I. Dignos vs.

CA

Facts:
 Dignos spouses sold a parcel of land located in Opon, Lapu-Lapu City to appellant Jabil for P28,000 payable in
2 installments in the sum of P12,000 and the next and last installment in the sum of P4,000. Jabil incurred delay in
payment for one month for the remaining balance of P4,000.
 Dignos spouses sold the same land in favor of defendant spouses Cabigas, who were then U.S. citizens for the
price of P35,000. A deed of absolute sale was executed by Digos spouses in favor of the Cabigas spouses which
was registered in the Office of the Register of Deeds.
 The Dignos spouses refused to accept Jabil’s payment of the balance of the purchase price and when the latter
discovered the second sale made by the former, the latter brought the present suit.

Issue(s):

1. Whether or not the contract is a deed of absolute sale or a contract to sell

2. Whether or not there was a valid rescission of the contract

Held:

1. The contract is a deed of absolute sale. The deed of sale is absolute in nature although denominated as a
“Deed of Conditional Sale” where nowhere in the contract is a stipulation reserving the title of the property on
the vendors nor does it give them the right to unilaterally rescind the contract upon non-payment of the balance
within a fixed period.
2. The Court held that in the absence of stipulation to the contrary, the ownership of the thing sold passes to the
vendee upon actual or constructive delivery thereof. So, when the petitioners sold the land to the Cabigas
spouses, they were no longer owners of the same and such sale is null and void.
3. There was no valid rescission of the contract. It is undisputed that the petitioners never notified Jabil that they
were rescinding the contract, nor did they file a suit in court to rescind the sale. There is no showing that Jabil
authorized Amistad to make an extra-judicial rescission on his behalf. It required that for such sale to be
rescinded, it must appear in a public document.

II. Tan vs. Benorilao

Facts:
 Spouses Benorilao and spouses Taningco were the co-owners of a parcel of land in Tagaytay City. They
executed a Deed of Conditional Sale over the property in favor of petitioner Tan.
 Among the stipulations of the Deed read that an initial down payment of P200,000 upon signing of the contract
and the remaining balance to be paid thereafter without interest.
 In case the buyer fails to comply with terms and conditions within the grace period, the seller shall have the right
to forfeit the down payment, and to rescind the conditional sale without need of judicial action.
 Further, the deed states that in case the buyer complied with the terms and conditions of the contract, the sellers
shall execute and deliver to the buyer the appropriate Deed of Absolute Sale.
 One of the spouses Benolirao, Lamberto, died intestate. His heirs executed an extrajudicial settlement of his
estate and a new certificate of title over the subject property was issued.
 Tan was not able to pay the balance of the purchase price on the period fixed in the contract, but he was granted
two extensions by the seller, but he was not able to pay still.
 When the sellers demanded payment from Tan, he refused to pay claiming that the annotation on the title,
pursuant to the extrajudicial settlement made, constituted an encumbrance on the property that would prevent from
delivering a clean title to him.
 Tan alleged that he could no longer be required to pay the balance of the purchase price and demanded the
return of his down payment. The sellers refused to refund the down payment pursuant to the stipulations of the
contract.
 The RTC and CA ruled that the respondent seller’s forfeiture of Tan’s down payment was proper in accordance
to the terms and conditions of the contract between the parties. Hence, the present petition of Tan.

Issue(s):

1. Whether or not the contract is a deed of absolute sale or a contract to sell

2. Whether or not the forfeiture of Tan’s down payment was valid
Held:

1. The contract is merely a contract to sell. The Courts established that where the seller promises to execute a
deed of absolute sale upon the completion by the buyer of the payment of the price, the contract is only a
contract to sale. Thus, while the parties call the contract as a Deed of Conditional Sale, the presence of aforesaid
stipulation in the contract make it as a mere contract to sell.
2. No. The contract to sell was terminated when the vendors could no longer legally compel Tan to pay the balance
of the purchase price as a result of the legal encumbrance which attached to the title of the property. His refusal
to pay was due to such encumbrance and not through his own fault or negligence.
3. The forfeiture of Tan’s down payment was clearly unwarranted. The Court held that the sellers should return
the P200,000 down payment to Tan, subject to the legal interest per annum computed from the date of Tan’s
first demand letter.

