price certain created a bilateral contract to sell and buy and upon acceptance, the offeree, ipso facto assumes obligations of a vende e. Demandability may be exercised at any time after the execution of the deed. F ACTS: Rigos gave Sanchez an option to purchase her property within 2 years and s aid option shall be deemed "terminated and elapsed," if "Sanchez shall fail to e xercise his right to buy the property" within the stipulated period. Several ten ders of payment were made by Sanchez within said period, but they were rejected by Mrs. Rigos. Rigos' defense was that the contract between the parties "is a unil ateral promise to sell, and the same being unsupported by any valuable considera tion, by force of the New Civil Code, is null and void". CARCELLAR V CA VILLAMOR V CA SANCHEZ V RIGOS

DOCTRINE: SC harmonized articles 14791 and 13242 of the Civil Code to rule that if a promise to sell or is unsupported by a distinct consideration, the promisor is not bound by his promise and may, accordingly, withdraw it; but, pending not ice of the withdrawal of his offer, his promise partakes of the nature of an off er to sell which, if accepted, results in a perfected contract of sale. EQUITORI AL REALTY V MAYFAIR FACTS: Carmelo leased its property to Mayfair whereby Mayfai r constructed thereon the Maxim & Miramar Theatres. Par8 of the lease contract p rovided that the Mayfair will be given 30 days exclusive option to purchase the property should Carmelo desire to sell it. Mayfair's negotiations w/ Carmelo didn't ripen into a sale. Carmelo sold the properties to Equatorial. DOCTRINE: Par. 8 i s not an option clause or option contract but a contract of a right of first ref usal by virtue of Art. 1479. The right of first refusal is an integral part of t he contracts of lease. The consideration is built into the reciprocal obligation s of the parties. The Ang Yu decision may apply if the contract is limited to th e buying and selling of the real property. However, the obligation of Carmelo to first offer the property to Mayfair is embodied in a contract. It should be enf orced according to the law on contracts instead of the panoramic and indefinite rule on human relations. The sale of the subject real property by Carmelo to Equ atorial must be rescinded since Mayfair was prejudiced by the sale to Equatorial w/o Carmelo conferring to Mayfair every opportunity to negotiate within the 30day stipulated period. Vitug, dissenting: a right of first refusal as a simple j uridical relation. It lacks the force of law sufficient to compel compliance per se or to establish a creditor-debtor or obligee-obligor relation between the pa rties. If a right of first refusal cannot even be properly classed as an offer o r as an option, certainly, and with much greater reason, it cannot be the equiva lent of, nor be given the same legal effect as, a duly perfected contract. No re scission! FACTS: Santos and Paranaque Kings entered into a lease contract. Contr act says in case of sale, LESSEE shall have the first option or priority to buy the properties subject of the lease. Santos sold the lots to Raymundo for 5M. It was also offered to Paranaque for P15M and given ten days to make good the offer which it rejected, calling the price ridiculous. Paranaque offered to buy the p roperty for 5M. DOCTRINE: The basis of the right of refusal must be the current offer to sell of the seller or offer to purchase of any prospective buyer and on ly when the optionee fails to exercise his right can the same be sold to third p ersons under the same terms as offered the optionee. Paranaque has right of firs t refusal to the same price offered to Raymundo. Sales Lady says: There was bad f aith in Raymundo's part. The remedy is specific performance because all the elemen ts of a valid contract of sale between Paranaque and Santos are already present the price was already determined to be 5K. The right of first refusal has alread y ripen into a contract FACTS: Tenants of residential and commercial spaces owne d by Cu Unjieng were granted priority to acquire the properties they PARANAQUE KINGS V CA ANG YU ASUNCION A promise to buy and sell a determinate thing for a price certain is reciprocall y demandable. An accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promisor if the promise is supported by a consideration distinct from the price 2 When the offerer has allowed the offer ee a certain period to accept, the offer may be withdrawn at any time before acc eptance by communicating such withdrawal, except when the option is founded upon consideration, as something paid or promised 1

V CA were renting. During the negotiations, Cu Unjieng offered a price of P6-million while tenants made a counter offer of P5million. They asked the Cu Unjiengs to p ut their offer in writing. The latter failed to specify the terms and conditions of the offer and the tenants also received information that Cu Unjieng was abou t to sell the properties. DOCTRINE: Even if a party is aggrieved by the failure to honor the right of first refusal, its breach cannot justify correspondingly a n issuance of a writ of execution, nor would it sanction an action for specific performance without thereby negating the indispensable element of consensuality in the perfection of contracts. (HINDI TALAGA DAPAT SPECIFIC PERFORMANCE!!!) The remedy is an action for damages for abuse of rights. Right of First Refusal an innovative juridical relation WHAT IT IS NOT: o NOT perfected contract of sale u nder Article 1458. o NOT option under the second paragraph of Article 1479 o NOT an offer under Article 1319 In RoFR, the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantor's event ual intention to enter into a binding juridical relation with another but also o n terms, including the price, that obviously are yet to be later firmed up. Prio r thereto, it can at best be so described as merely belonging to a class of prep aratory juridical relations governed not by contracts but by, among other laws o f general application, the pertinent scattered provisions of the Civil Code on h uman conduct (e.g. A19). FACTS: The lessees were given a right of first refusal by the owner, but it was made orally and not in writing. The representative of t he owner sent them an offer to buy the property for 2M. They counter-offered 1M. Later, they found out that the property had already been sold by the owner to R osencor. They wanted the contract of sale to be annulled in order for them to ex ercise their right of first refusal. DOCTRINE: A contract of sale entered into i n violation of a right of first refusal of another person, while valid, is resci ssible. However, in order for the doctrine to apply, it must be shown that the v endees acted in bad faith as they were aware or should have been aware of the ri ght of first refusal granted to another person by the vendors therein. Yet, in t his case, the right was given orally. A right of first refusal need not be writt en to be enforceable and may be proven by oral evidence. However, ROSENCOR V INQUING

