Part III.

FORMS OF CONTRACT
1. General (Art. 1356)
FORM OF CONTRACTS
Art. 1356. Contracts shall be obligatory, in whatever form they may have been entered into,
provided all the essential requisites for their validity are present. However, when the law
requires that a contract be in some form in order that it may be valid or enforceable or that a
contract be proved in a certain way, that requirement is absolute and indispensable.
In such cases, the rights of the parties stated in the following article cannot be exercised.
2. Importance of Formalities (Arts. 1356-1358)
Art. 1357. If the law requires a document or other special form, as in the acts and contracts
enumerated in the following article, the contracting parties may compel each other to
observe that form, once the contract has been perfected. This right may be exercised
simultaneously with the action upon the contract.
Art. 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property; sales of real property or of an
interest therein are governed by Articles 1403, No. 2, and 1405;
(2) The cession, repudiation 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 for its object an act
appearing or which should appear in a public document, or should prejudice a third person;
(4) The cession of actions or rights proceeding from 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.
Cases:

G.R. No. L-27010

April 30, 1969

MARLENE DAUDEN-HERNAEZ, petitioner,

vs.

HON. WALFRIDO DE LOS ANGELES, Judge of the Court of First Instance of Quezon City,
HOLLYWOOD FAR EAST PRODUCTIONS, INC., and RAMON VALENZUELA, respondents.
R. M. Coronado and Associates for petitioner.
Francisco Lavides for respondent.
REYES, J.B.L., Acting C.J.:
Petition for a writ of certiorari to set aside certain orders of the Court of First Instance
of Quezon City (Branch IV), in its Civil Case No. Q-10288, dismissing a complaint for breach
of contract and damages, denying reconsideration, refusing to admit an amended complaint,
and declaring the dismissal final and unappealable.
The essential facts are the following:
Petitioner Marlene Dauden-Hernaez, a motion picture actress, had filed a complaint
against herein private respondents, Hollywood Far East Productions, Inc., and its President
and General Manager, Ramon Valenzuela, to recover P14,700.00 representing a balance
allegedly due said petitioner for her services as leading actress in two motion pictures
produced by the company, and to recover damages. Upon motion of defendants, the
respondent court (Judge Walfrido de los Angeles presiding) ordered the complaint
dismissed, mainly because the "claim of plaintiff was not evidenced by any written
document, either public or private", and the complaint "was defective on its face" for
violating Articles 1356 and 1358 of the Civil, Code of the Philippines, as well as for
containing defective allege, petitions. Plaintiff sought reconsideration of the dismissal and
for admission of an amended complaint, attached to the motion. The court denied
reconsideration and the leave to amend; whereupon, a second motion for reconsideration
was filed. Nevertheless, the court also denied it for being pro forma, as its allegations "are,
more or less, the same as the first motion", and for not being accompanied by an affidavit of
merits, and further declared the dismissal final and unappealable. In view of the attitude of
the Court of First Instance, plaintiff resorted to this Court.
The answer sets up the defense that "the proposed amended complaint did not vary in
any material respect from the original complaint except in minor details, and suffers from
the same vital defect of the original complaint", which is the violation of Article 1356 of the
Civil Code, in that the contract sued upon was not alleged to be in writing; that by Article
1358 the writing was absolute and indispensable, because the amount involved exceeds five
hundred pesos; and that the second motion for reconsideration did not interrupt the period
for appeal, because it was not served on three days' notice.
We shall take up first the procedural question. It is a well established rule in our
jurisprudence that when a court sustains a demurrer or motion to dismiss it is error for the
court to dismiss the complaint without giving the party plaintiff an opportunity to amend his
complaint if he so chooses. 1 Insofar as the first order of dismissal (Annex D, Petition) did
not provide that the same was without prejudice to amendment of the complaint, or reserve
to the plaintiff the right to amend his complaint, the said order was erroneous; and this error
was compounded when the motion to accept the amended complaint was denied in the
subsequent order of 3 October 1966 (Annex F, Petition). Hence, the petitioner-plaintiff was

within her rights in filing her so-called second motion for reconsideration, which was
actually a first motion against the refusal to admit the amended complaint.
It is contended that the second motion for reconsideration was merely pro forma and
did not suspend the period to appeal from the first order of dismissal (Annex D) because (1)
it merely reiterated the first motion for reconsideration and (2) it was filed without giving
the counsel for defendant-appellee the 3 days' notice provided by the rules. This argument is
not tenable, for the reason that the second motion for reconsideration was addressed to the
court' refusal to allow an amendment to the original complaint, and this was a ground not
invoked in the first motion for reconsideration. Thus, the second motion to reconsider was
really not pro forma, as it was based on a different ground, even if in its first part it set forth
in greater detail the arguments against the correctness of the first order to dismiss. And as
to the lack of 3 days' notice, the record shows that appellees had filed their opposition (in
detail) to the second motion to reconsider (Answer, Annex 4); so that even if it were true
that respondents were not given the full 3 days' notice they were not deprived of any
substantial right. Therefore, the claim that the first order of dismissal had become final and
unappealable must be overruled.
It is well to observe in this regard that since a motion to dismiss is not a responsive
pleading, the plaintiff-petitioner was entitled as of right to amend the original dismissed
complaint. In Paeste vs. Jaurigue 94 Phil. 179, 181, this Court ruled as follows:
Appellants contend that the lower court erred in not admitting their amended
complaint and in holding that their action had already prescribed. Appellants are right on
both counts.
Amendments to pleadings are favored and should be liberally allowed in the
furtherance of justice. (Torres vs. Tomacruz, 49 Phil. 913). Moreover, under section 1 of Rule
17, Rules of Court, a party may amend his pleading once as a matter of course, that is,
without leave of court, at any time before a responsive pleading is served. A motion to
dismiss is not a "responsive pleading". (Moran on the Rules of Court, vol. 1, 1952, ed., p.
376). As plaintiffs amended their complaint before it was answered, the motion to admit the
amendment should not have been denied. It is true that the amendment was presented after
the original complaint had been ordered dismissed. But that order was not yet final for it
was still under reconsideration.
The foregoing observations leave this Court free to discuss the main issue in this
petition. Did the court below abuse its discretion in ruling that a contract for personal
services involving more than P500.00 was either invalid of unenforceable under the last
paragraph of Article 1358 of the Civil Code of the Philippines?
We hold that there was abuse, since the ruling herein contested betrays a basic and
lamentable misunderstanding of the role of the written form in contracts, as ordained in the
present Civil Code.
In the matter of formalities, the contractual system of our Civil Code still follows that
of the Spanish Civil Code of 1889 and of the "Ordenamiento de Alcala" 2 of upholding the
spirit and intent of the parties over formalities: hence, in general, contracts are valid and

