1. Gaite v.

Fonacier
G.R. No. L-11827
July 31, 1961

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.

2. KERR & CO vs LINGAD

GR No. L-20871
April 30, 1971

Facts:
CIR assessed the sum of P20,272.33 as the commercial broker’s percentage tax,
surcharge, and compromise penalty against Ker & Co. Ker and Co. requested for the
cancellation of the assessment and filed a petition for review with the Court of Tax Appeals. The
CTA ruled that Ker and Co is liable as a commercial broker. Ker has a contract with US rubber.
Ker is the distributor of the said company. Ker was precluded from disposing the products
elsewhere unless there has been a written consent from the company. The prices, discounts,
terms of payment, terms of delivery and other conditions of sale were subject to change in the
discretion of the Company.

Issue:
Whether the relationship of Ker and Co and US rubber was that of a vendor- vendee or
principal-broker

Ruling:
The relationship of Ker and Co and US rubber was that of a principal-broker/ agency.
Ker and Co is only an agent of the US rubber because it can dispose of the products of the
Company only to certain persons or entities and within stipulated limits, unless excepted by the
contract or by the Rubber Company, it merely receives, accepts and/or holds upon consignment
the products, which remain properties of the latter company, every effort shall be made by
petitioner to promote in every way the sale of the products and that sales made by petitioner
are subject to approval by the company. Since the company retained ownership of the goods,
even as it delivered possession unto the dealer for resale to customers, the price and terms of
which were subject to the company’s control, the relationship between the company and the
dealer is one of agency.
3. SCHMID & OBERLY, INC. Vs. RJL MARTINEZ FISHING CORPORATION
G.R. No. 75198 , October 18, 1988

FACTS:

The findings of facts by the trial court (Decision, pp. 21-28, Record on Appeal) shows:
that the plaintiff RJL Martinez Fishing Corporation is engaged in deep-sea fishing, and in the
course of its business, needed electrical generators for the operation of its business; that the
defendant sells electrical generators with the brand of "Nagata", a Japanese product; that the
supplier is the manufacturer, the D. Nagata Co. Ltd., of Japan, that the defendant Schmid &
Oberly Inc. advertised the 12 Nagata generators for sale; that the plaintiff purchased 12 brand
new Nagata generators, as advertised by herein defendant; that through an irrevocable line of
credit, the D. Nagata Co., Ltd., shipped to the plaintiff 12 electric generators, and the latter paid
the amount of the purchase price; that the 12 generators were found to be factory defective;
that the plaintiff informed the defendant herein that it shall return the 12 generators as in fact
three of the 12 were actually returned to the defendant; that the plaintiff sued the defendant
on the warranty; asking for rescission of the contract; that the defendant be ordered to accept
the generators and be ordered to pay back the purchase money; and that the plaintiff asked for
damages. (Record on Appeal, pp. 27-28) [CA Decision, pp. 34; Rollo, pp. 47-48.]

On the basis thereof, the Court of Appeals affirmed the decision of the trial court
ordering petitioner to refund to private respondent the purchase price for the twelve (12)
generators and to accept delivery of the same and to pay s and attorney's fees, with a slight
modification as to the amount to be refunded. In its resolution of the motion for
reconsideration, the Court of Appeals further modified the trial courts decision as to the award
of consequential damages.

Thus, after a careful scrutiny of the records, the Court has found the appellate court's
narration of facts incomplete. It failed to include certain material facts.
The facts are actually as follows: RJL MARTINEZ is engaged in the business of deep-sea fishing.
As RJL MARTINEZ needed electric generators for some of its boats and SCHMIID sold electric
generators of different brands, negotiations between them for the acquisition thereof took
place. The parties had two separate transactions over "Nagata"-brand generators.

The first transaction was the sale of three (3) generators. In this transaction, it is not
disputed that SCHMID was the vendor of the generators. The company supplied the generators
from its stockroom; it was also SCHMID which invoiced the sale. The second transaction, which
gave rise to the present controversy, involves twelve (12) "Nagata"-brand generators.

As not all of the generators were replaced or repaired, RJL MARTINEZ formally
demanded that it be refunded the cost of the generators and paid damages. SCHMID in its
reply maintained that it was not the seller of the twelve (12) generators and thus refused to
refund the purchase price therefor. Hence, on February 14, 1977, RJL MARTINEZ brought suit
against SCHMID on the theory that the latter was the vendor of the twelve (12) generators and,
as such vendor, was liable under its warranty against hidden defects.
 Both the trial court and the Court of Appeals upheld the contention of RJL MARTINEZ
that SCHMID was the vendor in the second transaction and was liable under its warranty.
Accordingly, the courts a quo rendered judgment in favor of RJL MARTINEZ.

ISSUE:
Whether the second transaction between the parties was a sale or an indent transaction.
SCHMID maintains that it was the latter; RJL MARTINEZ claims that it was a sale.

HELD:
At the outset, it must be understood that a contract is what the law defines it to be,
considering its essential elements, and not what it is caged by the contracting parties [Quiroga
v. Parsons Hardware Co., 38 Phil. 501 (1918).]
The Civil Code defines a contract of sale, thus: ART. 458. 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 therefor a price certain in money or its equivalent. It has been said
that the essence of the contract of sale is transfer of title or agreement to transfer it for a price
paid or promised [Commissioner of Internal Revenue v. Constantino, G.R. No. L-25926,
February 27, 1970, 31 SCRA 779, 785, citing Salisbury v. Brooks, 94 SE 117,118-19.] "If such
transfer puts the transferee in the attitude or position of an owner and makes him liable to the
transferor as a debtor for the agreed price, and not merely as an agent who must account for
the proceeds of a resale, the transaction is, a sale." [Ibid.]

On the other hand, there is no statutory definition of "indent" in this jurisdiction.

However, the Rules and Regulations to Implement Presidential Decree No. 1789 (the Omnibus
Investments Code) lumps "indentors" together with "commercial brokers" and "commission
merchants" in this manner:... A foreign firm which does business through the middlemen acting
in their own names, such asindentors, commercial brokers or commission merchants, shall not
be deemed doing business in the Philippines. But such indentors, commercial brokers or
commission merchants shall be the ones deemed to be doing business in the Philippines [Part I,
Rule I, Section 1, par. g (1).]
Therefore, an indentor is a middlemen in the same class as commercial brokers and commission
merchants. To get an Idea of what an indentor is, a look at the definition of those in his class
may prove helpful. A broker is generally defined as one who is engaged, for others, on a
commission, negotiating contracts relative to property with the custody of which he has no
concern; the negotiator between other parties, never acting in his own name but in the name of
those who employed him; he is strictly a middleman and for some purpose the agent of both
parties. (1 9 Cyc 186; Henderson vs. The State, 50 Ind., 234; Black's Law Dictionary.) A broker
is one whose occupation it is to bring parties together to bargain, or to bargain for them, in
matters of trade, commerce or navigation. Mechem on Agency, sec. 13; Wharton on Agency,
sec. 695.) Judge Storey, in his work on Agency, defines a broker as an agent employed to make
bargains and contracts between other persons, in matters of trade, commerce or navigation, for
compensation commonly called brokerage. (Storey on Agency, sec. 28.) [Behn Meyer and Co.,
Ltd. v. Nolting and Garcia, 35 Phil. 274, 279-80 (1916).] A commission merchant is one
engaged in the purchase or sale for another of personal property which, for this purpose, is
placed in his possession and at his disposal. He maintains a relation not only with his principal
and the purchasers or vendors, but also with the property which is subject matter of the
transaction. [Pacific Commercial Co. v. Yatco, 68 Phil. 398, 401 (1939).]
 Webster defines an indent as "a purchase order for goods especially when sent from a
foreign country." [Webster's Ninth New Collegiate Dictionary 612 (1986).] It would appear that
there are three parties to an indent transaction, namely, the buyer, the indentor, and the
supplier who is usually a non-resident manufacturer residing in the country where the goods are
to be bought [Commissioner of Internal Revenue v. Cadwallader Pacific Company, G.R. No. L-
20343, September 29, 1976, 73 SCRA 59.] An indentor may therefore be best described as one
who, for compensation, acts as a middleman in bringing about a purchase and sale of goods
between a foreign supplier and a local purchaser.

Finally, the afore-quoted penal provision in the Corporation Law finds no application to
SCHMID and its officers and employees relative to the transactions in the instant case. What the
law seeks to prevent, through said provision, is the circumvention by foreign corporations of
licensing requirements through the device of employing local representatives. An indentor,
acting in his own name, is not, however, covered by the above-quoted provision. In fact, the
provision of the Rules and Regulations implementing the Omnibus Investments Code quoted
above, which was copied from the Rules implementing Republic Act No. 5455, recognizes the
distinct role of an indentor, such that when a foreign corporation does business through such
indentor, the foreign corporation is not deemed doing business in the Philippines.

In view of the above considerations, this Court rules that SCHMID was merely acting as
an indentor in the purchase and sale of the twelve (12) generators subject of the second
transaction. Not being the vendor, SCHMID cannot be held liable for the implied warranty for
hidden defects under the Civil Code [Art. 1561, et seq.] However, even as SCHMID was merely
an indentor, there was nothing to prevent it from voluntarily warranting that twelve (12)
generators subject of the second transaction are free from any hidden defects. In other words,
SCHMID may be held answerable for some other contractual obligation, if indeed it had so
bound itself. As stated above, an indentor is to some extent an agent of both the vendor and
the vendee. As such agent, therefore, he may expressly obligate himself to undertake the
obligations of his principal (See Art. 1897, Civil Code.)

4. FILINVEST CREDIT CORPORATION vs. CA, JOSE SY BANG and ILUMINADA TAN SY
BANG
178 SCRA 188, G.R. No. 82508
September 29, 1989

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.
5. LUZON BROKERAGE CO. vs MARITIME BLDG
G.R. No. L-25885
January 31 1972

Doctrine:
The distinction between contracts of sale and contract to sell with reserved title has
been recognized by this Court in repeated decisions upholding the power of promisors under
contracts to sell in case of failure of the other party to complete payment, to extra judicially
terminate the operation of the contract, refuse conveyance and retain the sums or installments
already received, where such rights are expressly provided for, asin this case.

Facts:
Myers corp sold land to Maritime. In the agreement, they agreed on an installment plan
and that if Maritime missed a payment, the contract will be annulled and the payments already
made will be forfeited. Maritime failed to pay so Myers annulled the contract and did not return
payments. SC says Myers can do this because under contracts to sell, promisors, in case of
failure of the other party to complete payment, can extrajudicially terminate the contract,
refuse conveyance, and retain installments already received, where such rights are provided.

In Manila, Myers owned 3 parcels of land w/ improvements. Myers then entered into a contract
called a “Deed of Conditional Sale” with Maritime Building.
 Myers sold the land for P1million.
 They agreed on the manner of payment (installment, initial payment upon execution of
contract, interest rate)
 In the contract it was stipulated that in case of failure of buyer to pay any of the
instalments, the contract will be annulled at the option of the seller and all payments
made by the buyer is forfeited.

Later on, the stipulated installment of P10k with 5%interest was amended to the P5k with 5.5%
per annum.
 Maritime paid the monthly installments but failed to pay the monthly installment of
March.

VP of Maritime wrote to Pres of Myers requesting for a moratorium on the monthly payment of
the installments because the company was undergoing financial problems.
 Myers refused.
 For the months of March, April, and May, Maritime failed to pay and did not heed the
demand of Myers.

Myers wrote Maritime cancelling the “Deed of Conditional Sale”

 Myers demanded return of possession of properties
 Held Maritime liable for use and occupation amounting to P10k per month

In the meantime, Luzon Brokerage was leasing the property from Maritime.
 Myers demanded from Luzon the payment of monthly rentals of P10k
 Myers also demanded surrender of property.
While actions and crossclaims between Myers and Maritime were happening, the contract
between Maritime and Luzon was extended for 4more years.

Turns out, Maritime’s suspension of its payments to Myers corp arose from a previous event: An
award of backwages made by the Court of Industrial Relations in favor of Luzon Labor Union
(employees employed by Luzon).
 FH Myers was a major stockholder of Luzon Brokerage. FH Myers promised to
indemnify Schedler (who controlled Maritime) when Shedler purchased FH Myers’s
stock in Luzon Brokerage company. (This indemnification is for the award of backwages
by the CIR)
 Schedler claims that after FH Myers estates closed, he was notified that the indemnity
on the Labor Union case will not be honored anymore.
 And so, Schedler advised Myers corp that Maritime is withholding payments to Myers
corp in order to offset the liability when Myersheirs failed to honor the indemnity
agreement.

TC ruled Maritime in breach of contract.

Issue:
 Has there been a breach of contract?
 Can Myers extrajudicially terminate the contract?
Held:
Yes.
Yes.

Ratio:
 Failure to pay monthly installments constitute a breach of contract. Default was not
made in good faith.
 The letter to Myers corp means that the non-payment of installments was deliberately
made to coerce Myers crp into answering for an allegedpromise of the dead FH Myers.
 Whatever obligation FH Myers had assumed is not an obligation of Myers corp. No proof
that board of Myers corp agreed to assume responsibility to debts of FH Myers and
heirs.
 Schaedler allowed the estate proceedings of FH Myers to close without providing
liability.
 By the balance (of payment) in the Deed of Conditional Sale, Maritime wasattempting to
burden the Myers corp with an uncollectible debt,since enforcement against FH Myers
estate was already barred.
 Maritime acted in bad faith.
 Maritime’s contract with Myers is not the ordinary sale contemplated in NCC 1592
(transferring ownership simultaneously with delivery).
 The distinction between contracts of sale and contract to sell with reserved title has
been recognized by this Court in repeated decisions upholding the power of promisors
under contracts to sell in case of failure of the other party to complete payment, to extra
judicially terminate the operation of the contract, refuse conveyance and retain the
sums or installments already received, where such rights are expressly provided for, as
in this case.
 Decision affirmed
6. DIGNOS VS COURT OF APPEALS
G.R. No. L-59266, 158 SCRA 375
February 29, 1988

Facts:
In July 1965, here petitioners Silvestre T. Dignos and Isabela Lumungsod de Dignos
(spouses Dignos) sold their parcel of land in Opon, Lapu-Lapu to herein private respondent
Antonio Jabil for the sum of P28,000 payable for two installments, with an assumption of
indebtedness with the First Insular Bank of Cebu in the sum of P12,000 and the next
installment of P4,000 to be paid in September 1965. In November, 1965, the spouses Dignos
sold the same parcel of land for P35,000 to defendants Luciano Cabigas and Jovita L. de
Cabigas (spouses Cabigas) who were then US citizens, and executed in their favor an Absolute
Deed of Sale duly registered in the Office of the Register of Deeds.