FORMALITIES OF THE CONTRACT DALION V CA it makes it difficult to prove that the buyer was aware of such right. Construct ive notice cannot apply since even the lease contract was oral. There must be cl ear and convincing proof that Rosencor was made aware of the said right of first refusal before they can be guilty of bad faith. Remedy of the lessees for the v iolation of RoFR: action for damages for the unjustified disregard of their righ t. FACTS: A private document of absolute sale was executed between Sabesaje and Dalion. Sabesaje denied the fact of the sale contending that the document sued u pon is fictitious since his signature there was forged. DOCTRINE: Article 13583 provision 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 contr act of sale of a parcel of land that this be embodied in a public instrument. A contract of sale is a consensual contract. No particular form is required for it s validity. FACTS: The original owner of a 10,750sqm lot bound herself to transf er 1/3 of it to Sabellona thru an Agreement of Partition. Sabellona then sold 3, 000sqm of the 1/3 portion to the Secuyas in a private document. The 1/3 lot, how ever, was never actually transferred. Instead, parts of the original 10,750 lot, including the portion bought by the Secuyas, was sold to Selma. HELD: There was no property to partition. Thus, the Agreement of Partition is actually an expre ss trust. However, it was repudiated when the land was sold to another. (as a re sult, Sabellona could not validly sell the property). Even if the trust subsists , the Secuyas cannot prove their claim over it. The private document through whi ch they acquired the 3,000 sqm lot was lost. DOCTRINE: While a sale of a piece o f land appearing in a private deed is binding between the parties, it cannot be considered binding on third persons, if it is not embodied in a public instrumen t and recorded in the Registry of Property. FACTS: Espino and Paredes agreed abo ut the sale of a lot, the evidence of which is letters only without any written contract. It was agreed that only upon Espino's arrival at Puerto Princesa will th e price be paid and the deed of sale executed. But Espino refused to execute the deed upon his arrival despite Paredes' demand and willingness to pay. Paredes sou ght specific performance. HELD: The SC ruled that the contract between the two d oes not fall under the Statute of Frauds by virtue of the existence of the lette rs, which constitute sufficient memorandum, embodying the essential terms of the contract. DOCTRINE: Statute of Frauds does not require the contract itself to b e in writing. Article 1403, par. (2) is clear that a written note or memorandum, embodying the essentials of the contract and signed by party charged, or his ag ent, suffices to make the SECUYA V VDA. DE SELMA PAREDES V ESPINO 3 The following must appear in a public document: (1) Acts and contracts which hav e for their object the creation, transmission, modification or extinguishment of real rights over immovable property; sales of real property or of an interest t herein are governed by articles 1403, No. 2, and 1405; (2) The cession, repudiat ion or renunciation of hereditary rights or of those of the conjugal partnership of gains; (3) The power to administer property, or any other power which has fo r its object an act appearing or which should appear in a public document, or sh ould prejudice a third person; (4) The cession of actions or rights proceeding f rom an act appearing in a public document. All other contracts where the amount involved exceeds five hundred pesos must appear in writing, even a private one. But sales of goods, chattels or things in action are governed by articles, 1403, No. 2 and 1405. (1280a)

BARETTO V MANILA verbal agreement enforceable, taking it out of the operation of the statute. FAC TS: Barretto allegedly had an oral contract w/ Manila Railroad whereby the compa ny would buy his house. Barretto made a deed of sale, but when he delivered and presented it to the company, the latter refused to buy. Barretto brings specific performance suit. HELD: The contract of sale is unenforceable because delivery of a deed of sale w/o intent to part w/ the title until paid is not constructive delivery or performance. The contract is not partially performed to take it out of the context of the Statute of Frauds. By Manila Railroad's objection to the in troduction of parol evidence to prove the oral contract of sale, said contract c annot be proven or enforced. DOCTRINE: If a contract is not partially performed, it is still within the context of the Stature of Frauds. Partial performance mu st be coupled with intent to perform. FACTS: Inigo (Buyer) & Maloto(seller) had a verbal contract of sale of a property for w/c buyer paid the purchase price. T he contract & the receipt of the purchase price were not reduced into writing. U pon death of seller, her heirs inherited the property. Buyer demands the executi on of a deed of sale. HELD: The Statute of Frauds doesn't bar the sale of real pro perty in the case at bar because it has been partially performed (executed alrea dy, not executory). DOCTRINE: Under Art. 1403(2)(e), a verbal contract for the s ale of real property is unenforceable, unless ratified as it offends the Statute of Frauds. However, this only applies to executory contracts & not to those eit her totally or partially performed. Oral evidence of the alleged consummated sal e is not forbidden by the Statute of Frauds. F.P. Holdings(owner) offered for sa le to the general public its land thru its broker Meldin Roy of Metro Drug. Roy sent a sales brochure to Atty. Gelacio Mamaril, a practicing lawyer and register ed real estate broker who in turn passed on these documents to City-Lite Realty Corporation. City-Lite conveyed its interest to buy in a letter to Metro Drug af ter and all correspondence to Metro Drug. When they met in person, City-Lite and Roy reached an agreement. For some reason or another and despite demand, F.P Ho ldings refused to execute the corresponding deed of sale in favor of City-Lite. HELD: There was NO perfected contract of sale between City-Lite and F.P. Holding s because the broker had no authority to sell the property because authorization was only to find buyers. DOCTRINE: Article 1874 of the CC provides: When the sal e of a piece of land or any interest therein is through an agent, the authority of the latter shall be in writing; otherwise, the sale shall be void. For lack of written authority to sell, sale should be as it is declared null and void. FACT S: HELD: DOCTRINE: FACTS:Myers and Maritime entered into a contract of Condition al Sale (Contract to Sell). Myers reserved the right to cancel contract in case of Maritime's failure to pay installments. Maritime failed to pay, hence, Myers ca ncelled the contract. HELD: (as previously proven) contract to sell, not of sale . When payment was not made, contract of sale was not perfected. INIGO V ESTATE OF MALOTO CITY LITE V CA VII. TRANSFER OF OWNERSHIP KUENZLE V MACKE LUZON BROKERAGE V MARITIME

BEAN V CADWALLADER DOCTRINE: A contract to sell, payment is only a positive suspensive condition, t he failure of which is not a breach, casual or serious, but simply an event that prevented the obligation of the vendor to convey title from acquiring binding f orce. To argue that there was only a casual breach is to proceed from the assump tion that the contract is one of absolute sale, where nonpayment is a resolutory condition, which is not the case. There is power of promisors under contracts t o sell in case of failure of the other party to complete payment, to extrajudici ally terminate the operation of the contract, refuse conveyance and retain the s ums or installments already received, where such rights are expressly provided f or. FACTS: Where the goods were ready for delivery at the time and place agreed upon, the mere fact that the buyer, by reason of the improper equipment of the v essel, was unable to take the goods aboard the vessel, cannot relieve the latter for responsibility under the contract. George Case and BW Cadwallader had a con tract for the sale of certain types of logs. Case bound himself to deliver said pieces of wood to the BW Cadwallader alongside the latters ship at Basilan. Cas e was able to deliver the logs on time in the port of Basilan. However, despite repeated attempts to load the logs, they were not loaded. CAdwallader wants the contract rescinded. HELD: Case had already complied with his obligation to deliv er the logs since he had already delivered the logs alongside the vessel. Actual manual delivery of an article sold is not essential to the passing of the title thereto (art 1450, Civil Code) unless made so by the terms of the contract or b y an understanding of the parties. The parties to the contract may agree when an d on what conditions the property in the subject of the contract was passed to t he prospective owner. FACTS: HELD: DOCTRINE: FACTS: Ong Siao Hua bought a condo unit from Cebu Winland. No written document was executed for the sale.When const ruction finished, Winland turned possession of the properties over to Ong. Ong n oticed that in the Deeds, the stated floor area of his units were smaller than w hat he bought. He conducted a verification survey and it was found that the tota l area of the units was actually much smaller. He demanded a refund of the total value corresponding to the lacking floor area. HELD: Ong Siao has already acqui red ownership of the condo unit. DOCTRINE: Delivery has been described as a comp osite 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 possess ion of the property, and the other acquires the right to and the possession of t he same. In its natural sense, delivery means something in addition to the deliv ery of property or title; it means transfer of possession. In the Law on Sales, delivery may be either actual or constructive, but both form sof delivery contem plate `the absolute giving up of the control and custody of the property on the pa rt of the vendor, and the assumption of the same by the vendee. FACTS: HELD: DOC TRINE: OCEJO V INTERNATIONAL BANK CEBU WINLAND V ONG SIAO HUA AVILES V ARCEGA