binding from their perfection regardless of form whether they be oral or written. This is plain
from Articles 1315 and 1356 of the present Civil Code. Thus, the first cited provision
prescribes:
ART. 1315. Contracts are perfected by mere consent, and from that moment the
parties are bound not only to the fulfillment of what has been expressly stipulated but also
to all the consequences which, according to their nature, may be in keeping with good faith,
usage and law. (Emphasis supplied)
Concordantly, the first part of Article 1356 of the Code Provides:
ART. 1356. Contracts shall be obligatory in whatever form they may have been entered
into, provided all the essential requisites for their validity are present.... (Emphasis supplied)
These essential requisites last mentioned are normally (1) consent (2) proper subject
matter, and (3) consideration or causa for the obligation assumed (Article 1318). 3 So that
once the three elements exist, the contract is generally valid and obligatory, regardless of
the form, oral or written, in which they are couched.lawphi1.nt
To this general rule, the Code admits exceptions, set forth in the second portion of
Article 1356:
However, when the law requires that a contract be in some form in order that it may
be valid or enforceable, or that a contract be proved in a certain way, that requirement is
absolute and indispensable....
It is thus seen that to the general rule that the form (oral or written) is irrelevant to
the binding effect inter partes of a contract that possesses the three validating elements of
consent, subject matter, and causa, Article 1356 of the Code establishes only two
exceptions, to wit:
(a) Contracts for which the law itself requires that they be in some particular form (writing)
in order to make themvalid and enforceable (the so-called solemn contracts). Of these the
typical example is the donation of immovable property that the law (Article 749) requires to
be embodied in a public instrument in order "that the donation may be valid", i.e., existing or
binding. Other instances are the donation of movables worth more than P5,000.00 which
must be in writing, "otherwise the donation shall be void" (Article 748); contracts to pay
interest on loans (mutuum) that must be "expressly stipulated in writing" (Article 1956);
and the agreements contemplated by Article 1744, 1773, 1874 and 2134 of the present Civil
Code.
(b) Contracts that the law requires to be proved by some writing (memorandum) of its
terms, as in those covered by the old Statute of Frauds, now Article 1403(2) of the Civil
Code. Their existence not being provable by mere oral testimony (unless wholly or partly
executed), these contracts are exceptional in requiring a writing embodying the terms
thereof for their enforceability by action in court.
The contract sued upon by petitioner herein (compensation for services) does not
come under either exception. It is true that it appears included in Article 1358, last clause,

providing that "all other contracts where the amount involved exceeds five hundred pesos
must appear in writing, even a private one." But Article 1358 nowhere provides that the
absence of written form in this case will make the agreement invalid or unenforceable. On
the contrary, Article 1357 clearly indicates that contracts covered by Article 1358 are
binding and enforceable by action or suit despite the absence of writing.
ART. 1357. If the law requires a document or other special form, as in the acts and
contracts enumerated in the following article, the contracting parties may compel each other
to observe that form, once the contract has been perfected. This right may be exercised
simultaneously with the action the contract. (Emphasis supplied) .
It thus becomes inevitable to conclude that both the court a quo as well as the private
respondents herein were grossly mistaken in holding that because petitioner Dauden's
contract for services was not in writing the same could not be sued upon, or that her
complaint should be dismissed for failure to state a cause of action because it did not plead
any written agreement.
The basic error in the court's decision lies in overlooking that in our contractual system
it is not enough that the law should require that the contract be in writing, as it does in
Article 1358. The law must further prescribe that without the writing the contract is not
valid or not enforceable by action.
WHEREFORE, the order dismissing the complaint is set aside, and the case is ordered
remanded to the court of origin for further proceedings not at variance with this decision.
Costs to be solidarity paid by private respondents Hollywood Far East Productions,
Inc., and Ramon Valenzuela.
Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Teehankee and Barredo, JJ., concur.
Concepcion, C.J. and Castro, J., are on leave.
Capistrano, J., took no part.

FIRST DIVISION

[G.R. No. 140487. April 2, 2001]

REPUBLIC OF THE
PHILIPPINES, petitioner,
MANGUBAT, respondents.

vs. LEON

SILIM

and

ILDEFONSA

DECISION
KAPUNAN, J.:
Before the Court is a petition for review under Rule 45 seeking the reversal of the
Decision of the Court of Appeals in CA-G.R. No. 43840, entitled Leon Silim, et al. vs. Wilfredo
Palma, et al., which declared null and void the donation made by respondents of a parcel of
land in favor of the Bureau of Public Schools, Municipality of Malangas, Zamboanga del Sur.
The antecedents of this case are as follows:
On 17 December 1971, respondents, the Spouses Leon Silim and Ildefonsa Mangubat,
donated a 5,600 square meter parcel of land in favor of the Bureau of Public Schools,
Municipality of Malangas, Zamboanga del Sur (BPS). In the Deed of Donation, respondents
imposed the condition that the said property should be used exclusively and forever for
school purposes only.[1] This donation was accepted by Gregorio Buendia, the District
Supervisor of BPS, through an Affidavit of Acceptance and/or Confirmation of Donation.
Through a fund raising campaign spearheaded by the Parent-Teachers Association of
Barangay Kauswagan, a school building was constructed on the donated land. However, the
Bagong Lipunan school building that was supposed to be allocated for the donated parcel of
land in Barangay Kauswagan could not be released since the government required that it be
built upon a one (1) hectare parcel of land. To remedy this predicament, Assistant School
Division Superintendent of the Province of Zamboanga del Sur, Sabdani Hadjirol, authorized
District Supervisor Buendia to officially transact for the exchange of the one-half (1/2)
hectare old school site of Kauswagan Elementary School to a new and suitable location
which would fit the specifications of the government. Pursuant to this, District Supervisor
Buendia and Teresita Palma entered into a Deed of Exchange whereby the donated lot was
exchanged with the bigger lot owned by the latter. Consequently, the Bagong Lipunan
school buildings were constructed on the new school site and the school building previously
erected on the donated lot was dismantled and transferred to the new location.
When respondent Leon Silim saw, to his surprise, that Vice-Mayor Wilfredo Palma was
constructing a house on the donated land, he asked the latter why he was building a house
on the property he donated to BPS. Vice Mayor Wilfredo Palma replied that he is already the
owner of the said property. Respondent Leon Silim endeavored to stop the construction of
the house on the donated property but Vice-Mayor Wilfredo Palma advised him to just file a
case in court.
On February 10, 1982, respondents filed a Complaint for Revocation and Cancellation of
Conditional Donation, Annulment of Deed of Exchange and Recovery of Possession and
Ownership of Real Property with damages against Vice Mayor Wilfredo Palma, Teresita
Palma, District Supervisor Buendia and the BPS before the Regional Trial Court of Pagadian
City, Branch 21. In its Decision dated 20 August 1993, the trial court dismissed the
complaint for lack of merit.[2] The pertinent portion of the decision reads:
Thus, it is the considered view of this Court that there was no breach or violation of the
condition imposed in the subject Deed of Donation by the donee. The exchange is proper

