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Sales Case Digest
Sales Case Digest
for the system manufactured and installed will depend greatly on the particular
plans and specifications agreed upon with the customers.
same depending upon its quality. The fact that the exact number of cavans of palay
to be delivered has not been determined does not affect the perfection of the
contract. Article 1349 of the New Civil Code provides: "The fact that the quantity is
not determinate shall not be an obstacle to the existence of the contract, provided
it is possible to determine the same, without the need of a new contract between
the parties." In this case, there was no need for NFA and Soriano to enter into a new
contract to determine the exact number of cavans of palay to be sold. Soriano can
deliver so much of his produce as long as it does not exceed 2,640 cavans. From
the moment the contract of sale is perfected, it is incumbent upon the parties to
comply with their mutual obligations or "the parties may reciprocally demand
performance" thereof.
RULING: Yes, encargado was a tenant. The Court discerns no reversible error in the
finding and conclusion of the trial court that the unnamed encargado on the lands in
question is actually a tenant or agricultural lessee. The bases of this ineluctable
conclusion are not hard to so, as succinctly point out by the court a quo, the
encargado is staying in his own existing house thereon, and subject agricultural
land is planted with coffee and other plants not only by the encargado but also by
his deceased parents. The court held that there is no basis for rescinding the
contract because the removal of the encargado was not a condition precedent to
the contract of sale. Rather it was one alternative periods of payment of the
2nd installment given by the seller himself to the buyers. Secondly, even granting
that it was indeed a legal status of the encargado, the lower court was rash in
holding that the encargado was a tenant of the land in question. The petition is
hereby granted and the decision of the CA is reversed and set aside. Petitioners are
ordered to pay the full 75% balance.
City Treasurer of Quezon City executed a final deed of sale of said lands and the
improvements thereon. Said final deed of sale was also registered in the Office of
the Register of Deeds of Quezon City. Later on, Duazo filed a petition for
consolidation of ownership. The appellate court upheld the tax sale of the real
properties at which Duazo acquired the same and her ownership upon Vda. de
Gordons failure to redeem the same, having found the sale to have been conducted
under the direction and supervision of the City Treasurer of Quezon City after the
proper procedure and legal formalities had been duly accomplished. The combined
assessed value of the two parcels of land is P16,800.00. The price paid at the public
sale is P10,500.00. The residential house on the land is assessed at P45,580.00. But
the assessment was made in 1961. The present value of the residential house must
be much less now considering the depreciation for over ten years. While the price of
P10,500.00 is less than the total assessed value of the land and the improvement
thereon, said price cannot be considered so grossly inadequate as to be shocking to
the conscience of the court. The appellate court's decision, mere inadequacy of the
price alone is not sufficient ground to annul the public sale.
ISSUE: Whether or not the price is grossly inadequate as to justify the setting aside
of public sale.
RULING: No, gross inadequacy of the purchase price is not sufficient ground to
annul the public sale. As the court held in Velasquez vs. Coronet, alleged gross
inadequacy of the price is not material when law gives the owner the right to
redeem as when a sale is made at public auction, upon the theory that the lesser
the price the easier it is for the owner to effect the redemption.
FACTS: Domingo Melad owned 2 lots in Cagayan, a residential lot and a farm lot.
Danguilan and Apolonia Melad both claim rights over the said lots.
Melads contends: based on a Deed of Sale signed by Domingo. This sale was
supposedly entered into by her mother when she was just a kid, the payment for
such sale earned by her mother at the Tabacalera Factory. She also claimed that
she was the illegitimate daughter of Melad, who lived with them until he died. She
explained that she vacated the place because Melad asked her permission to
cultivate the land as her tenant who would deliver pne half of the harvest to her.
But she filed a complaint since the deliveries have stopped. Danguilans contends:
Donations in 2 private instruments were made by Domingo to him and his wife
(Domingos niece), in exchange for taking care of the old man, and cultivating his
land and with the understanding that he would bury him upon his death.
ISSUE: Whether or not the sale was consummated.