PHIL SUBURBAN V AUDITOR GENERAL SARMIENTO V LESACA FACTS: HELD: DOCTRINE: FACTS: HELD: DOCTRINE: FACTS: Foz executed a contract, re tified by notary, selling his property to Florendo. Florendo already made a part ial payment, the remaining balance was agreed to be paid when they see each othe r in Vugan during thye next month. When Florendo tendered payment for remaining balance, Foz refused to receive and repudiated the contract. HELD: Foz can be co mpelled to deliver the property to Florendo. DOCTRINE: When a sale is made by me ans of a public document, the execution of it shall b equivalent to delivery of the thing formal delivery de jure. FACTS: HELD: DOCTRINE: FACTS: APT had certain premises (where machinery & equipment were stored) leased to Creative Lines. AP T sold some of the machinery & equipment therein to TJ Enterprises. TJ wasn't able to haul the machinery & equipment from the premises because of APT's refusal. HEL D: There was no constructive delivery upon the execution of the deed or issuance of the gate pass because it was not APT that had actual possession of the prope rty. The phrase as-is where-is basis pertains solely to the physical condition o f the thing sold, not to its legal situation. Creative Lines' refusal to haul the machinery isn't a fortuitous event. DOCTRINE: As a general rule, execution of a de ed of sale is equivalent to the delivery of the object if from the deed the cont rary doesn't appear or can't clearly be inferred. For movables, delivery may consist in delivery of the keys of the place or depository where it is stored or kept. The thing must be place in control of the object in order for execution of a dee d to effect tradition (but it's only a presumption) except when the delivery isn't e ffected because of a legal impediment. BAVIERA CITATION In a contract for the sa lvage of surplus property, the employer assigned all its rights and title to all surplus property salvaged by the contractor at a price of P90 per long ton, pay ment to be made monthly, on the basis of recovery reports of sunken surplus prop erty salvaged during the preceding month, the Court held that it was a case of t radition longa manu and ownership passed as soon as the property was salvaged. F ACTS: Abuan acquired homestead which passed on to his legal heirs upon his death . August 7, 1953 - Legal heirs sold land to Garcia by a Deed of Absolute Sale (p ublic instrument). Legal heirs filed action to recover land due to fraud and con tract being executed without consideration which was eventually settled amicably on February 28, 1955. Garcia paid P500 on that day and promised to pay P1500 mo re (on or before April 30, 1955). FLORENDO V FOZ MASALLO V CESAR ASSET PRIVATIZATION V TJ ENTERPRISES BOARD OF LIQUIDATORS V FLORO ABUAN V GARCIA

HELD: The period to repurchase has already prescribed. DOCTRINE: There was DELIV ERY BREVI MANU or TRADITIO BREVI MANU permissible under A1499 and A1501. Intenti on to give possession and ownership was gleaned from the fact that in the 2nd de ed (which was a private deed NOT construed as constructive delivery): There is n o stipulation reserving ownership The fact that the agreement was entered into i n consideration of plaintiff's/ legal heir's desistence, as in fact they desisted, f rom prosecuting their reivindicatory action, LEAVING PROPERTY IN THE HANDS OF GA RCIA, as owner thereof. FACTS: HELD: DOCTRINE: FACTS: HELD: DOCTRINE: FACTS: HEL D: DOCTRINE: FACTS: 2 buyers offered to buy the seller's land w/ assumption of mor tgage The price proposal of Buyer 1 was accepted and memorandum was made allowin g the seller to occupy the land for 1 year and to lease it thereafter. When Buye r 1 went to the Seller w/ the deed, Seller told him that he already gave the lot to Buyer 2. Buyer 2 presented a memorandum wherein the Seller obligated himself to sell the lot to him, as well as a deed of sale. Buyer 2 had the sale registe red 4 days after the 1st sale was registered. HELD: Buyer 1 was in good faith at the time of their negotiations & the perfection of the sale, there was no 2nd s ale yet to speak of. The circumstances show that Buyer 2 was in bad faith. The 1 st sale was properly perfected & consummated; Seller retained possession of her house as a lessee. Although the memorandum between Buyer 1 & Seller wasn't in the form required by the Statute of Frauds, it was still proof of a partially perfor med sale. The assumption of the mortgage & the lease of the house formed part of the consideration of the sale. Other issues involve BPS. DOCTRINE: Court reiter ated Art. 1544 on Double Sales4. Good faith of the buyer of the realty is essent ial in registering his deed BAUTISTA V SIOSON BEHN MEYER V YANGCO GENERAL FOOD V NACOCO DOUBLE SALES CARBONELL V CA If the same thing should have been sold to different vendees, the ownership shall be transferred to the person who may have first taken possession thereof in goo d faith, if it should be movable property. Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith first record ed it in the Registry of Property. Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided t here is good faith. 4

CHENG V GONZALES of sale (a.k.a. anterior registration) to merit the protection in Art. 1544, per 2nd par. of the said article.5 If there's no inscription (registration), what is decisive is prior possession in good faith. FACTS: HELD: DOCTRINE: Compania exec uted two mortgages on the same building. Both were foreclosed. 1 st buyer bought the lot through a deed of sale (public instrument but not registered) and was I possession of the building ever since. 2 nd buyer/ mortgagee had the sale to hi m (by a public auction) registered despite his knowledge of the 1st sale and the 1st buyer's possession. Court said first buyer should be declared the owner becau se the 2 nd buyer made the inscription in bad faith. 1st buyer was in possession first in good faith DOCTRINE: GOOD FAITH: Test: Good faith, or the lack of it, is in its last analysis a question of intention; but in ascertaining the intenti on by which one is actuated on a given occasion, the Court is necessarily contro lled by the evidence as to the conduct and outward acts by which alone the inwar d motive may, with safety, be determined. It is: "the honesty of intention," "th e honest lawful intent," which constitutes good faith implies a "freedom from kn owledge and circumstances which ought to put a person on inquiry," "Good faith, or the want of it, is not a visible, tangible fact that can be seen or touched, but rather a state or condition of mind which can only be judged of by actual or fancied tokens or signs." (Wilder v Gilman) BAD FAITH: One who purchases real e state with knowledge of a defect or lack of title in his vendor cannot claim tha t he has acquired title thereto in good faith as against the true owner of the l and or of an interest therein; and the same rule must be applied to one who has knowledge of facts which should have put him upon such inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vend or. FACTS: Lichauco Brothers offered for sale certain old machinery and boilers which were deposited in a yard. Rivera allegedly purchased some of the materials through an agent, but failed to take possession of the property. Ong Che bought the property from Lichauco brothers and immediately took possession. Rivera sue d Ong Che in order to recover the articles. HELD: Ong Che has a better right of ownership. He was a purchaser in food faith who immediately took possession of t he property. Under article 1473(now 1544) of the Civil Code, Ong Che has a bette r title than the first purchaser, who has never had possession at all. DOCTRINE: Two different agents of the same owner successively negotiated sales to two dif ferent purchasers, and under 1473 of the Civil Code, the second purchaser having acquired possession first must be declared the true owner. Ong Che, was a LEUNG YEE V FL MACHINERY RIVERA V ONG CHE 5 DBP vs. Mangawang, et al., 11 SCRA 405; Soriano, et al. vs. Magale, et al., 8 SC RA 489

