GENERAL PRINCIPLES:

REYES VS TUPARAN
FACTS
Petitioner Mila Reyes owns a three-storey commercial
building in Valenzuela City. Respondent, Victoria
Tuparan leased a space on said building for a monthly
rental of P4, 000. Aside from being a tenant,
respondent also invested in petitioner's financing
business. On June 20, 1988, Petitioner borrowed P2
Million from Farmers Savings and Loan Bank (FSL Bank)
and mortgaged the building and lot (subject real
properties). Reyes decided to sell the property for P6.5
Million to liquidate her loan and finance her business.
Respondent offered to conditionally buy the real
properties for P4.2 Million on installment basis without
interest and to assume the bank loan. The conditions
are the following:
1. Sale will be cancelled if the petitioner can find a
buyer of said properties for the amount of P6.5 Million
within the next three months. All payments made by
the respondent to the petitioner and the bank will be
refunded to Tuparan with an additional 6% monthly
interest.
2. Petitioner Reyes will continue using the space
occupied by her drug store without rentals for the
duration of the installment payments.
3. There will be a lease for 15 years in favor of Reyes
for a monthly rental of P8, 000 after full payment has
been made by the defendant.
4. The defendant will undertake the renewal and
payment of the fire insurance policies of the 2
buildings, following the expiration of the current
policies, up to the time the respondent has fully paid
the purchase price.
They presented the proposal for Tuparan to assume the
mortgage to FSL Bank. The bank approved on the
condition that the petitioner would remain as co-maker
of the mortgage obligation.
Petitioner's Contention
Under their Deed of Conditional Sale, the respondent is
obliged to pay a lump sum of P1.2 Million in three fixed
installments. Respondent, however defaulted in the
payment of the installments. To compensate for her
delayed payments, respondent agreed to pay
petitioner monthly interest. But again, respondent
failed to fulfill this obligation. The petitioner further
alleged that despite her success in finding another
buyer according to their conditional sale agreement,
respondent refused to cancel their transaction. The
respondent also neglected to renew the fire insurance
policy of the buildings.
Respondent's Answer
Respondent alleges that the deed of Conditional Sale of
Real Property with Assumption of Mortgage was
actually a pure and absolute contract of sale with a
term period. It could not be considered a conditional
sale because the performance of the obligation therein
did not depend upon a future and uncertain event. She
also averred that she was able to fully pay the loan and
secure the release of the mortgage. Since she also paid
more than the P4.2 Million purchase price, rescission
could not be resorted to since the parties could no
longer be restored to their original positions.

ISSUE
Can the transaction or obligation be rescinded given
that the conditions were not satisfied?
RULING(S)
RTC
The deed of conditional sale was a contract to sell. It
was of the opinion that although the petitioner was
entitled to a rescission of the contract, it could not be
permitted because her non-payment in full of the
purchase price may not be considered as substantial
and fundamental breach of the contract as to defeat
the object of the parties in entering into the contract.
The RTC believed that respondent showed her sincerity
and willingness to settle her obligation. Hence, it would
be more equitable to give respondent a chance to pay
the balance plus interest within a given period of time.
The court ordered the respondent to pay the petitioner
the unpaid balance of the purchase price.
CA
The CA agreed with the RTC that the remedy of
rescission could not apply because the respondents
failure to pay the petitioner the balance of the
purchase price in the total amount of 805,000.00 was
not a breach of contract, but merely an event that
prevented the seller (petitioner) from conveying title to
the purchaser (respondent). Since respondent had
already paid a substantial amount of the purchase
price, it was but right and just to allow her to pay the
unpaid balance of the purchase price plus interest.
SC
The SC agrees that the conditional sale is a contract to
sell. The title and ownership of the subject properties
remains with the petitioner until the respondent fully
pays the balance of the purchase price and the
assumed mortgage obligation. Without respondents
full payment, there can be no breach of contract to
speak of because petitioner has no obligation yet to
turn over the title. The court agrees that a substantial
amount of the purchase price has already been paid. It
is only right and just to allow Tuparan to pay the said
unpaid balance of the purchase price to Reyes.
Granting that a rescission can be permitted under
Article 1191, the Court still cannot allow it for the
reason that, considering the circumstances, there was
only a slight or casual breach in the fulfillment of the
obligation. The court considered fulfillment of 20% of
the purchase price is NOT a substantial breach. Unless
the parties stipulated it, rescission is allowed only
when the breach of the contract is substantial and
fundamental to the fulfillment of the obligation.
Whether the breach is slight or substantial is largely
determined by the attendant circumstance. As for the
6% interest, petitioner failed to substantiate her claim
that the respondent committed to pay it. Petition is
denied.
RELEVANT JURISPRUDENCE
Art. 1458. By the contract of sale, one of the
contracting parties obligates himself to transfer the
ownership of and to deliver a determinate thing, and
the other to pay therefore a price certain in money or
its equivalent. The essential elements of a contract of
sale are the following:
a) Consent or meeting of the minds, that is, consent to
transfer ownership in exchange for the price;
b) Determinate subject matter; and