since it is still for the exclusive use for school purposes and for the expansion and
improvement of the school facilities within the community. The Deed of Exchange is but a
continuity of the desired purpose of the donation made by plaintiff Leon Silim.
In sum, it may be safely stated that the aforesaid transaction of exchange is a (sic)
exception to the law invoked by the plaintiffs (Art. 764, Civil Code). The donee, being the
State had the greater reciprocity of interest in the gratuitous and onerous contract of
donation. It would be illogical and selfish for the donor to technically preclude the donee
from expanding its school site and improvement of its school facilities, a paramount
objective of the donee in promoting the general welfare and interests of the people of
Barangay Kauswagan. But it is a well-settled rule that if the contract is onerous, such as the
Deed of Donation in question, the doubt shall be settled in favor of the greatest reciprocity
of interests, which in the instant case, is the donee.
xxx
WHEREFORE, in view of all the foregoing, judgement is hereby rendered:
1. Dismissing the complaint for lack of merit;
2. Dismissing the counterclaim for the sake of harmony and reconciliation between
the parties;
3. With costs against plaintiffs.
SO ORDERED.[3]
Not satisfied with the decision of the trial court, respondents elevated the case to the
Court of Appeals. In its Decision dated 22 October 1999, the Court of Appeals reversed the
decision of the trial court and declared the donation null and void on the grounds that the
donation was not properly accepted and the condition imposed on the donation was
violated.[4]
Hence, the present case where petitioner raises the following issues:
I. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULL
AND VOID DUE TO AN INVALID ACCEPTANCE BY THE DONEE.
II. WHETHER THE COURT OF APPEALS ERRED IN DECLARING THE DONATION NULL
AND VOID DUE TO AN ALLEGED VIOLATION OF A CONDITION IN THE
DONATION.[5]
The Court gives DUE COURSE to the petition.
Petitioner contends that the Court of Appeals erred in declaring the donation null and
void for the reason that the acceptance was not allegedly done in accordance with Articles
745[6] and 749[7] of the New Civil Code.
We agree.
Donations, according to its purpose or cause, may be categorized as: (1) pure or simple;
(2) remuneratory or compensatory; (3) conditional or modal; and (4) onerous. A pure or
simple donation is one where the underlying cause is plain gratuity. [8] This is donation in its
truest form. On the other hand, a remuneratory or compensatory donation is one made for
the purpose of rewarding the donee for past services, which services do not amount to a
demandable debt.[9] A conditional or modal donation is one where the donation is made in

consideration of future services or where the donor imposes certain conditions, limitations
or charges upon the donee, the value of which is inferior than that of the donation
given.[10] Finally, an onerous donation is that which imposes upon the donee a reciprocal
obligation or, to be more precise, this is the kind of donation made for a valuable
consideration, the cost of which is equal to or more than the thing donated. [11]
Of all the foregoing classifications, donations of the onerous type are the most
distinct. This is because, unlike the other forms of donation, the validity of and the rights
and obligations of the parties involved in an onerous donation is completely governed not by
the law on donations but by the law on contracts. In this regard, Article 733 of the New Civil
Code provides:
Art. 733. Donations with an onerous cause shall be governed by the rules on contracts, and
remuneratory donations by the provisions of the present Title as regards that portion which
exceeds the value of the burden imposed.
The donation involved in the present controversy is one which is onerous since there is a
burden imposed upon the donee to build a school on the donated property. [12]
The Court of Appeals held that there was no valid acceptance of the donation because:
xxx
Under the law the donation is void if there is no acceptance. The acceptance may either be in
the same document as the deed of donation or in a separate public instrument. If the
acceptance is in a separate instrument, "the donor shall be notified thereof in an authentic
form, and his step shall be noted in both instruments.
"Title to immovable property does not pass from the donor to the donee by virtue of a deed
of donation until and unless it has been accepted in a public instrument and the donor duly
noticed thereof.(Abellera vs. Balanag, 37 Phils. 85; Alejandro vs. Geraldez, 78 SCRA 245). If
the acceptance does not appear in the same document, it must be made in another. Solemn
words are not necessary; it is sufficient if it shows the intention to accept, But in this case, it
is necessary that formal notice thereof be given to the donor and the fact that due notice has
been given it must be noted in both instruments (that containing the offer to donate and
that showing acceptance). Then and only then is the donation perfected. (11 Manresa 15511, cited in Vol. II, Civil Code of the Philippines by Tolentino.)."
This Court perused carefully the Deed of Donation marked as exhibit "A" and "1" to
determine whether there was acceptance of the donation. This Court found none. We further
examined the record if there is another document which embodies the acceptance, we found
one. Although the Court found that in the offer of exhibits of the defendants, a supposed
affidavit of acceptance and/or confirmation of the donation, marked as exhibit "8" appears
to have been offered.
However, there is nothing in the record that the exhibits offered by the defendants have
been admitted nor such exhibits appear on record.
Assuming that there was such an exhibit, the said supposed acceptance was not noted in the
Deed of Donation as required under Art. 749 of the Civil Code. And according to Manresa,
supra, a noted civilist, the notation is one of the requirements of perfecting a donation. In
other words, without such a notation, the contract is not perfected contract. Since the
donation is not perfected, the contract is therefore not valid.[13]