CARUMBA V CA purchaser of these articles in good faith. He acquired possession by virtue of h is purchase. He, undoubtedly has, under article 1473 of the Civil Code, a better title than the first purchaser, who has never had possession at all. FACTS: HEL D: DOCTRINE: FACTS: Hanopol claims ownership of the land through a seies of purc hases in a private document and a CFI decision in a reivindicatory case. Pilapil asserts his title to the property through a duly notarized deed of sale execute d in his favour. HELD: PILAPIL wns the land. DOCTRINE: Better right is much more than the mere prior deed of sale in favor of the 1 st vendee. It is the prescri ptive right that had supervened or other facts and circumstances exist which, in addition to his deed of sale, the 1 st vendee can be said to have better right than the 2nd purchaser. FACTS: A parcel of unregistered land was sold to Macam. He did not register the sale. After this, the certificate of title was issued ov er the land. Then, the original owner was made a judgment creditor in a separate case. The sheriff levied upon the land and was sold in a public sale. The buyer was able to consolidate ownership and register the sale. On the issue of who ha s a better right to the land, it was HELD: The first buyer is the owner. The rul es on registered and unregistered land cannot be applied because the situation o btaining here does not fall strictly within the ambit of any of the two rules. I nstead, we apply ROC the buyer in a public sale steps into the shoes of the judg ment debtor. Since the judgment debtor had previously sold the land to Macam, th e buyer in the public sale had nothing to step into. DOCTRINE: In case of convey ance of registered real estate, the registration of the deed of sale is the oper ative act that gives validity to the transfer. Sec 35, Rule 39 of the ROC, to th e effect that upon the execution and delivery of the final certificate of sale i n favor of the purchaser of land sold in an execution sale, such purchaser shall be substituted to and acquire all the right, title, interest and claim of the ju dgment debtor to the property as of the time of the levy. FACTS: HELD: DOCTRINE: FACTS: HELD: DOCTRINE: FACTS: Roman (owner) and Grimalt (buyer) verbally agreed upon the sale of the schooner Santa Marina. Grimalt agreed to buy it at 3 equal installments provided the title papers were in proper form. However, the title o f the vessel was not in Roman's name. Roman promised to perfect his title to the v essel but failed. The vessel sank in the Manila harbor during a storm this was b efore Roman was able to produce the proper papers showing ownership of the vesse l. Grimalt refused to pay upon Roman's demand. HANOPOL V PILAPIL DAGUPAN V MACAM QUIMSON V ROSETE SANCHEZ V RAMOS VIII. RISK OF LOSS ROMAN V GRIMALT

HELD: Roman should bear the risk of loss because there was no sale yet. If no co ntract of sale was executed by the parties, the loss must be borne by its owner & not by a party who only intended to purchase it and who was unable to do so du e to the failure by the owner to show proper title to it and thus enable them to draw up the contract of sale. Grimalt was not obliged to pay the price of the v essel, the purchase of which had not been concluded. The conversations bet the p arties did not establish a contract sufficient in itself to create reciprocal ri ghts bet the parties. DOCTRINE: Ownership is not considered transmitted until th e property is actually delivered and the purchaser has taken possession of the v alue and paid the price agreed upon, in which case the sale is considered perfec ted. Art 1452 6 of the old Civil Code re injury or benefit of the thing sold aft er a perfect contract, and Arts 10967 and 11828 re obligation to deliver a speci fic thing & extinction of such obligation due to loss or destruction do not appl y if no contract was perfected in the first place. FACTS: Nepales bought from No rkis a Yamaha Wonderbike, but Norkis retained possession. Norkis issued a Sales Invoice showing that the contract of sale had been perfected signed by Nepales. The motorcycle was registered in the Land Transportation Commission in the name of Alberto Nepales.Norkis delivered the bike to Julian Nepales(3 rd person) with out authority from buyer Napales. The bike was completely destroyed in an accide nt. HELD: Ownership was not transferred to Nepales since there was no delivery. The invoice is nothing more than a detailed statement of the nature, quantity an d cost of the thing sold not necessarily coupled with the intention of the deliv ery of the thing. Registration was only to facilitate the execution of a chattel mortgage in favor of DBP for the release of the motorcycle loan. HELD: Article 1496 provides in the absence of an express assumption of risk by the buyer, the t hings sold remain at seller's risk until the ownership thereof is transferred to t he buyer. Norkis was still the owner and possessor of the motorcycle when it was wrecked. This is in accordance with the well-known doctrine of res perit domino. FACTS: Sun Bros and Perez entered into a conditional sale agreement involving a n Admiral Air Conditioner. The agreement specifically states that Perez assumes responsibility for any loss. Aircon was delivered to Perez, notwithstanding nonpayment of price, and was totally destroyed by fire. HELD: Perez bears the risk of loss. Sun Bros can recover payment. NORKIS V CA SUN BROS. PEREZ Now Art. 1480 Any injury to or benefit from the thing sold, after the contract h as been perfected, from the moment of perfection of the contract to the time of delivery, shall be governed by (Arts 1163 to 1165 and 1262) 6 Now Arts. 1165 When what is to be delivered is a determinate thing, the creditor , in addition to the right granted him by Article 1170, may compel the debtor to make the delivery. If the thing is indeterminate or generic, he may ask that th e obligation be complied with at the expense of the debtor. If the obligor delay s, or has promised to deliver the same thing to two or more persons who do not h ave the same interest, he shall be responsible for any fortuitous event until he has effected the delivery. 7 Now Art 1262 An obligation w/c consists in the delivery of a determinate thing s hall be extinguished if it should be lost or destroyed w/o the fault of the debt or, and before he has incurred in delay (par. 1) 8

LAWYER'S COOP V TABORA DOCTRINE: An agreement making the buyer responsible for any loss whatsoever, for tuitous or otherwise, even if the title to the property remains in the vendor, i s neither contrary to law, nor to morals or public policy. FACTS: Atty. Tabora b ought from the Lawyers Cooperative Publishing Company one complete set of Americ an Jurisprudence. Tabora made a partial payment of the purchase price. The books were duly delivered and received. In the midnight of that same day, a big fire broke at the law office and library of Tabora The books were burned. HELD: altho ugh Lawyers' agreed that the ownership of the books shall remain with it until the purchase price shall have been fully paid, but such stipulation cannot make it liable in case of loss not only because such was agreed merely to secure the per formance by the buyer of his obligation. In the very contract it was expressly a greed that the "loss or damage to the books after delivery to the buyer shall be borne by the buyer." DOCTRINE: Any such stipulation that any damage shall be bo rne by buyer after delivery is sanctioned by Article 1504 of the Civil Code, whi ch in part provides: (1) Where delivery of the goods has been made to the buyer or to a bailee for the buyer, in pursuance of the contract and the ownership in the goods has been retained by the seller merely to secure performance by the bu yer of his obligations under the contract, the goods are at the buyers risk fro m the time of such delivery. FACTS:Song Fo sold a launch to Oria. The launch was delivered to Oria in Manila, but was shipwrecked and became a total loss while en route to Orias place of business in Samar. No part of the purchase price has ever been paid. HELD: Oria, who had exclusive control of the operation of the v essel, sent the launcgh from Manila to Samar, well knowing that it had not yet b een insured: and that Song Fo & Co. had no power to interfere, or to keep her in port pending their application for insurance. DOCTRINE: Party who has exclusive control of property bears the risk of loss. SONG FO V ORIA IX. DOCUMENTS OF TITLE SIY CONG BIEN V HSBC Supra of Quedans(warehouse receipts DOCTRINE: The quedans were issued in the nam e of Siy Cong Bien duly endorsed in blank, and thus negotiable in form. It follo ws that on the delivery of the quedans to HSBC they were no longer the property of the endorser unless he liquidated his debt with the bank. It is a representat ion that the one to whom the possession of the receipt has been so intrusted has the title to the goods. If the owner of the goods permits another to have the p ossession or custody of negotiable warehouse receipts running to the order of th e latter, or to /bearer, it is a representation of title upon which bona fide pu rchasers for value are entitled to rely, despite breaches of trust or violations of agreement on the part of the apparent owner. FACTS: Smith Bell and Sotelo en tered into contracts whereby Smith, Bell & Co. obligated itself to sell, and Sot elo to purchase: 2 steel tanks for Php. 21,000, to be shipped from New York and delivered at Manila within 4 months; 2 expellers at Php. 25,000 each, to be ship ped from San Francisco in the month of September, 1918 or asap; and 2 electric m otors Php. 2,000 each. Stipulaiton as to delivery is as follows--Approximate deli very within 90 days. This is not guaranteed. All the equipment arrived later than the date specified. HELD: the obligation was complied with in time since the ob ligation was conditional, subject to contingencies the rigid measures imposed af ter World War 1. ISSUES/ HELD: XI. PERFORMANCE OF CONTRACT SMITH BELL V MATTI