c) Price certain in money or its equivalent.

In a contract to sell, the seller explicitly reserves the
transfer of title to the prospective buyer. The first
element (in the contract of sale) is missing. There is no
consent yet to the transfer of ownership of the
property. (Nabus v Joaquin). The payment of the price
is a positive suspensive condition, failure of which
is not a breach but an event that prevents the
obligation of the vendor to convey title from becoming
effective. (Chua v CA)
Art. 1191 does not apply in a contract to sell since the
breach contemplated in said article is an obligors
failure to comply with an existing obligation. It does not
apply in the failure of a condition to make that
obligation arise.
STARBRIGHT
SALES
ENTERPRISES,
INC.,
PETITIONER,
VS.
PHILIPPINE
REALTY
CORPORATION, MSGR. DOMINGO A. CIRILOS,
TROPICANA PROPERTIES AND DEVELOPMENT
CORPORATION
AND
STANDARD
REALTY
CORPORATION, RESPONDENTS.
[G.R. No. 177936, January 18, 2012]
ABAD, J.:
Facts:
On April 17, 1988 Ramon Licup wrote Msgr. Domingo A.
Cirilos, offering to buy three contiguous parcels of land
in Paraaque that The Holy See and Philippine Realty
Corporation (PRC) owned for P1,240.00 per square
meter. Licup accepted the responsibility for removing
the illegal settlers on the land and enclosed a check for
P100,000.00 to "close the transaction. He undertook
to pay the balance of the purchase price upon
presentation of the title for transfer and once the
property has been cleared of its occupants. Msgr.
Cirilos, representing The Holy See and PRC, signed his
name on the conforme portion of the letter and
accepted the check. But the check could not be
encashed due to Licup's stop-order payment. Licup
wrote Msgr. Cirilos on April 26, 1988, requesting that
the titles to the land be instead transferred to
petitioner Starbright Sales Enterprises, Inc. (SSE). He
enclosed a new check for the same amount. SSE's
representatives, Mr. and Mrs. Cu, did not sign the letter.
On November 29, 1988 Msgr. Cirilos wrote SSE,
requesting it to remove the occupants on the property
and, should it decide not to do this, Msgr. Cirilos would
return to it the P100,000.00 that he received. On
January 24, 1989 SSE replied with an "updated
proposal. It would be willing to comply with Msgr.
Cirilos' condition provided the purchase price is
lowered to P1,150.00 per square meter.
On January 26, 1989 Msgr. Cirilos wrote back, rejecting
the "updated proposal." He said that other buyers were
willing to acquire the property on an "as is, where is"
basis at P1,400.00 per square meter. He gave SSE
seven days within which to buy the property at
P1,400.00 per square meter, otherwise, Msgr. Cirilos
would take it that SSE has lost interest in the same. He
enclosed a check for P100,000.00 in his letter as
refund of what he earlier received. The property was
eventually sold to Tropicana Properties and then sold
Standard Realty.
Issue:

Whether or not there is a perfected contract existing

between SSE and land owners, represented by Msgr.
Cirilos.
Ruling:
Three elements are needed to create a perfected
contract: 1) the consent of the contracting parties; (2)
an object certain which is the subject matter of the
contract; and (3) the cause of the obligation which is
established. Under the law on sales, a contract of sale
is perfected when the seller, obligates himself, for a
price certain, to deliver and to transfer ownership of a
thing or right to the buyer, over which the latter
agrees. From that moment, the parties may demand
reciprocal performance.
The Court believes that the letter between Licup and
Msgr. Cirilos, the representative of the property's
owners, constituted a perfected contract. However,
when Licup ordered to stop his deposit and instead
transferred the property to SSE, a novation took place.
Novation serves two functions - one is to extinguish an
existing obligation, the other to substitute a new one in
its place - requiring concurrence of four requisites: 1) a
previous valid obligation; 2) an agreement of all parties
concerned to a new contract; 3) the extinguishment of
the old obligation; and 4) the birth of a valid new
obligation. In the given case, it was noted that the
signatures present during Licup and Msgr. Cirilos
agreement are not present in the letter of agreement
between SSE and Msgr. Cirilos. SSE cannot revert to
the original terms stated in Licup's letter to Msgr.
Cirilos since it was not privy to such contract. The
parties to it were Licup and Msgr. Cirilos. Under the
principle of relativity of contracts, contracts can only
bind the parties who entered into it.
PRICE
DEL PRADO VS CABALLERO
Several parcels of land, including Cadastral Lot No.
11909, were adjudicatedin favor of Spouses Antonio
and Leonarda Caballero in 1985; hence, the
courtordered for the issuance of the decree of
registration and the corresponding titles of the lots in
favor of the Caballeros.On June 11, 1990, Spouses
Caballero sold to Carmen del Prado, Cadastral LotNo.
11909 on the basis of the tax declaration covering the
property. On March 20,1991, petitioner filed in the
same
cadastral
proceedings
a
"Petition
for
Registrationof Document Under PD 1529" in order that
a certificate of title be issued in hername, covering the
whole Lot No. 11909, which is in excess of the allotted
area tobe sold. In the petition, she alleged that the
tenor of the instrument of saleindicated that the sale
was for a lump sum, in which case, the vendor was
bound todeliver all that was included within said
boundaries even when it exceeded the areaspecified in
the contract.
Issue
WON the petitioners recourse, by filing the petition for
registration in thesame cadastral case, was proper.
Ruling
Petitioners recourse, by filing the petition for
registration in the samecadastral case, was improper. It
is a fundamental principle in land registration that
acertificate of title serves as evidence of an
indefeasible and incontrovertible title tothe property in

favor of the person whose name appears therein.

Suchindefeasibility commences after one year from the
date of entry of the decree of registration. Inasmuch as
the petition for registration of document did not
interruptthe running of the period to file the
appropriate petition for review and consideringthat the
prescribed one-year period had long since expired, the
decree of registration, as well as the certificate of title
issued
in
favor
of
respondents,
hadbecome
incontrovertible.In addition, what really defines a piece
of ground is not the area, calculatedwith more or less
certainty, mentioned in its description, but the
boundaries thereinlaid down, as enclosing the land and
indicating its limits. However, numerical dataare not
the sole gauge of unreasonableness of the excess or
deficiency in area. Inthe instant case, the parties
agreed on the purchase price of P
40,000.00 for apredetermined area of 4,000 sq m, with
the specified boundaries. Clearly, thediscrepancy of
10,475 sq m cannot be considered a slight difference in
quantity. Itis not a reasonable excess or deficiency that
should be deemed included in thedeed of sale
PROHIBITION
FUENTES vs ROCA
FACTS: On, Oct 11, 1982, Tarciano Roca bought a 358square meter lot in Zambales from his mother. Six
years later in 1988, Tarciano offered to sell the lot to
the petitioners Fuentes spouses through the help of
Atty. Plagata who would prepare the documents and
requirements to complete the sale. In the agreement
between Tarciano and Fuentes spouses there will be a
Php 60,000 down payment and Php 140,000 will be
paid upon the removal of Tarciano of certain structures
on the land and after the consent of the estranged wife
of Tarciano, Rosario, would be attained. Atty. Plagata
thus went about to complete such tasks and claimed
that he went to Manila to get the signature of Rosario
but notarized the document at Zamboanga . The deed
of sale was executed January 11, 1989. As time passed,
Tarciano and Rosario died while the Fuentes spouses
and possession and control over the lot. Eight years
later in 1997, the children of Tarciano and Rosario filed
a case to annul the sale and reconvey the property on
the ground that the sale was void since the consent of
Rosario was not attained and that Rosarios signature
was a mere forgery. The Fuentes spouses claim that
the action has prescribed since an action to annul a
sale on the ground of fraud is 4 years from discovery.
The RTC ruled in favor of the Fuentes spouses ruling
that there was no forgery, that the testimony of Atty.
Plagata who witnessed the signing of Rosario must be
given weight, and that the action has already
prescribed.
On the other hand, the CA reversed the ruling of the CA
stating that the action has not prescribed since the
applicable law is the 1950 Civil Code which provided
that the sale of Conjugal Property without the consent
of the other spouse is voidable and the action must be
brought within 10 years. Given that the transaction
was in 1989 and the action was brought in 1997 hence
it was well within the prescriptive period.

