Fule vs.

CA
Facts:
Gregorio Fule, a banker and a jeweller, offered to sell his parcel of land to Dr. Cruz in exchange for P40,000 and a
diamond earring owned by the latter. A deed of absolute sale was prepared by Atty. Belarmino, and on the same day
Fule went to the bank with Dichoso and Mendoza, and Dr. Cruz arrived shortly thereafter. Dr. Cruz got the earrings
from her safety deposit box and handed it to Fule who, when asked if those were alright, nodded and took the earrings.
Two hours after, Fule complained that the earrings were fake. He files a complaint to declare the sale null and void on
the ground of fraud and deceit.
Issue: Whether the sale should be nullified on the ground of fraud
Held: A contract of sale is perfected at the moment there is a meeting of the minds upon the thing which is the object of
the contract and upon the price. Being consensual, a contract of sale has the force of law between the contracting
parties and they are expected to abide in good faith by their respective contractual commitments. It is evident from the
facts of the case that there was a meeting of the minds between petitioner and Dr. Cruz. As such, they are bound by
the contract unless there are reasons or circumstances that warrant its nullification.
Contracts that are voidable or annullable, even though there may have been no damage to the contracting parties are:
(1) those where one of the parties is incapable of giving consent to a contract; and (2) those where the consent is
vitiated by mistake, violence, intimidation, undue influence or fraud. The records, however, are bare of any evidence
manifesting that private respondents employed such insidious words or machinations to entice petitioner into entering
the contract of barter. It was in fact petitioner who resorted to machinations to convince Dr. Cruz to exchange her
jewelry for the Tanay property.
Furthermore, petitioner was afforded the reasonable opportunity required in Article 1584 of the Civil Code within which
to examine the jewelry as he in fact accepted them when asked by Dr. Cruz if he was satisfied with the same. By
taking the jewelry outside the bank, petitioner executed an act which was more consistent with his exercise of
ownership over it. This gains credence when it is borne in mind that he himself had earlier delivered the Tanay property
to Dr. Cruz by affixing his signature to the contract of sale. That after two hours he later claimed that the jewelry was
not the one he intended in exchange for his Tanay property, could not sever the juridical tie that now bound him and Dr.
Cruz. The nature and value of the thing he had taken preclude its return after that supervening period within which
anything could have happened, not excluding the alteration of the jewelry or its being switched with an inferior kind.
Ownership over the parcel of land and the pair of emerald-cut diamond earrings had been transferred to Dr. Cruz and
petitioner, respectively, upon the actual and constructive delivery thereof. Said contract of sale being absolute in
nature, title passed to the vendee upon delivery of the thing sold since there was no stipulation in the contract that title
to the property sold has been reserved in the seller until full payment of the price or that the vendor has the right to
unilaterally resolve the contract the moment the buyer fails to pay within a fixed period.
While it is true that the amount of P40,000.00 forming part of the consideration was still payable to petitioner, its
nonpayment by Dr. Cruz is not a sufficient cause to invalidate the contract or bar the transfer of ownership and
possession of the things exchanged considering the fact that their contract is silent as to when it becomes due and
demandable.
PUP vs. CA

FACTS: The National Development Corp. (NDC) owned the NDC Compound, a portion of which was leased to
Firestone Ceramics, which built several warehouses and facilities therein. Since business between NDC and Firestone
went smooth, the lease was twice renewed this time conferring upon Firestone a right of first refusal should NDC
decide to dispose of the property. Also, under the contract, Firestone was obliged to introduce considerable
improvements thereon. Eventually though, Memo Order No. 214 was issued ordering the transfer of NDC Compound
to the government in consideration of the cancellation of NDCs P57M debt. Pursuant thereto, NDC transferred the
property to Polytechnic University (PUP). Firestone sued for specific performance invoking its right of first refusal, and
sought to enjoin NDC and PUP from proceeding with the sale. Both PUP and NDC aver that there was no sale
involved since ownership of the property remained with the governmentboth companies being GOCCs.
ISSUE: W/N there was a sale