Should the vendor be paid? - Was the obligation complied with in time? YES DOCTR INE: when the time of delivery is not fixed in the contract, time is regarded as unessential. In such cases, the delivery must be made within a reasonable time. The question as to what is a reasonable time for the delivery of the goods by t he seller is to be determined by the circumstances attending the particular tran saction. Reasonable time does not mean immediately or that the seller must stop all his other work and devote himself to that particular order. But the seller m ust nevertheless act with all reasonable diligence or without unreasonable delay . SOLER V CHESKY FACTS: Soler entered into a contract of sale with Wm. H. Anderson and Co. for th e purchase of certain oil machinery subject to contingencies. Soler sold to Chel sey all his rights without any condition and even guaranteed that the equipment was on its way. The shipment was delayed so Chelsey wanted the contract rescinded. HELD: Soler was in delay since time was an essential element of the contract. C helsey gave his consent to the contract because he expected the machinery to arr ive within a short time- the time reasonably necessary for such machinery to rea ch Manila from America. DOCTRINE: He who contracts and assumes an obligation is presumed to know the circumstances under which said obligation can be complied w ith. Although there was no specific time specified for the arrival of the machin ery, the guaranty was tantamount to saying that under normal condition they woul d arrive in a short period of time (like 3 mos in the case of the expellers). REPUBLIC V LITTON FACTS: RP Gov't enters into contracts of sale w/ Litton for padlocks and other goo ds to be used for the April 23, 1946 elections. The agreements stipulated that d elivery was to be made on or before March 1, 1946. Goods were to be shipped from US to RP. Only a small part of the goods arrived before or on schedule. The res t were either delivered after. HELD: Facts show that contract was not conditione d on any RP Gov't obligation to procure export license and shipping priority from US Gov't. It was expressly made clear that delivery was to be made on or before Ma rch 1, as it was also made clear that the goods were to be used for the April 23 elections. It is preposterous to suppose that delivery after the elections woul d ever be contemplated. DOCTRINE: If a party assumes liability in all eventualit y, it cannot invoke force majeure as a defense. FACTS: Azarraga sold two parcels of land to Gay for the lump sum of P47,000 to be paid as provided in the contra ct. They agreed upon the sale of 2 parcels of land, the first containing 102 hec tares, 67 ares, and 32 centares, and the second, 98 hectares, more or less, for the lump sum of P47,000 payable, partly in cash and partly in installments. Said 2 parcels are defined by means of the boundaries given in the contract. Gay ref used to pay the full price, alleging that the 2 nd parcel with an area of 98 hec tares according to the deed of sale, had only 70 hectares, and therefore asked f or a reduction of the price. Azarraga refused to grant the request, and brought suit against the Buyer to recover the whole price agreed upon. HELD: price canno t be reduced bec all land contained within boundaries were delivered to Gay. DOC TRINE: Interpretation of Art 1471: In case of the sale of real estate for a lump sum and not at the rate of a specified price for each unit of measure, there sha ll be no increase or decrease of the price even if the area be found to be more or less than that stated in the contract. The same rule shall apply when two or more estates are sold for a single price; but, if in addition to a statement of the boundaries, which is indispensable in every conveyance of real estate, the a rea of the estate should be designated in the contract, the vendor shall be obli ged to deliver all that is included with such boundaries, even should it exceed the area specified AZARRAGA V GAY

in the contract; and, should he not be able to do so, he shall suffer a reductio n of the price in proportion to what is lacking of the area, unless the contract be annulled by reason of the vendees refusal to accept anything other than tha t which was stipulated. 1st par of 1471: deals w/ the situation (a) wherein ever ything included w/in the boundaries has been delivered. Rule: WON the object of sale be 1 realty for a lump sum, or 2+ for a single price also a lump sum, and, consequently, not for X price per unit of measure or number, there shall be no i ncrease or decrease in the price even if the area be found to be more or less th an that stated in the contract. Why? Because the consideration in the contract i s the determinate object & not the number of units that it contains. It is deter minate because it is dealt w/ as a single realty so long as they are sold for a single price constituting a lump sum and not for X price per unit. 2nd par of 14 71: WON the object of the sale be 1 realty for a lump sum, or 2+ for a single pr ice also a lump sum, and, consequently not at X price per each unit of measuring or number, the seller shall be bound to deliver everything that is included wit hin the boundaries stated, although it may exceed the area or number expressed i n the contract. In case he cannot deliver it, the buyer shall have the right eit her to reduce the price proportionately to what is lacking of the area or number , or to rescind the contract at his option. If everything w/in the stipulated bo undaries isn't delivered, the determinate object w/c was the consideration is not delivered, thus the power to nullify it. But it may be said that although he has n't received the object accdg to the stipulated terms, it is in his power to carry the contract into effect w/ the just decrease in price. FACTS: Ong Siao Hua bou ght a condo unit from Cebu Winland. No written document was executed for the sal e.When construction finished, Winland turned possession of the properties over t o Ong. Ong noticed that in the Deeds, the stated floor area of his units were sm aller that what he bought. He conducted a verification survey and it was found t hat the total area of the units was actually much smaller. He demanded a refund of the total value corresponding to the lacking floor area. HELD: Refund because the sale not lump sum but made at the rate of a certain price for a square area . DOCTRINE: In Article 1539, if the area actually delivered is less than the sti pulated, the buyer can either choose to oblige the seller to deliver the remaini ng area or demand for the proportionate reduction of the purchase price if deliv ery is not possible. He (and he alone) may also rescind the contract if the infe rior value exceeds one-tenth. If the buyer would not have bought the property ha d he known of its smaller or inferior quality however, he may rescind (regardles s of the one-tenth rule). FACTS: Associated constructed a conveyor system for La Fuerza's wine factory. When the construction was finished, to La Fuerza's dismay, t he conveyor system did not met its expectation because: several bottles collided with each other, some bottles jumped off the conveyor belt and were broken, cau sing considerable damage and the flow of the system was so sluggish. La Fuerza r efused to pay the balance of the conveyor system's purchase price. HELD: La Fuerza's action for rescission has already prescribed. Action for rescission based in hi dden faults or defects must be filed within 6 months after delivery. La Fuerza's a ction was filed after 10 months. DOCTRINE: Pursuant to A1566 and A 1567, if the thing sold has hidden faults or defects the vendor shall be responsible and the vendee may elect between withdrawing from the contract and demanding a proportion al reduction of the price, with damages in either case." but the action therefor in the language of Art. 1571 "shall be barred after six months, from the delive ry of the thing sold." The period of four (4) years, provided in Art. 1389 of sa id Code, for "the action to claim rescission," applies to contracts, in general, and must yields, in the instant case, to said Art. 1571, which refers to sales in particular. CEBU WINLAND V ONG SIAO HUA LA FUERZA V CA