Upon discovery of the 2nd sale of the subject land, Jabil filed the case at bar in the CFI of
Cebu which rendered its Decision in August 1975 declaring the 2nd sale to the spouses Cabigas
null and void ab initio and the 1st sale to Jabil not rescinded. The CFI of Cebu also ordered Jabil
to pay the remaining P16,000 to the spouses Dignos and to reimburse the spouses Cabigas a
reasonable amount corresponding the expenses in the construction of hollow block fences in
the said parcel of land. The spouses Dignos were also ordered to return the P35,000 to the
spouses Cabigas.

Both Jabil and the spouses Dignos appealed to the Court of Appeals, which affirmed in
July 1981 the CFI of Cebu’s Decision except for the part of Jabil paying the expenses of the
spouses Cabigas for building a fence. The spouses Dignos contested that the contract between
them and Jabil was merely a contract to sell and not a deed of sale.

Issue:
Whether or not the contract between the parties is a contract of sale or a contract to
sell?

Held:
The Supreme Court affirmed the decision of the Court of Appeals saying stated that all
the elements of a valid contract of sale are present in the document and that the spouses
DIgnos had no right to sell the land in question because an actual delivery of its possession has
already been made in favor of Jabil as early as March 1965. It was also found that the spouses
Dignos never notified Jabil by notarial act that they were rescinding the contract, and neither
did they file a suit in court to rescind the sale. There is no showing that Jabil properly
authorized a certain Cipriano Amistad to tell peitioners that he was already waiving his rights to
the land in question.
7. MARTIN VS REYES
G.R. No. L-4402
July 28, 1952

Facts:
Respondent Pedro Revilla and Maria Reyes obtained from the La Previsora Filipinas
sometime before November 18, 1930 a loan of P6,500; and with the money, the price of a lot,
with improvements, which they paid had previously purchased from the Archbishop of Manila.
They mortgaged the property to La Previsora for the purpose of guaranteeing repayment of the
debt in installments with interest at 12% per annum. It turned out later that Monte de Piedad y
Caja de Ahorros had obtained a judgment against Pedro Revilla for the sum of P45,000 and had
levied execution therefor upon the property and its rentals. Apprised of this development, the
La Previsora started foreclosure proceedings, alleging non-payment of its credit by the
mortgagors. It seems that La Previsora at the same time, or immediately thereafter conveyed
the property by Exhibit C to petitioner Canuto Martin, who then executed the document Exhibit
D undertaking to allow respondents to repurchase the property within the sixty days from
October 31, 1941, but at the price of P14,000. This document Exhibit D was signed by Maria
reyes signifying her assent.

Issue:
Whether or not the respondents properly exercised their right to repurchase?

Held:
No. The Court of Appeals stated that in December 1941, Maria Reyes accompanied by
Marcela Mota de Malonso went to the office of La Previsora, not for the purpose of repurchasing
the property, but to ask for extension of the period. Nevertheless, that Court opined that
inasmuch as the complaint to compel repurchase had been filed on January 2, 1952 within the
sixty-day period mentioned in Exhibit E, the vendors had preserved their redemption option.

Upon a move to reconsider, the Court of Appeals amplified its decision saying, “In view
of the refusal of Atty. Pete A. Revilla who was acting in behalf of appellee Canuto Martin, to
receive any amount less than P14,000, nor to accept in behalf of the La Previsora Filipina,
claiming that the latter’s right were already ceded to appellee Canuto Martin, we hold that the
question to the efficiency of the amount offered at the time is not as vital to the issue as the
necessity of making one. We find that the plaintiff Maria Reyes, accompanied to one Marcela
Mota de Malonso did make an offer to redeem the property in the property days of December
1941.

Whether or not the amount they had on that occasion was sufficient to redeem the
property at P8,204.60 or P10,204.60 is not vital to the preservation of the rights of the
plaintiff’s in view of the refusal to accept any amount less than P14,000.”
8. MINDANAO ACADEMY, INC. VS YAP
G.R. No. L-17681, 13 SCRA 190
February 26, 1965

Facts:
By deed entitled “Mutual Agreement”, executed on May 10, 1964, Rosenda A. de Nuqui
and her son Sotero Dionidio, Jr., sold three parcels of residential land in Oroquieta, Misamis
Occidentalm and another parcel in Ozamis City in favor of Ildefonso D. Yap. Included in the sale
were certain building situated on said lands as well as laboratory equipment, books, furniture
and fixtures used by two schools established in the respective properties, the Mindanao
Academy in Oroquieta and the Misamis Academy in Ozamis City.

The aggregate price stated in the deed as P100,700, to be paid according to the terms
and conditions specified in the contract. Besides Rosenda and her son Sotero, Jr. both of whom
signed the instrument, Adelaida Dionisio-Nuesa is also named therein as co-vendor, but actually
did not take part either personally or through her uncle and supposed attorney-in-fact, Restituto
Abuton. These three- Rosenda and her two children above named – are referred to in the deed
as the owners of the lands. The buyer, Ildefonso D. Yap, obtained possession of the properties
by virtue of the sale, took over the operation of the two schools and even changed their names
to Harvardian Colleges.

Issue:
Whether or not the Mindanao Academy can reimburse even in bad faith.

Held:
Yes. The appellant claims reimbursement for the value of the improvements he allegedly
introduced in the schools, consisting of a new building worth P8,000 and a toilet costing P800,
besides laboratory equipment, furniture, fixtures and books for the libraries. It should be noted
that the judgment of the trial court specifies, for delivery to the plaintiffs, only “the buildings
and grounds described in the mutual agreement together with all the permanent improvements
thereon.” If the defendant constructed a new building, as he alleges, he cannot recover its
value because the construction was done after the filing of the action for annulment, thus
rendering him a builder in bad faith that is denied by law any right of reimbursement.

In connection with the equipment, books, furniture and fixtures brought in by him, he is
not entitled to reimbursement either, because the judgment does not award them to any of the
plaintiffs in these two actions. What is adjudged is for the defendant to restore to the Mindanao
Academy, Inc. all the books, laboratory apparatus, furniture and other equipment “described in
the Mutual Agreement and specified in the Inventory attached to the records of this case; or in
default thereof, their value in the amount of P23,500.” In other words, whatever has been
brought in by the defendant is outside the scope of the judgment and may be retained by him.
9. ESTOQUE VS PAJIMULA
G.R. No. L-24419
July 15, 1968

Facts:
Lot No. 802 of the Cadastral survey of Rosario, was originally owned by the late
spouses, Rosendo Perez and Fortunata Bernal, who were survived by her children, namely,
Crispina Perez, Lorenzo Perez and Ricardo Perez. Ricardo Perez is also now dead. On October
28, 1951, Crispina P. Vda. De Aquitania sold her right and participation in Lot No. 802 consisting
of 1/3 portion with an area of 640 square meters to Leonora Estoque. On October 29, 1951, a
deed of extrajudicial settlement was entered into wherein Lorenzo Perez, Emilia Posadas and
her minor children. On December 30, 1959, Crispina Perez and her children Rosita Aquitania
Belmonte, Remedios Aquitania Misa, Manuel Aquitania, Sergio Aquitania and Aurora Aquitania
sold to Elena Pajimula, the remaining 2/3 western portion of Lot No. 802 with an area of 958
square meters.

Plaintiff based her complaint for legal redemption on a claim that she is a co-owner of
Lot No. 802, for having purchased 1/3 portion thereof, containing an area of 640 square meters
as evidenced by a deed of sale which was executed on October 28, 1951 by Crispina Perez de
Aquitania, one of the co-owners, in her favor. On the other hand, the defendant, who on
December 30, 1959 acquired the other 2/3 portion of Lot No. 802 from Crispina Aquitania and
her children claimed that the plaintiff bought the 1/3 south-eastern portion, which is definitely
identified and segregated, hence there existed no co-ownership at the time and after the said
plaintiff bought the aforesaid portion upon which right of legal redemption can be exercised or
taken advantage of.

Estoque’s stand is that the deed in her favor was inoperative to convey the south-
eastern third of Lot 802 of the Rosario Cadastre notwithstanding the description in the deed
itseld, for the reason that the vendor , being a mere co-owner, had no right to sell any definite
portion of the land held in common but could only transmit her undivided share, since the
specific portion corresponding to the selling co-owner is not known until partition takes place.
From this premise, the appellant argues that the sale in her favor, although describing a definite
areas, should be construed as having conveyed only the undivided 1/3 interest in Lot 802
owned at the time by the vendor, Crispina Perez Vda. De Aquitania. Wherefore, when the next
day said vendor acquired the 2/3 interest of her two other co-owners, Lot 802 became the
common property of appellant and Crispina Perez.

Therefore, appellant argues, when Crispina sold the rest of the property to appellee
Pajimula spouses, the former was selling an undivided 2/3 that appellant, as co-owner, was
entitled to redeem, pursuant to Article 1620 of the New Civil Code Art. 1620. A co-owner of a
thing may exercise the right of redemption in case the shares of all the other co-owners or of
any of them are sold to a third person. If the price of the alienation is grossly excessive the
redemptioner shall pay only a reasonable one. Should two or more co-owners desire to exercise
the right of redemption, they may only do so in proportion to the share they may respectively
have in the thing owned in common.
Issue:
Whether or not the right of redemption can be exercised by Estoque.

Held:
No. Appellant Estoque became the actual owner of the south eastern third of lot 802 on
October 29, 1951. Wherefore, she never acquired an undivided interest in lot 802. And when
eight years later Crispina Perez sold to the appellee Pajimula the western 2/3 of the same lot,
appellant did not acquire a right to redeem the property thus sold, since their respective
portions were distinct and separate. The deed of sale to Estoque clearly specified the object
sold as the south eastern third portion of lot 802 of the Rosario Cadastre, with an area of 840
square meters, more or less.

Granting that the seller, Crispina Perez Vda. De Aquitania could not have sold this
particular portion of the lot owned in common by her and her two brothers, Lorenzo and
Ricardo Perez, by no means does it follow that she intended to sell to appellany Estoque her 1/3
undivided interest in the lot for mentioned. There is nothing in the deed of sale to justify such
inference. That the seller could have validly sold her 1/3 undivided interest to appellant is no
proof that she did choose to sell the same.

While on the date of the sale to Estoque said contract may have been ineffective, for
lack of power in the vendor to sell the specific portion described in the deed, the transaction
was validated and became fully effective when the next day the vendor, Crispina Perez,
acquired the entire interest of her remaining co-owners and thereby became the sole owner of
lot no. 802 of the Rosario Cadastrak survey. Article 1434 of the Civil Code of the Philippines
clearly prescribes that when a person who is not the owner of a thing sells or alienates and
delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of
law to the buyer or grantee. CA decision affirmed.

10. SEGURA VS SEGURA

G.R. No. L-29320
September 19, 1988

Facts:
The land in question consists of 4,060 square meters and was originally registered under
Original Certificate of Title No. 1994 in the Registry of Deeds of Iloilo in the name of Gertrudes
Zamora. She died intestate and without debts in 1936 and was survived by four children, who
never got around to dividing the property among themselves. This controversy is not among the
four brothers, who are now also deceased. It is Gertrude’s grandchildren by three of her sons
who are involved in this complaint for recovery of ownership and possession of the disputed
inheritance, plus damages. The conflict began when on April 6, 1941, three of these nine
grandchildren, executed a deed of extrajudicial partition arrogating the entire property to
themselves alone as equal pro in diviso owers. This partition was not registered immediately,
but only in 1946, or five years later.

Issue:
Whether or not the plaintiff can apply prescription in acquiring the land.
Held:
It is noted that when Amojido secured the registration of the land in his name following
the deed of sale executed in his favor by the parties to the extrajudicial partition, his certificate
of title carried an express reservation of whatever rights might pertain to the other heirs. This
annotation constituted an acknowledgement of the possibility that a portion of the land might
not belong to him and the commitment that he would be holding such part as impliedly
conveyed to him in trust by and for its true owners. However, when Amojido himself sold the
land to Mirope Mascareñas vda. de Elison on March 13, 1953, the transfer certificate of title
issued in her name no longer carried the said encumbrance. By the deletion of this annotation,
Mirope, as the new transferee, repudiated as of the date of registration the claim of the other
heirs to their shares in the property. From then on her assertion of ownership over the whole
land became adverse even as against the appellants herein. And as the certificate of title was
notice to the whole world of her exclusive title to the land, such rejection was binding on the
said heirs and started as against them the period of prescription.

The record does not show when TCT No. T-19396 in the name of Mirope Mascareñas
vda. de Elison was issued, but it can be conjectured that this was done before February 14,
1957, when she sold the land to Mildred Elison vda. de Javelosa. On the assumption that the
land was registered in the name of Mirope in 1953 following her purchase without
acknowledgement of the co-heirs' rights, the 10-year prescriptive period would have started
from that year. Suspended on May 28, 1956, when the first complaint was filed, it began
running again on February 16, 1958, 30 days after it was dismissed, and was completed after
seven more years in 1965, two years before the second complaint was filed in 1968. Hence,
that complaint was barred by prescription, as correctly held by the trial court, although the
different starting point it used, erroneously, was 1941, date of the extrajudicial partition.

11. REPUBLIC OF THE PHILIPPINES VS. COURT OF APPEALS

G.R. No. 128531, 165 SCRA 480
October 26, 1999

Facts:

Private respondent Vicente Yupangco is the owner of a unit in a condominium building in

Legaspi Street, Makati City, as evidenced by Certificate of Title No. 7648. Because his aforesaid
certificate could not be located, he filed, on January 28, 1994, in the Regional Trial Court,
Branch 136, Makati, a petition for the issuance of a new duplicate certificate of title in lieu of his
lost copy, pursuant to 109 of P.D. No. 1529 (Property Registration Decree). The trial court
ordered the Register of Deeds of Makati to comment on the petition and thereafter set the case
for initial hearing.

Issue:

Whether or not in a proceeding for the issuance of an owners duplicate certificate of

title, the Solicitor General is required to be notified, such that failure to give such notice would
render the proceedings void.
Held:

The decision of the Court of Appeals is AFFIRMED. This is not correct. Considering that
the law does not impose such notice requirement in proceedings for the issuance of a new
owners duplicate certificate of title, the lack of notice to the Solicitor General, as counsel for the
Registrar of Deeds, was at most only a formal and not a jurisdictional defect.

This case should be distinguished from our rulings in cadastral registration cases and
original land registration proceedings which require that the Solicitor General be notified of
decisions and hold as decisive, for the purpose of determining the timeliness of the appeal filed
by the government, the date of his receipt of the decisions therein and not that of the Director
of Lands or of his other representatives. The issue and the applicable laws in those cases are
different.

12. TOMAS T. TEODORO VS. THE COURT OF APPEALS

G.R. No. 140799 170 SCRA 620
September 10, 2002

Facts:

PAMI Development Corporation registered with the Mining Records of Bulacan its mining
claims to a parcel of land consisting of 185.8611 hectares, located at San Mateo, Norzagaray,
Bulacan. it was issued Placer Lease Contracts, later renamed Mining Lease Contracts (MLC),
Nos. V-202 and V-203, for a period of twenty-five years. On January 5, 1965, PAMI sold its
mining claims to respondent Continental Cement Corporation.

