25. Atkins, Kroll & Co. v. Cua Hian Tek, 102 Phil 68. San Lorenzo Development Corp.

rp. v. Court of 111. Lacorte v. Court of Appeals, 286 SCRA 24

948 Appeals, 449 SCRA 99

Atkins, Kroll & Co. v. Cua Hian Tek,

102 Phil 948, January 1958

FACTS:

On September 13, 1951, petitioner Atkins Kroll & Co. (Atkins) sent a letter to respondent B. Cu Hian Tek (Hian Tek)
offering (a) 400 cartons of Luneta brand Sardines in Tomato Sauce 48 / 15-oz. Ovals at $8.25 per carton, (b) 300
cartons of Luneta brand Sardines Natural 48/15 oz. talls at $6.25 per carton, and (c) 300 cartons of Luneta brand
Sardines in Tomato Sauce 100/5-oz. talls at $7.48 per carton, with all of the offers subject to reply by September 23,
1951. Hian Tek unconditionally accepted the said offer through a letter delivered on September 21, 1951, but Atkins
failed to deliver the commodities due to the shortage of catch of sardines by the packers in California.

Hian Tek, therefore, filed an action for damages in the CFI of Manila which granted the same in his favor. Upon Atkins’
appeal, the Court of Appeals affirmed said decision but reduced the damages to P3,240.15 representing unrealized
profits. Atkins herein contends that there was no such contract of sale but only an option to buy, which was not
enforceable for lack of consideration because it is provided under the 2nd paragraph of Article 1479 of the New Civil
Code that "an accepted unilatateral promise to buy or to sell a determinate thing for a price certain is binding upon the
promisor if the promise is supported by a consideration distinct from the price.” Atkins also insisted that the offer was a
mere offer of option, because the "firm offer" was a continuing offer to sell until September 23.
ISSUE: Whether or not there was a contract of sale between the parties, or a mere unilateral promise to buy?

RULING:

The Supreme Court held that there was a contract of sale between the parties. Petitioner’s argument assumed that only
a unilateral promise arose when the respondent accepted the offer, which is incorrect because a bilateral contract to sell
and to buy was created upon respondent’s acceptance.

Had B. Cua Hian Tek backed out after accepting, by refusing to get the sardines and / or to pay for their price, he could
also be sued. But his letter-reply to Atkins indicated that he accepted "the firm offer for the sale" and that "the
undersigned buyer has immediately filed an application for import license.” After accepting the promise and before he
exercises his option, the holder of the option is not bound to buy. In this case at bar, however, upon respondent’s
acceptance of herein petitioner's offer, a bilateral promise to sell and to buy ensued, and the respondent had
immediately assumed the obligations of a purchaser.

San Lorenzo Development Corp. v. Court of Appeals,

G.R. No. 124242 Jan. 21, 2005

FACTS:

On Aug. 20, 1986, Spouses Miguel Lu and Pacita Zavalla purportedly sold two parcels of land to respondent Pablo
Babasanta at P15/sq.meter. Downpayment worth P50,000 was made by Babasanta as evidenced by a memorandum
receipt issued by Pacita Lu. Babasanta paid a total of P200,000. In May 1989, Babasanta, in a letter, demanded the
execution of a final deed of sale in his favor, and has informed the spouses through he same letter that he received
info that the spouses has sold the same parcels of land to another without his knowledge and consent. Pacita Lu
responded through a letter that though she agreed to sell, when the balance became due and when she refused the
price reduction he requested, Babasanta backed out of the sale and claimed that she returned the sum of P50,000 to
Babasanta through Eugenio Oya.

Babasanta then filed before the RTC a complaint for specific performance and damages against Spouses Lu claiming
that the lands had been sold to him. Spouses Lu in their answer claimed that Pacita had originally obtained loans
from Babasanta and had transformed the loan intoa contract to sell without Miguel Lu’s
knowledge and consent. They further claim that Babasanta failed to pay the balance despite repeated demands, and
when Babasanta’s request for price reduction was denied, that he rescinded the contract.
San Lorenzo Development Corp filed a Motion for Intervention alleging that it has legal interest in the subject
because the subject lands were sold to it, with the Spouses Lu executing in its favor an Option ti Buy, and
subsequently, a Deed of Absolute Sale after paying P632,320. The certificates if title were then delivered to SLDC by
the spouses.