ISSUES: 1. Whether or not Rosarios signature on the

document of consent to her husband Tarcianos sale of
their conjugal land to the Fuentes spouses was forged;
2. Whether or not the Rocas action for the declaration
of nullity of that sale to the spouses already prescribed;
and
3. Whether or not only Rosario, the wife whose consent
was not had, could bring the action to annul that sale.
RULING: 1. The SC ruled that there was forgery due to
the difference in the signatures of Rosario in the
document giving consent and another document
executed at the same time period. The SC noted that
the CA was correct in ruling that the heavy handwriting
in the document which stated consent was completely
different from the sample signature. There was no
evidence provided to explain why there was such
difference in the handwriting.
2. Although Tarciano and Rosario was married during
the 1950 civil code, the sale was done in 1989, after
the effectivity of the Family Code. The Family Code
applies to Conjugal Partnerships already established at
the enactment of the Family Code. The sale of conjugal
property done by Tarciano without the consent of
Rosario is completely void under Art 124 of the family
code. With that, it is a given fact that assailing a void
contract never prescribes. On the argument that the
action has already prescribed based on the discovery
of the fraud, that prescriptive period applied to the
Fuentes spouses since it was them who should have
assailed such contract due to the fraud but they failed
to do so. On the other hand, the action to assail a sale
based on no consent given by the other spouse does
not prescribe since it is a void contract.
3. It is argued by the Spouses Fuentes that it is only
the spouse, Rosario, who can file such a case to assail
the validity of the sale but given that Rosario was
already dead no one could bring the action anymore.
The SC ruled that such position is wrong since as
stated above, that sale was void from the beginning.
Consequently, the land remained the property of
Tarciano and Rosario despite that sale. When the two
died, they passed on the ownership of the property to
their heirs, namely, the Rocas. As lawful owners, the
Rocas had the right, under Article 429 of the Civil Code,
to exclude any person from its enjoyment and disposal.
OBLIGATION OF THE VENDOR
HEIRS OF PAULINO
ESPIDOL

ATIENZA versus

DOMINGO P.

G.R. No. 180665, Aug. 11,2010

Facts:
This case is about the legal consequences when a
buyer in a contract to sell on installment fails to make
the next payments that he promised.