Almost fifteen years later, on April 10, 1980, Francisco and Tomas Teodoro applied for
quarry permits with the Bureau of Mines, denominated as AQP-551 and AQP-552, over their
property located at Barrio Pinagkamaligan, Norzagaray, Bulacan. The Bureau of Mines denied
the Teodoros application since it will conflict with the mining claims of respondent.

Subsequently, the Teodoros filed with the then Ministry of Natural Resources a petition
for cancellation of respondents MLC Nos. V-202 and V-203 on the ground of non-development
of mineral lands. The said mining lease contracts of respondent were cancelled for non-
compliance with the work obligations under the law.

Issue:
Whether or not there was extrinsic fraud.

Held:

Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which
is committed outside of the trial of the case, whereby the unsuccessful party has been
prevented from exhibiting fully his case, by fraud or deception practiced on him by his
opponent. Fraud is regarded as extrinsic where it prevents a party from having a trial or from
presenting his entire case to the court, or where it operates upon matters pertaining not to the
judgment itself but to the manner in which it is procured. The overriding consideration when
extrinsic fraud is alleged is that the fraudulent scheme of the prevailing litigant prevented a
party from having his day in court. None of these conditions obtain in the case at bar.

13. YU TEK AND CO., VS. BASILIO GONZALES

G.R. No. L-9935 , 29 Phil. 384
February 1, 1915

Facts:

A contract was executed between the herein parties, whereby Mr. Basilio Gonzales
acknowledges the receipt of Php3, 000 from Yu Tek & Co., and that in consideration of which he
obligates himself to deliver to the latter 600 piculs of sugar of the first and second grade,
according to the result of polarization, within 3 months. There is a stipulation providing for
rescission with Php1,200 penalty in case of failure to deliver. No sugar was delivered, so plaintiff
filed a case praying for the judgment of Php3,000 plus Php1,200. Php3,000 was awarded, thus,
both parties appealed.

Issue:

(a) Whether compliance of the obligation to deliver depends upon the production in
defendant‘s plantation.
(b)Whether there is a perfected Sale.

Held:

(a) There is not the slightest intimation in the contract that the sugar was to be raised
by the defendant. Parties are presumed to have reduced to writing all the essential conditions of
their contract. While parol evidence is admissible in a variety of ways to explain the meaning of
written contracts, it cannot serve the purpose of incorporating into the contract additional
contemporaneous conditions which are not mentioned at all in the writing, unless there has
been fraud or mistake. In an early case this court declined to allow parol evidence showing that
a party to a written contract was to become a partner in a firm instead of a creditor of the firm.
(Pastor vs. Gaspar, 2 Phil. Rep., 592.) Again, in Eveland vs. Eastern Mining Co. (14 Phil. Rep.,

509) a contract of employment provided that the plaintiff should receive from the defendant a
stipulated salary and expenses. The defendant sought to interpose as a defense to recovery
that the payment of the salary was contingent upon the plaintiff's employment redounding to
the benefit of the defendant company. The contract contained no such condition and the court
declined to receive parol evidence thereof.

(b)We conclude that the contract in the case at bar was merely an executory
agreement; a promise of sale and not a sale. At there was no perfected sale, it is clear that
articles 1452, 1096, and 1182 are not applicable. The defendant having defaulted in his
engagement, the plaintiff is entitled to recover the P3,000 which it advanced to the defendant,
and this portion of the judgment appealed from must therefore be affirmed.

14. ONG JANG CHUAN VS. WISE & CO. (LTD)

G.R. No. L-10907 33 Phil. 339
January 29, 1916

Facts:

This is an appeal from a judgment of the Court of First Instance of Manila condemning
the defendant to pay the plaintiff the sum of P1,237.50, together with interest and costs, as
damages for a breach of contract. It has been established by a preponderance of evidence that
the reason for the nonfulfillment, on the part of Wise & Co., of the contract made with the
plaintiff, was that the "Mano" brand of flour which the defendant bound itself to deliver during
the months of September and October had to come from Australia, and at the time the contract
was executed Wise & Co. did not have a sufficient stock of the said brand of flour; and that, as
the government of Australia prohibited the exportation of flour, because of the scarcity of grain
in that country, due to the war that had been declared between Great Britain, of which Australia
is an integral part and the German Empire, it was impossible for the importers to supply Wise &
Co. with a sufficient quantity of flour to enable the latter, in turn, to serve its customers.

Issue:
Whether or not there was a perfected sale.

Held:

The judgment appealed from is affirmed, with costs against the appellant. The
undertaking of the defendant was to sell to the plaintiff 1,000 sacks of "Mano" flour at P11.05
per barrel, 500 sacks to be delivered in September and 500 in October. There was no delivery at
all under the contract. If called upon to designate the article sold, the defendant could only say
that it was "Mano" flour. There was no appropriation of any particular lot of flour. The flour
mentioned in the contract was not "physically segregated from all other articles.' In fact, the
defendant did not have in its possession in Manila, at the time the contract was entered into,
the 1,000 sacks of flour which it agreed to deliver in September and October. It is therefore
clear that under the rule laid down in the case of Yu Tek & Co., supra, and the case cited in that
opinion, the sale here in question was not a perfected one.
15. BUNGE CORP. ET. AL.VS. ELENA CAMENFORTE AND COM.
G.R. No. L-4440 48 Off. Gaz. 3377
August 29, 1952

Facts:

A contract was entered into between the Visayan Products Company and Bunge
Corporation (represented by the Universal Commercial Agencies) whereby the former sold to
the latter 500 long tons of merchantable Philippine copra in bulk at the prices of $188.80, U.S.
currency, per ton, less 1 per cent brokerage per short ton of 2,000 pounds, C & F Pacific Coast,
U.S.A.; that, according to the terms and conditions of the contract, the vendor should ship the
stipulated copra during the month of November or December 1947, to San Francisco, California,
U.S.A. for delivery to the vendee; , the vendee sold to El Dorado Oil Works the quantity of copra
it had purchased at the same price agreed upon; and that because of the failure of the vendor
to fulfill its contract to ship and deliver the quantity of copra agreed upon within the period
stipulated, the vendee has suffered damages. Visayan product contended that no contract of
sale was perfected. If any, it was that signed by Vicente Kho, the manager and controlling
stockholder in Visayan product Tacloban, but he was not authorized to sign a contract for
Visayan Product Cebu. Kho admitted that he signed the contract and tried his best to deliver the
copra but due to force majeure failed to do so. Lower court ordered for payment of damages by
Visayan Product to Bunge Corp.

Issue:

Whether or not there was a perfected contract of sale between El Dorado and Bunge
Corporation of the copra to be acquired from sale by Visayan Products.

Held:

We are of the opinion that the lower court erred in disregarding the transaction with the
El Dorado Oil Works simply because it found an apparent discrepancy in the dates appearing in
the contracts Exhibits O and C. Exhibit C appears dated on October 22, 1947, and was executed
in Cebu, Philippines, whereas Exhibit O appears dated on October 21, 1947, and was executed
in New York City. The difference of one day in the execution of these documents is merely
nominal because New York time is several hours behind Cebu time. In fact both transactions
have been practically executed on the same day. Even supposing that the contract with the El
Dorado Oil Works calls for future and not present deliveries. There is nothing improbable for the
appellees to sell copra which they expect to acquire sometime in the future for purposes of
speculation. But this error cannot now materially change the result of this case considering that
plaintiffs-appellees did not appeal from the decision. "It has been held that appellee, who is not
appellant, may also assign errors in his brief where his purpose is to maintain the judgment on
other grounds, but he may not do so if his purpose is to have the judgment modified or
reversed, for, in such case, he must appeal." Wherefore, the decision appealed from is affirmed,
with costs against appellants.
16. PATERNO VS. SALUD
G.R. No. L-15620 , 9 SCRA 81
September 30, 1963

FACTS:
Defendant claims to be the owner of the land which plaintiffs seek to recover having
been in adverse possession thereof since 1890 and having registered it in his name Registration
Case No. 23 of the same court on April 16, 1940 for which he obtained a Torrens title.

On March 1912, Jose T. Paterno, as administrator of the estate Maximino Molo Agustin
Paterno, acquired at an auction sale certain parcels of land that were levied in execution
belonging to Esteban de Villa. These includes the land in question which contained 5 hectares.
In 1927, all these lands were adjudicated to Concepcion Paterno Vda. de Padilla, daughter of
the late Maximino Molo Agustin Paterno as her share in the estate. In that year, the lease of the
lands to the De Villas was not renewed and so their possession was returned to the Paternos.
In 1943, Concepcion Paterno died leaving all the lands she owned in Batangas, including the
one in question, to plaintiffs as her heirs. Hence, from 1927, when the lease to the De Villas
was terminated, to 1949, plaintiffs had been in possession of the lot with an area of 5 hectares.

The Court of Appeals ruled in favor of the defendant that land in question and the
bigger Parcel of 30.5285 hectares of which it was originally a part, were not included in the
auction in 1912 of the properties of Esteban de Villa.

ISSUE:
Whether or not the 5 hectares of land is owned by the defendant

HELD:

The Supreme Court ruled that the Court of Appeals erred in declaring defendant owner of the
parcel of land claimed in his counterclaim. The evidence shows that plaintiff predecessor-in-
interest Concepcion Paterno Vda. de Villa secured in 1928 Original Certificate of Title No. 49
over a parcel of land of which the land involved here was a part. This parcel of land was
originally acquired by the Paternos in 1912. This was leased to Esteban Villa and Pia de Villa
from 1917 to 1925; surveyed Jose T. Paterno on September 25, 1924; was the subject of
petition for registration by the Paternos in 1926, due notice of which was given to the De Villas,
and upon the death of Concepcion Paterno Vda. de Padilla, it was transmitted to plaintiffs by
succession. Since the land in question was registered in the name of the Paternos in 1928 and it
was only on November 19, 1952, date of defendant' answer, that he sought its reconveyance to
him, that title became indefeasible under Section 38, Act No. 496, as amended by Act No. 3630.
17. JOSE SANTA ANA, JR. VS. ROSA HERNANDEZ
G.R. No. L-16394 , 18 SCRA 973
December 17, 1966

FACTS:

Spouses Jose Santa Ana, Jr. and Lourdes Sto. Domingo sold a land in Bulacan to
respondent Rosa Hernandez for 11,000 pesos lump sum. (There were two other previous sales
to different vendees of other portions of the land).

The boundaries of the land were stated in the deed of sale and its approximate land
area. Petitioner spouses caused the preparation of the subdivision plan but Hernandez didn‘t
agree to the partition. As such, petitioners-spouses filed a case alleging that Hernandez is
occupying in excess of 17000 square meter of the land sold. Hernandez claims that the excess
area is part of the land she bought.

ISSUE:
Whether or not the excess area occupied by Hernandez is part of the land sold.

HELD:

The sale involves a definite and identified tract, a corpus certrum that obligated the
vendors to deliver to the buyer all the lands within the boundaries, irrespective of whether its
real area should be greater or smaller than what is recited in the deed.

To hold the buyer to no more than the area recited on the deed, it must be made clear therein
that the sale was made by unit of measure at a definite price for each unit. The sale in this case
only involves the definite boundaries but only approximate land areas. As such, Article 1542
concerning the sale of lump sum must be considered.

18. SIBAL VS. VALDEZ

G.R. No. L-26278, 50 Phil. 512
August 4, 1927

FACTS:

Plaintiff alleged that the defendant Vitaliano Mamawal, deputy sheriff of the Province of
Tarlac, by virtue of a writ of execution issued by the Court of First Instance of Pampanga,
attached and sold to the defendant Emiliano J. Valdez the sugarcane planted by the plaintiff
and his tenants on seven parcels of lands. Plaintiff offered to redeem said sugarcane and
tendered to the defendant Valdez the amount sufficient to cover the price paid by the latter, the
interest thereon after the purchase, and the interest corresponding thereto. However, Valdez
refused to accept the money and to return the sugarcane to the plaintiff. Meanwhile, defendant
argued that the sugar cane was personal property hence not subject to redemption.
ISSUE:
Whether or not future crops to be harvested can be considered a valid object of sale.

HELD:

Yes. A valid sale may be made of a thing, which though not yet actually in existence, is
reasonably certain to come into existence as the natural increment or usual incident of
something already in existence and then belonging to the vendor, and then title will vest in the
buyer the moment the thing comes into existence. (Emerson vs. European Railway Co. ., 67 Me,
387; Cutting vs. Packers Exchange, 21 Am. St. Rep, 63)

A man may sell property of which he is potentially and not actually possessed.

19. LUIS PICHEL VS. PRUDENCIO ALONZO

G.R. No. L-36902 , 111 SCRA 341
January 30, 1982

FACTS:

Prudencio Alonzo (vendor) executed a deed of sale for the coconut fruits of his land in
Balactasan, Lamitan, Basilan City in favor of Luis Pichel (vendee). The land from which the
subject coconut fruits are derived from was subjected to a cancellation of the award in 1965,
due to the reason of violation of the law that disallows alienation of land. The vendor and his
wife sold to the vendee the fruits of the coconut trees from 1968 to 1976 for consideration of
4,200. Even during the date of sale, the land was still leased to one Ramon Sua, and it was part
of the agreement of the sale that the sum of 3,650.00 was to be paid by vendor to Ramon Sua
as to release the land.

The RTC decided in favor of the vendor, due to the fact that the deed of sale that was
executed was invalid, due to its supposed violation of R.A. No. 477, in which they equated the
deed of sale executed by the parties as a contract of lease.

ISSUE:

Whether or not the deed of sale is valid

HELD:

Yes, the RTC erred in constructing the deed of sale as a contract of lease. There was no
need on the part of the RTC to interpret the contract, since there was no ambiguity; it merely
contracts the sale of the fruits of the land, not the land itself.

The Supreme Court relied upon the Article 1370 of the Civil Code, regarding the rule on
interpreting contracts. Its interpretation in express form is the preferred. Construction shall be
employed when such literal interpretation is impossible.
 The possession of the coconut fruits for 7 years is different from possession of the land,
since the coconut fruits are mere accessories and the land is the principal- a transfer of
accessories and the land is the principal; it is the other way around. The vendor having received
the consideration for the sale of his coconut fruits cannot be allowed to impugn the validity of
the contracts he entered into, to the prejudice of petitioner who contracted in good faith and
consideration. Therefore the judgement of the lower court has been set aside.