DELA CRUZ V LEGASPI FACTS: de la Cruz purchased from Legaspi a parcel of land. However, de la Cruz w as not able to pay the purchase price of P450. Legaspi claims that the contract was null and void for lack of consideration. HELD: contract was valid because th ere was consideration P450. Non-payment does not void contract. DOCTRINE: Subsequ ent non-payment of the price at the time agreed upon did not convert the contrac t into one without cause or consideration: a nudum pactum. In the sale of real p roperty, even though it may have been stipulated that in default of the price wi thin the time agreed upon, the resolution of the contract shall take place ipso facto, the vendee may pay even after the expiration of the period, at any time b efore demand has been made upon him either by suit or by notarial act. After suc h demand has been made the judge cannot grant him further time. (Art. 1504 Civil Code.). FACTS: Bareng purchased from Alegria cinematographic equipment installe d at the Pioneer Theater. Ruiz informed Bareng that he was a co-owner of the equ ipment and told him to suspend payments because he was not agreeable to the sale . Alegria and Ruiz subsequently reached a compromise in the case. Alegria then s ued Bareng for the unpaid balance. HELD; the suspension of payment was justified only at the time before the compromise between Alegria and Ruiz. From the time Alegria and Ruiz reached this settlement, there was no longer any danger of thre at to Barengs ownership and full enjoyment of the equipment. DOCTRINE: When the disturbance feared of had already ceased, the buyer who suspended payment shoul d immediately resume payment. Otherwise, the buyer would incur delay and would b ecome liable for interest. FACTS: Laforteza sold to Machuca a parcel of land. Th e Memorandum of Agreement stated that Machuca would pay the price within 30 days from the reconstruction of the title. Machuca asked for an extension but was de nied by Laforteza. Machuca informed the Lafortezas that he already has the balan ce but Laforteza refused to accept it. HELD: failure to pay the balance within t he period allowed does not void the MOA. The contract had already been perfected . Subsequent non-payment will not void it. DOCTRINE: Failure to comply with a co ndition imposed upon the perfection of the contract results in the failure of a contract. Failure to comply with a condition imposed on the performance of the o bligation only gives the other party the option either to refuse to proceed with the sale or to waive the condition. In addition, the heirs were not ready with the reconstituted title within the specified period. In reciprocal obligations, neither party incurs delays both are not ready to comply. FACTS:Myers and Mariti me entered into a contract of Conditional Sale (Contract to Sell). Myers reserve d the right to cancel contract in case of Maritime's failure to pay installments. Maritime failed to pay, hence, Myers cancelled the contract. HELD: (as previousl y proven) contract to sell, not of sale. When payment was not made, contract of sale was not perfected. DOCTRINE: A contract to sell, payment is only a positive suspensive condition, the failure of which is not a breach, casual or serious, but simply an event that prevented the obligation of the vendor to convey title from acquiring binding force. To argue that there was only a casual breach is to proceed from the assumption that the contract is one of absolute sale, where no npayment is a resolutory condition, which is not the case. There is power of pro misors under contracts to sell in case of failure of the other party to complete payment, to extrajudicially terminate the operation of the contract, refuse con veyance and retain the sums or installments already received, where such rights are expressly provided for. BARENG V CA LAFORTEZA V MACHUCA LUZON BROKERAGE V MARITIME

VALARAO V CA FACTS: Under a deed of conditional sale, between Valarao and Arellano, Valarao m ay automatically rescind the contract if Seller pays to pay 3 successive monthly installments or 1 year lump sum payment. Arellano wasn't able to pay for 2 months so she tendered payment of the 2 months together w/ the payment for the 3rd mon th. Valarao refused to accept the payment per order of the Sellers. Buyer filed a consignation case but Seller made a rescission letter. HELD:The contract cannot be rescinded. Valarao was not justified in refusing Arellano's tender of payment. DOCTRINE: Article 1592 applies only to contracts of sale, and not to contracts t o sell or conditional sales where title passes to the vendee only upon full paym ent of the purchase price. Furthermore, in order to enforce the automatic forfei ture clause in a deed of conditional sale, the vendors have the burden of provin g a contractual breach on the part of the vendee. Relevant In any case, rescissi on and forfeiture of payments can't be effected because under the Maceda Law, a Bu yer has a 1month grace period for every year of installments paid. (In this case , Arellano had 3 months from Dec 31, 1990) FACTS: In a contract to sell, Daroya, a contract worker in the Middle East, agreed to buy from Active Realty a lot in its subdivision. Daroya for 3 months amortizations prompting the Corp to sent a notice of cancellation of their contract to take effect 30 days from receipt of the letter. Active cancelled the contract and forfeited all previous payments. Daroya filed a complaint for specific performances and damages. HELD: There was no valid rescission because there was no compliance to the Maceda Law of notariz ed notice of cancellation and refund of cash surrender value. ACTIVE REALTY V DAROYA DOCTRINE: twin requirements for a valid and effective cancellation under the law a notarized notice of cancellation and cash surrender value refund. The Maceda law seeks to redress the acute house problem in the country that has prompted th ousands of middle and lower class buyers of houses, lots and condominium units t o enter into all sorts of contracts with private housing developers involving in stallment schemes. XII. WARRANTIES SONGCO V SELLNER FACTS: Sellner bought Songco's sugar cane as so he can use the right of way. Songco estimated to him that the field would produce 3,000 piculs of the sugar. Sellner requested Songco to guara ntee the quantity but Songco did not. The crop turned out to be only 2,017 picul s. HELD: Songco's representation can only be considered matter of opinion as the c ane was still standing in the field, and the quantity of the sugar it would prod uce could not be known with certainty until it should be harvested and milled. S ellner could judge with his own eyes as to the character of the cane, and it is shown that he measured the fields and ascertained that they contained 96 1/2 hec tares. DOCTRINE: A misinterpretation upon a mere matter of opinion is not an act ionable deceit, nor is it a sufficient ground for avoiding a contract as fraudul ent. The law allows considerable latitude to sellers statements, or dealers ta lk; and experience teaches that it is exceedingly risky to accept it at its face value. The refusal of the seller to warrant his estimate should have admonished the purchaser that that estimate was put forth as a mere opinion. A man who rel ies upon such an affirmation made