On August 12, 2002 the Atienzas and respondent

Domingo P. Espidol entered into a contract called
Kasunduan sa Pagbibili ng Lupa na may PaunangBayad (contract to sell land with a down payment)
covering the property. They agreed on a price, payable
in three installments.
When the Atienzas demanded payment of the second
installment of P1,750,000.00 in December 2002,
however, respondent Espidol could not pay it. Claiming
that Espidol breached his obligation, on February 21,
2003 the Atienzas filed a complaint for the annulment
of their agreement with damages before the Regional
Trial Court (RTC)of Cabanatuan City in a Civil Case.
Issue:
Whether or not the Atienzas were entitled to the
cancellation of the contract to sell they entered into
with respondent Espidol on the ground of the latters
failure to pay the second installment when it fell due.
Held:
The Court declares the Kasunduan sa Pagbibili ng Lupa
na may Paunang-Bayad between petitioner Heirs of
Paulino Atienza and respondent Domingo P. Espidol
dated August 12, 2002 cancelled and the Heirs
obligation under it non-existent. Regarding the right to
cancel the contract for non-payment of an installment,
there is need to initially determine if what the parties
had was a contract of sale or a contract to sell. In a
contract of sale, the title to the property passes to the
buyer upon the delivery of the thing sold. In a contract
to sell, on the other hand, the ownership is, by
agreement, retained by the seller and is not to pass to
the vendee until full payment of the purchase price. In
the first place, since Espidol failed to pay the
installment on a day certain fixed in their agreement,
the Atienzas can afterwards validly cancel and ignore
the contract to sell because their obligation to sell
under it did not arise. Since the suspensive condition
did not arise, the parties stood as if the conditional
obligation had never existed.

Delivery
EQUATORIAL REALTY DEVELOPMENT, INC., vs. MAYFAIR
THEATER, INC.
Posted on September 21, 2013 by winnieclaire
Standard
[G.R. No. 133879. November 21, 2001.]
FACTS:
Mayfair Theater, Inc. was a lessee of portions of a
building owned by Carmelo & Bauermann, Inc. Their
lease contracts of 20 years (1. which covered a portion
of the second floor and mezzanine of a two-storey
building with about 1,610 square meters of floor area,
which respondent used as a movie house known as

Maxim Theater 2. two store spaces on the ground floor

and the mezzanine, with a combined floor area of
about 300 square meters also used as a movie house
Miramar Theater)
Lease contracts contained a provision granting Mayfair
a right of first refusal to purchase the subject
properties.
However, before the contracts ended, the subject
properties were sold for P11,300 by Carmelo to
Equatorial Realty Development, Inc.
This prompted Mayfair to file a case for the annulment
of the Deed of Absolute Sale between Carmelo and
Equatorial, specific performance and damages.
In 1996, the Court ruled in favor of Mayfair.
Barely five months after Mayfair had submitted its
Motion for Execution, Equatorial filed an action for
collection of sum of money against Mayfair claiming
payment of rentals or reasonable compensation for the
defendants use of the subject premises after its lease
contracts had expired.
Maxim Theater contract expired on May 31, 1987,
while the Lease Contract covering the premises
occupied by Miramar Theater lapsed on March 31,
1989.
The lower court debunked the claim of Equatorial for
unpaid back rentals, holding that the rescission of the
Deed of Absolute Sale in the mother case did not
confer on Equatorial any vested or residual propriety
rights, even in expectancy.
It further ruled that the Court categorically stated that
the Deed of Absolute Sale had been rescinded
subjecting the present complaint to res judicata.
Hence, Equatorial filed the present petition.

ISSUE: whether Equatorial was the owner of the subject

property and could thus enjoy the fruits or rentals
therefrom
HELD: NO.
CIVIL LAW; PROPERTY; CIVIL FRUIT OF OWNERSHIP;
RENTALS. Rent is a civil fruit that belongs to the
owner of the property producing it by right of
accession. Consequently and ordinarily, the rentals
that fell due from the time of the perfection of the sale
to petitioner until its rescission by final judgment
should belong to the owner of the property during that
period.
SALES; OWNERSHIP OF THE THING SOLD IS
TRANSFERRED, NOT BY CONTRACT ALONE, BUT BY
TRADITION OR DELIVERY. By a contract of sale, one
of the contracting parties obligates himself to transfer
ownership of and to deliver a determinate thing and
the other to pay therefor a price certain in money or its
equivalent. Ownership of the thing sold is a real right,
which the buyer acquires only upon delivery of the
thing to him in any of the ways specified in Articles
1497 to 1501, or in any other manner signifying an
agreement that the possession is transferred from the
vendor to the vendee. This right is transferred, not by
contract alone, but by tradition or delivery. Non nudis
pactis sed traditione dominia rerum transferantur.
THERE IS DELIVERY WHEN THE THING SOLD IS PLACED
UNDER THE CONTROL AND POSSESSION OF THE
VENDEE. [T]here is said to be delivery if and when