20. BUCTON VS. GABAR

G.R. No. L-36359 , 55 SCRA 499
January 31, 1974

FACTS:
Nicanora Bucton & Josefina Gabar are sisters-in-law. Josefina bought a land from Villarin
on installment basis. Josefina then entered into a verbal agreement with Nicanora that the latter
would pay one-half of the price and would then own one-half of the land. Nicanora agreed. She
paid the initial amount evidenced by a receipt. Bucton then took possession of the land and
made thereon improvements. When a deed of sale was executed in favor of Gabar for the land,
Bucton sought to obtain a separate title but was refused. Bucton filed a case for specific
performance which was granted by the trial court. CA reversed, ruling that the action for
specific performance was based on the receipt of the initial payment which was executed 22
years ago, thus had already prescribed (10 years prescription for an action based on a written
agreement – Art. 1444). Bucton argues that as owners in actual, continuous and physical
possession of the land since its purchase, their right of action did not prescribe.

ISSUE:
Whether or not Bucton‘s right of action to compel Gabar to execute a formal deed of
conveyance in their favor, has prescribed.

HELD:

No. The real and ultimate basis of petitioners‘ action is their ownership of one-half of the
lot coupled with their possession thereof (not the receipt), which entitles them to a conveyance
of the property.

By the delivery of the possession of the land, the sale was consummated and title was
transferred to Bucton, that the action is actually not for specific performance, since all it seeks
is to quiet title, to remove the cloud cast upon Bucton‘s ownership as a result of Gabar‘s refusal
to recognize the sale made and that as Bucton are in possession of the land, the action is
imprescriptible.
21. REPUBLIC OF THE PHILIPPINES VS. LICHAUCO, ET AL
G.R. No. L-21436 , 46 SCRA 305
August 18, 1972

FACTS:

The Republic of the Philippines, by authority of Republic Act No. 1400, represented by
the Land Tenure Administration, filed on December 2, 1957, in the Court of First Instance of
Pangasinan a complaint against the defendants for the expropriation of the lands of the
"Hacienda El Porvenir", situated in the province of Pangasinan. In the complaint it was alleged,
among other things, that the continuous agrarian conflicts between defendants and their
tenants could be solved only through the purchase of said property by the government.
Defendants, in their amended motion to dismiss, sought the dismissal of the complaint, alleging
that the hacienda was no longer a co-ownership but had been partitioned among the several
heirs of Crisanto Lichauco, herein defendant.

Both the plaintiff and the defendants filed in court an ―Agreement and Joint Motion‖
and it is stipulated, among other things, that "the plaintiff shall have the option to buy the said
portions in question as adjudicated and pay the corresponding price as in this expropriation
case".

ISSUE:
Whether or not the sale of property yet to be adjudicated by a court is valid and binding

HELD:

Yes. Where it was expressly stipulated that in the event that the difference in area is still
subject of judicial determination is adjusted and/or adjudicated in favor of defendant co-
owners, "the plaintiff shall have the option to buy the said portions in question as adjudicated
and pay the corresponding price as in this expropriation case", said stipulation has the force of
law between the contracting parties and should be complied with.

22. DEL ROSARIO VS. SANTOS, ET AL.

G.R. No. L-46892 , 108 SCRA 43
September 30, 1981

FACTS:

On January 14, 1974, Amparo del Rosario filed a complaint against the spouses Andres
F Santos and Aurora O. Santos, for specific performance and damages allegedly for failure of
the latter to execute the Deed of Confirmation of Sale of an undivided 20,000 square meters of
land, part of Lot 1, Psu-206650, located at Barrio Sampaloc, Tanay, Rizal, in malicious breach of
a Deed of Sale dated September 28, 1964.
 Amparo del Rosario died on September 21, 1980 so that she is now substituted by the
heirs named in her will. Andres F. Santos also died, on September 5, 1980, and he is
substituted by his heirs.

Plaintiff claimed fulfillment of the conditions for the execution of the Deed of
Confirmation of Sale, namely: the release of the title of the lot and the approval of the
subdivision plan of said lot by the Land Registration Commission. The following titles with their
corresponding land areas are: TCT 203580 - 30,205 sq.m.; TCT 203581 - 19, 790 sq.m.; and
TCT 167568 - 40,775 sq.m.

In a motion to dismiss, defendants pleaded, inter alia, the defenses of lack of jurisdiction
of the court a quo over the subject of the action and lack of cause of action. They likewise set
up the defense of prescription allegedly because the deed of sale was dated September 28,
1964 and supposedly ratified October 1, 1964 but the complaint was filed only on January 14,
1974, a lapse of more than nine years when it should have been filed within five years from
1964 in accordance with Art. 1149, New Civil Code. Defendant also claimed that the demand set
forth in the complaint has been waived, abandoned or otherwise extinguished. It is alleged that
the deed of sale was ―only an accommodation graciously extended, out of close friendship
between the defendants and the plaintiff and her casual business partner in the buy and sell of
real estate, one Erlinda Cortez. Defendants characterized the said deed of sale as a mere
tentative agreement which was never intended nor meant to be ratified by and acknowledged
before a notary public. In fact, they claimed that they never appeared before Notary Public
Florencio Landrito. Finally, defendants alleged that the claim on which the action or suit is
founded is unenforceable under the statute of frauds and that the cause or object of the
contract did not exist at the time of the transaction.

Hence, this appeal as only questions of law are involved.

ISSUE:
Whether or not the sale is valid as to the cause or object of the contract.

HELD:

Supreme Court held that the execution of the deed of sale is valid notwithstanding the
lack of any title to the lot by appellants at the time of execution of the deed of sale in favor of
appellee as there can be a sale of an expected thing in accordance with Article 1461 of the New
Civil Code:

Art. 1461. Things having a potential existence may be the object of the contract of sale.

The efficacy of the sale of a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence.

The sale of a vain hope or expectancy is void. The case at bar is not a case of a vain
hope or expectancy which is void under the law. The expectant right came into existence or
materialized for the appellants actually derived titles from Lot 1 which subsequently became the
object of subdivision.
 Further, a sale of real property to be enforceable need not be notarized. As correctly
pointed out by the court a quo, the alleged false notarization of the deed of sale is of no
consequence. For a sale of real property or of an interest therein to be enforceable under the
Statute of Frauds, it is enough that it be in writing. It need not be notarized. But the vendee
may avail of the right under Article 1357 of the New Civil Code to compel the vendor to observe
the form required by law in order that the instrument may be registered in the Registry of
Deeds. Hence, the due execution and genuineness of the deed of sale are not really in issue in
this case.

As to the appellants‘ allegation that the appellee‘s claim is barred by prescription, the
ruling of the trial court that only seven years and six months of the ten-year prescription period
provided under Arts. 1144 and 155 in cases of actions for specific performance of the written
contract of sale had elapsed and that the action had not yet prescribed, as in accordance with
law. This Court affirmed.

23. TIBURCIO LUTERO VS. SIULIONG & CO.

G.R. No. 31125, 54 PHIL 272
January 21, 1930

FACTS:
On June 30, 1919, the plaintiff Tiburcio Lutero and the defendant Siuliong & Co. entered
into a contract (Exhibit A).
On August 21, 1919, the same parties entered into another contract (Exhibit C).
Under contract Exhibit A, the plaintiff had received from the defendant in cash, goods,
and other expenses the amount of P4,606.15. Having delivered 337 piculs and 57 cates of
muscovado sugar, the total value of which is P3,405.58, he had still a balance of P1,199.87 to
pay, and 162 piculs and 44 cates of sugar to deliver.

Under contract Exhibit C, the plaintiff received from the defendant in cash, goods, and
other expenses the total sum of P6,862. Having delivered 319 piculs and 77 cates of muscovado
sugar, the full value whereof is P3,822.44, he had still a balance of P3,031.54 to pay, and 490
piculs and 24 cates of sugar to deliver.
In accordance with contracts Exhibits A and C, the plaintiff bound himself to pay in cash,
according to the current market price, for the undelivered difference.

It is contended by the plaintiff-appellant that the defendant having advanced money to

the plaintiff upon both contracts, said money was given as a loan payable in sugar, which,
according to the law, must be computed on the basis of the market price at the time of
delivery; and that as the maximum price of sugar on the respective dates of delivery was P30,
and the price stipulated in said contracts was not even one-half of the market price, said
contracts are usurious.
ISSUE:
(1) Whether or not the contracts Exhibits A and C, entered into by and between
Lutero and Siuliong & Co. are for usurious loans of money payable in sugar;
(2) Whether or not the plaintiff must pay to the defendant for the sugar which the
former failed to deliver in accordance with the aforesaid contracts.

HELD:

The sale of sugar to be delivered at a future definite time and for a fixed price, a part of
which is advanced by the purchaser to the vendor, is neither usurious nor illegal even though
said price should prove to be much less than the market price on the date of delivery.

The fact that the purchaser does not bring suit against the vendor immediately upon the
latter‘s default in the delivery of the sugar sold, and that he allows six years to elapse, does not
deprive him of his right to bring such action on account of laches, inasmuch as such actions,
arising from a written contract, does not prescribe until after ten years from the time the cause
of action arises (Sec. 43, Code of Civil Procedure).

The purchaser is entitled to damages sustained on account of the vendor‘s default, said
damages consisting in the difference between the price stipulated and the market price of the
goods at the time delivery thereof should have been made.

24. KER & CO., LTD. VS JOSE B. LINGAD

G.R. No. L-20871 , 38 SCRA 524
April 30, 1971

FACTS:

Petitioner was assessed by then Commissioner of Internal Revenue Domingo the sum of
P20,272.33 as the commercial broker‘s percentage, tax, surcharge, and compromise penalty for
the period from July 1, 1949 to December 31, 1953.

There was a request on the part of the petitioner for the cancellation of such
assessment, which request was turned down.

As a result, it filed a petition for review with Court of Tax Appeals.

ISSUE:

Whether or not the relationship thus created is one of vendor and vendee (contract of
sale) or of broker and principal (contract of agency).

HELD:

The difficulty in distinguishing between the contracts of sale and the creation of an
agency to sell has led to the establishment of rules by the application of which this difficulty
may be solved. The decisions say the transfer of title or agreement to transfer it for a price paid
or promised is the essence of sale. If such transfer puts the transferee in the attitude or
position of an owner and makes him liable to the transferor as a debtor for the agreed price,
and not merely as an agent who must account for the proceeds of a resale, the transaction is a
sale; while the essence of an agency to sell is the delivery to an agent, not as his property, but
as the property of the principal, who remains the owner and has the right to control sales, fix
the price, and terms, demand and receive the proceeds less the agent‘s commission upon sales
made.

SC then ruled that the relationship is that of a broker and principal (contract of agency).

National Internal Revenue Code defined commercial broker as all persons, other than
importer, manufacturers, producers or bona fide employees who, for compensation or profit,
sell or bring about sales or purchase of merchandise for other persons or bring proposed buyers
and sellers together and also includes commission merchants such as Ker in this case.

The mere disclaimer in a contract that an entity like petitioner is not ―the agent or legal
representative xxx for any purpose whatsoever‖ does not suffice to yield the conclusion that it is
an independent merchant if the control over the goods for resale of the goods consigned is
pervasive in character.
Thus, SC rejected Ker‘s petition to reverse decision of CTA.

25. INCHAUSTI AND CO. VS. ELLIS CROMWELL

G.R. No. L-6584, 20 Phil 345
October 16, 1911

FACTS:

Inchausti is engaged in the business of buying and selling at wholesale hemp. It is

customary to sell hemp in bales. The operation of bailing hemp is designated among merchants
by the word ―prensaje‖.

In all sales of hemp by the plaintiff firm, the price is quoted to the buyer at so much per
picul, no mention being made of bailing; but with the tacit understanding, unless otherwise
expressly agreed, that the hemp will be delivered in bales and that, according to the custom
prevailing among hemp merchants and dealers in the Philippine Islands, a charge, is to be
made against the buyer under the denomination of ―prensaje‖. This charge is made in the
same manner in all cases, even when the operation of bailing was performed by the plaintiff or
by its principal long before the contract of sale was made.

Plaintiff Inchausti has always paid to the defendant Collector of Internal Revenue or to
his predecessor in the office of the Collector of Internal Revenue the tax collectible upon the
selling price expressly agreed upon for all hemp sold by the plaintiff firm, but has not, until
compelled to do so, paid the said tax upon sums received from the purchaser of such hemp
under the denomination of ―prensaje‖.
 Subsequently, the defendant acting in his official capacity as Collector of Internal
Revenue of the Philippine Islands, made demand in writing upon plaintiff frim for the payment
as tax on sums of money collected from purchasers of hemp under the denomination of
―prensaje.‖

The plaintiff firm paid to the defendant under protest that the tax for the collected
money under the denomination of ―prensaje‖ is illegal upon the ground that said charge does
not constitute a part of the selling price of the hemp, but is a charge made for the service of
baling the hemp.

It is the contention of the defendant that the said charge made under the denomination
of ―prensaje‖ is in truth and in fact a part of the gross value of the hemp sold and of its actual

selling price.

ISSUE:
Whether or not the baled hemp constitute a contract of sale

HELD:

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 no 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 had 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

here in 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 defendant's request, it is a
contract of sale, even though it may be entirely made after, and in consequence of, the
defendant's order for it.

A contract for the sale of an article which the vendor in the ordinary course of his
business manufactures or procures for the general market, whether the same is on hand at the
time or not, is a contract for the sale of goods to which the statute of frauds applies. But if the
goods are to be manufactured especially for the purchaser and upon his special order, and not
for the general market, the case is not within the statute.

It is clear to our minds that in the case at bar the baling was performed for the general
market and was not something done by 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.

26. MAJARABAS, ET. AL. VS. LEONARDO

G.R. No. 4348 , 11 Phil 272
September 12, 1908

FACTS:

The plaintiff had rendered services as wet nurse and governess to an infant daughter of
the defendant by virtue of a verbal agreement entered into with the now deceased parents of
the defendant, who, to use the language of the complaint, " promised to liberally compensate
the services of the plaintiff, providing the maintenance of herself, her husband and their child,
during all the time that the services of the plaintiff where required as such wet nurse and
governess."

It is maintained in the demurrer that the obligation contracted by the parents of the
defendant was to support the plaintiff and her family, and that the reason of the death of the
former, as stated in the complaint, under the provision of article 150 of the Civil Code, the said
obligation has been extinguished in fact and in law, and the plaintiff cannot therefore, bring suit
for compliance herewith. The demurrer was overruled by the court below on the ground that
aforesaid agreement constituted a contract for services, although the price was to be measured
by the cost of the maintenance of the plaintiff. This ruling has been assigned as error by the
appellant in his brief.