xxx
We hold that there was a valid acceptance of the donation.
Sections 745 and 749 of the New Civil Code provide:
ART. 745. The donee must accept the donation personally, or through an authorized person
with a special power for the purpose, or with a general and sufficient power; otherwise the
donation shall be void.
ART. 749. In order that the donation of an immovable may be laid, it must be made in a
public document, specifying therein the property donated and the value of the charge which
the donee must satisfy.
The acceptance may be made in the same deed of donation or in a separate public
document, but it shall not take effect unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall be notified thereof in an
authentic form, and this step shall be noted in both instruments.
Private respondents, as shown above, admit that in the offer of exhibits by the
defendants in the trial court, an affidavit of acceptance and/or confirmation of the donation,
marked as Exhibit "8," was offered in evidence. However, private respondents now question
this exhibit because, according to them "there is nothing in the record that the exhibits
offered by the defendants have been admitted nor such exhibit appear on record."
Respondents' stance does not persuade. The written acceptance of the donation having
been considered by the trial court in arriving at its decision, there is the presumption that
this exhibit was properly offered and admitted by the court.
Moreover, this issue was never raised in the Court of Appeals. Nowhere in their brief did
respondents question the validity of the donation on the basis of the alleged defect in the
acceptance thereof. If there was such a defect, why did it take respondents more than ten
(10) years from the date of the donation to question its validity? In the very least, they are
guilty of estoppel.[14]
Respondents further argue that assuming there was a valid acceptance of the donation,
the acceptance was not noted in the Deed of Donation as required in Article 749 of the Civil
Code, hence, the donation is void.
The purpose of the formal requirement for acceptance of a donation is to ensure that
such acceptance is duly communicated to the donor. Thus, in Pajarillo vs. Intermediate
Appellate Court,[15] the Court held:
There is no question that the donation was accepted in a separate public instrument and
that it was duly communicated to the donors. Even the petitioners cannot deny this. But
what they do contend is that such acceptance was not "noted in both instruments," meaning
the extrajudicial partition itself and the instrument of acceptance, as required by the Civil
Code.
That is perfectly true. There is nothing in either of the two instruments showing that
"authentic notice" of the acceptance was made by Salud to Juana and Felipe. And while the
first instrument contains the statement that "the donee does hereby accept this donation
and does hereby express her gratitude for the kindness and liberality of the donor," the only

signatories thereof were Felipe Balane and Juana Balane de Suterio. That was in fact the
reason for the separate instrument of acceptance signed by Salud a month later.
A strict interpretation of Article 633 can lead to no other conclusion that the annulment of
the donation for being defective in form as urged by the petitioners. This would be in
keeping with the unmistakable language of the above-quoted provision. However, we find
that under the circumstances of the present case, a literal adherence to the requirement of
the law might result not in justice to the parties but conversely a distortion of their
intentions. It is also a policy of the Court to avoid such as interpretation.
The purpose of the formal requirement is to insure that the acceptance of the donation is
duly communicated to the donor. In the case at bar, it is not even suggested that Juana was
unaware of the acceptance for she in fact confirmed it later and requested that the donated
land be not registered during her lifetime by Salud. Given this significant evidence, the Court
cannot in conscience declare the donation ineffective because there is no notation in the
extrajudicial settlement of the donee's acceptance. That would be placing too much stress
on mere form over substance. It would also disregard the clear reality of the acceptance of
the donation as manifested in the separate instrument dated June 20, 1946, and as later
acknowledged by Juan.
In the case at bar, a school building was immediately constructed after the donation
was executed. Respondents had knowledge of the existence of the school building put up on
the donated lot through the efforts of the Parents-Teachers Association of Barangay
Kauswagan. It was when the school building was being dismantled and transferred to the
new site and when Vice-Mayor Wilfredo Palma was constructing a house on the donated
property that respondents came to know of the Deed of Exchange. The actual knowledge by
respondents of the construction and existence of the school building fulfilled the legal
requirement that the acceptance of the donation by the donee be communicated to the
donor.
On respondents' claim, which was upheld by the Court of Appeals, that the acceptance
by BPS District Supervisor Gregorio Buendia of the donation was ineffective because of the
absence of a special power of attorney from the Republic of the Philippines, it is undisputed
that the donation was made in favor of the Bureau of Public Schools. Such being the case,
his acceptance was authorized under Section 47 of the 1987 Administrative Code which
states:
SEC. 47. Contracts and Conveyances. - Contracts or conveyances may be executed for and in
behalf of the Government or of any of its branches, subdivisions, agencies, or
instrumentalities, whenever demanded by the exigency or exigencies of the service and as
long as the same are not prohibited by law.
Finally, it is respondents' submission that the donee, in exchanging the donated lot with
a bigger lot, violated the condition in the donation that the lot be exclusively used for school
purposes only.
What does the phrase "exclusively used for school purposes" convey? "School" is simply
an institution or place of education.[16] "Purpose" is defined as "that which one sets before
him to accomplish or attain; an end, intention, or aim, object, plan, project. Term is
synonymous with the ends sought, an object to be attained, an intention,
etc."[17] "Exclusive" means "excluding or having power to exclude (as by preventing entrance
or debarring from possession, participation, or use); limiting or limited to possession, control
or use.[18]

Without the slightest doubt, the condition for the donation was not in any way violated
when the lot donated was exchanged with another one. The purpose for the donation
remains the same, which is for the establishment of a school. The exclusivity of the purpose
was not altered or affected. In fact, the exchange of the lot for a much bigger one was in
furtherance and enhancement of the purpose of the donation. The acquisition of the bigger
lot paved the way for the release of funds for the construction of Bagong Lipunan school
building which could not be accommodated by the limited area of the donated lot.
WHEREFORE, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE
and the decision of the Regional Trial Court is REINSTATED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 174978

July 31, 2013

SALLY YOSHIZAKI, Petitioner,

vs.
JOY TRAINING CENTER OF AURORA, INC., Respondent.
DECISION
BRION, J.:
We resolve the petition for review on certiorari1 filed by petitioner Sally Yoshizaki to
challenge the February 14, 2006 Decision2 and the October 3, 2006 Resolution3 of the Court
of Appeals (CA) in CA-G.R. CV No. 83773.
The Factual Antecedents
Respondent Joy Training Center of Aurora, Inc. (Joy Training) is a non-stock, non-profit
religious educational institution. It was the registered owner of a parcel of land and the
building thereon (real properties) located in San Luis Extension Purok No. 1, Barangay
Buhangin, Baler, Aurora. The parcel of land was designated as Lot No. 125-L and was
covered by Transfer Certificate of Title (TCT) No. T-25334.4