the thing sold is placed in the control and possession

of the vendee. Thus, it has been held that while the
execution of a public instrument of sale is recognized
by law as equivalent to the delivery of the thing sold,
such constructive or symbolic delivery, being merely
presumptive, is deemed negated by the failure of the
vendee to take actual possession of the land sold.
Delivery has been described as a composite act, a
thing in which both parties must join and the minds of
both parties concur. It is an act by which one party
parts with the title to and the possession of the
property, and the other acquires the right to and the
possession of the same. In its natural sense, delivery
means something in addition to the delivery of
property or title; it means transfer of possession. In the
Law on Sales, delivery may be either actual or
constructive, but both forms of delivery contemplate
the absolute giving up of the control and custody of
the property on the part of the vendor, and the
assumption of the same by the vendee.

ID.; OBLIGATIONS AND CONTRACTS; RESCISSIBLE

CONTRACTS; NOT ONLY THE LAND AND BUILDING SOLD
SHALL BE RETURNED TO THE SELLER BUT ALSO THE
RENTAL PAYMENTS PAID, IF ANY. [T]he point may be
raised that under Article 1164 of the Civil Code,
Equatorial as buyer acquired a right to the fruits of the
thing sold from the time the obligation to deliver the
property to petitioner arose. That time arose upon the
perfection of the Contract of Sale on July 30, 1978,
from which moment the laws provide that the parties
to a sale may reciprocally demand performance. Does
this mean that despite the judgment rescinding the
sale, the right to the fruits belonged to, and remained
enforceable by, Equatorial? Article 1385 of the Civil
Code answers this question in the negative, because
[r]escission creates the obligation to return the things
which were the object of the contract, together with
their fruits, and the price with its interest; . . . . Not
only the land and building sold, but also the rental
payments paid, if any, had to be returned by the buyer.

ID.; NOT PRESENT IN CASE AT BAR. [T]heoretically, a

rescissible contract is valid until rescinded. However,
this general principle is not decisive to the issue of
whether Equatorial ever acquired the right to collect
rentals. What is decisive is the civil law rule that
ownership is acquired, not by mere agreement, but by
tradition or delivery. Under the factual environment of
this controversy as found by this Court in the mother
case, Equatorial was never put in actual and effective
control or possession of the property because of
Mayfairs timely objection.

ID.; SALES; CONTRACT OF SALE; RENTAL PAYMENTS

MADE
SHOULD
NOT
BE
CONSTRUED
AS A
RECOGNITION OF THE BUYER AS NEW ORDER BUT
MERELY TO AVOID IMMINENT EVICTION; CASE AT BAR.
The fact that Mayfair paid rentals to Equatorial
during the litigation should not be interpreted to mean
either actual delivery or ipso facto recognition of
Equatorials title. The CA Records of the mother case
show that Equatorial as alleged buyer of the
disputed properties and as alleged successor-ininterest of Carmelos rights as lessor submitted two
ejectment suits against Mayfair. Filed in the
Metropolitan Trial Court of Manila, the first was
docketed as Civil Case No. 121570 on July 9, 1987; and
the second, as Civil Case No. 131944 on May 28, 1990.
Mayfair eventually won them both. However, to be able
to maintain physical possession of the premises while
awaiting the outcome of the mother case, it had no
choice but to pay the rentals. The rental payments
made by Mayfair should not be construed as a
recognition of Equatorial as the new owner. They were
made merely to avoid imminent eviction.