ISSUE:

Whether or not a contract of services exist although no specified or fixed price was
stipulated

HELD:

Yes. It is not necessary that the certainty of the price be actual or determined at the
time of executing the contract, but that it is sufficient compliance with the law if the same can
be determined by the speculations of the contract made by the party thereto. In the present
case the contracting parties fixed the maintenance of the plaintiff and her family as the price for
the services required of her. Said maintenance is the specific and determinate thing that in its
turn fixes the price, inasmuch as its cost determines the price according to the agreement of
the parties to the contract. There might be a question as to the actual cost of the plaintiff‘s
maintenance, but this is a matter of fact which in such a case would have to be proven. Be it as
it may, whatever might be the cost of said subsistence, it would constitute the price for the
services rendered by the plaintiff; said price is unquestionably the specified one since it refers
to a specified thing designated by the parties as the rate regulating the amount thereof.
Therefore, the appellant's allegation is unfounded, and the order of the court below overruling
the demurrer must be affirmed.

27. MITSUI BUSSAN KAISHA VS. THE MANILA E. R. AND L. CO.

G.R. No. L-13753 , 39 Phil 624
February 15, 1919

FACTS:

Prior to December 23, 1914, the plaintiff corporation, Mitsui Bussan Kaisha, had
contracted to sell large quantities of coal to the defendant, the Manila Electric Railroad and
Light Company. Deliveries under this contract were made from time to time to meet the
requirements of the defendant company from shipments arriving from Japan. The basic price
fixed in the contract was P9.45 per long ton, but it was stipulated that the price was subject to
modification "in proportion to variations in calories and ash content, and not otherwise." This
means of course and ash contend, and not otherwise." This means of course that the price
could be made certain by the application of known factors.

While extensive deliveries were still to be made under the contract above referred to,
the Legislature, by Act No. 2432, passed December 23, 1914, and imposed a specific tax of one
pose per metric ton on coal. Shortly thereafter this Act was amended in certain respects by Act
No. 2445.

In the period embracing the months from March to October, inclusive, of the year 1915,
the plaintiff company brought to Manila from Japan large quantities of coal amounting in all to
11,874.75 metric tons for delivery to the defendant company upon the contract above-
mentioned. In order to effect the entrance of said coal, through the Bureau of Customs, at the
port of Manila, it was necessary for the plaintiff company to pay the new internal-revenue tax
imposed by Acts Nos. 2432 and 2445; and it did in fact pay in satisfaction of said tax the
aggregate sum of P11,874.75. The plaintiff then demanded reimbursement of said sum from
the defendant, basing its claim upon the provision from Act No. 2445. The defendant refused to
accede to this demand, and the present action was instituted by the plaintiff to recover the
amount so paid out by it. From judgment entered in favor of the plaintiff the defendant has
appealed.

ISSUE:

Whether or not the parties have already agreed as to a fixed price when a contract
entered into states "in proportion to variations in calories and ash content and not otherwise"

HELD:

Yes. The stipulation means that the price could be made certain by the application of
known factors (Civil Code, art. 1447), and for the purposes of this case it may be assumed that
the price was fixed at P9.45 per long ton. This provision has exclusive reference to the quality
of the coal delivered, and has no other purpose than to supply a means of ascertaining the
value of the coal by determining its utility combustion.

28. E. C. MCCULLOUGH VS. R. AENLLE & CO.

G.R. No. 1300 , 3 Phil 285
February 3, 1904

FACTS:

The plaintiff and defendant entered into an agreement August 27, 1901, for the
purchase by the plaintiff and sale by the defendant of certain real property, the tobacco and
cigarette factory known as "La Maria Cristina," said sale including the trade-mark "La Maria
Cristina," which was been duly registered, the stock of tobacco in leaf and manufacture,
machinery, labels, wrappers, furniture, fixtures, and everything else belonging to the said
factory, as shown in the inventory to be drawn up for the purpose of making formal delivery of
the said property.

In this inventory the value of each individual piece of furniture will be fixed at 10 per
cent below the price shown in the partnership inventory. The machinery and cost of installing
the same will also be fixed at 10 per cent below its invoice price. The value of the tobacco, both
in leaf and in process of manufacture, boxes, labels, wrappers, cigars, cigarettes, and paper
mouthpieces for cigarettes will be fixed at the invoice price. The value of tobacco made up into
cigars will be fixed in accordance with the price list of the partnership, less 20 per cent
discount. The cigars will be inventoried at the prices in the same list, less a discount of 35 per
cent.

ISSUE:

Whether or not under the terms of the agreement, the price of the property sold be
considered certain

HELD:

Yes. The articles which were the subject of the sale were definitely and finally agreed
upon. The appellee agreed to buy, among other things, all of the leaf tobacco in the factory.
This was sufficient description of the thing sold. The price for each article was fixed. It is true
that the price of this tobacco, for example, was not stated in dollars and cents in the contract.
But by its terms the appellee agreed to pay therefor the amount named in the invoices then in
existence. The price could be made certain by a mere reference to those invoices. By the
instrument of August 27 the contract was perfected and thereafter each party could compel the
other to fulfill it. By its terms the appellee was bound to take all the leaf tobacco then belonging
to the factory and to pay therefor the prices named in the invoices. This obligation was absolute
and did not depend at all upon the quality of the tobacco or its value. The appellee did not, in
this contract, reserve the right to reject the tobacco if it were not of a specific crop. He did not
buy tobacco of a particular kind, class, or quality. He bought all the tobacco which the appellant
owned and agreed to pay for it what the defendant had paid for it.

29. ZACARIAS ROBLES VS. LIZARRAGA HERMANOS

G.R. No. L-26173, 50 Phil 387
July 13, 1927

FACTS:

It appears that the hacienda "Nahalinan," belonged originally to the spouses Zacarias
Robles and Anastacia de la Rama, parents of the present plaintiff, Zacarias Robles. Upon the
death of Zacarias Robles Sr., his widow Anastacia de la Rama was appointed administrator of
his estate; and on May 20, 1913, as widow and administrator, she leased the hacienda to the
plaintiff, Zacarias Robles, for the period of six years beginning at the end of the milling season
in May, 1915, and terminating at the end of the milling season in May, 1920. It was stipulated
that any permanent improvements necessary to the cultivation and exploitation of the hacienda
should be made at the expense of the lessee without right to indemnity at the end of the term.
As the place was in a run-down state, and it was foreseen that the lessee would be put to much
expense in bringing the property to its productive capacity, the annual rent was fixed at the
moderate amount of P2,000 per annum.

The plaintiff made various improvements and additions to the plant. The firm of
Lizarraga Hermanos was well aware of the nature and extent of these improvements.

When the plaintiff‘s mother died, defendant came forward with a proposal to buy the
heirs‘ portion of the property. In consideration that the plaintiff should shorten the term of his
lease to the extent stated, the defendant agreed to pay him the value of all betterments that he
had made on the land and furthermore to purchase from him all that belonged to him
personally on the land. The plaintiff agreed to this.

On the ensuing instrument made, no reference was made to the surrender of the
plaintiff‘s rights as lessee, except in fixing the date when the lease should end; nor is anything
said concerning the improvements which the plaintiff had placed. At the same time the promise
of the defendant to compensate for him for the improvements was wanting. Accordingly, the
representative of the defendant explained that this was unnecessary in view of the confidence
existing between the parties.

On the part of the defendant it was claimed that the agreement with respect to
compensating the plaintiff for improvements and other things was never in fact made.

ISSUE:

Whether or not the stipulation for appraisal and agreement as to the price was a
suspensive condition for the enforceability of the contract
HELD:

No. In this connection it is claimed that the true meaning of the proven verbal agreement is
that, in case the parties should fail to agree upon the price, after an appraisal of the property,
the agreement would not be binding; in other words, that the stipulation for appraisal and
agreement as to the price was a suspensive condition in the contract: and since the parties
have never arrived at any agreement on the price (except as to the carabao), it is contended
that the obligation of the defendant has never become effective. We are of the opinion that the
stipulation with respect to the appraisal of the property did not create a suspensive condition.
The true sense of the contract evidently was that the defendant would take over the movables
and the improvements at an appraised valuation, and the defendant obligated itself to promote
the appraisal in good faith. As the defendant partially frustrated the appraisal, it violated a term
of the contract and made itself liable for the true value of the things contracted about; as such
value may be established in the usual course of proof. Furthermore, it must occur to any one,
as the trial judge pointed out, that an unjust enrichment of the defendant would result from
allowing it to appropriate the movables without compensating the plaintiff thereof.

30. ASKAY VS. COSALAN

GR No. 21943, 46 Phil. 179
September 15, 1924

FACTS:

Askay, an illiterate Igorrote between 70 and 80 years of age, residing in the municipal
district of Tublay, Province of Benguet, who at various times has been the owner of mining
property. The defendant is Fernando A. Cosalan, the nephew by marriage of Askay, and
municipal president of Tublay, who likewise has been interested along with his uncle in mining
enterprises.

About 1907, Askay obtained title to the Pet Kel Mineral Claim located in Tublay,
Benguet. On November 23, 1914, if we are to accept defendant's Exhibit 1, Askay sold this
claim to Cosalan. Nine years later, in 1923, Askay instituted action in the Court of First Instance
of Benguet to have the sale of the Pet Kel Mineral Claim adhered null, to secure possession of
the mineral claim, and to obtain damages from the defendant in the amount of P10,500.
Following the presentation of various pleadings including the answer of the defendant, and
following trial before Judge of First Instance Harvey, judgment was rendered dismissing the
complaint and absolving the defendant from the same, with costs against the plaintiff. On being
informed of the judgment of the trial court, plaintiff attacked it on two grounds: The first,
jurisdiction, and the second, formal. Both motions were denied and an appeal was perfected.

ISSUE:
Whether or not the deed of sale can be cancelled based on the plaintiff‘s claim

HELD:

No, in our judgment he has failed to establish his claim. Fraud must be both alleged and
proved. One fact exists in plaintiff's favor, and this is the age and ignorance of the plaintiff who
could be easily duped by the defendant, a man of greater intelligence. Another fact is the
inadequacy of the consideration for the transfer which, according to the conveyance, consisted
of P1 and other valuable consideration, and which, according to the oral testimony, in reality
consisted of P107 in cash, a bill fold, one sheet, one cow, and two carabaos. Gross inadequacy
naturally suggests fraud and is some evidence thereof, so that it may be sufficient to show it
when taken in connection with other circumstances, such as ignorance or the fact that one of
the parties has an advantage over the other. But the fact that the bargain was a hard one,
coupled with mere inadequacy of price when both parties are in a position to form an
independent judgment concerning the transaction, is not a sufficient ground for the cancellation
of a contract.

31. WARNER, BARNES & CO., LIMITED VS. SANTOS

G.R. No. L-4932 , 14 Phil. 446
November 16, 1909

FACTS:

Plaintiff brought an action for the purpose of foreclosing a mortgage. Later the cause
was brought on for trial, and after hearing the evidence adduced during the trial, the lower
court rendered a judgment in favor of the plaintiff. The judgment of the lower court further
provided that if the defendant failed to pay the amount of aid judgment that an execution might
issue against the property. On the 6th day of March, 1908, upon the petition of the plaintiff, the
amount of said judgment not having been paid, judge of said court, issued an order of
execution, directing the sheriff to sell the property covered by the said mortgage. The
mortgaged property, under said execution, was duly sold on the 10th day of April, 1908. On the
21st day of April, 1908, the defendant appeared in the court and objected to the confirmation
of the sale upon the ground that there was another person who would pay the sum of P5,500
for the property sold. The return of the sheriff shows that he sold the property for the sum of
P4,715. The defendant in said motion requested that the property be put up and sold again. It
will be noticed that the defendant appeared and objected to the confirmation of the sale eleven
days after the sale had been consummated, and so far as the record discloses this was his first
appearance during the pendency of the cause in the lower court. On the 21st day of April,
1908, after duly considering the objection made by the defendant, the lower court overruled the
said objection and confirmed the sale of said property.

ISSUE:

Whether or not the objection of the defendant to the confirmation of the sale
constituted a sufficient cause for refusing to confirm such sale.

HELD:

The basis of the objection of the defendant in the lower court was that he was able to
obtain from another person about P800 more than the sheriff received from the person to
whom he sold said property. This person was not discovered by the defendant until ten or
twelve days after the sale took place. No objection is made by the defendant that the sale was
not duly advertised or that there was any collusion on the part of the sheriff or the other parties
interested in the sale. It is the duty of the court, of course, in the sale of the property under the
conditions of the present case, to obtain as much money for the judgment debtor out of his
property as it is possible. This duty on the part of the court, however, does not justify negligent
delay in an attempt to protect his rights on the part of the said judgment debtor.

In the present case the defendant made no attempt to defend his rights until some days
after judgment, execution, and sale. The Supreme Court of the United States has held in
numerous decisions, that a sale under foreclosure proceedings would not be set aside upon the
ground that the sheriff did not receive as much money as he might have received, providing all
of the proceedings were valid and regular, unless the sale was made for a sum grossly
inadequate in comparison with the real value of the property.

32. NATIONAL BANK VS. GONZALEZ

45 Phil. 693
November 23, 1921

FACTS:

November 23, 1921, Philippine National Bank commenced a suit against Manuel Ernesto
Gonzales to foreclose a real mortgage made to secure a promissory note for P15,000. March 17,
1922, the plaintiff bank filed an amended complaint against the same defendant, in which the
original was reproduced, to foreclose a second mortgage for P15,000 upon the same land
described in the original complaint. The bank filed for default and the court subsequently
declared defendant in default. On January 11, 1923, an execution was issued for the sale of the
real property described in the mortgages to satisfy the amount of the judgment. On August 28,
1922, the total of the judgment in the first cause of action, including the interest, was
P17,313.59, and in the second mortgage, on the same date, it was P17,755. February 16, 1923,
the sheriff filed a motion to confirm the sale to Lopez and the court made an order duly
conforming the sale. April 5, 1923, the defendant Gonzales, through his then attorney, filed a
motion for reconsideration of the order entered in this case

April 16, 1923, the court rendered a decision in which he found as a fact that all of the
necessary requisites for the notice of sale had been duly complied with but that it appeared that
the value of the land, which was sold to the appellant, was P45,940, for which he did only
15,000, and on account of this difference in value for taxation purposes and the value for which
the land was sold, the court set aside the confirmation, and ordered a resale "thereby giving the
aforesaid defendant a greater opportunity in order that he may obtain a better price, if possible,
from the sale of the aforesaid lands." From that order, Lopez appeals, assigning as error that
"the trial court erred in setting aside, without good cause having been shown, the prior order
confirming the judicial sale, and ordering the resale of the land in question.
ISSUE:
Whether or not the trial court erred in setting aside the decision.

HELD:

It will be noted that in the first instance, the trial court confirmed the sale on the motion
of the sheriff, and that in the last order, he specifically found as a fact that there had been a
compliance of all of the essential requisites for a sale on execution, and that the order,
confirming the sale, was set aside upon the sole ground of inadequacy of consideration. It will
also be noted that in the motion to set aside the sale, the only ground specified is "that order is
not in accordance with law." In other words, in the motion itself no grounds are specifically set
forth or alleged as to why the sale should be set aside, and that in the body of the motion, it is
not claimed that the land was sold for an inadequate consideration.