On November 10, 1998, the spouses Richard and Linda Johnson sold the real properties, a
Wrangler jeep, and other personal properties in favor of the spouses Sally and Yoshio
Yoshizaki. On the same date, a Deed of Absolute Sale 5 and a Deed of Sale of Motor
Vehicle6 were executed in favor of the spouses Yoshizaki. The spouses Johnson were
members of Joy Trainings board of trustees at the time of sale. On December 7, 1998, TCT
No. T-25334 was cancelled and TCT No. T-260527 was issued in the name of the spouses
Yoshizaki.
On December 8, 1998, Joy Training, represented by its Acting Chairperson Reuben V. Rubio,
filed an action for the Cancellation of Sales and Damages with prayer for the issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction against the spouses
Yoshizaki and the spouses Johnson before the Regional Trial Court of Baler, Aurora
(RTC).8 On January 4, 1999, Joy Training filed a Motion to Amend Complaint with the
attached Amended Complaint. The amended complaint impleaded Cecilia A. Abordo, officerin-charge of the Register of Deeds of Baler, Aurora, as additional defendant. The RTC
granted the motion on the same date.9
In the complaint, Joy Training alleged that the spouses Johnson sold its properties without
the requisite authority from the board of directors.10 It assailed the validity of a board
resolution dated September 1, 199811 which purportedly granted the spouses Johnson the
authority to sell its real properties. It averred that only a minority of the board, composed of
the spouses Johnson and Alexander Abadayan, authorized the sale through the resolution. It
highlighted that the Articles of Incorporation provides that the board of trustees consists of
seven members, namely: the spouses Johnson, Reuben, Carmencita Isip, Dominador Isip,
Miraflor Bolante, and Abelardo Aquino.12
Cecilia and the spouses Johnson were declared in default for their failure to file an Answer
within the reglementary period.13 On the other hand, the spouses Yoshizaki filed their
Answer with Compulsory Counterclaims on June 23, 1999. They claimed that Joy Training
authorized the spouses Johnson to sell the parcel of land. They asserted that a majority of
the board of trustees approved the resolution. They maintained that the actual members of
the board of trustees consist of five members, namely: the spouses Johnson, Reuben,
Alexander, and Abelardo. Moreover, Connie Dayot, the corporate secretary, issued a
certification dated February 20, 199814 authorizing the spouses Johnson to act on Joy
Trainings behalf. Furthermore, they highlighted that the Wrangler jeep and other personal
properties were registered in the name of the spouses Johnson. 15 Lastly, they assailed the
RTCs jurisdiction over the case. They posited that the case is an intra-corporate dispute
cognizable by the Securities and Exchange Commission (SEC). 16
After the presentation of their testimonial evidence, the spouses Yoshizaki formally offered
in evidence photocopies of the resolution and certification, among others. 17 Joy Training
objected to the formal offer of the photocopied resolution and certification on the ground
that they were not the best evidence of their contents. 18 In an Order19 dated May 18, 2004,
the RTC denied the admission of the offered copies.
The RTC Ruling
The RTC ruled in favor of the spouses Yoshizaki. It found that Joy Training owned the real
properties. However, it held that the sale was valid because Joy Training authorized the
spouses Johnson to sell the real properties. It recognized that there were only five actual
members of the board of trustees; consequently, a majority of the board of trustees validly

authorized the sale. It also ruled that the sale of personal properties was valid because they
were registered in the spouses Johnsons name. 20
Joy Training appealed the RTC decision to the CA.
The CA Ruling
The CA upheld the RTCs jurisdiction over the case but reversed its ruling with respect to the
sale of real properties. It maintained that the present action is cognizable by the RTC
because it involves recovery of ownership from third parties.
It also ruled that the resolution is void because it was not approved by a majority of the
board of trustees. It stated that under Section 25 of the Corporation Code, the basis for
determining the composition of the board of trustees is the list fixed in the articles of
incorporation. Furthermore, Section 23 of the Corporation Code provides that the board of
trustees shall hold office for one year and until their successors are elected and qualified.
Seven trustees constitute the board since Joy Training did not hold an election after its
incorporation.
The CA did not also give any probative value to the certification. It stated that the
certification failed to indicate the date and the names of the trustees present in the meeting.
Moreover, the spouses Yoshizaki did not present the minutes that would prove that the
certification had been issued pursuant to a board resolution.21 The CA also denied22 the
spouses Yoshizakis motion for reconsideration, prompting Sally23 to file the present petition.
The Petition
Sally avers that the RTC has no jurisdiction over the case. She points out that the complaint
was principally for the nullification of a corporate act. The transfer of the SECs original and
exclusive jurisdiction to the RTC24 does not have any retroactive application because
jurisdiction is a substantive matter.
She argues that the spouses Johnson were authorized to sell the parcel of land and that she
was a buyer in good faith because she merely relied on TCT No. T-25334. The title states that
the spouses Johnson are Joy Trainings representatives.
She also argues that it is a basic principle that a party dealing with a registered land need
not go beyond the certificate of title to determine the condition of the property. In fact, the
resolution and the certification are mere reiterations of the spouses Johnsons authority in
the title to sell the real properties. She further claims that the resolution and the
certification are not even necessary to clothe the spouses Johnson with the authority to sell
the disputed properties. Furthermore, the contract of agency was subsisting at the time of
sale because Section 108 of Presidential Decree No. (PD) 1529 requires that the revocation
of authority must be approved by a court of competent jurisdiction and no revocation was
reflected in the certificate of title.25
The Case for the Respondent
In its Comment26 and Memorandum,27 Joy Training takes the opposite view that the RTC has
jurisdiction over the case. It posits that the action is essentially for recovery of property and