The RTC upheld the sale of the property to SLDC and ordered the Spouses Lu to pay Babasanta P200,000 with legal
interest plus P50,000. Babasanta and the Spouses Lu appealed said decision The CA reversed the lower court’s
decision, and declared that the sale between Babasanta and the Spouses Lu was valid.

ISSUE:
Whether or not there was delivery in the contract of sale between Babasanta and the Spouses Lu?

Whether or not Babasanta acquired ownership over the land?

RULING:
1. No.
It can be noted that there are 2 modes of delivery: (1) “Actual delivery which consists in placing the thing sold
in the control and possession of the vendee”, and (2) “Legal or constructive delivery which may be had through
any of the following ways: the execution of a public instrument evidencing the sale; symbolical tradition such
as the delivery of the keys of the place where the movable sold is being kept; traditio longa manu or by mere
consent or agreement if the movable sold cannot yet be transferred to the possession of the buyer at the time
of the sale; traditio brevi manu if the buyer already had possession of the object even before the sale; and
traditio constitutum possessorium, where the seller remains in possession of the property in a different
capacity.” There was neither Actual nor constructive delivery. Babasanta did not take possession at any time
after the perfection of the sale in his favor or exercised acts of dominion over it despite his assertions that he
 was the rightful owner of the lands, thus no actual delivery. The agreement was also not embodied in a public
instrument, nor in any other manner provided for in order to have constructive delivery.

2. No.
Ownership is only transferred to the vendee upon its delivery to said vendee. “even on the assumption that the
perfected contract between the parties was a sale, ownership could not have passed to Babasanta in the
absence of delivery, since in a contract of sale ownership is transferred to the vendee only upon the delivery of
the thing sold.” “Sale is not a mode but merely a title. A mode is the legal means by which dominion or
ownership is created, transferred or destroyed, but title is only the legal basis by which to affect dominion or
ownership. Contracts only constitute titles or rights to the transfer or acquisition of ownership, while delivery
or tradition is the mode of accomplishing the same.

Therefore, sale by itself does not transfer or affect ownership; the most that sale does is to create the
obligation to transfer ownership. It is tradition or delivery, as a consequence of sale, that actually transfers
ownership.”

FACTS:
San Lorenzo Development Corporation filed with the MTCC of Danao City an application for registration of title to a parcel of land.
This was opposed by the Republic
 The date for the initial hearing was reset for many times
The case called aloud in open court to determine whether there were other oppositors aside from the Republic. There being none,
the court issued an Order of General Default
Respondent corporation presented several documents and witnesses as evidence
MTCC rendered decision granting respondent’s application
It is important to take note of the following dates:
Ø  May 15, 1988 – The trial court issued an order
Ø  June 6, 1988 – The notice of initial hearing was issued
Ø  September 23, 1988 – The hearing was actually held
On appeal, petitioner Republic maintains that the MCTC never acquired jurisdiction over the case on account of its failure to conduct
the initial hearing thereof within the period fixed in Section 23 of P.D. No. 1529 which mandates that the date and hour of initial
hearing shall not be earlier than 45 days nor later than 90 days from the date of the Order.
In such case, the initial hearing should have been set NOT earlier than June 29, 1988 (45 days from May 15, 1998) and NOT later
than August 13, 1998 (which is 90 days from May 15, 1998).
CA dismissed Republic’s appeal.
ISSUE: W/N the defective notice of publication of initial hearing vested the trial court with jurisdiction

RULING:
YES. Respondent Corporation should NOT BE FAULTED if the initial hearing was conducted on September 23, 1995 was outside the
90-day period set forth under Section 23 of Presidential Decree No. 1529. Respondent Corporation has substantially complied with
the requirements under the registration of the land.
A party cannot intervene in matters within the exclusive power of the trial court. No fault is attributable to such party if the trial
court errs on matters within its sole power. It is unfair to punish an applicant for an act or omission over which the applicant has
neither responsibility nor control, especially if the applicant has complied with all the requirements of the law.
As held in Republic vs Manna Properties, The duty and the power to set the hearing date lie with the land registration court. After an
applicant has filed his application, the law requires the issuance of a court order setting the initial hearing date. The notice of initial
hearing is a court document. The notice of initial hearing is signed by the judge and copy of the notice is mailed by the clerk of court
to the LRA [Land Registration Authority]. This involves a process to which the party applicant absolutely has no participation.
 However, the Supreme Court found that the respondent corporation can only prove possession because of the tax declarations it
presented for the year 1948, 1963 and 1964. This does NOT constitute the evidence necessary to acquire the title through adverse
occupation under CA 141. All that the CENRO certificate evidences is the alienability of the land involved, not the open, continuous,
exclusive and notorious possession and occupation thereof by the respondent or its predecessors-in-interest for the period
prescribed by law.
 Hence, SC ruled in favor of Republic