RULING: No, the sale was not consummated. Even assuming the validity of the
deed of sale, the record shows that the private respondent did not take possession
of the disputed properties and indeed waited until to file the action for recovery of
the lands from the petitioner. If she did have possession, she transferred the same
to Danguilan, by her own admission. She failed to show that she consummated the
contract of sale by actual delivery of the properties to her and actual
possession thereof in the concept of purchaser-owner. As to the argument that
symbolic delivery was effected through the deed of sale, the Code imposes upon
the vendor the obligation to deliver the thing sold and such is done when it is placed
in the hands and possession of the vendee. In order that symbolic delivery may
produce the effect of tradition, control over the thing sold is necessary and not just
ownership and right of possession
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EQUATORIAL REALTY vs. MAYFAIR
264 scra 482
FACTS: Petitioner Carmelo and Bauermann Inc. leased its parcel of land with 2storey building to respondent Mayfair Theater Inc. They entered a contract which
provides that if the lessor should desire to sell the leased premises, the lessee shall
be given 30-days exclusive option to purchase the same. Carmelo
informed Mayfair that it will sell the property to Equatorial. Mayfair made known its
interest to buy the property but only to the extent of the leased premises.
Notwithstanding Mayfairs intention, Carmelo sold the property to Equatorial.
ISSUE: Whether or not the sale of the property to Equatorial is valid.
RULING: No, the sale of the property to Equatorial is not valid. The sale of the
property should be rescinded because Mayfair has the right of first refusal. Both
Equatorial and Carmelo are in bad faith because they knew of the stipulation in the
contract regarding the right of first refusal. The stipulation is a not an option
contract but a right of first refusal and as such the requirement of a separate
consideration for the option, has no applicability in the instant case. The
consideration is built in the reciprocal obligation of the parties. In reciprocal
contract, the obligation or promise of each party is the consideration for that of the
other. (Promise to lease in return of the right to first refusal). With regard to the
impossibility of performance, only Carmelo can be blamed for not including the
entire property in the right of first refusal. Court held that Mayfair may not have the
option to buy the property, not only the leased area but the entire property.
invoice and the registration of the vehicle in the name of Alberto Nepales with the
Land Registration Commission was not to transfer the ownership and dominion over
the motorcycle to him, but only to comply with the requirements of the DBP for
processing private respondent's motorcycle loan. The circumstances in the case
itself more than amply rebut the disputable presumption of delivery upon which
Norkis anchors its defense to Nepales' action.
RULING: No, the sale in public auction is not valid. If Art. 1544 had been applied;
the judgment should be rendered in favor of Radiowealth being the one who
registered the land first. But since the subject land is an unregistered land, a
different rule should apply.
RULING: No, said respondent spouses were likewise the first to register the sale
with the right of repurchase in their favor under the Register of Deeds. They could
not register the absolute deed of sale in their favor and obtain the corresponding
transfer certificate of title because at that time the sellers duplicate certificate was
still with the bank. But there is no question and the lower courts so found
conclusively as a matter of fact, that when petitioner Cruz succeeded in registering
the later sale in his favor, he knew and he was informed of the prior sale in favor of
respondents spouses. The knowledge of the first sale Abelardo Cruz had gained
defeats his rights even if he is first to register the second sale, since such
knowledge taints his prior registration with bad faith. This is the exacted by Article
1544 of the Civil Code. Before the second buyer can obtain priority over the first, he
must show that he acted in good faith throughout from the time of acquisition until
the title is transferred to him by registration or failing registration, by delivery of
possession. The second buyer must show continuing good faith and innocence or
lack of knowledge of the first sale until his contract ripens into full ownership
through prior registration as provided by law. Respondent appellate court correctly
held that such knowledge of a prior transfer of a registered property by a
subsequent purchaser makes him a purchaser in bad faith and his knowledge of
such transfer vitiates his title acquired, by virtue of the latter instrument of
conveyance which creates no right as against the first purchaser.