GOCHANGCO V DEAN by a person whose interest might so readily prompt him to exaggerate the value o f his property does so at his peril 9, and must take the consequences of his own imprudence. FACTS: Gochangco and Dean agreed to exchange their properties, Goch angco exchanging his Pasay Estate land w/ Dean exchanging his Masbate land. Dean declared that the Masbate land had more than 6K coconut trees growing on it but it turned out the trees were less than 6k. HELD: The allegation of false & frau dulent representations as to the existence of the 6K coconut trees wasn't proven. It doesn't appear that Dean deliberately violated the truth in stating his belief that there were such a number of coconut trees on said lands. It was shown that Gochangco viewed the lands and himself estimated that there were more than 6,000 coconut trees thereon. DOCTRINE: If seller does not appear to have violated the truth when he stated a belief, then there is no fraud. Also, if he is given a c hance to inspect the property, then there is no false representation. FACTS: Go Jocco sold 500 tons of coconut oil PMMC . Go Jocco guaranteed jthat the oil was 5& f.f.a. PMC was able to examine the oild's quality. They then sold the oil to Po rtsmouth. The contract had an express warranty, not only regarding 5% ffa but al so against impurities. When Portsmouth received it, the oil had impurities. Held : Go Jocco is not liable to PMC because their contract did not contain an expres s warranty against impurities aside from the stipulation that not more than 5 pe r cent of free fatty acid would be allowed. There was also no implied warranty s ince PMC was able to fully examine the oils. DOCTRINE: An intention to deceive o r mislead the purchaser of merchandise to his prejudice is an essential element of fraud. FACTS: Soledad and Ang entered a car-swapping scheme. Ang, being engaged in buy and sell of cars, sold the Mitsubishi GSR to Bugash and before it was re gistered under his name a writ of replevin was issued on the Mitsubishi GSR. Ang paid the mortgagee the balance amount and sought to recover from Soledad but fa iled. MTCC dismissed the case on prescription. RTC affirmed but granted Ang reco very based on equity. CA reversed. HELD: action has already prescribed. DOCTRINE : In declaring that he owned and had clean title to the vehicle, Soledad gave an implied warranty of title. In pledging that he "will defend the same from all c laims or any claim whatsoever [and] will save the vendee from any suit by the go vernment of the Republic of the Philippines," Soledad gave a warranty against ev iction. Action prescribed. The prescriptive period to file a breach thereof is s ix months after the delivery of the vehicle, following Art. 1571. FACTS: Levy He rmanos, Inc., sold to Lazaro Blas Gervacio, a Packard car. Gervacio made an init ial payment and executed a promissory note for the balance of P2,400 and mortgag e the car to secure the payment of the note. Gervacio failed to pay the note at its maturity, and Levy Hermanos foreclosed the mortgage. The car was sold at pub lic auction, at which Levy Hermanos was the highest bidder for P800. Thus, there was still a remaining balance of P1,600. Levy Hermanos filed a complaint for th e HELD: Gervacio should still pay because Recto law does not apply there being o nly one payment. DOCTRINE: Article 1454-A applies only to contracts of sale of p ersonal property in installment where there is failure to pay 2 or PMC V GOJUCO ANG V CA XIII. BREACH OF CONTYRACT LEVY HERMANOS V GERVACIO 9 Caveat Emptor buyer beware

BORBON V SERVICEWIDE more installments. If sale is not one on installments, but on straight term, in which the balance, after payment of the initial sum, should be paid in its total ity at the time specified in the promissory note, 1454-A does not apply. Rationa le for 1454-A: possible miscalculation of ability to pay Aim of the law are sale s where the price is payable in several installments, for it is in these cases t hat partial payments consist in relatively small amounts, constituting thus a gr eat temptation for improvident purchasers to buy beyond their means. There is no such temptation where the price is to be paid in cash, or partly in cash and pa rtly in one term since partial payments are not so small as to place purchasers off their guard and delude them to a miscalculation of their ability to pay. FAC TS: Borbons bought an Isuzu Crew Cab from Pangasinan Auto Mart under a promissor y note. Pangasinan Auto Mart assigned the note & chattel mortgage to Filinvest C redit Corporation, then to Servicewide. The Borbons failed to comply with their obligation to pay the installment . An action for replevin was instituted to for eclose the vehicle, which the TC granted along with liquidated damages and attor ney's fees. HELD: The award of liquidated damages is not proper bec all unpaid bala nce pertains to ALL other claims on the promissory note. DOCTRINE: The remedies u nder A1484 are not cumulative but alternative and exclusive. The argument is apt ly made. The phrase "any unpaid balance" can only mean the deficiency judgment t o which the mortgagee may be entitled to when the proceeds from the auction sale are insufficient to cover the "full amount of the secured obligations which . . . include interest on the principal, attorneys fees, expenses of collection, a nd the costs." The legislative intent is not to merely limit the proscription of any further action to the "unpaid balance of the principal" but to all other cl aims that may be likewise be called in for in the accompanying promissory note a gainst the buyer-mortgagor or his guarantor, including costs and attorneys fees . FACTS: E.M. Reyes executed a chattel mortgage on an automobile as security for the payment of P400 in favor of Manila Trading. Reyes failed to pay some of the instalments. This failure prompted Manila Trading to proceed with the foreclosu re of its chattel mortgage. The automobile was sold for P200 at a public auction and Reyes still had an unpaid balance. Manila Trading instituted an action for the recovery of it and questions constitutionality of Art 4122(Recto Law). HELD: Recto law is constitutional. DOCTRINE: The controlling purpose of Act No. 4122 is revealed to be to close the door to abuses committed in connection with the f oreclosure of chattel mortgages when sales were payable in installments. The Leg islature may change judicial methods and remedies for the enforcement of contrac ts, as it has done by the enactment of Act No. 4122, without unduly interfering with the obligation of the contracts, without sanctioning class legislation, and without a denial of the equal protection of the laws. FACTS: Cruz bought 1 unit Isuzu Diesel Bus from Filipinas and executed a promissory note. A chattel mortg age was also executed over the bus to secure the indebtedness. Since no down pay ment was made by Cruz, Filipinas required, and Cruz agreed to give, an additiona l security a Second Mortgage over a parcel of land. Cruz defaulted on his paymen ts. Filipinas then foreclosed the chattel mortgage on the bus. However, the proc eeds of the sale were not enough so they wanted to foreclose on the second secur ity. HELD: Filipinas cannot foreclose the 2nd security because it is barred by 1 484. MANILA TRADING V REYES CRUZ V FILIPINAS