Not a witness was called to testify as to the value of the land. In other words, the only
evidence before the court as to value was the certificate of the deputy municipal treasurer, and
that was to the effect that the four pieces of land therein described had an assessed valuation
of P45,940. Neither was there any showing made nor any evidence presented, that, in the
event the property in question was resold, that it would sell for more than P15,000. That as to
the land in question, it appears of record that on August 28, 1922, the amount of the bank's
judgment was P17,313.59. It also appears that the bank was personally represented at the
sale, and that it refused to bid more than P15,000. For such reason, the property was sold to
Lopez, as the highest bidder. In other words, it appears of record that the bank itself consented
and agreed to the sale of the property in question for more than P3,000 less than the amount
of its claim.

33. THE DIRECTOR OF LANDS VS. ABARCA

G.R. No. L-38581 , 61 Phil. 70
December 18, 1934

Facts:

The lot now in question was the subject of litigation between Datu Bualan and his co-
claimants, on the one hand, and Ciriaco Lizada, on the other. Juan A. Sarenas and Domingo
Braganza were the attorneys for Datu Bualan and his co-claimants in that suit, wherein a
judgment was rendered declaring Datu Bualan and his co-claimants the owners of the land
involved in the litigation. Subsequently, a controversy arose between the Bagobos and their
attorneys as to the amount of fees due the latter, whereupon the attorneys took possession of
the property now in question. Action was brought by the Bagobos against their former
attorneys for the recovery of the land. In this action (civil case No. 607) judgment was rendered
ordering the attorneys to return the property seized by them, and requiring the Bagobos to pay
their former attorneys the sum of P6,000 as fees. As a result of this judgment Datu Bualan and
his co-claimants paid Sarenas and Braganza the sum of P5,126.13. They also paid to the
municipal treasurer of Davao in the name of Sarenas and Braganza, for taxes and penalties due
on the property in the year 1926, while the same was in the possession of the latter, the sum of
P1,035.87. The Bagobos assumed that, by these payments which amounted in all to P6,162,
the judgment rendered against them for P6,000 together with interests due thereon, was fully
satisfied.

Claiming that the sum paid to the municipal treasurer of Davao should not be credited
on the amount of the judgment obtained by them, Sarenas and Braganza caused the clerk of
the court to issue a writ of execution on the said judgment. By reason of the writ of execution
so issued, the sheriff levied on the property here in question and sold it to Sarenas and
Braganza for the sum of P877.25. Upon the failure of the Bagobos to redeem the property, they
filed their claim in the present cadastral case, alleging that they were the absolute owners of lot
No. 700.

Issue:

Whether or not the sum paid by the Bagobos to the municipal treasurer should be
credited.

Held:

Yes, it should be credited. In fairness and equity, which after all are the true aims of the
law, the amount paid by Datu Bualan and his co-claimants for taxes and penalties due on the
contested property should be credited on the judgment obtained by Sarenas and Braganza in
civil case No. 607. Such taxes and penalties accrued while the property was in that possession
under a claim of ownership. It follows that the error assigned by Datu Bualan and his co-
claimants against the judgment below, to the effect that the lower court erred in subjecting the
property sought to be registered to a lien in favor of Sarenas and Braganza for P877.25 with
interests, must be sustained.

34. DE LEON VS. SALVADOR

G.R. No. L-30871 , 36 SCRA 567
December 28, 1970

FACTS:

A judgment for P35,000.00-actual, moral and exemplary damages and a writ of

execution was obtained by Enrique de Leon against private respondent Eusebio Bernabe in Civil
Case No. C-189 of Branch XII of the Rizal court of first instance, Caloocan City branch presided
by Judge Fernando A. Cruz. The city sheriff sold the said properties to herein petitioner, as the
highest bidder for the total sum of P30,194.00. The sheriff executed the corresponding
certificate of sale in her favor, which was duly registered on February 21, 1967 with the
Caloocan City register of deeds. On February 7, 1968, Bernabe filed a separate civil action for
the annulment of execution sale. This second case, instead of being referred to Judge Cruz
presiding over Branch XII which had issued the writ of execution, was assigned to Branch XIV,
the other Caloocan City branch of the Rizal Court of First Instance presided by Judge Serafin
 Salvador, who issued on February 19, 1968 a writ of preliminary injunction enjoining
therein defendants, particularly the sheriff to desist "from taking further proceedings against
the properties of the plaintiff [Bernabe] that were sold at public auction on February 14, 1967,
and from issuing a sheriff‘s deed of sale at the expiration of the period of redemption on
February 21, 1968 in favor of defendant Aurora P. de Leon." Aurora moved to dissolve the
injunction and to dismiss this second case on the grounds of laches and lack of jurisdiction of
Judge Salvador‘s court to interfere with the execution proceedings pending in the first case
before Judge Cruz‘ court which is of equal and co-ordinate jurisdiction.

ISSUE:

Whether or not Branch XIV presided by Judge Salvador has exclusive jurisdiction to set
aside for alleged irregularities the execution sale made by Judge Cruz‘s court.

HELD:

It is patent that such exclusive jurisdiction was vested in Judge Cruz‘ court. Having
acquired jurisdiction over Case No. C-189 and rendered judgment that had become final and
executory, it retained jurisdiction over its judgment, to the exclusion of all other co-ordinate
courts for its execution and all incidents thereof, and to control, in furtherance of justice, the
conduct of its ministerial officers in connection therewith. 2 Execution of its judgment having
been carried out by the sheriff with the levy and sale of the judgment debtor‘s properties,
Eusebio Bernabe as judgment debtor could not in the guise of a new and separate second
action (Case No. 1217) ask another court of coordinate jurisdiction, Judge Salvador‘s court, to
interfere by injunction with the execution proceedings, to set them aside and to order the
holding of a new execution sale — instead of seeking such relief by proper motion and
application from Judge Cruz‘ court which had exclusive jurisdiction over the execution
proceedings and the properties sold at the execution sale. As early as 1922, in Cabigao v. del
Rosario, 3 this Court laid down the doctrine that "no court has power to interfere by injunction
with the judgments or decrees of a court of concurrent or coordinate jurisdiction having power
to grant the relief sought by injunction," pointing out that" the various branches of the Court of
First Instance of Manila are in a sense coordinate courts and to allow them to interfere with
each other‘s judgments or decrees by injunctions would obviously lead to confusion and might
seriously hinder the administration of justice.

35. BORROMEO VS. BORROMEO, ET AL.

G.R. No. L-18498 52 , Off. Gaz. 1392
March 30, 1967

FACTS:

Vito Borromeo, a widower and permanent resident of the City of Cebu, died on March
13, 1952, at the age of 88 years, without forced heirs but leaving extensive properties in the
province of Cebu.

Of the same year, Jose H. Junquera, filed with the Court of First Instance of said
province a petition for the probate of a one page document as the last will left by said
deceased, devising all his properties to Tomas, Fortunato and Amelia, all surnamed Borromeo,
in equal and undivided shares, and designating Junquera as executor thereof (Special
Proceedings No. 916-R). The document was dated May 17, 1946, drafted in Spanish, and
allegedly signed, and thumb marked by said deceased, in the presence of Dr. Cornelio G.
Gandionco, Eusebio Cabiluna and Filiberto Leonardo as attesting witnesses. On June 14, 1952,
the probate court appointed Junquera as special administrator of the estate.

On November 14 of the same year, Teofilo Borromeo filed an opposition to the probate
of the will based on the following grounds: (1) that the formalities required by law had not been
complied with; (2) that the testator was mentally incapable of making a will at the time of its
execution; (3) that the will was procured by undue and improper influence, on the part of the
beneficiaries and/or some other person; (4) that the signature of the testator was procured by
fraud; and (5) that the testator acted by mistake or did not intend the instrument he signed to
be his will at the time he affixed his signature thereto.

On May 28, 1960, the Court rendered a decision denying the probate of the will and
declaring itself without jurisdiction to pass upon the question of ownership over the thirteen lots
which the Cebu Arcade etc. claimed as its own. All the parties appealed — the proponents of
the will from the portion of the decision denying probate, and the oppositors and the Republic
of the Philippines, from that portion thereof where the court refused to decide the question of
ownership of the thirteen lots already mentioned.

ISSUE:

Whether or not the evidence of record is sufficient to prove the due execution of the will
in question.

HELD:

It must be conceded that in this jurisdiction, the subscribing witnesses to a contested

will are regarded as the best witnesses in connection with its due execution. It is similarly true,
however, that to deserve full credit, their test, testimony must be reasonable and unbiased, and
that, as in the case of any other witness, their testimony may be overcome by any competent
evidence — direct or circumstantial (Board, etc. vs. Shasser, 10 Kan. 585, 168 Pac. 836 [1917]).

It is also an appellate practice of long standing in this jurisdiction to accord great weight to the
findings of fact made by the trial court and not to disturb them unless said court had failed to
consider material facts and circumstances or had given undue weight to, Or misconstrued the
testimony of particular witnesses, the reason for this being that the trial judge had full
opportunity to hear and observe the conduct and demeanor of the witnesses while testifying
and was consequently in a better position than the reviewing court to determine the question of
their credibility. While this is not applicable to the present case because His Honor, the judge
who penned the appealed decision was not the same judge before whom the evidence of the
parties was presented, it must be stated that, judging from the carefully written decision under
review, it was only after a thorough study of the record that His Honor arrived at the conclusion
that the subscribing witnesses do not appear to be wholly disinterested persons.
 While it is true that the testimony of these subscribing witnesses was given around eight
years after the alleged execution of the questioned will, still we believe that the transaction in
which they claim to have taken an important part is of such character and importance that it
cannot be a very easy matter for anyone of them to have a hazy recollection of the number of
copies signed by the testator and by them. Stranger still would it be for them to say something
in open contradiction with the reality on the matter. If, as may be clearly deduced from their
testimony.

38. Odegar vs. Guico

G.R. No. L-67548 , 180 SCRA 372
December 20, 1989

Facts:

Fermina Maluto and her husband, Isidro P. Guico, to whom one of the five (5) lots in
controversy was sold by Rufino Tamisin on April 10, 1953, supra, took no part. It was not until
March 12, 1975-almost twenty-two (22) years after they had purchased the lot from Rufino
Tamisin, and after Fermina Maluto had died-that Isidro P. Guico, Fermina's husband, and their
two (2) children, Emmanuel Guico and Lourdes G. Amoranto, finally went to Court to vindicate
their rights over the land sold to Fermina Maluto. They filed suit, described by them as one "for
annulment of documents and tax declaration and to quiet title to property with damages," in
the Court of First Instance of Laguna. Their complaint named Ambrocio Odejar and Gliceria
Gibas as defendants, but when it was discovered soon thereafter that these two had already
died, the pleading was amended so as to include said spouses' heirs as defendants, namely:
Ireneo Odejar, Librada Odejar and Juanito Odejar. Also named as defendants were Attorney
Juan Baes, the Odejars' counsel, to whom they had conveyed one-half (1/2) interest pro
indiviso in the five (5) lots; the provincial sheriff, Cecilio Bituin; and the Provincial Assessor of
Laguna. The complaint prayed that the sheriffs certificate of sale dated June 16, 1960, and the
conveyance to Atty. Juan Baes of an undivided interest over the land sold to Fermina Maluto, be
declared null and void.

Issue:
Whether or not the sale can still be cancelled and be declared null and void even after
the lapse of 22 years.

Held:

The facts above detailed, considered conjointly, irresistibly conduce to the conclusion
that Rufino Tamisin and Fermina Maluto never intended to effect a genuine, bona fide transfer
of property when they entered into the sale of April 10, 1953, a reality made manifest and
according to which the parties, vendors and vendees as well as their privies guided their
actions, during the period of twenty (20) years or so following the transaction. The Tamisins'
acts clearly show that they considered themselves still the owners of the property and as never
having parted therewith even after the sale, publicly and openly proclaiming their title and
demanding recognition thereof on several occasions. The Guicos, for their part, tacitly
acquiesced, at least never presented any opposition, to such assertions of title by the Tamisins
until March 12, 1975, when it had already become apparent that the latter had exhausted every
possible recourse for the recovery of the property from the Odejars. All indications, therefore,
are that the ostensible conveyance was executed solely to prevent the property of the Tamisins
from being levied upon in execution of the judgment in Civil Case No. 9401, or ever applied in
satisfaction of the Tamisins' adjudicated liability to the Odejars. Such a stratagem cannot be
allowed to succeed.

The defect of the sale of April 10, 1953 thus produced effects transcending mere
rescissibility. The sale could not be treated merely as a simple conveyance of "things under
litigation ... entered into by the defendant without the knowledge and approval of the litigants
or of competent judicial authority," rescindable by action within four (4) years. It was in reality
"absolutely simulated or fictitious" and hence " inexistent and void" in contemplation of Article
1409 of the Civil Code. Since, as Article 1411 of the Civil Code provides, the "action or defense
for the declaration of the inexistence of a contract does not prescribe," the Odejars were not
precluded from invoking such nullity, as they did, even after the lapse of twenty-two years.

39. MARIA ENCARNACION CASTILLO v. JOSEFA GALVAN +

GR No. L-27841, 175 Phil. 28
Oct 20, 1978

Facts:
The complaint, is for the annulment of a document, denominated "DEED OF ABSOLUTE
SALE", executed on August 3, 1955, by and between Paulino Galvan, the predecessor-in-
interest, and defendants Josefa Galvan and Natividad S. Galvan. The plaintiffs alleged that
Paulino Galvan, during his lifetime, was the registered owner of an undivided one-half (1/2)
interest over two parcels of land, the other undivided half is owned by his two daughters by a
first marriage, herein defendants Josefa Galvan and Natividad Galvan. On these lots, which are
contiguous, is built the family home. On February 10, 1961, Paulino Galvan died.
Plaintiffs found a deed of sale, signed by the late Paulino Galvan and the plaintiff, Maria
Encarnacion Castillo, whereby they had purportedly sold for P500.00 the one-half undivided
portion of Paulino Galvan over said lots in favor of defendants.
Plaintiffs stated that the undivided half share of Paulino Galvan was worth around P22,500.00
so that he could not have sold it for only P500.00.
Wherefore, they prayed that the deed of sale be declared null and void; that the plaintiffs be
declared the owners of four-sixths (4/6) of the undivided haIf share pertaining to Paulino
Galvan; that the defendants be ordered to pay the amount of P1,500.00, as attorney's fees;
and to pay the costs of suit.[1]
The defendants claimed that "they are the absolute and exclusive owners of whole parcels of
land described in the complaint for having acquired the portions belonging to their late father
Paulino Galvan through legal and valid conveyance and this fact is known to the plaintiffs long
before the filing of the complaint."[2]
On August 27, 1966, the defendants filed a motion to dismiss the complaint upon the ground
that the action is barred by the statute of limitations for the reason that the present action for
the annulment of the instrument of sale is based upon fraud which should be brought within
four (4) years from the time of the discovery of the same in accordance with Article 1391 of the
Civil Code; and fraud, as a ground for annulment, shall be deemed to be discovered from the
date of the registration of the alleged fraudulent documents; and considering that the deed of
sale in question was registered on August 4, 1955, while the action for its annulment was
commenced only on August 1, 1961, or after the lapse of more than four (4) years from its
registration with the Register of Deeds, the action for annulment had prescribed.[6]

Trial court infavor of the Defendants.