Lacorte v. Court of Appeals, 286 SCRA 24

G.R. No. 124574. February 2, 1998

FACTS:

Petitioners and private respondent Peregrino Lacorte are the heirs of Maria Inocencio Lacorte who was the
original owner of a parcel of land located at Sta. Cruz, Lezo, Aklan with an area of 14,556 square meters,
more or less. The subject property was foreclosed by the Rural Bank of Malinao, Aklan, Inc. which, after
consolidating its ownership thereover, subsequently sold the same to herein private respondent Jose Icaca.
On October 17, 1983, respondent Jose Icaca and petitioner Simon Lacorte, in behalf of the heirs of Maria
Lacorte, entered into an Agreement whereby the former was authorized to purchase the subject property from
the bank provided that the heirs of Maria Lacorte shall be given the right to repurchase the same in the
amount of P33,090.00 within a period of one year from that date. The one-year redemption period was later
extended to March, 1987 pursuant to another Agreement dated October 16, 1984. Both agreements were
signed by petitioner Simon Lacorte for himself and in representation of the heirs of Maria Lacorte. On
November 4, 1984, respondent Peregrino Lacortes wife, Adela, paid to respondent Icaca the amount
of P26,000.00 as deposit for the repurchase of the property.

It appears, however, that without the knowledge and consent of herein petitioners, and before the expiration
of the grace period, private respondents Peregrino Lacorte and his wife were able to purchase the land in their
names by virtue of a Deed of Reconveyance executed by respondent Icaca dated February 3, 1987.

That prompted herein petitioners to commence this action on December 9, 1988 for annulment of the
contract on the ground that the same was entered into in evident bad faith and in violation of the previous
agreements between the parties, thereby resulting in prejudice to the property rights of herein petitioners. In
their Answer, respondents Peregrino and Adela Lacorte denied that there was an agreement to sell the
property collectively to the heirs of Maria Lacorte, and argued that since the land was legally sold by the bank
to respondent Icaca, then the sale thereof by the latter to the former is likewise valid.

ISSUES:
Whether or not the petitioners have the right to ask for reformation of the instrument reflecting the proper
parties and true intention of the Deed of Reconveyance

RULING:

Yes.
There is no doubt that petitioners are entitled to bring an action to annul the contract because they stand to
be prejudiced by the enforcement of the Deed of Reconveyance. As to whether or not they also have the right
to ask for reformation of the instrument, we hold in the affirmative. This is because petitioner should really
have been made parties to the Deed of Reconveyance were it not for the fact that Adela Lacorte had
fraudulently excluded their names therefrom. From the start of the negotiations with the bank and, later, with
Jose Icaca, petitioners have actively participated. They remained in possession of the land, gathered fruits
therefrom, and never for a moment relinquished their rights thereover.

Since petitioners should in truth and in fact be parties to the Deed of Reconveyance, they are entitled to the
reformation of the contract in order to reflect the true intention of the parties. In fact, Jose Icaca, who is the
real injured party in this case because of the fraud committed on him, has acquiesced to the cancellation of
the contract. There is nothing to prevent the reformation of the instrument 23 as has in effect been granted by
the court a quo by way of an additional or alternative relief.

We accordingly declare that what is necessary is only a reformation of the Deed of Reconveyance by reflecting
therein the names of herein petitioners as additional parties thereto, since there has been a meeting of the
minds on the object and the consideration. Herein petitioners need merely contribute pro rata to the
payments and expenses as may have heretofore been made or shall hereafter be involved in implementing the
relief sought by and granted to them, the details of which shall be determined by the trial court.

WHEREFORE, the judgment appealed from is hereby REVERSED and SET ASIDE, and the judgment of the
Regional Trial Court, Branch 1, of Kalibo, Aklan, is hereby REINSTATED, subject to the modifications
regarding the implementation thereof by the court a quo on the basis of the rationale therefor as herein
discussed.