DOCTRINE: Should the vendee or purchaser of a personal property default in the p ayment of two or more of the agreed installments, the vendor or seller has the o ption to avail of any one of these three remedies either to exact fulfillment by the purchaser of the obligation, or to cancel the sale, or to foreclose the mor tgage on the purchased personal property, if one was constituted. These remedies have been recognized as alternative, not cumulative, that the exercise of one w ould bar the exercise of the others. It has also been established that the forec losure and actual sale of a mortgaged chattel bars further recovery by the vendo r of any balance on the purchaser's outstanding obligation. To sustain Far East's ar gument about proceeding against a third person is to overlook the fact that if t he guarantor should be compelled to pay the balance of the purchase price, the g uarantor will in turn be entitled to recover what she has paid from the debtor. Ultimately, it will be the debtor-vendee who will be made to bear the payment of the balance of the price, despite the earlier foreclosure of the chattel mortga ge against him. The protection given by Art 1484 would be indirectly subverted. FACTS: Tajanlangit bought goods, which were subjected to a chattel mortgage, fro m Souther Motors. They paid thru promissory notes, promising to pay in installme nt. They defaulted. Sheriff levied, pursuant to an earlier court decision for co llection for the unpaid notes. The proceeds were insufficient to cover the purch ase price so another writ of execution was obtained. Tajanlangits seek to annul the writ saying its obligation was already satisfied by the first execution. HEL D: The first execution was for the collection of the unpaid obligation under the promissory notes, and not under a foreclosure under the chatter mortgage, South ern Motors can still levy Tajanlangits' other properties. DOCTRINE: The vendor had a right to select among the three remedies established in Article 1484. In choo sing to sue on the note, it was not thereby limited to the proceeds of the sale, on execution, of the mortgaged good. The vendor can still collect because the o ption chosen was not to foreclosure. FACTS: Spouses Nonato bought a car on insta lment, secured by promissory note and chattel mortgage over said car in favour o f vendor. For their failure to pay two or more instalments, the car was reposses sed by vendor's assignee (IFC). Despite repossession, IFC demanded payment of the balance of the price of the car. HELD: Art 1484 CC is applicable in this case (s ale of goods on instalment). The remedies there, (1) performance, (2) cancellati on, (3) foreclosure of chattel mortgage if any, are alternative, not cumulative; the exercise of one would bar the exercise of the others. DOCTRINE: Should the vendee or purchaser of a personal property default in the payment of two or more of the agreed installments, the vendor or seller has the option to avail of any of these three remedies-either to exact fulfillment by the purchaser of the obl igation, or to cancel the sale, or to foreclose the mortgage on the purchased pe rsonal property, if one was constituted. These remedies are alternative, not cum ulative; the exercise of one would bar the exercise of the others. YOU CANNOT HA VE YOUR CAKE AND EAT IT TOO! FACTS: Niu Kim Duan and Chan Fue Eng purchased from Delta Motor 3 units of `DAIKIN' air-conditioner all valued at P19,350.00. Buyers ex ecuted a promissory note and failed to pay at least 2 monthly installments. Delt a Motors prayed for the issuance of a writ of replevin, which the Court granted after Delta Motors posted the requisite bond. Delta is claiming for the remainin g balance. HELD: Delta is not entitled to the balance of the aircons that it suc cessfully repossessed. It sought judicial declaration that it had validly rescin ded the Deed of Conditional Sale and thus chose the 2nd remedy of Article 1484 i n seeking enforcement of its TAJANLANGIT V SOUTHERN MOTORS NONATO V IAC DELTA MOTOR V NUI KIM

contract with Buyers DOCTRINE: The seller in a sale of personal property payable in installments may exercise one of 3 remedies, namely, (1) exact fulfillment o f obligation if Buyer fails to pay; (2) cancel sale upon Buyer's failure to pay 2+ instalments 3) foreclose the chattel mortgage, if any, upon the Buyer's failure t o pay 2+ instalments. The 3 remedies are alternative and NOT cumulative. It canno t have its cake and eat it too. FACTS: Sapinoso bought from Northern Motors an Op el Kadett car and to secure payment thereof, he executed a chattel mortgage over the same car. He failed to pay some instalments but several payments were made. Northern filed a case against Sapisono, claiming it was availing of its option of extrajudicial foreclosure and prayed for the issuance of a writ of replevin, which is the first step toward foreclosure, upon its filing of the bond. After t he commencement of the action but before filing his answer, Sapisono made 2 paym ents. HELD: Northern need not give back the 2 payments of Sapisano. It is true t hat replevin is the first step towards foreclosure. However, since there was no foreclosure yet, then Northern has not yet chosen a relief. DOCTRINE: There is n o reason why a mortgagee should be barred from receiving payments before the act ual foreclosure, tendered voluntarily by the debtor-mortgagor who admits his ind ebtedness. FACTS: Saldaa bought 2 lots from Hermanos and Legarda's subdivision. Aft er 8 years (95 out of 120 monthly installments) of faithful compliance on due pa yments, Saldaa stopped payments leaving a balance from the purchase price. Saldaa wrote Hermanos saying he can't build on the lot because of Hermanos' failure to intr oduce improvements such as roads. Hermanos cancelled the contract, arguing that it is a contract to sell, since Saldaa failed to pay remaining installments. HELD : Since the payment was already more than the price of one lot, deliver that lot of Saldaaand Hermanos retain the other lot., another to be retained by Hermanos. Interest payments forfeited in favor of Hermanos. DOCTRINE: A1234 of CC: If th e obligation has been substantially performed in good faith, the obligor may rec over as though there had been a strict and complete fulfillment, less damages su ffered by the obligee," and in the interest of justice and equity. FACTS: Denni s and Rebecca Sevilla agreed to purchase from Casa Filipina Realty Corporation ( CFRC) a parcel of land in CFRC's subdivision. The Sevilla spouses failed to pay th e amortizations on time. They then wrote a letter to CFRC regarding the absence of any improvement in the subdivision, the claim of a bank against the lot and r equested a refund of all installment payments made on account of the contract. H ELD: Sevillas are entitled to a refund pursuant to Sec 23 of PD 957 becase notic e was already given notice regarding, among other things, the nondevelopment of the subdivision, and demanded for refund. Section 23 does not require that a not ice be given first before a demand for refund can be made. The notice and the de mand can be made in the same letter or communication. DOCTRINE: P.D. 957 was iss ued in the wake of numerous reports that many real estate subdivision developers and/or sellers "have reneged on their representations and obligations to provid e and maintain properly subdivisions" for the health and safety of home and lot buyers. It was designed to stem the tide of "fraudulent manipulations perpetrat ed by unscrupulous subdivision and condominium sellers and operators, such as fa ilure to deliver titles to buyers or titles free from liens and encumbrances." NORTHERN MOTORS V SAPINOSO LEGARDA V SALDANA CASA FILIPINA V OP

MCLAUGHLIN V CA Should the notice requirement provided for in Sec. 23 be construed as required t o be given before a buyer desists from further paying amortizations, the intent of the law to protect subdivision lot buyers will tend to be defeated. FACTS: Mc laughlin and Flores entered into a contract of conditional sale of real property with the stipulated purchase price payable on installments. Flores defaulted in the payment of the installments, so Mclaughlin filed a complaint for the rescis sion of the deed of conditional sale. However, the suit was eventually compromis ed, with Flores agreeing on a scheduled payment of the balance of the purchase p rice. Such compromise agreement also provided that in case of failure of the buy er to comply with the terms of payment, all payments previously made shall be fo rfeited in favor of the Mclaughlin as liquidated damages. Flores still failed to pay on the dates provided in the compromise agreement, so Mclaughlin refused to accept further payment and eventually filed a motion for the writ of execution for the rescission of the contract. HELD: McLaughlin cannot rescind the contract and forfeit all the installments since Mclaughlin could cancel the contract onl y 30 days after the notice of cancellation. Since the tender of payment of the b alance of the purchase price was made within the 30 day period, this prevented t he cancellation of the contract. DOCTRINE: (from Villanueva) McLaughlin provides two basic doctrines applicable said law: 1. The law seems to require rescission and cancellation to be both by notarial act, McLaughlin would hold notarial act as merely applicable to rescission, whereas notice of cancellation need not be by notarial act. 2. McLaughlin would hold that even after the expiration of the gr ace period provided by the Law, the buyer still can prevent rescission or cancel lation of the contract w/in the 30-day pd when rescission or cancellation is to take effect. McLaughlin thus provides for two grace periods: 1. The one provided for expressly by the Law, which is a min of 60 days 2. The period before the re scission or cancellation actually takes effect.