is therefore a case cognizable by the RTC. Furthermore, Sally is estopped from questioning
the RTCs jurisdiction because she seeks to reinstate the RTC ruling in the present case.
Joy Training maintains that it did not authorize the spouses Johnson to sell its real
properties. TCT No. T-25334 does not specifically grant the authority to sell the parcel of
land to the spouses Johnson. It further asserts that the resolution and the certification
should not be given any probative value because they were not admitted in evidence by the
RTC. It argues that the resolution is void for failure to comply with the voting requirements
under Section 40 of the Corporation Code. It also posits that the certification is void because
it lacks material particulars.
The Issues
The case comes to us with the following issues:
1) Whether or not the RTC has jurisdiction over the present case; and
2) Whether or not there was a contract of agency to sell the real properties between
Joy Training and the spouses Johnson.
3) As a consequence of the second issue, whether or not there was a valid contract of
sale of the real properties between Joy Training and the spouses Yoshizaki.
Our Ruling
We find the petition unmeritorious.
The RTC has jurisdiction over disputes concerning the application of the Civil Code
Jurisdiction over the subject matter is the power to hear and determine cases of the general
class to which the proceedings before a court belong. 28 It is conferred by law. The
allegations in the complaint and the status or relationship of the parties determine which
court has jurisdiction over the nature of an action.29 The same test applies in ascertaining
whether a case involves an intra-corporate controversy.30
The CA correctly ruled that the RTC has jurisdiction over the present case. Joy Training seeks
to nullify the sale of the real properties on the ground that there was no contract of agency
between Joy Training and the spouses Johnson. This was beyond the ambit of the SECs
original and exclusive jurisdiction prior to the enactment of Republic Act No. 8799 which
only took effect on August 3, 2000. The determination of the existence of a contract of
agency and the validity of a contract of sale requires the application of the relevant
provisions of the Civil Code. It is a well-settled rule that "disputes concerning the application
of the Civil Code are properly cognizable by courts of general jurisdiction." 31 Indeed, no
special skill requiring the SECs technical expertise is necessary for the disposition of this
issue and of this case.
The Supreme Court may review questions of fact in a petition for review on certiorari when
the findings of fact by the lower courts are conflicting
We are aware that the issues at hand require us to review the pieces of evidence presented
by the parties before the lower courts. As a general rule, a petition for review on certiorari

precludes this Court from entertaining factual issues; we are not duty-bound to analyze
again and weigh the evidence introduced in and considered by the lower courts. However,
the present case falls under the recognized exception that a review of the facts is warranted
when the findings of the lower courts are conflicting.32 Accordingly, we will examine the
relevant pieces of evidence presented to the lower court.
There is no contract of agency between Joy Training and the spouses Johnson to sell the
parcel of land with its improvements
Article 1868 of the Civil Code defines a contract of agency as a contract whereby a person
"binds himself to render some service or to do something in representation or on behalf of
another, with the consent or authority of the latter." It may be express, or implied from the
acts of the principal, from his silence or lack of action, or his failure to repudiate the agency,
knowing that another person is acting on his behalf without authority.
As a general rule, a contract of agency may be oral. However, it must be written when the
law requires a specific form.33 Specifically, Article 1874 of the Civil Code provides that the
contract of agency must be written for the validity of the sale of a piece of land or any
interest therein. Otherwise, the sale shall be void. A related provision, Article 1878 of the
Civil Code, states that special powers of attorney are necessary to convey real rights over
immovable properties.
The special power of attorney mandated by law must be one that expressly mentions a sale
or that includes a sale as a necessary ingredient of the authorized act. We unequivocably
declared in Cosmic Lumber Corporation v. Court of Appeals34 that a special power of
attorneymust express the powers of the agent in clear and unmistakable language for the
principal to confer the right upon an agent to sell real estate. When there is any reasonable
doubt that the language so used conveys such power, no such construction shall be given
the document. The purpose of the law in requiring a special power of attorney in the
disposition of immovable property is to protect the interest of an unsuspecting owner from
being prejudiced by the unwarranted act of another and to caution the buyer to assure
himself of the specific authorization of the putative agent.35
In the present case, Sally presents three pieces of evidence which allegedly prove that Joy
Training specially authorized the spouses Johnson to sell the real properties: (1) TCT No. T25334, (2) the resolution, (3) and the certification. We quote the pertinent portions of these
documents for a thorough examination of Sallys claim. TCT No. T-25334, entered in the
Registry of Deeds on March 5, 1998, states:
A parcel of land x x x is registered in accordance with the provisions of the Property
Registration Decree in the name of JOY TRAINING CENTER OF AURORA, INC., Rep. by Sps.
RICHARD A. JOHNSON and LINDA S. JOHNSON, both of legal age, U.S. Citizen, and residents
of P.O. Box 3246, Shawnee, Ks 66203, U.S.A.36(emphasis ours)
On the other hand, the fifth paragraph of the certification provides:
Further, Richard A. and Linda J. Johnson were given FULL AUTHORITY for ALL SIGNATORY
purposes for the corporation on ANY and all matters and decisions regarding the property
and ministry here. They will follow guidelines set forth according to their appointment and
ministerial and missionary training and in that, they will formulate and come up with bylaws which will address and serve as governing papers over the center and corporation. They

are to issue monthly and quarterly statements to all members of the

corporation.37 (emphasis ours)
The resolution states:
We, the undersigned Board of Trustees (in majority) have authorized the sale of land and
building owned by spouses Richard A. and Linda J. Johnson (as described in the title SN No.
5102156 filed with the Province of Aurora last 5th day of March, 1998. These proceeds are
going to pay outstanding loans against the project and the dissolution of the corporation
shall follow the sale. This is a religious, non-profit corporation and no profits or stocks are
issued.38 (emphasis ours)
The above documents do not convince us of the existence of the contract of agency to sell
the real properties. TCT No. T-25334 merely states that Joy Training is represented by the
spouses Johnson. The title does not explicitly confer to the spouses Johnson the authority to
sell the parcel of land and the building thereon. Moreover, the phrase "Rep. by Sps.
RICHARD A. JOHNSON and LINDA S. JOHNSON"39 only means that the spouses Johnson
represented Joy Training in land registration.
The lower courts should not have relied on the resolution and the certification in resolving
the case.1wphi1 The spouses Yoshizaki did not produce the original documents during trial.
They also failed to show that the production of pieces of secondary evidence falls under the
exceptions enumerated in Section 3, Rule 130 of the Rules of Court. 40 Thus, the general rule
that no evidence shall be admissible other than the original document itself when the
subject of inquiry is the contents of a document applies.41
Nonetheless, if only to erase doubts on the issues surrounding this case, we declare that
even if we consider the photocopied resolution and certification, this Court will still arrive at
the same conclusion.
The resolution which purportedly grants the spouses Johnson a special power of attorney is
negated by the phrase "land and building owned by spouses Richard A. and Linda J.
Johnson."42 Even if we disregard such phrase, the resolution must be given scant
consideration. We adhere to the CAs position that the basis for determining the board of
trustees composition is the trustees as fixed in the articles of incorporation and not the
actual members of the board. The second paragraph of Section 25 43 of the Corporation Code
expressly provides that a majority of the number of trustees as fixed in the articles of
incorporation shall constitute a quorum for the transaction of corporate business.
Moreover, the certification is a mere general power of attorney which comprises all of Joy
Trainings business.44Article 1877 of the Civil Code clearly states that "an agency couched in
general terms comprises only acts of administration, even if the principal should state that
he withholds no power or that the agent may execute such acts as he may consider
appropriate, or even though the agency should authorize a general and unlimited
management."45
The contract of sale is unenforceable
Necessarily, the absence of a contract of agency renders the contract of sale
unenforceable;46 Joy Training effectively did not enter into a valid contract of sale with the
spouses Yoshizaki. Sally cannot also claim that she was a buyer in good faith. She
misapprehended the rule that persons dealing with a registered land have the legal right to