ID.; EXECUTION OF CONTRACT OF SALE AS FORM OF

CONSTRUCTIVE DELIVERY HOLDS TRUE ONLY WHEN
THERE IS NO IMPEDIMENT THAT MAY PREVENT THE
PASSING OF THE PROPERTY FROM THE VENDOR TO THE
VENDEE. From the peculiar facts of this case, it is
clear that petitioner never took actual control and
possession of the property sold, in view of respondents
timely objection to the sale and the continued actual
possession of the property. The objection took the form
of a court action impugning the sale which, as we
know, was rescinded by a judgment rendered by this
Court in the mother case. It has been held that the
execution of a contract of sale as a form of constructive
delivery is a legal fiction. It holds true only when there
is no impediment that may prevent the passing of the
property from the hands of the vendor into those of the
vendee. When there is such impediment, fiction yields
to reality the delivery has not been effected.
Hence, respondents opposition to the transfer of the
property by way of sale to Equatorial was a legally
sufficient impediment that effectively prevented the
passing of the property into the latters hands.
ID.; EXECUTION OF PUBLIC INSTRUMENT GIVES RISE
ONLY TO A PRIMA FACIE PRESUMPTION OF DELIVERY.
The execution of a public instrument gives rise, . . .
only to a prima facie presumption of delivery. Such
presumption is destroyed when the instrument itself
expresses or implies that delivery was not intended; or
when by other means it is shown that such delivery
was not effected, because a third person was actually
in possession of the thing. In the latter case, the sale
cannot be considered consummated.

STATUTORY CONSTRUCTION; GENERAL PROPOSITIONS

DO NOT DECIDE SPECIFIC CASES. As pointed out by
Justice Holmes, general propositions do not decide
specific cases. Rather, laws are interpreted in the
context of the peculiar factual situation of each case.
Each case has its own flesh and blood and cannot be
decided on the basis of isolated clinical classroom
principles.
CIVIL LAW; SALES; VALID FROM INCEPTION BUT
JUDICIALLY RESCINDED BEFORE IT COULD BE
CONSUMMATED; CASE AT BAR. [T]he sale to
Equatorial may have been valid from inception, but it
was judicially rescinded before it could be
consummated. Petitioner never acquired ownership,
not because the sale was void, as erroneously claimed
by the trial court, but because the sale was not
consummated by a legally effective delivery of the
property sold.
ID.; ID.; BUYER IN BAD FAITH; NOT ENTITLED TO ANY
BENEFIT; ENTITLED SOLELY TO THE RETURN OF THE
PURCHASE PRICE; MUST BEAR ANY LOSS.
[A]ssuming for the sake of argument that there was

valid delivery, petitioner is not entitled to any benefits

from the rescinded Deed of Absolute Sale because of
its bad faith. This being the law of the mother case
decided in 1996, it may no longer be changed because
it has long become final and executory. . . . Thus,
petitioner was and still is entitled solely to the return of
the purchase price it paid to Carmelo; no more, no less.
This Court has firmly ruled in the mother case that
neither of them is entitled to any consideration of
equity, as both took unconscientious advantage of
Mayfair. In the mother case, this Court categorically
denied the payment of interest, a fruit of ownership. By
the same token, rentals, another fruit of ownership,
cannot be granted without mocking this Courts en
banc Decision, which has long become final.
Petitioners claim of reasonable compensation for
respondents use and occupation of the subject
property from the time the lease expired cannot be
countenanced. If it suffered any loss, petitioner must
bear it in silence, since it had wrought that loss upon
itself. Otherwise, bad faith would be rewarded instead
of punished.

ID.; ID.; ID.; ID.; APPLICABLE IN CASE AT BAR. Suffice

it to say that, clearly, our ruling in the mother case
bars petitioner from claiming back rentals from
respondent. Although the court a quo erred when it
declared void from inception the Deed of Absolute
Sale between Carmelo and petitioner, our foregoing
discussion supports the grant of the Motion to Dismiss
on the ground that our prior judgment in GR No.
106063 has already resolved the issue of back rentals.
On the basis of the evidence presented during the
hearing of Mayfairs Motion to Dismiss, the trial court
found that the issue of ownership of the subject
property has been decided by this Court in favor of
Mayfair. . . . Hence, the trial court decided the Motion
to Dismiss on the basis of res judicata, even if it erred
in interpreting the meaning of rescinded as
equivalent to void. In short, it ruled on the ground
raised; namely, bar by prior judgment. By granting the
Motion, it disposed correctly, even if its legal reason for
nullifying the sale was wrong.