III. Artates vs. Urbi

Facts:
 The Proper Land Authorities issued a homestead covered by a patent and duly registered in the name of the
spouses Artates. Lino Artates inflicted physical injuries to respondent Urbi who then filed a civil case against the
former.
 The Court awarded damage in favor of Urbi, so the Provincial Sheriff of Cagayan made a public sale of the
spouses’ homestead to satisfy the said judgment. Spouses Artates alleged that such sale violated the provision of
the Public Land Law.
 Further, Urbi executed a deed of sale of the same parcel of land to defendant Soliven who was a minor, in order
to defraud the spouses.

Issue(s):

1. Whether or not spouses Artates possess absolute ownership over the homestead covered by the patent

Held:

1. Yes. The homestead patent was issued to the appellants on September 23, 1952 and it was sold at public
auction to satisfy the civil liability of Lino Artates to Urbi on March 14, 1956. As prescribed by the Public Land
Law, the said property shall be exempted from execution for any debt contracted within five years from the date
of issuance of the patent.
2. The public policy underlying this grant is to preserve and keep in the family of the homesteader that portion of
public land which the State has given to him. Considering our public land laws were copied from American
legislation, American jurisprudence reveals that “debts contracted” by a homesteader has been held to include
freedom from money liabilities involving torts or crimes committed by him.

IV. Heirs of Enriquez Zambales vs. CA

Facts:
 The spouses Zambales, who are illiterate, were granted homestead patents of a parcel of land in Palawan. They
claimed that respondent Corporation, Nin Bay Mining, removed sand from their land and destroyed the plants and
other improvements on it, to which the corporation denied having done so.
 The spouses, assisted by their counsel, Atty. De Los Reyes, entered into a Compromise Agreement with Nin
Bay Mining giving the corporation full power and authority to sell, transfer, and convey they whole or any part of the
subject property. This agreement was done within 5 years after the issuance of the homestead patent.
 The corporation then sold the property to Preysler. 10 years after the Compromise Agreement, the spouses filed
a civil action for the annulment of the deed of sale with recovery of possession and ownership with damages, alleging
that Atty. De Los Reyes and the corporation induced them through fraud, deceit and manipulation to sign the
compromise agreement.

Issue(s):

1. Whether or not the petitioners’ consent was vitiated in entering the Compromise Agreement
2. Whether or not the Compromise Agreement and subsequent Deed of Sale were valid and legal
Held:

1. No. The Court held that fraud and misrepresentation did not vitiate petitioner’s consent to enter the Agreement
because even though they were illiterate, they were not as ignorant as they tried to show. The spouses were
political leaders who speak in the platform during political rallies, and they lawyers belong to well-established
law firms in Manila, which show that the spouses are still well-informed.
2. No. The Compromise Agreement was entered into within the 5-year prohibitory period of the Public Land Act
and is therefore, illegal and void. Hence, the subsequent deed of sale between Preysler and the corporation
was also declared null and void.

V. Quiroga vs. Parsons

Facts:
 A contract was entered into by and between Quiroga and Parsons for the exclusive sale of “Quiroga” beds in the
Visayan Islands subject to several conditions. Later on, a complaint was filed by Quiroga, contending that Parsons
violated certain obligations imposed by the contract.
 Quiroga alleged that the defendant was his agent for the sale of his beds in Iloilo and that said obligations are
implied in a contract of Commercial Agency.