rely on the face of the title and to dispense with the need to inquire further, except when the
party concerned has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such inquiry. 47 This rule applies when the ownership of a
parcel of land is disputed and not when the fact of agency is contested.
At this point, we reiterate the established principle that persons dealing with an agent must
ascertain not only the fact of agency, but also the nature and extent of the agents
authority.48 A third person with whom the agent wishes to contract on behalf of the principal
may require the presentation of the power of attorney, or the instructions as regards the
agency.49 The basis for agency is representation and a person dealing with an agent is put
upon inquiry and must discover on his own peril the authority of the agent.50 Thus, Sally
bought the real properties at her own risk; she bears the risk of injury occasioned by her
transaction with the spouses Johnson.
WHEREFORE, premises considered, the assailed Decision dated February 14, 2006 and
Resolution dated October 3, 2006 of the Court of Appeals are hereby AFFIRMED and the
petition is hereby DENIED for lack of merit.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 78903 February 28, 1990
SPS. SEGUNDO DALION AND EPIFANIA SABESAJE-DALION, petitioners,
vs.
THE HONORABLE COURT OF APPEALS AND RUPERTO SABESAJE, JR., respondents.

Francisco A. Puray, Sr. for petitioners.

Gabriel N. Duazo for private respondent.

MEDIALDEA, J.:
This is a petition to annul and set aside the decision of the Court of Appeals rendered on May
26, 1987, upholding the validity of the sale of a parcel of land by petitioner Segundo Dalion
(hereafter, "Dalion") in favor of private respondent Ruperto Sabesaje, Jr. (hereafter,
"Sabesaje"), described thus:
A parcel of land located at Panyawan, Sogod, Southern Leyte, declared in the
name of Segundo Dalion, under Tax Declaration No. 11148, with an area of

8947 hectares, assessed at P 180.00, and bounded on the North, by Sergio

Destriza and Titon Veloso, East, by Feliciano Destriza, by Barbara Bonesa (sic);
and West, by Catalino Espina. (pp. 36-37, Rollo)
The decision affirms in toto the ruling of the trial court
dispositive portion of which provides as follows:

issued on January 17, 1984, the

WHEREFORE, IN VIEW OF THE FOREGOING, the Court hereby renders

judgment.
(a) Ordering the defendants to deliver to the plaintiff the parcel of land
subject of this case, declared in the name of Segundo Dalion previously under
Tax Declaration No. 11148 and lately under Tax Declaration No. 2297 (1974)
and to execute the corresponding formal deed of conveyance in a public
document in favor of the plaintiff of the said property subject of this case,
otherwise, should defendants for any reason fail to do so, the deed shall be
executed in their behalf by the Provincial Sheriff or his Deputy;
(b) Ordering the defendants to pay plaintiff the amount of P2,000.00 as
attorney's fees and P 500.00 as litigation expenses, and to pay the costs; and
(c) Dismissing the counter-claim. (p. 38, Rollo)
The facts of the case are as follows:
On May 28, 1973, Sabesaje sued to recover ownership of a parcel of land, based on a private
document of absolute sale, dated July 1, 1965 (Exhibit "A"), allegedly executed by Dalion,
who, however denied the fact of sale, contending that the document sued upon is fictitious,
his signature thereon, a forgery, and that subject land is conjugal property, which he and his
wife acquired in 1960 from Saturnina Sabesaje as evidenced by the "Escritura de Venta
Absoluta" (Exhibit "B"). The spouses denied claims of Sabesaje that after executing a deed
of sale over the parcel of land, they had pleaded with Sabesaje, their relative, to be allowed
to administer the land because Dalion did not have any means of livelihood. They admitted,
however, administering since 1958, five (5) parcels of land in Sogod, Southern Leyte, which
belonged to Leonardo Sabesaje, grandfather of Sabesaje, who died in 1956. They never
received their agreed 10% and 15% commission on the sales of copra and abaca,
respectively. Sabesaje's suit, they countered, was intended merely to harass, preempt and
forestall Dalion's threat to sue for these unpaid commissions.
From the adverse decision of the trial court, Dalion appealed, assigning errors some of
which, however, were disregarded by the appellate court, not having been raised in the
court below. While the Court of Appeals duly recognizes Our authority to review matters
even if not assigned as errors in the appeal, We are not inclined to do so since a review of
the case at bar reveals that the lower court has judicially decided the case on its merits.
As to the controversy regarding the identity of the land, We have no reason to dispute the
Court of Appeals' findings as follows:
To be sure, the parcel of land described in Exhibit "A" is the same property
deeded out in Exhibit "B". The boundaries delineating it from adjacent lots are
identical. Both documents detail out the following boundaries, to wit:

On the North-property of Sergio Destriza and Titon Veloso;