HELD: YES. The argument of PUP and NDC was untenable. GOCCs have personalities separate and distinct from the
government. Sale brings within its grasp the whole gamut of transfers where ownership of a thing is ceded for
consideration. Further, judging from the conduct of the parties in this case, all the elements of a valid sale attend.
Consent is manifested by the Memo Order No. 214, the cancellation of liabilities constituted consideration; the subject
matter was of course the property subject of the dispute. Since a sale was involved, the right of first refusal in favor of
Firestone must be respected. It forms an integral part of the lease and is supported by considerationFirestone
having made substantial investments therein. Only when Firestone fails to exercise such right may the sale to PUP
proceed.
Gaite vs. Fonacier
Facts:
Gaite was appointed by Fonacier as attorney-in-fact to contract any party for the exploration and development of
mining claims. Gaite executed a deed of assignment in favor of a single proprietorship owned by him. For some
reasons, Fonacier revoked the agency, which was acceded to by Gaite, subject to certain conditions, one of which
being the transfer of ores extracted from the mineral claims for P75,000, of which P10,000 has already been paid upon
signing of the agreement and the balance to be paid from the first letter of credit for the first local sale of the iron ores.
To secure payment, Fonacier delivered a surety agreement with Larap Mines and some of its stockholders, and
another one with Far Eastern Insurance. When the second surety agreement expired with no sale being made on the
ores, Gaite demanded the P65,000 balance. Defendants contended that the payment was subject to the condition that
the ores will be sold.
Issue:
(1) Whether the sale is conditional or one with a period
(2) Whether there were insufficient tons of ores
Held:
(1) The shipment or local sale of the iron ore is not a condition precedent (or suspensive) to the payment of the
balance of P65,000.00, but was only a suspensive period or term. What characterizes a conditional obligation is the
fact that its efficacy or obligatory force (as distinguished from its demandability) is subordinated to the happening of a
future and uncertain event; so that if the suspensive condition does not take place, the parties would stand as if the
conditional obligation had never existed.
A contract of sale is normally commutative and onerous: not only does each one of the parties assume a correlative
obligation (the seller to deliver and transfer ownership of the thing sold and the buyer to pay the price),but each party
anticipates performance by the other from the very start. While in a sale the obligation of one party can be lawfully
subordinated to an uncertain event, so that the other understands that he assumes the risk of receiving nothing for
what he gives (as in the case of a sale of hopes or expectations, emptio spei), it is not in the usual course of business
to do so; hence, the contingent character of the obligation must clearly appear. Nothing is found in the record to
evidence that Gaite desired or assumed to run the risk of losing his right over the ore without getting paid for it, or that
Fonacier understood that Gaite assumed any such risk. This is proved by the fact that Gaite insisted on a bond a to
guarantee payment of the P65,000.00, an not only upon a bond by Fonacier, the Larap Mines & Smelting Co., and the
company's stockholders, but also on one by a surety company; and the fact that appellants did put up such bonds
indicates that they admitted the definite existence of their obligation to pay the balance of P65,000.00.
The appellant have forfeited the right court below that the appellants have forfeited the right to compel Gaite to wait for
the sale of the ore before receiving payment of the balance of P65,000.00, because of their failure to renew the bond
of the Far Eastern Surety Company or else replace it with an equivalent guarantee. The expiration of the bonding
company's undertaking on December 8, 1955 substantially reduced the security of the vendor's rights as creditor for
the unpaid P65,000.00, a security that Gaite considered essential and upon which he had insisted when he executed
the deed of sale of the ore to Fonacier.
(2) The sale between the parties is a sale of a specific mass or iron ore because no provision was made in their
contract for the measuring or weighing of the ore sold in order to complete or perfect the sale, nor was the price of
P75,000,00 agreed upon by the parties based upon any such measurement.(see Art. 1480, second par., New Civil
Code). The subject matter of the sale is, therefore, a determinate object, the mass, and not the actual number of units
or tons contained therein, so that all that was required of the seller Gaite was to deliver in good faith to his buyer all of
the ore found in the mass, notwithstanding that the quantity delivered is less than the amount estimated by them.

