SALES – CASE NOTES:

1. Optimum Development Bank v. Benigno V. Jovellanos & Lourdes R. Jovellanos

- April 26, 2005: Spouses Jovellanos entered into a Contract to Sell with Palmera
Homes, Inc.
o Subject Property: Residential house and lot in Block 3, Lot 14, Villa Alegria
Subdivision, Caloocan City.
o P 1,015,000.00
o As stipulated, Jovellanos took possession of the property upon the down payment
of 91,500.00
 Monthly installments of P13, 107.00 for a period of 10 years from June
12, 2005.
- August 22, 2006, assigned all rights, titles, and interests in the Contract to Sell in favor of
Optimum Development Bank via Deed of Assignment.
o April 10, 2006, Optimum issued a Notice of Delinquency and Cancellation of
Contract to Sell
 Jovellino’s failure to pay monthly installments
- May 25, 2006, Final Demand Letter from ODB: Jovellinos to vacate and deliver
possession of the subject property within seven days.
o Unheeded; ODB filed a complaint for unlawful detainer before MeTC.
 Jovellanos failed to file their answer within the prescribed period
o ODB moved for the rendition of judgment; Jovellanos filed their opposition—
Motion to Reopen and Set the Case for Preliminary Conference
 Denied by the MeTC
 The MeTC ordered Jovellanos to vacate the subject property and
pay OPB reasonable compensation in the amount of P5,000.00 for
its use and occupation until possession has been surrendered
- Jovellanos appealed to the RTC, claiming that OPB counsel made them believe that a
compromise agreement was being prepared.
o The case did not merely involve the issue of physical possession but the rights
under a contract to sell: a matter incapable of pecuniary estimation and, therefore,
within the jurisdiction of the RTC
- RTC affirmed the MeTC's judgment; the case was elevated to the CA.
o CA reversed and set aside the RTC's decision; the issue of possession, the validity
of the cancellation of the Contract to Sell, and the determination of the rights of
the parties as well as the governing law (Republic Act No. 6552, among others)
- OPB raised the case to the SC.
o Determinative of the nature of the action and the court with jurisdiction:
 The allegations in the complaint
 The character of the relief sought
 not the defenses set up in an answer
- On the matter of pecuniary estimation:
SALES – CASE NOTES:

o MeTCs are conditionally vested with the authority to resolve the question of
ownership raised as an incident in an ejectment case where the determination is
essential to a complete adjudication of the issue of possession.
- In this case, Optimum complied with all the requisites and the Javellanos still didn’t pay.
Thus,
- Javellanos lost possession and MeTC has jurisdiction
- In this case, Optimum complied with all the requisites and the Javellanos still didn’t pay.
Thus,
- Javellanos lost possession and MeTC has jurisdiction
- In this case, Optimum complied with all the requisites and the Javellanos still didn’t pay.
Thus,
- Javellanos lost possession and MeTC has jurisdiction
- Thus, the MeTC has jurisdiction and that OPB is found compliant with all the requisites
while the Javellano spouses didn’t pay.

2. Hernando R. Peñalosa Alias "Henry Peñalosa," v. Severino C. Santos (deceased),

Substituted by his Heirs: Oliver Santos And Adyll M. Santos, and Adela Duran
Mendez Santos
- Respondents Severino C. Santos and Adela Mendez Santos are registered owners of a
residential house and lot located at No. 113 Scout Rallos Street, Quezon City
- In 1988, Severino and Adela decided to sell their property and for this purpose,
negotiated with petitioner Hernando Peñalosa
- The property was then occupied by a lessee, Eleuterio Perez, who was given preference
to buy it under the same terms offered by the buyer.
o Perez proposed less favorable terms, and Severino rejected his offer
- On August 1, 1988, petitioner Henry Peñalosa and respondent Severino Santos attempted
to enter into an agreement whereby the latter, for consideration of P1, 800.000.00, would
sell the property subject of the instant case to the former.
o The deed of absolute sale (1st deed) evidencing this transaction was signed by
Henry but not by Severino.
- On August 15, 1988, Henry signed a document stating that the first deed was executed
between him and Severino for the sole purpose of helping the latter eject Perez, the
occupant of the property.
o Henry acknowledged in said document that although Severino had agreed to sell
the property to him, he had not paid the consideration stated in the first deed.
- Henry and Severino executed another deed of absolute sale (2nd deed).
o It was signed by both parties and duly notarized.
o It states that Severino sells and transfers the house and lot to Henry, who had paid
the full price of P2,000,000.00
- The initial asking price for the property was only P1, 800,000.00 as shown in the first
deed.
SALES – CASE NOTES:

o Severino later asked for a higher price because Henry could not give the money as
soon as expected.
o Severino claimed that he made it clear to Henry that he agreed to sell the property
under the second deed for P2,000,000.00, provided that payment be immediately
effected.
- Henry then gave Severino P300,000.00 as "earnest money,” purportedly with the
understanding that the former was to pay the balance within 60 days.
- After the execution of the second deed, Henry filed a loan application with the Philippine
American Life Insurance Company (PhilAm Life) for the amount of P2, 500,000.00.
o that the balance of P1,700,000.00 would be
paid by means of a loan, with the property itself given as collateral
- On the strength of the first deed and as the new "owner" of the property, Henry wrote a
letter dated August 8, 1988 to the lessee, Eleuterio Perez, demanding that the latter vacate
the premises within 10 days.
o Failing in this effort, Henry brought a complaint for ejectment against Perez
before the Office of the Barangay Captain
- When Henry and Severino met with officials of Philam Life to finalize the loan/mortgage
contract, Severino refused to surrender the owner's duplicate title and insisted on being
paid immediately in cash.
o The loan/mortgage contract with Philam Life did not materialize.
- Perez was then successfully ordered to vacate and surrender the property to Henry, who
was recognized as the new owner.
- Severino then wrote a letter through counsel to Henry, demanding that the latter vacate
the house and lot on the ground that:
o Henry did not conclusively offer nor tender a price certain for the purchase of the
property.
o Severino has since rejected Henry's alleged offer and promise to buy the property.
- When Henry refused to vacate the property, Severino brought this action to quiet the title
and recover possession and damages before the RTC.
o Severino averred that the second deed was void and inexistent because:
a) There was no cause or consideration, since he did not receive the
P2,000,000.00 stated in the deed;
b) his wife, Adela, in whose name the property was titled, did not consent to the
sale nor sign the deed;
c) The deed was not registered with the Register of Deeds;
d) he did not acknowledge the deed personally before the notary public;
e) his residence certificate, as appearing in the deed, was falsified;
f) The deed is fictitious and simulated because it was executed only for the
purpose of placing Henry in possession of the property because he tendered
"earnest money.”
g) Severino also claimed that there was no meeting of minds with respect to the
cause or consideration since Henry's varied offers of P1, 800,000.00, P2,
000,000.00, and P2, 500,000.00 were all rejected by him.
SALES – CASE NOTES:

- Henry answered by saying that:

o He was already the owner of the property being claimed by Severino by virtue of
a final agreement reached with the latter.
o The price of the property was pegged at P2,000,000.00, as agreed upon by the
parties under the second deed
o He has not paid Severino the balance of the purchase price because the of the
latter’s non-payment; the latter refused to deliver the owner's duplicate title to the
financing company
- The RTC ruled that the Deed of Absolute Sale between Severino (vendor) and Henry
(vendee) is inexistent and void ab initio; Henry’s title to the property is thus quieted.
- Upon appeal, the CA affirmed the RTC’s decision and denied Henry’s motion to
reconsideration.
- Before the Supreme Court, Henry maintains that the existence of a perfected contract of
sale in this case is beyond doubt since there clearly was a meeting of minds between the
parties.
- The final ruling: the contract of Sale was not simulated; the contracts were perfected, and
the entire requirement for the perfection of a contract of sale were satisfied.
o The meeting of the minds of Santos and Penalosa perfected the contract despite
the failure of Penalosa to pay the purchase price.

3. Aquiles Riosa, v. Tabaco La Suerte Corporation