Issues:
Whether or not the trial court improperly dismissed the complaint on the ground of
prescription

Held:
2. In its order dated September 22, 1966, dismissing the complaint, the trial court said:

"The complaint, among others, prays for the annulment of document, which is a deed of
sale dated August 3, 1955, purporting conveyance of the two parcels described in the complaint
in favor of defendants Josefa Galvan and Natividad Galvan and Emilio Samson. Said document
(Exh. 1 for defendants) was registered on August 4, 1955 (Exhs. 1-A and 1-B). It is the
contention of the defendants that plaintiffs' action has prescribed as the same was not
presented within four years from the registration of the document.

"The court sustains defendants' contention. The basis of the annulment is alleged fraud,
and the action for the annulment of the document should be brought within 4 years from the
discovery of fraud (Mauricio vs. Villanueva, L-11072, September 24, 1959), and that such
discovery of fraud is deemed to have taken place when the instrument was filed and registered
with the Register of Deeds and new transfer certificate of title is issued in the name of the
vendee for the registration of the deed constitutes constructive notice to the whole world (Diaz
vs. Gorricho, L-11229, March 29, 1958; Ignacio Gerona, et al. vs. Carmen de Guzman, et al., L-
19060, May 29, 1964).

"In view of the foregoing, the court resolves to dismiss, as it hereby dismisses, the
complaint without costs."[13]
The allegations of the complaint show, however, that the plaintiffs' action is to declare void and
inexistent the deed of sale executed by Paulino Galvan and Encarnacion Castillo on August 3,
1955, in favor of Josefa and Natividad Galvan, upon the grounds that (a) there is fraud in
securing the signatures of the vendors in said deed of sale; and (b) there was no consideration
given at the time of the transaction. In other words, the plaintiffs are seeking a judicial
declaration that the deed of sale in question is void ab initio, which action is
imprescriptible.[14] The trial court erred, therefore, in dismissing the complaint for the reasons
stated.
the judgment appealed from is reversed and the order of September 22, 1966, dismissing the
complaint, is hereby set aside. Let this case be remanded to the court of origin for further
proceedings. Without costs.
40. LEOPOLDO DE BELEN v. INSULAR COLLECTOR OF CUSTOMS +
GR No. 22082, 46 Phil. 241
Sep 26, 1924

Facts:
Timoteo Tienzo , duly accredited customs broker in the City of Manila, and is a truck
operator for conveying merchandise arriving at the port of Manila to various consignees. Tienzo
procured a permit from the Insular Collector for the withdrawal of 12,500 sacks of flour for
delivery to one Chua Soco, merchant, City of Manila.
No Bill of Lading was produced by Tienzo at the time he procured the delivery permit, to get the
flour, he obligated himself, upon his bond as a customs broker. However, BL was never
produced by Tienzo or his principal, Chua Soco. The collector of customs caused an action of
replevin to recover the flour or to recover judgment for the value thereof in the amount of
P47,816.32.
An attachment was sued out against the property of Tienzo, on the ground of Fraud for
disposing the items; the sheriff levied said attachment on seven trucks that had been operated
by Tienzo.
After the sheriff had taken the trucks ,Leopoldo de Belen, a brother-in-law of Tienzo,
made claim to the trucks, relying on a document of transfer and executed by Tienzo and
himself, in which Tienzo purports to convey to Belen all of the trucks involved in this
controversy.

The consideration stated in this instrument is the sum of P25,000, said to have been
advanced upon previous occasions to Tienzo by Belen. The sheriff having ignored the claim of
Belen to the ownership of the trucks, the present action of replevin was instituted by Belen
against the Collector of Customs and the sheriff for the recovery of the trucks and
compensation for the unlawful detention of the same.
The trial judge found that the document referred to was evidently a fictitious transfer,
conceived and executed for the purpose of placing the trucks in question beyond the reach of
the creditors of Tienzo, that the transfer of the trucks was a simulated transaction

Issue:
Whether or not the Trail Court erred in rendering judgment that the document
presented by DE BELEN was a simulated contract

Held:
It was found out that in a conversation between Sheriff and the present plaintiff soon
after the service of the complaint, the latter said that Tienzo was owner of the trucks and that
he (Belen) was merely an instrument of Tienzo. This admission of the plaintiff, in connection
with the relation of the parties and the financial difficulties then impending over Tienzo,
establish in our opinion a strong presumption that the transfer referred to was made for the
purpose of placing the trucks beyond the reach of legal process directed against Tienzo . The
trial judge we think was right in entertaining the suspicion that these receipts might have been
manufactured to meet the situation, without representing bona fide debts of Tienzo to Belen. At
any rate it is quite clear that Belen was aware of the financial embarrassment in which Tienzo
was involved, and the evidence in our opinion establishes the conclusion drawn by the trial
court, namely, that the transfer of the trucks was a simulated transaction.
 A simulated transfer of property constitutes no obstruction whatever to the levy of legal
process of any sort directed against a person who has executed such a transfer, and in such
case no independent action to rescind or annul is necessary. The explanation of this is
apparently found in the circumstance that a simulated or purely fictitious contract lacks the
elements prescribed in article 1261 of the Civil Code as necessary to make any contract
whatever, and it may therefore be treated as non-existent for all purposes'. This distinction
between entire absence of contract (inexistencia) and the situation requiring an action of
rescission or nullity is fully expounded by Manresa in his comment on article 1300 of the Civil
Code.
41. FRANCISCO IRURETA GOYENA VS. ILDEFONSO TAMBUNTING
G.R. No. L-956 , 1 Phil. 490
November 18, 1902

Facts:
The plaintiff's principal owned a tract of land and the building thereon known as No. 20
Calle San Jose, Ermita, Manila. This tract contained 152.46 square meters of land. A broker,
representing the plaintiff, stated to the defendant that this lot was for sale and, on information
received from the plaintiff, that it measured 23 meters in front and 8 meters in depth. The
plaintiff and defendant had certain negotiations between themselves concerning the sale. On
March 12, 1901, the defendant signed the following document:

On this date I have bought from Don Francisco Yrureta Goyena a lot at No. 20 Calle San
Jose, Ermita, for the sum of thirty-two hundred pesos, this money to be paid as soon as the bill
of sale is signed. Manila, March 12, 1901. (Signed) Tambunting.

The plaintiff signed a similar document. What the negotiations between the parties were
prior to the signing of the these documents does not appear. There is no evidence whatever in
the record that they came to any agreement in regard to the sale other than the one contained
in the papers of March 12. On the day assigned for the execution of the instrument, all the
parties being in the office of the notary, the defendant told the latter to insert in the writing the
price, $3,200, and then refused to sign it because the lot did not contain the area which the
plaintiff, through the broker, had represented that it contained. He expressed his willingness to
sign it if a proportional reduction was made in the price. The plaintiff refused to make, and this
action was brought under article 1451 of the Civil Code. The private contract expresses a
specific thing as the object of the contract. Upon this point there is no controversy. There is no
doubt as to which lot is No. 20 on Calle San Jose, of the District of Ermita of the city of Manila.
The private contract specifies a certain price, 3,200 pesos. There is no controversy whatsoever
upon this point. There is no question that this sum is there specified plainly and specifically, and
without being made subject to any condition whatever.

Issue:
Whether or not there was a perfect contract

Held:
Evidently nothing is lacking for the existence of a perfect contract of purchase and sale.
Article 1445 of the Civil Code is as follows: "By the contract of purchase and sale one of the
contracting parties undertakes to deliver a specific thing, and the other to pay therefore a price
certain, in money or in something representing it. Article 1450 of the same Code is a follows:
"The sale shall be perfected between vendor and vendee and shall be binding on both of them,
if they have agreed upon the thing which is the object of the contract and upon the price, even
when neither has been delivered." This private document was not a more draft or project. It
cannot be said that the purchase is not to be understood as perfected until the execution of the
public instrument. That private document is not subject to any term or condition whatever. The
least that can be said about the private document is that it contains a promise to buy, not a
mere project of sale, and a promise to buy, according to article 1451, confers upon the
contracting parties the right to reciprocally demand the performance of the contract. If the
contract were not perfected no right would accrue in favor of the contracting parties to
reciprocally demand its performance. A thing which has no existence can produce no effect.
Because it is merely a private document which contemplates the subsequent execution of a
public instrument, it does not follow that it is not enforceable as it now stands. "Contracts,"
says article 1278, "shall be obligatory whatever may be the form in which they have been
entered into, provided that the essential elements for their validity are present," to wit, a
determinate thing, a price certain, and a meeting of the minds with respect to the object of the
contract. Hence the contract in question is obligatory.

42. FILIPINAS COLLEGES, INC. VS. TIMBANG, ET. AL.

G.R. No. L-12812 52, OFF. GAZ. 3624
September 29, 1959

Facts:
This is an appeal taken from an order of the Court of First Instance of Manila dated May
10, 1957 (a) declaring the Sheriff's certificate of sale covering a school building sold at public
auction null and void unless within 15 days from notice of said order the successful bidders,
defendants-appellants spouses Maria Garcia Timbang and Marcelino Timbang, shall pay to,
appellee Maria Gervacio Blas directly or through the Sheriff of Manila the sum of P5,750.00 that
the spouses Timbang had bid for the building at the Sheriff's sale; (b) declaring the other
appellee Filipinas Colleges, Inc. owner of 24,500/3,285,934 undivided interest in Lot No. 2-a
covered by certificate of tile No 45970, on which the building sold in the auction sale is situated;
and (c) ordering the sale in public auction of the said undivided interest of the Filipinas
Colleges, Inc., in lot No. 2-a aforementioned to satisfy the unpaid portion of the judgment in
favor of appellee Blas and against Filipinas Colleges, Inc. in the amount of P8,200.00 minus the
sum of P5,750.00 mentioned in (a) above.

The order appealed from is the result of three motions filed in the court a quo in the
course of the execution of a final judgment of the Court of Appeals rendered in 2 cases
appealed to it in which the spouses Timbang, the Filipinas Colleges, Inc., and Maria Gervacio
Blas were the parties. Filipinas Colleges, Inc. having failed to pay or deposit the sum of
P32,859.34 within the time prescribed, the spouses Timbang, in compliance with the judgment
of the Court of Appeals, on September 28, 1956, made known to the court their decision that
they had chosen not of appropriate the building but to compel Filipinas Colleges, Inc., for the
payment of the sum of P32,859,34. The motion having been granted, a writ of execution was
issued on January 8, 1957.

On January 16, 1957, appellee Blas in turn filed a motion for execution of her judgment
of P8,200.00 representing the unpaid portion of the price of the house sold to Filipinas Colleges,
Inc. Over the object of the Timbangs, the court grated the motion and the corresponding writ
of execution was issued on January 30, 1957, date of the granting of the motion for execution,
Blas through counsel, sent a letter to the Sheriff of Manila advising him of her preferential claim
or lien on the house to satisfy the unpaid balance of the purchase price thereof under Article
2242 of the Civil Code, and to withhold from the proceed of the auction sale the sum of
P8,200.00. Levy having been made on the house in virtue of the writs of execution, the Sheriff
of Manila on March 5, 1957, sold the building in public auction in favor of the spouses Timbang,
as the highest bidders, in the amount of P5,750.00.

Personal properties of Filipinas Colleges, Inc. were also auctioned for P245.00 in favor of
the spouses Timbang. As a result of these actuation, three motion were subsequently filed
before the lower court. The Timbang spouses presented their opposition to each and all of
these motions.

Issue:
Whether or not the appellants as owner of the land may seek recovery of the value of
the land by writ of execution, levy the house of the builder and sell it in public auction.

Held:
No. The Court has already held in Matias vs. The Provincial Sheriff of Nueva Ecija that
while it is the inveriable practice, dictated by common sense, that where the successful bidder
is the execution creditor himself, he need not pay down the amount of the bid if it does not
exceed the amount of his judgement, nevertheless, when there is a claim by a third-party, to
the proceeds of the sale superior to his judgment credit, the execution creditor, as successful
bidder, must pay in cash the amount of his bid as a condition precedent to the issuance to him
of the certificate of sale.

In the instant case, the Court of Appeals has already adjudged that appellee Blas is entitled to
the payment of the unpaid balance of the purchase price of the school building. Blas is actually
a lien on the school building are concerned. The order of the lower court directing the Timbang
spouses, as successful bidders, to pay in cash the amount of their bid in the sum of P5,750.00
is therefore correct. With respect to the order of the court declaring appellee Filipinas Colleges,
Inc. part owner of the land to the extent of the value of its personal properties sold at public
auction in favor of the Timbang, this Court Likewise finds the same as justified, for such amount
represents, in effect, a partial payment of the value of the land. failure of the Timbang spouses
to pay to the Sheriff or to Manila Gervacio Blas said sum of P5,750.00 within fifteen (15) days
from notice of the final judgment, an order of execution shall issue in favor of Maria Gervasio
Blas to be levied upon all properties of the Timbang spouses not exempt from execution for the
satisfaction of the said amount.

43. BARRETTO VS. SANTA MARINA

G.R. No. 8238
26 Phil. 200

Facts:

La Insular cigar and cigarette factory is a joint account association with a nominal capital
of P865,000, the plaintiff's share being P20,000, or 4/173 of the whole. On March 14, 1910, the
plaintiff's attorneys wrote the defendant's local representative a letter offering to sell to the
defendant plaintiff's participation in the factory.
 The result of the correspondence between the parties and their representatives was that
Exhibit G was duly executed on May 3, 1910. In accordance with the terms of this exhibit a
committee of appraisers was appointed to ascertain and fix the actual value of La Insular. The
net value was at P4,428,194.44. Of this amount 4/173 part represented the plaintiff‘s share on
his P20,000 of the nominal capital. In Exhibit J which was executed on November 22, 1910, the
plaintiff acknowledged to have received from the defendant that amount. Subsequently to the
execution of Exhibit J, demand was made by the plaintiff upon the defendant for his share of
the profits from June 30, 1909, to November 22, 1910. This demand was refused and
thereupon this action was instituted to recover said profits.

The plaintiff admits that if the agreement of May 3, 1910, was a perfected sale he
cannot recover any profits after that date; while on the other hand defendant concedes that if
the said agreement was only a promise to sell in the future it, standing alone, would not
prevent recovery in this action.

Issue:
Whether the agreement executed by both parties on May 03, 1910 was a perfected
contract of sale?