Commissioner vs. Ateneo de Manila

Facts:
ADMU Institute of Philippine Culture is engaged in social science studies of Philippine society and culture.
Occasionally, it accepts sponsorships for its research activities from international organizations, private foundations
and government agencies.
On July 1983, CIR sent a demand letter assessing the sum of P174,043.97 for alleged deficiency contractors tax.
Accdg to CIR, ADMU falls under the purview of independent contractor pursuant to Sec 205 of Tax Code and is also
subject to 3% contractors tax under Sec 205 of the same code. (Independent Contractor means any person whose
activity consists essentially of the sale of all kinds of services for a fee regardless of whether or not the performance of
the service calls for the exercise or use of the physical or mental faculties of such contractors or their employees.)
Issue:
1)
WON
ADMU
is
an
independent
contractor
hence
liable
for
tax?
NO.
2) WON the acceptance of research projects by the IPC of ADMU a contract of sale or a contract for a piece of work?
NEITHER.
Held:
1) Hence, to impose the three percent contractors tax on Ateneos Institute of Philippine Culture, it should be
sufficiently proven that the private respondent is indeed selling its services for a fee in pursuit of an independent
business.
2) Records do not show that Ateneos IPC in fact contracted to sell its research services for a fee. In the first place, the
petitioner has presented no evidence to prove its bare contention that, indeed, contracts for sale of services were ever
entered into by the private respondent. Funds received by the Ateneo de Manila University are technically not a fee.
They may however fall as gifts or donations which are tax-exempt. Another fact that supports this contention is that for
about 30 years, IPC had continuously operated at a loss, which means that sponsored funds are less than actual
expenses for its research projects.
In fact, private respondent is mandated by law to undertake research activities to maintain its university status. In fact,
the research activities being carried out by the IPC is focused not on business or profit but on social sciences studies
of Philippine society and culture. Since it can only finance a limited number of IPCs research projects, private
respondent occasionally accepts sponsorship for unfunded IPC research projects from international organizations,
private foundations and governmental agencies. However, such sponsorships are subject to private respondents
terms and conditions, among which are, that the research is confined to topics consistent with the private respondents
academic agenda; that no proprietary or commercial purpose research is done; and that private respondent retains not
only the absolute right to publish but also the ownership of the results of the research conducted by the IPC.
SALE vs. CONTRACT FOR PIECE OF WORK
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. By its very nature, a
contract of sale requires a transfer of ownership. In the case of a contract for a piece of work, the contractor binds
himself to execute a piece of work for the employer, in consideration of a certain price or compensation. If the
contractor agrees to produce the work from materials furnished by him, he shall deliver the thing produced to the
employer and transfer dominion over the thing. Whether the contract be one of sale or one for a piece of work, a
transfer of ownership is involved and a party necessarily walks away with an object. In this case, there was no sale
either of objects or services because there was no transfer of ownership over the research data obtained or the results
of research projects undertaken by the Institute of Philippine Culture.
Inhausti vs. Cromwell
FACTS:
1. Plaintiff firm for many years past has been and is now engaged in business of buying and selling at wholesale hemp.
2. It was customary for it to sell hemp in bales and that in all sales of hemp by the plaintiff firm no mention is made of
baling; but with the tacit understanding, unless otherwise expressly agreed, that the hemp will be delivered in bales.
3. A charge is then made against the buyers for said baling.
4. Elias Cromwell, the Collector of the Internal Revenue then made a tax assessment upon the sums received from the
sale of baled hemp.
5. Plaintiff paid under protest contending that the tax assessed by the defendant upon the aggregate of charges made
against said purchasers of hemp by the plaintiff is illegal upon the ground that the said charge does not constitute a
part of the selling price of the hemp, but is a charge made for the services of baling the hemp.
ISSUE:

Is there a contract of sale?