Nacion. However, the case was dismissed. Petitioner re-filed the complaint for
recovery of possession with damages before the MCTC against Juanita
Camalla, Diosdado Balila, Conrado Balila, Forferia
Aguirre,
Jaime Nacion and
Ester Moya. After trial, the MCTC rendered its decision, in favor of plaintiff Juanita
Naval. Respondents thereafter elevated the case to the Court of Appeals. Finding
the prior registration of the deed of sale between Ildefonso and Gregorio with the
Register of Deeds as a constructive notice to subsequent buyers, the appellate
court reversed the decision of the RTC.
ISSUE: Who have the superior right over the parcel of land sold.
RULING: Respondents, still have superior right over the disputed property, even if
petitioner argues that she purchased and registered the subject land in good faith
and without knowledge of any adverse claim thereto. Supreme Court held in
Rayos v. Reyes The issue of good faith or bad faith of the buyer is relevant only
where the subject of the sale is registered land and the purchaser is buying the
same from the registered owner whose title to the land is clean x x x in such case
the purchaser who relies on the clean title of the registered owner is protected if he
is a purchaser in good faith for value. Since the properties in question are
unregistered lands, petitioners as subsequent buyers thereof did so at their
peril. Their claim of having bought the land in good faith, i.e., without notice that
some other person has a right to or interest in the property, would not protect them
if it turns out, as it actually did in this case, that their seller did not own the property
at the time of the sale. In the case at bar, since Ildefonso no longer owned the
subject land at the time of the sale to the petitioner, he had nothing to sell and the
latter did not acquire any right to it. Even if we apply Article 1544, the facts would
nonetheless show that respondents and their predecessors-in-interest registered
first the source of their ownership and possession, i.e., the 1969 deed of sale, and
possessed the subject land at the earliest time. Applying the doctrine of priority in
time, priority in rights or prius tempore, potiorjure, respondents are entitled to
the ownership and possession of the subject land. WHEREFORE, in view of the
foregoing, the petition is DENIED.
Dominador Jimenez, while the western portion was allocated to Rosario and Salud
Jimenez. Thereafter, Adelfa Properties expressed interest in buying the western
portion of the property from Rosario and Salud. Before Adelfa Properties could make
payment, it received summons, together with a copy of a complaint filed by the
nephews and nieces of Rosario and Salud against the latter, Jose and Dominador
Jimenez, and Adelfa Properties in the RTC, for annulment of the deed of sale in favor
of Household Corporation and recovery of ownership of the property. Rosario and
Salud sent Francisca Jimenez to see Atty. Bernardo, in his capacity as Adelfa
Properties counsel, and to inform the latter that they were cancelling
the transaction. Adelfa Properties was willing to pay the purchase price, and he
requested that the corresponding deed of absolute sale be executed. This was
ignored by Rosario and Salud. Jimenez counsel sent a letter to Adelfa Properties
enclosing therein a check for representing the refund of 50% of the option money
paid under the exclusive option to purchase. Rosario and Salud Jimenez filed Civil
Case in the RTC for annulment of contract with damages, praying, among others,
that the exclusive option to purchase be declared null and void; that Adelfa
Properties be ordered to return the owners duplicate certificate of title; and that
the annotation of the option contract on TCT be cancelled.
ISSUE: Whether or not the contract is a Contract of Sale, Option Contract or
Contract to Sell.
RULING: The alleged option contract is a contract to sell, rather than a contract
of sale. The distinction between the two is important for in contract of sale, the title
passes to the vendee upon the delivery of the thing sold; whereas in a contract to
sell, by agreement the ownership is reserved in the vendor and is not to pass until
the full payment of the price. In a contract of sale, the vendor has lost and cannot
recover ownership until and unless the contract is resolved or rescinded; whereas in
a contract to sell, title is retained by the vendor until the full payment of the price
Thus, a deed of sale is considered absolute in nature where there is neither a
stipulation in the deed that title to the property sold is reserved in the seller until
the full payment of the price, nor one giving the vendor the right to unilaterally
resolve the contract the moment the buyer fails to pay within a fixed period. That
the parties really intended to execute a contract to sell is bolstered by the fact that
the deed of absolute sale would have been issued only upon the payment of
the balance of the purchase price, as may be gleaned from Adelfa Properties letter
wherein it informed the vendors that it is now ready and willing to pay you
simultaneously with the execution of the corresponding deed of absolute sale. The
important task in contract interpretation is always the ascertainment of the
intention of the contracting parties and that task is to be discharged by looking
to the words they used to project that intention in their contract, all the words not
just a particular word or two, and words in context not words standing alone.