On the East-property of Feliciano Destriza;
On the South-property of Barbara Boniza and
On the West-Catalino Espina.
(pp. 41-42, Rollo)
The issues in this case may thus be limited to: a) the validity of the contract of sale of a
parcel of land and b) the necessity of a public document for transfer of ownership thereto.
The appellate court upheld the validity of the sale on the basis of Secs. 21 and 23 of Rule 132
of the Revised Rules of Court.
SEC. 21. Private writing, its execution and authenticity, how proved.-Before
any private writing may be received in evidence, its due execution and
authenticity must be proved either:
(a) By anyone who saw the writing executed;
(b) By evidence of the genuineness of the handwriting of the maker; or
(c) By a subscribing witness
xxx xxx xxx
SEC. 23. Handwriting, how proved. The handwriting of a person may be
proved by any witness who believes it to be the handwriting of such person,
and has seen the person write, or has seen writing purporting to be his upon
which the witness has acted or been charged, and has thus acquired
knowledge of the handwriting of such person. Evidence respecting the
handwriting may also be given by a comparison, made by the witness or the
court, with writings admitted or treated as genuine by the party against whom
the evidence is offered, or proved to be genuine to the satisfaction of the
judge. (Rule 132, Revised Rules of Court)
And on the basis of the findings of fact of the trial court as follows:
Here, people who witnessed the execution of subject deed positively testified
on the authenticity thereof. They categorically stated that it had been
executed and signed by the signatories thereto. In fact, one of such witnesses,
Gerardo M. Ogsoc, declared on the witness stand that he was the one who
prepared said deed of sale and had copied parts thereof from the "Escritura De
Venta Absoluta" (Exhibit B) by which one Saturnina Sabesaje sold the same
parcel of land to appellant Segundo Dalion. Ogsoc copied the bounderies
thereof and the name of appellant Segundo Dalion's wife, erroneously written
as "Esmenia" in Exhibit "A" and "Esmenia" in Exhibit "B". (p. 41, Rollo)
xxx xxx xxx

Against defendant's mere denial that he signed the document, the positive
testimonies of the instrumental Witnesses Ogsoc and Espina, aside from the
testimony of the plaintiff, must prevail. Defendant has affirmatively alleged
forgery, but he never presented any witness or evidence to prove his claim of
forgery. Each party must prove his own affirmative allegations (Section 1,
Rule 131, Rules of Court). Furthermore, it is presumed that a person is
innocent of a crime or wrong (Section 5 (a), Idem), and defense should have
come forward with clear and convincing evidence to show that plaintiff
committed forgery or caused said forgery to be committed, to overcome the
presumption of innocence. Mere denial of having signed, does not suffice to
show forgery.
In addition, a comparison of the questioned signatories or specimens (Exhs. A2 and A-3) with the admitted signatures or specimens (Exhs. X and Y or 3-C)
convinces the court that Exhs. A-2 or Z and A-3 were written by defendant
Segundo Dalion who admitted that Exhs. X and Y or 3-C are his signatures.
The questioned signatures and the specimens are very similar to each other
and appear to be written by one person.
Further comparison of the questioned signatures and the specimens with the
signatures Segundo D. Dalion appeared at the back of the summons (p. 9,
Record); on the return card (p. 25, Ibid.); back of the Court Orders dated
December 17, 1973 and July 30, 1974 and for October 7, 1974 (p. 54 & p. 56,
respectively, Ibid.), and on the open court notice of April 13, 1983 (p.
235, Ibid.) readily reveal that the questioned signatures are the signatures of
defendant Segundo Dalion.
It may be noted that two signatures of Segundo D. Dalion appear on the face
of the questioned document (Exh. A), one at the right corner bottom of the
document (Exh. A-2) and the other at the left hand margin thereof (Exh. A-3).
The second signature is already a surplusage. A forger would not attempt to
forge another signature, an unnecessary one, for fear he may commit a
revealing error or an erroneous stroke. (Decision, p. 10) (pp. 42-43, Rollo)
We see no reason for deviating from the appellate court's ruling (p. 44, Rollo) as we
reiterate that
Appellate courts have consistently subscribed to the principle that conclusions
and findings of fact by the trial courts are entitled to great weight on appeal
and should not be disturbed unless for strong and cogent reasons, since it is
undeniable that the trial court is in a more advantageous position to examine
real evidence, as well as to observe the demeanor of the witnesses while
testifying in the case (Chase v. Buencamino, Sr., G.R. No. L-20395, May 13,
1985, 136 SCRA 365; Pring v. Court of Appeals, G.R. No. L-41605, August 19,
1985, 138 SCRA 185)
Assuming authenticity of his signature and the genuineness of the document, Dalion
nonetheless still impugns the validity of the sale on the ground that the same is embodied in
a private document, and did not thus convey title or right to the lot in question since "acts
and contracts which have for their object the creation, transmission, modification or
extinction of real rights over immovable property must appear in a public instrument" (Art.
1358, par 1, NCC).

This argument is misplaced. The provision of Art. 1358 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 contract of sale of a parcel of land that this be embodied in a public instrument.
A contract of sale is a consensual contract, which means that the sale is perfected by mere
consent. No particular form is required for its validity. Upon perfection of the contract, the
parties may reciprocally demand performance (Art. 1475, NCC), i.e., the vendee may compel
transfer of ownership of the object of the sale, and the vendor may require the vendee to
pay the thing sold (Art. 1458, NCC).
The trial court thus rightly and legally ordered Dalion to deliver to Sabesaje the parcel of
land and to execute corresponding formal deed of conveyance in a public document. Under
Art. 1498, NCC, when the sale is made through a public instrument, the execution thereof is
equivalent to the delivery of the thing. Delivery may either be actual (real) or constructive.
Thus delivery of a parcel of land may be done by placing the vendee in control and
possession of the land (real) or by embodying the sale in a public instrument (constructive).
As regards petitioners' contention that the proper action should have been one for specific
performance, We believe that the suit for recovery of ownership is proper. As earlier stated,
Art. 1475 of the Civil Code gives the parties to a perfected contract of sale the right to
reciprocally demand performance, and to observe a particular form, if warranted, (Art.
1357). The trial court, aptly observed that Sabesaje's complaint sufficiently alleged a cause
of action to compel Dalion to execute a formal deed of sale, and the suit for recovery of
ownership, which is premised on the binding effect and validity inter partes of the contract
of sale, merely seeks consummation of said contract.
... . A sale of a real property may be in a private instrument but that contract is
valid and binding between the parties upon its perfection. And a party may
compel the other party to execute a public instrument embodying their
contract affecting real rights once the contract appearing in a private
instrument hag been perfected (See Art. 1357).
... . (p. 12, Decision, p. 272, Records)
ACCORDINGLY, the petition is DENIED and the decision of the Court of Appeals upholding
the ruling of the trial court is hereby AFFIRMED. No costs.
SO ORDERED.