HELD:
The judgment of the court below was right. It is one of the stipulations in the Statement of Facts that it is customary to
sell hemp in bales, and that the price quoted in the market for hemp per picul is the price for the hemp baled. The fact
it that among large dealers like the plaintiff in this case it is practically impossible to handle hemp without its being
baled, and it is admitted by the Statement of Facts, as well as demonstrated by the documentary proof introduced in
this case, that if the plaintiff sold a quantity of hemp it would be the understanding, without words, that purchase price
would include the cost and expense of baling.
In other words, it is the fact as stipulated, as well as it would be the fact of necessity, that in all dealings in hemp in the
general market the selling price consist of the value of the hemp loose plus the cost and expense of petting it into
marketable form.
* Under such conditions the cost and expenses of baling the hemp is a part of the purchase price and subject to a tax
imposed by law on the gross amount of sales of the dealers, and is not a sum paid for work, labor, and materials
performed and furnished by the vendor for the vendee.
The word price signifies the sum stipulated or the equivalent of the thing sold and also every incident taken into
consideration for the fixing of the price, put to the debit of the vendee and agreed to by him.
The distinction between a contract of sale and one for work, labor, and materials is tested by the inquiry whether the
thing transferred is one not in existence and which never would have existed but for the order of the party desiring to
acquire it, or a thing which would have existed and been the subject of sale to some other person, even if the order has
not been given.
It is clear that in the case at bar the hemp was in existence in baled form before the agreements of sale were made, or,
at least, would have been in existence even if none of the individual sales herein question had been consummated. It
would have been baled nevertheless, for sale to someone else, since, according to the agreed Statement of Facts, it is
customary to sell hemp in bales.
When a person stipulates for the future sale of articles which he is habitually making, and which at the time are not
made or finished, it is essentially a contract of sale and not a contract for labor. It is otherwise when the article is made
pursuant to agreement. Where labor is employed on the materials of the seller he cannot maintain an action for work
and labor. If the article ordered by the purchaser is exactly such as the plaintiff makes and keeps on hand for sale to
anyone, and no change or modification of it is made at the defendants request, it is a contract of sale, even though it
may be entirely made after, and in consequence of, the defendants order for it.
In the case at bar the baling was performed for the general market and was not something done by the plaintiff which
was a result of any peculiar wording of the particular contract between him and his vendee. It is undoubted that the
plaintiff prepared his hemp for the general market. This would be necessary. One who exposes goods for sale in the
market must have them in marketable form.

Celestino vs. Collector

Facts:
Celestino Co & Company is a general co-partnership registered under the trade name Oriental Sash Factory. From
1946 to 1951, it paid taxes equivalent to 7% on the gross receipts under Sec. 186 of the NIRC, which is a tax on the
original sales of articles by manufacturer, producer or importer. However, in 1952 it began to claim only 3% tax under
Sec. 191, which is a tax on sales of services. Petitioner claims that it does not manufacture ready-made doors, sash
and windows for the public, but only upon special orders from the customers, hence, it is not engaged in
manufacturing, but only in sales of services.
Issue: Whether the petitioner company is engaged in manufacturing, or is merely a special service provider
Held:

Celestino Co & Company habitually makes sash, windows and doors, as it has represented in its stationery and
advertisements to the public. That it "manufactures" the same is practically admitted by appellant itself. The fact that
windows and doors are made by it only when customers place their orders, does not alter the nature of the
establishment, for it is obvious that it only accepted such orders as called for the employment of such materialmoulding, frames, panels-as it ordinarily manufactured or was in a position habitually to manufacture.
Any builder or homeowner, with sufficient money, may order windows or doors of the kind manufactured by this
appellant. Therefore it is not true that it serves special customers only or confines its services to them alone. And
anyone who sees, and likes, the doors ordered by Don Toribio Teodoro & Sons Inc. may purchase from appellant
doors of the same kind, provided he pays the price. Surely, the appellant will not refuse, for it can easily duplicate or
even mass-produce the same doors-it is mechanically equipped to do so.
The Oriental Sash Factory does nothing more than sell the goods that it mass-produces or habitually makes; sash,
panels, mouldings, frames, cutting them to such sizes and combining them in such forms as its customers may desire.
When this Factory accepts a job that requires the use of extraordinary or additional equipment, or involves services not
generally performed by it-it thereby contracts for a piece of work filing special orders within the meaning of Article
1467. The orders herein exhibited were not shown to be special. They were merely orders for work nothing is shown to
call them special requiring extraordinary service of the factory.
Anyway, supposing for the moment that the transactions were not sales, they were neither lease of services nor
contract jobs by a contractor. But as the doors and windows had been admittedly "manufactured" by the Oriental Sash
Factory, such transactions could be, and should be taxed as "transfers" thereof under section 186 of the National
Revenue Code.
Commissioner vs. Engineer Equipment
FACTS: Engineering Equipment & Supply (EES) was engaged in the business of designing and installing central airconditioning systems. It was assessed by the CIR for 30% advanced sales tax, among other penalties pursuant to an
anonymous complaint filed before the BIR. EES vehemently objected and argued that they are contractors and not
manufacturers, and thus, should only be liable for the 3% tax on sales of services or pieces of work.
ISSUE: W/N EES is a contractor (piece of work)
HELD: YES. EES was NOT a manufacturer of air-conditioning units. While it imported such items, they were NOT for
sale to the general public and were used as mere components for the design of the centralized air-conditioning
system, wherein its designs and specifications are different for every client. Various technical factors must be
considered and it can be argued that no 2 plants are the same; all are engineered separately and distinctly. Each
project requires careful planning and meticulous layout. Such central air-conditioning systems and their designs would
not have existed were it not for the special order of the party desiring to acquire it. Thus, EES is not liable for the sales
tax of 30%.
Quiroga vs. Parsons
Facts:
Plaintiff engaged into a contract for the exclusive sale of its beds with defendants. Plaintiff filed a complaint against the
defendant for violation of the following obligations: not to sell the beds at higher prices than those of the invoices; to
have an open establishment in Iloilo; itself to conduct the agency; to keep the beds on public exhibition, and to pay for
the advertisement expenses for the same; and to order the beds by the dozen and in no other manner. Plaintiff alleged
that the defendant was his agent.
Issue: Whether the defendant, by reason of the contract hereinbefore transcribed, was a purchaser or an agent of the
plaintiff for the sale of his beds
Held:
There was the obligation on the part of the plaintiff to supply the beds, and, on the part of the defendant, to pay their
price. These features exclude the legal conception of an agency or order to sell whereby the mandatory or agent
received the thing to sell it, and does not pay its price, but delivers to the principal the price he obtains from the sale of
the thing to a third person, and if he does not succeed in selling it, he returns it. By virtue of the contract between the
plaintiff and the defendant, the latter, on receiving the beds, was necessarily obliged to pay their price within the term