Issue(s):

1. Whether or not the defendant was an agent of the plaintiff for the sale of the latter’s bed by reason of the contract

Held:

1. No. The contract contains the essential features of a contract of purchase and sale. There was an obligation on
the part of the plaintiff to supply the beds, and on the part of the defendant, to pay the price. These features are
not the same as to a contract of commercial agency wherein an agent receives the thing to sell, does no pay
the price, but delivers to the principal the price he obtains from the sale of the thing to a third person, and if he
does not succeed in selling it, he returns it to the principal.
2. By virtue of the contract between the plaintiff and the defendant, the latter, on receiving the beds, was
necessarily obliged to pay the price within the term fixed, without any other consideration regardless as to
whether he had or had not sold the beds. The words “commission on sales” used in the contract mean nothing
else than a mere discount in ton the invoice price. Further, the word “agency” only expresses that the defendant
was the only one who could sell the plaintiff’s beds in the Visayan Islands.

VI. Concrete Aggregates Inc. vs. CTA

Facts:
 Concrete Aggregates Inc. is a domestic corporation which maintains and operates a plant at Quezon City for the
production of ready-mixed concrete and plant-mixed hot asphalt. The agents of respondent Commission on Internal
Revenue investigated on petitioner’s tax liabilities, then assessed and demanded payment from petitioner for sales
and ad valorem taxes inclusive of charges.
 The petitioner contended that it is a contractor subjected to 3% contractor’s tax, not a manufacturer subjected to
7% sales tax, as assessed by the CIR. Petitioner further stated that its business falls under “other construction work
contractors” or “other independent contractors” classified under “general engineering contractor” and “specialty
contractor”.
 It advances the theory that it produced asphalt and concrete mix only upon previous orders, and that without
such other, it would not do so considering the highly perishable nature of the asphalt and concrete mix.

Issue(s):

1. Whether or not the petitioner is a contractor or manufacturer under the Tax Code

Held:

1. The Court affirmed respondent CTA’s decision and declared the petitioner as a manufacturer under the Tax
Code. The petitioner was formed and organized primarily as a manufacturer. Petitioner, as a manufacturer, not
only manufactures the finished articles but also sells or distributes them to others. Selling or distribution is an
essential ingredient of manufacturing.
2. 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. It is clear that petitioner does nothing more than sell the articles that it habitually manufactures.
 3. The habituality of the production of goods for the general public characterizes the business of the petitioner.
One who manufactures articles, although upon a previous order and subject to the specifications of the buyer,
is nonetheless a manufacturer.

VII. People’s Homesite & Housing Corp. vs. CA

Facts:
 PHHC bound itself to sell to the Mendoza spouses Lot 4 with an area of 4,182.2 square meters located in Quezon
City. Its board of directors passed a resolution stating that the sale is subject to the approval of the Quezon City
Council as it is awarded to the respondent spouses at a price of P21.00 per square meter.
 The city council disapproved the proposed consolidation subdivision plan and the spouses were informed of
such disapproval. Another plan was submitted for approval, which reduced the area to 2,608.7 square meters, and
later on was approved by the city council.
 The BODs of PHHC passed a resolution recalling all the awards of lots to persons who failed to pay the deposit
or down payment for the lots awarded to them. The Mendozas never paid the price of the lot nor the initial deposit.
PHHC withdrew the award to the Mendozas and re-award it to 5 other persons who made the initial deposit and
corresponding deeds of sale were executed in their favor.
 Mendoza spouses asked for reconsideration of the withdrawal of the previous award to them and filed the instant
action for specific performance and damages.

Issue(s):

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

Held:

1. No. It was conditionally of contingently awarded to the Mendozas subject to the approval by the city council of
the proposed plan. The council did not approve the plan and the spouses were informed of such disapproval.
2. When the plan with the reduction of area was approved, Mendozas should have manifested in writing their
acceptance of the award to show that they were still interested. They did not do so. There was no perfected
sale since there was no meeting of the minds on the purchase of Lot 4 with an area of 2,608.7 square meters.