Held:
Yes. Article 1450 of the Civil Code reads: "The sale shall be perfected between vendor
and vendees and shall be binding on both of them, if they have agreed upon the thing which is
the object of the contract and upon the price, even when neither has been delivered." This is
supplemented by article 1447 of the Code which reads as follows: "In order that the price may
be considered fixed, it shall be sufficient that it be fixed with regard to another determinate
thing also specific, or that the determination of the same be left to the judgment of a specified
person."

Under article 1450, there are two indispensable requisites in a perfected sale: (1) There
must be an agreement upon the thing which is the object of the contract; and (2) the
contracting parties must agree upon the price. The object of the contract in the case at bar was
the whole of the plaintiff's right, title, and interest in La Insular. This whole was 4/173 of the
entire net value of the business. The parties agreed that the price should be 4/173 of the total
net value. The fixing of such net value was unreservedly left to the judgment of the appraisers.
As to the thing and the price the minds of the contracting parties met, and all questions relating
thereto were settled. Nothing was left unfinished in so far as the contracting parties were
concerned. Neither party could withdraw from the contract without the consent of the other.
The result is that the two essential requisites necessary to constitute a perfected sale were
present.
45. OBAÑA VS. COURT OF APPEALS AND SANDOVAL
135 SCRA 557
March 29, 1985

FACTS:
On November 21, 1964, Anicleto Sandoval (owner of Sandoval‘s and Sons Rice Mill) was
approached by Chan Lin who offered to purchase from him 170 cavans of rice at the price of
P37.25 per cavan. The driver attempted to collect the payment from Chan Lin and Petitioner
Anacleto Sandoval but the latter refused, stating that he had already made the payment to
Chan Lin. Further demands having been met with refusal, Sandoval, as plaintiff, filed suit for
Replevin against petitioner, before the Municipal Court of San Fernando, La Union which
ordered petitioner- defendant to pay to Sandoval ½ of the cost of the rice or P2,805. On appeal
by the petitioner to the court of First Instance, judgment was rendered dismissing the
complaint. On appeal to respondent Appellate Court, Sandoval obtained a reversal in his favor.
Hence, the present petition seeks for the review of the decision of Court of Appeals ordering
Obaña inaction for Replevin to return to Sandoval, Private Respondent herein, 170 cavans of
rice or to pay its value in the amount P37.25 per cavan, with legal interest from the filing of the
complaint until fully paid.

ISSUE:
Whether or not the petitioner-dependent had unjustly enriched himself at the expense
of another by holding on to property no longer belonging to him.

HELD:
The judgment under review is hereby affirmed. No person should be benefited without a
valid basis or justification, shall enrich himself at the expense of another and hold on to a
property no longer belonging to him. The petition- defendant in his own testimony said that he
was repaid the sum of P5,600 by Chan Lin and claimed that he delivered the rice back to them.
However, the driver denied that the rice had ever been returned. The driver‘s version is more
credible since Sandoval‘s lawyer had manifested in open court that they would have withdrawn
the complaint if the return of the rice had been effected. In law and equity, therefore, Sandoval
is entitled to recover the rice, or the value thereof since he was not paid the price there for.
Costs against petitioner.

46. SOSTENES CAMPILLO VS.COURT OF APPEALS

G.R. No. L-56483 , 129 SCRA 513
May 29, 1984

Facts:
On February 27, 1961, Tomas de Vera and his wife Felisa Serafico sold two parcels of
land located in Tondo, Manila, designated as Lots 1 and 2 of the consolidation and subdivision
plan (LRC) Pcs. 888 and segregated from Transfer Certificate of Title No. 37277 under Transfer
Certificate of Title No. 63559, to Simplicio Santos, now deceased and is represented by his
administrator, Zenaida Diaz Vda. De Santos, the herein private respondents. Said sale was
however never presented for registration in the office of the Registry of Deeds of Manila nor
noted in the title covering the property.

On January 27, 1962, petitioner Sostenes Campillo obtained a judgment for a sum of
money against Tomas de Vera in Civil Case No. 49060 of the Court of First Instance of Manila.
That judgment became final and executory, and petitioner obtained an order for the issuance of
a writ of execution. The writ was issued on April 4, 1962 and pursuant thereto, the City Sheriff
levied on three (3) parcels of land covered by TCT No. 63559 in the name of Tomas de Vera,
including the two (2) parcels of land which the latter previously sold to Simplicio Santos.

On July 25, 1962, the three parcels of land were sold at the public auction for P
17,550.8 in favor of the petitioner who was issued the corresponding certificate of sale.
Claiming to be the owner of the two parcels of land by reason of the previous sale of him by
Tomas de Vera, Simplicio Santos filed an action to annul the levy, notice of sale, sale at public
auction and final deed of sale at the said land and in favor of the petitioner. In resisting the
complaint, the herein petitioner as one of the defendants below, alleged that he is an innocent
purchase for the value and that the supposed previous sale could not be preferred over the levy
and sale at public action because it was not registered. After due trial, the lower court rendered
judgment sustaining the validity of the levy and sale at public auction primarily because at the
time of the levy and sale, the disputed properties were still registered in the name of the
judgment debtor, Tomas de Vera. The trial court ruled, the sale to Simplicio Santos which was
neither registered nor noted in the title of the subject lots, cannot bind third persons.

Issue:
Whether or not the said right of title to Sostenes Campilio who subsequently purchase
them at an execution sale and obtained through a certificate of title.

Held:

It is settled in this jurisdiction that a sale of real estate, whether made as a result if a
private transaction or of a foreclosure or execution sale, becomes legally effective against third
persons only from the date of its registration. Consequently, and considering that the properties
subject matter thereof were actually attached and levied upon at the time when said properties
stood in the official records of the Registry of Deeds as still owned by and registered in the
name of the judgment debtor, Tomas de Vera, the attachment, levy and subsequent sale of
said properties are proper and legal. The net result is that the execution sale made in favor of
the herein petitioner transferred to him all the rights, interest and participation of the judgment
debtor in the aforestated properties as actually appearing in the certificate of title, unaffected
by any transfer or encumbrance not so recorded therein.

Since the sale made in favor of the vendee did not comply with the above-quoted
provision, the transaction was ineffectual as to third persons. And since the sale made in favor
of the second vendee complied with relevant provision, the sale to him was good and should be
protected.
 The questioned decision of the respondent appellate court is hereby reversed and set
aside, and that the judgment of the lower court is reinstated. Without pronouncement to the
cost.

47. KERR & CO. LTD VS. COLLECTOR OF INTERNAL REVENUE

GR. No. 46667 ,70 Phil.36
June 20, 1940

Facts:

Petitioner Company bought goods from Shaw, Wallace & Co. of Calcutta, India, in which
they offered a priced and was accepted, Petitioner now in their own name contracted sale with
the local buyers for the sale of the goods for a much higher price which includes their profit.
Petitioner now assails the action of the government which collected them traders‘ tax, they
contend that they are merchants and not traders and are exempted from tax under article
1459.
1. tax, petitioner was never the one who sold the goods to the local buyers but only acted
as a broker between them. Therefore they never engage in any contract of sale with the local
buyers.

Issue:
Whether or not there is a perfected sale between petitioner and Shaw & Wallace
Company.
Whether or not there was a perfected sale between petitioner and local buyers.
Whether or not Petitioner Company can be considered as a merchant under
art.1459.

Held:
Yes there was a perfected sale since the price was already agreed upon or the offer
was accepted

No, there was no sale between local buyers and petitioner since the goods never ended
in the hands of the petitioner but directly to the local buyers hence they merely acted as a
mediator between the parties and gain profit for the transaction.

No. Court held that petitioner is a trader and not a merchant, therefore is not exempted
from the traders
49. PEOPLE'S HOMESITE & HOUSING CORP. VS. COURT OF APPEALS
G.R. No. L-61623 , 133 SCRA 777
December 26, 1984

FACTS:

The PHHC board of directors on February 18, 1960 passed Resolution No. 513 wherein it
stated "that subject to the approval of the Court Council of the PHHC‘s consolidation subdivision
plan, awarding Lot 4 with an area of 4,182.2 square meters located at Diliman, Court City to
respondents Rizalino and Adelaida Mendoza (spouses Mendoza) at a price of twenty-one pesos
(P21.00) per square meter. The City Council disapproved the consolidation subdivision plan in
August 1960 but approved in February 1964 its revised version where Lot 4 was reduced to an
area of 2,608.7 square meters. Then in October 1965, the PHHC withdrew the tentative award
of Lot 4 to the spouses Mendoza for the latter‘s failure neither to pay its price nor to make a
20% initial deposit, and re-awarded said lot jointly and in equal shares to Miguela Sto.
Domingo, Enrique Esteban, Virgilio Pinzon, Leonardo Redublo and Jose Fernandez, all of whom
made the initial deposit. The subdivision of Lot 4 into five lots was later approved by the Court
council and the Bureau of Lands.

The spouses Mendoza asked for reconsideration and for the withdrawal of the said 2nd
award to Sto. Domingo and four others, and at the same time filed an action for specific
performance plus damages. The trial court sustained the award but the Court of Appeals
reversed the said decision, declared void the re-award to Sto. Domingo and four others, and
ordered the PHHC to sell Lot 4 with an area of 2,608.7 square meters at P21.00 per square
meter to spouses Mendoza.

ISSUE:

Whether or not there was a perfected sale of Lot 4, with the reduced area, to the
Mendoza‘s which they can enforce against the PHHC by an action for specific performance.

HELD:

We hold that there was no perfected sale of Lot 4. It was conditionally or contingently
awarded to the Mendoza‘s subject to the approval by the city council of the proposed
consolidation subdivision plan and the approval of the award by the valuation committee and
higher authorities.

When the plan with the area of Lot 4 reduced to 2,608.7 square meters was approved,
the Mendoza‘s should have manifested in writing their acceptance of the award for the
purchase of Lot 4 just to show that they were still interested in its purchase although the area
was reduced and to obviate ally doubt on the matter. They did not do so. The PHHC board of
directors acted within its rights in withdrawing the tentative award.

"The contract of sale is perfected at the moment there is a meeting of minds upon the
thing which is the object of the contract and upon the price. From that moment, the parties
may reciprocally demand performance, subject to the law governing the form of contracts."
(Art. 1475, Civil Code).
 50. ANG VS. THE COURT OF APPEALS
G.R. No. 80058 , 170 SCRA 286
February 13, 1989

FACTS:
Petitioners Ernesto Ang and Rosalinda Ang, brother and sister, are the owners of three

(3) parcels of land located at Quezon City with an aggregate area of 2,096 sq. m which they
purchased at a price of P680,000.00. Negotiations were undertaken for the sale of the
aforementioned properties between the petitioners as sellers and private respondent Lee Chuy
Realty Corporation, through its president Henry Lee Chuy as buyer.

Lee Chuy issued in favor of Ang a check in the amount of P50,000.00 together with a
receipt embodying the terms and conditions of their agreement indicating the agreed total price
of P1,600,000. The accompanying receipt was not returned by Ang and instead another receipt
prepared and signed by Ang which did not state the agreed price and forwarded to Lee Chuy.

Ang demanded to Lee Chuy to pay the balance of the purchase price and failure to do
so will result in the cancellation of their agreement. Lee Chuy replied that they had been ready
since December to perform its part of the agreement while Ang had not yet complied with their
undertaking to clear the subject properties of the obstructions thereon. Ang demanded the
refund of the P 50,000.00 down payment on account of the failure of Ang to comply with their
undertaking and their subsequent withdrawal from the sale. Upon the failure of the Ang to
return the down payment, Lee Chuy filed a complaint for the collection of a sum of money with
damages before RTC. The trial court rendered its decision in favor of Ang.

CA reversed the RTC decision and held that Ang were the ones who breached the
agreement.

ISSUE:
Whether or not Ang breach the agreement and the agreed price is P2,340,000.00.

HELD:

Yes, Ang is liable to refund the P 50, 000 down payment of Lee Chuy.

CA found that Ang breached the agreement when they failed to undertake fulfillment of
the 2 conditions; (1) that Ang will remove and clear the subject property of all occupants and
obstructions and (2) that when the property is cleared of all occupants and obstructions, Ang
shall deliver a deed of absolute sale in favor of Lee Chuy with all pertinent papers necessary.

However, such breach does not warrant a resolution of the contract. While it is true that
in reciprocal obligations, such as the contract of purchase and sale, the power to rescind is
implied and any of the contracting parties may, upon non-fulfillment by the other party of his
part of the obligation, resolve the contract, rescission wig not be permitted for a slight or casual
breach of the contract. Rescission may be had only for such breaches that are so substantial
and fundamental as to defeat the object of the parties in making the agreement.
The two conditions that were breached by petitioners are not essential for the fulfillment of the
obligations to but merely an incidental undertaking. The rescission of the contract may not be
allowed on this ground alone. Lee Chuy at first did not seek to rescind the contract on the basis
of the non-fulfillment of these conditions. Lee in fact sought definite advice from Ang as to
when they can comply with the conditions. Indeed, it was the failure of the Ang to comply with
the conditions of the agreement that caused the delay in the payment by Lee. When Ang
refused to proceed with the sale unless Lee agreed to pay the higher price, Ang thereby
committed a serious breach of the agreement. There was a perfected contract of sale and the
purchase price was set at P1,600,000. Ang cannot increase the purchase price agreed upon
without the consent of private respondent. Lee had the right to rescind the agreement.

Since Ang had already sold the properties to Chua, they can no longer perform to deliver
the property to Lee. This is another breach of their agreement. CA aptly characterized the
actuations of Ang to be "double-dealing."

As to the agreed price, there is is no doubt that there was a perfected contract for the
sale as evidenced by the down payment of P50,000.00. If the price was really P2,340,000, they
could have easily written the amount in the receipt. Ang were the ones who clearly caused the
obscurity when they omitted the purchase price in the receipt they prepared and signed. Hence,
such obscurity must be construed against them.

If the true price was P2,340,000, it would be unusual for Ang to enter into such an
agreement with Chua at a lesser purchase price. The only logical conclusion is that Ang had
intentionally omitted the price of P1,600,000 in the receipt they signed either to compel Lee
Chuy to agree to a price increase or to enable them to back out of their agreement
notwithstanding their plan to reduce their capital gains tax liability. The claim of Ang is that they
could no longer accept the offers from Dolora Chua because of their previous commitment with
Lee Chuy. - This pretension is not supported by the evidence. The records show that Ang had
entered into an "Agreement of Purchase or Sale" with Dolora 1 day before the date of the
receipt of down payment.

Ang also argue that the document is an agreement and not a mere offer.- We find no
cogent basis to view the same as a mere offer. It is clearly stated in the agreement that
petitioners received P20,000 from Chua as down payment with the balance of the purchase
price of P2,160,000.00 to be paid in full at the time the land shall have been cleared and that
Ang bind themselves to deliver to Chua the deed of sale upon full payment.