fixed, without any other consideration and regardless as to whether he had or had not sold the beds. The words
commission on sales used in clause (A) of article 1 mean nothing else, as stated in the contract itself, than a mere
discount on the invoice price. The word agency, also used in articles 2 and 3, only expresses that the defendant was
the only one that could sell the plaintiff's beds in the Visayan Islands. With regard to the remaining clauses, the least
that can be said is that they are not incompatible with the contract of purchase and sale.
Gonzalo Puyat vs. Arco Amusement
Facts:
Respondent is engaged in operating cinematographs, while petitioner is acting as an agent for Starr Piano Company of
Richmond. Respondent negotiated with petitioner and agreed that petitioner would order sound reproducing equipment
on its behalf, and respondent would pay 10% commission and out-of-pocket expenses in addition to the selling price.
Transactions for 2 orders transpired. After 3 years, respondent discovered that that price quoted to them by petitioner
was not the net price but the list price. They sought to obtain reimbursement from the petitioner, and failing on this,
filed the instant case.
Issue: Whether the contract between petitioner and respondent is that of agency where agent is bound to indemnify
the principal for damages, or a mere contract of sales
Held:
The letters, by which the respondent accepted the prices for the sound reproducing equipment subject of its contract
with the petitioner, are clear in their terms and admit no other interpretation that the respondent in question at the
prices indicated which are fixed and determinate. The respondent admitted in its complaint filed with the Court of First
Instance of Manila that the petitioner agreed to sell to it the first sound reproducing equipment and machinery.
We agree with the trial judge that "whatever unforseen events might have taken place unfavorable to the defendant
(petitioner), such as change in prices, mistake in their quotation, loss of the goods not covered by insurance or failure
of the Starr Piano Company to properly fill the orders as per specifications, the plaintiff (respondent) might still legally
hold the defendant (petitioner) to the prices fixed of $1,700 and $1,600." This is incompatible with the pretended
relation of agency between the petitioner and the respondent, because in agency, the agent is exempted from all
liability in the discharge of his commission provided he acts in accordance with the instructions received from his
principal (section 254, Code of Commerce), and the principal must indemnify the agent for all damages which the latter
may incur in carrying out the agency without fault or imprudence on his part (article 1729, Civil Code).
While the letters state that the petitioner was to receive ten per cent (10%) commission, this does not necessarily
make the petitioner an agent of the respondent, as this provision is only an additional price which the respondent
bound itself to pay, and which stipulation is not incompatible with the contract of purchase and sale.
In the second place, to hold the petitioner an agent of the respondent in the purchase of equipment and machinery
from the Starr Piano Company of Richmond, Indiana, is incompatible with the admitted fact that the petitioner is the
exclusive agent of the same company in the Philippines. It is out of the ordinary for one to be the agent of both the
vendor and the purchaser. The facts and circumstances indicated do not point to anything but plain ordinary
transaction where the respondent enters into a contract of purchase and sale with the petitioner, the latter as exclusive
agent of the Starr Piano Company in the United States.
It follows that the petitioner as vendor is not bound to reimburse the respondent as vendee for any difference between
the cost price and the sales price which represents the profit realized by the vendor out of the transaction. This is the
very essence of commerce without which merchants or middleman would not exist.
Philippine Lawin vs. CA
Sales Week 3Dacion en Pago
Philippine Lawin Bus Co. (Lawin) vs CADoctrine:Nature:
RTC- Suit to claim for a sum of money against Lawin, case was dismissedCA- Reversed RTC and ruled that Lawin
has to pay ACCSC- Affirmed CAs decision and ordered
Facts:
Lawin initially loaned from Advance Capital Corp. (ACC) Php 8M payable w/in1 yr and guaranteed by a chattel
mortgage of Lawins 9 buses. Lawin was indefault in its payments and was able to pay only Php 1.8M.
Lawin obtained its second loan of 2M payable in one month under apromissory note. Lawin was in default again
hence it asked ACC for arestructuring of the loan despite this Lawin was still not able to pay. Thebuses for foreclosed
and it was sold for 2M.