VIII. Toyota Shaw, Inc. vs. CA

Facts:
 Luna Sosa and Bernardo, a sales representative of Toyota Shaw, contracted an agreement that a Lite Ace unit
would be delivered to respondent Sosa and that balance of the purchase price would be paid by credit financing
through B.A. Finanace.
 The next day, Sosa went to Toyota to deliver the down payment of P100,000 as he stated on the agreement.
Bernardo then accomplished a printed Vehicle Sales Proposal (VSP). Sosa was then made to wait for the unit, but
it was not released to him.
 Toyota contends that the Lite Ace was not delivered to Sosa because of the disapproval by B.A. Finance of the
credit financing application of Sosa and that petitioner could not release said unit due to the uncertainty of payment
of the balance of the purchase price. Toyota then gave Sosa the option to purchase the unit by paying the full price
in cash, but Sosa refused.
 Sosa asked that his down payment be refunded, and Toyota did so on the very same day. After which, Sosa
sent two letters to Toyota demanding the refund of the down payment plus interest from the time he paid and
demanding P1M representing interest and damages with a warning that legal action would be taken if payment was
not made within 3 days.
 Toyota’s counsel refused to accede to the demands of Sosa. Toyota alleged that no sale was entered into
between it and Sosa as Bernardo had no authority to sign the VSP for and its behalf, and that Bernardo signed it in
his personal capacity.

Issue(s):

1. Whether or not the agreement between private respondent and petitioner’s sales rep a perfected contract of
sale binding upon the petitioner
2. Whether or not breach of said agreement entitles the private respondent to damages and attorney’s fees
Held:

1. No. It is not a contract of sale. No obligation on the part of Toyota to transfer ownership of a determinate thing
to Sosa and no correlative obligation on the part of the latter to pay therefor a price certain appears therein. The
provision on the down payment of P100,000 made no specific reference to a sale of a vehicle. Nothing was
mentioned about the full purchase price and the manner the installments were to be paid.
2. The Court ruled that a definite agreement on the manner of payment of the price is an essential element in the
formation of a binding and enforceable contract of sale. A disagreement of the manner of payment is tantamount
to a failure to agree on the price. Definiteness as to the price is an essential element of a binding agreement to
sell personal property.
3. No. The award of moral and exemplary damages and attorney’s fees and costs of suit is without legal basis. At
the bottom of this claim is nothing but misplaced pride and ego. It was the respondent who brought
embarrassment upon himself by bragging about a thing which he did not own yet.

IX. Sampaguita Pictures vs. Jalwindor Manufacturers, Inc.

Facts:
 Sampaguita is the owner of a building located in Quezon City. The roof deck of the building and all existing
improvements thereon were leased by Sampaguita to Capitol “300” Inc. and it was agreed that all permanent
improvements made by the lessee on the premises shall belong to the lessor without any obligation on the part of
the lessor to reimburse he lessee for the sum spent for said improvements.
 Capitol purchased on credit from defendant Jalwindor glass and wooden jalousies which were delivered and
installed in the leased premises of Sampaguita. Capitol was not able to pay defendant for its purchases as well as
petitioner for its rentals.
 Sheriff of Quezon City made levy on the glass and wooded jalousies in question. Sampaguita filed a third-party
claim alleging that it is the owner of said materials and not Capitol, but respondent filed an indemnity bond in favor
of the Sheriff and the items were sold in a public auction with Jalwindor as the highest bidder.

Issue(s):

1. Whether or not the petitioner Sampaguita is the rightful owner of the materials in question

Held:

1. Yes. When the glass and wooden jalousies in question were delivered and installed in the leased premises,
Capitol became the owner thereof. Ownership if not transferred by perfection of the contract but by delivery,
either actual or constructive. This is true even if the purchase has been made on credit, as in the case at bar.
Ownership is acquired from the moment the thing sold was delivered to the vendee, as when it is placed in his
control and possession.
2. Capitol entered into a lease contract with Sampaguita and the latter became the owner of the items in question
by virtue of the agreement said in the contract. When levy was made, Capitol, the judgment debtor, was no
longer the owner thereof. The items in question were illegally levied upon since they do not belong to the
judgment debtor. Since the items already belonging to Sampaguita and not to Capitol, the judgment debtor, the
levy and auction sale are null and void.