Moreover, judging from the subsequent acts of the parties which will hereinafter be
discussed, it is undeniable that the intention of the parties was to enter into
a contract to sell. In addition, the title of a contract does not necessarily determine
its true nature. Hence, the fact that the document under discussions entitled
Exclusive Option to Purchase is not controlling where the text thereof shows that
it is a contract to sell.
GEM ROSE ORTIZ ALLAN
Case Digest on Law on Sales
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Makati, which did not comply with the stipulations in the DR. Contractual
Obligations between parties have the force of law between them and absent
any allegation that the same are contrary to law, morals, good customs, public
order or public policy, they must complied with in good faith. Thus, the assailed
decision of the Court of Appeals is reversed and set aside.
immovable property, the ownership shall belong to the person acquiring it who in
good faith recorded 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 possession;
and in the absence thereof, to the person who presents the oldest title, provided
there is good faith.
re-trial, Trial Court reversed its decision ruling that the claim of the respondents
were greater than that of the petitioner. CA ruled in favor of petitioner, alleging that
it has a superior right over the respondent. After a motion for reconsideration CA
reversed its decision.
ISSUE: Whether or not Petitioner has the superior right over the property.
RULING: Yes, petitioner has the superior right over the property. Article 1544, New
Civil Code, which is decisive of this case, recites: 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 good faith, if it
should movable property. Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith first recorded 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 there is good faith. When
Carbonell bought the lot from Poncio, she was the only buyer thereof and the title of
Poncio was still in his name solely encumbered by bank mortgage duly annotated
thereon. Carbonell was not aware and she could not have been aware of any sale of
Infante as there was no such sale to Infante then. Hence, Carbonell's prior purchase
of the land was made in good faith. Her good faith subsisted and continued to exist
when she recorded her adverse claim prior to the registration of Infantes's deed of
sale. Carbonell's good faith did not cease after Poncio told her of his second sale of
the same lot to Infante.
GEM ROSE ORTIZ ALLAN
Case Digest on Law on Sales
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Campillo vs CA
G.R. No. 56483 May 29, 1984
FACTS: Tomas de Vera was the owner of two parcels of land in Tondo, Manila. De
Vera sold the lands to Simplicio Santos. Santos however did not register the sale in
the Registry of Deeds, which means that the land was still under de Veras name.
On the other hand, de Vera was indebted to Campillo. Campillo obtained a judgment
for sum of money. De Veras 3 parcels of land, including those sold to Santos were
levied in 1962 in favor of Campillo. Campillo acquired the land and he was able to
have the lands be registered under his name.
ISSUE: Who has better right over the property: Santos who first bought it
without registering it
or
Campillo
who
subsequently
purchased
it
at
a public auction and have it registered under his name.
RULING: Campillo has the right over the said properties. It is settled in
this jurisdiction that a sale of real estate, whether made as a result of a private
transaction or of a foreclosure or execution sale, becomes legally effective against
third persons only from the date of its registration. Santos purchase of the two
parcels of land may be valid but it is not enforceable against third persons for he
failed to have it registered. Campillo is a purchaser in good faith as he was not
aware of any previous sale for Santos never caused the annotation of the sale. The
purchaser Campillo in the execution sale of the registered land in suit, acquires
such right and interest as appears in the certificate of title unaffected by prior lien
or encumbrances not noted therein. This must be so in order to preserve the
efficacy and conclusiveness of the certificate of title which is sanctified under our
Torrens system of land registration.