 ACC sent Lawin demand letters to settle its indebtedness amounting to hp16,484,992.42 then subsequently filed a
suit for sum of money againstLawin. Lawin in its defense said that there was already an arrangement tosettle the
obligation
A. Sale of 9 buses and its proceeds will cover for the full payment; OR
B. ACC will shoulder the rehabilitation of the buses and the earnings of the operation will be then applied to the loan
Issue/Held: W/N there was a dacion en pago bet. the parties? NO
Ratio:
Dacion en Pago is a special mode of payment, the debtor offers another thingto the creditor who accepts it as
equivalent of payment of the outstandingobligation. It partakes the nature of a sale whose essential elements are
a)consent b)object certain and c) cause and the contract is perfected at themoment of the meeting of the minds of the
parties.
In this case there was no meeting of the minds between Lawin and ACC thatthe obligation would be extinguished by
dacion en pago. The receipts showsthat the delivery of the 2 buses to ACC didnt transfer the ownership of thebus to
ACC rather they were deemed to be only as Lawins agent in the saleof the bus whereby the proceeds are then to be
applied as payment for theloan.
Filinvest Credit vs. CA
FACTS:
Herein private respondents spouses Jose Sy Bang and Iluminada Tan were engaged in the sale of gravel produced
from crushed rocks and used for construction purposes. They intended to buy rock crusher from Rizal Consolidated
Corporation which carried a cash price tag of P550,000.00. They applied for financial assistance from herein petitioner
Filinvest Credit Corporation, who agreed to extend financial aid on the certain conditions.
A contract of lease of machinery (with option to purchase) was entered into by the parties whereby the private
respondents agreed to lease from the petitioner the rock crusher for two years starting from July 5, 1981, payable as
follows: P10,000.00 first 3 months, P23,000.00 next 6 months, P24,800.00 next 15 months. It was likewise
stipulated that at the end of the two-year period, the machine would be owned by the private respondents. Thus the
private respondent issued in favor of the petitioner a check for P150,550.00, as initial rental (or guaranty deposit), and
24 postdated checks corresponding to the 24 monthly rentals. In addition, to guarantee their compliance with the lease
contract, the private respondent executed a real estate mortgage over two parcels of land in favor of the petitioner. The
rock crusher was delivered to the spouses.
However, 3 months later, the souses stopped payment when petitioner had not acted on the complaints of the spouses
about the machine. As a consequence, petitioner extra-judicially foreclosed the real estate mortgage. The spouses
filed a complaint before the RTC. The RTC rendered a decision in favor of private respondent. The petitioner elevated
the case to CA which affirmed the decision in toto. Hence, this petition.
ISSUES:
1. Whether or not the nature of the contract is one of a contract of sale.\
2. Whether or not the remedies of the seller provided for in Article 1484 are cumulative.
HELD:
1. Yes. The intent of the parties to the subject contract is for the so-called rentals to be the installment payments. Upon
the completion of the payments, then the rock crusher, subject matter of the contract, would become the property of
the private respondents. This form of agreement has been criticized as a lease only in name.
Sellers desirous of making conditional sales of their goods, but who do not wish openly to make a bargain in that form,
for one reason or another, have frequently restored to the device of making contracts in the form of leases either with
options to the buyer to purchase for a small consideration at the end of term, provided the so-called rent has been duly
paid, or with stipulations that if the rent throughout the term is paid, title shall thereupon vest in the lessee. It is obvious
that such transactions are leases only in name. The so-called rent must necessarily be regarded as payment of the
price in installments since the due payment of the agreed amount results, by the terms of bargain, in the transfer of title
to the lessee.
2. No, it is alternative. The seller of movable in installments, in case the buyer fails to pay 2 or more installments, may
elect to pursue either of the following remedies: (1) exact fulfillment by the purchaser of the obligation; (2) cancel the
sale; or (3) foreclose the mortgage on the purchased property if one was constituted thereon. It is now settled that the
said remedies are alternative and not cumulative, and therefore, the exercise of one bars the exercise of the others.
Indubitably, the device contract of lease with option to buy is at times resorted to as a means to circumvent Article
1484, particularly paragraph (3) thereof. Through the set-up, the vendor, by retaining ownership over the property in
the guise of being the lessor, retains, likewise the right to repossess the same, without going through the process of
foreclosure, in the event the vendee-lessee defaults in the payment of the installments. There arises therefore no need

to constitute a chattel mortgage over the movable sold. More important, the vendor, after repossessing the property
and, in effect, canceling the contract of sale, gets to keep all the installments-cum-rentals already paid.