Christ the King College

Gingoog City
Accountancy Program

Regulatory Framework from

Business Transactions

CASE DIGEST
G.R. No. 244232
G.R. No. L-46765
G.R. No. 231936

Submitted by:
ANGEL DIANNIE J. ALPUERTO
Student

Submitted to:
ATTY. CRISJESA LAO FLORES-GOMEZ
Instructor

OCTOBER 26, 2023

G.R. No. L-46765 143 SCRA 663 August 29, 1986
JOSEPH & SONS ENTERPRISES, INC. VS COURT OF APPEALS, RODOLFO
T. LAT, BIENVENIDO LAUREL & PAZ BANAAD-LAUREL

FACTS: On April 1, 1964 respondent Rodolfo T. Lat purchased the lot in

question from the Makati Development Corporation. One condition embodied in
the Deed of Absolute Sale was that the lot could not be sold, transferred, or
conveyed until after the construction of a house thereon was completed. In
spite of his having fully paid for the lot, respondent Lat could not have it
registered in his name because another condition of the sale was that the deed
of sale could not be registered and the title would not be released to the buyer
until the house has been completely constructed.

On July 24, 1965, respondent Lat entered into an agreement to purchase and
sell the lot with respondent Paz Banaad Laurel. After paying the full
consideration of P38,830.00, respondent spouses Laurel, hereinafter referred to
as the Laurels, constructed a residential house on the lot.

After completing the construction of the house, the Laurels advertised the
house and lot for sale. Petitioner's President and Secretary, Alfredo Joseph and
his daughter Alegria Neri, went to see the Laurels at the latter's residence and
negotiated for the purchase of the property.

Having agreed on the terms and conditions of the sale, the parties executed a
Deed of Conditional Sale on April 23, 1966. Because the house and lot, while
already owned by the Laurels, were still registered in the name of respondent
Lat, the deed was signed with the latter as vendor and the Laurels as
witnesses.

The consideration for the conditional sale was P125,000.00, of which

P20,000.00 was payable upon the execution of the deed and the balance
payable in six equal installments of P17,500.00 each at specified dates between
June 7, 1966 and January 22, 1967.

Petitioner failed to pay the second and subsequent installments on time. As of

October 22, 1966, when petitioner should have paid P90,000.00 under the
contract, it had paid only P60,000.00. The July 22, 1966 installment was paid
only on September 1, 1966 while the September 7, 1966 installment was paid
with a check which bounced.
Because of its difficulties in paying its obligations and to enable it to pay the
Laurels in full, petitioner through Mrs. Alegria Neri proposed to the Laurels
that a loan be secured from a bank using the property as collateral. The
proceeds of the loan would be applied to the unpaid installments already due
while petitioner would assume the payment of the bank loan.

Since the title to the property was still in respondent Lat's name, the People's
Bank and Trust Co. advised the parties to have the title transferred to
respondent Paz Banaad Laurel. A deed of absolute sale was executed by
respondent Bienvenido Laurel as attorney-in-fact of Rodolfo T. Lat in favor of
Paz Banaad Laurel on November 7, 1966. On November 9, 1966 a confirmation
of the sale was executed by Rodolfo T. Lat and TCT No. 176760 was issued in
Paz Banaad's name.

On November 28, 1966, the Laurels mortgaged the disputed property to the
bank to secure a P56,000.00 loan. The loan was payable in quarterly
installments of P14,000.00 each between February 28, 1967 and November 28,
1967.

Out of the P54,217.47 net proceeds of the bank loan, P48,145.12 was applied
to petitioner's unpaid installments already past due, while the balance of
P6,063.35 was turned over to it.

Petitioner failed to pay the P17,500.00 final installment under the deed of
conditional sale executed on April 23, 1966. It also failed to pay any of the loan
amortizations due to the People's Bank and Trust Company, this in spite of its
having leased the property to the United States Agency for International
Development (USAID) at a monthly rental of Pl,000.00.

To stave off foreclosure, the Laurels paid for bank loan, interests and expenses,
including the P6,083.35 earlier given to petitioner, in the total sum of
P63,452.22.

On July 25, 1967 in view of petitioner's refusal to surrender the house and lot
to them, the Laurels filed a complaint for ejectment against the petitioner and
USAID with the Municipal Court of Makati. The court decided the case in favor
of the Laurels. The record is not clear as to the present status of this case.
Petitioner states in its brief that this case was later dismissed on appeal to the
Court of First Instance, but respondents state in their brief that the case is still
pending.
On December 18, 1967, petitioner filed a complaint for annulment of title and
of contract, with damages and preliminary injunction. The Laurels filed a
counterclaim for the cancellation and termination of the Deed of Conditional
Sale; for the recovery of possession and payment of rentals; and for damages.
As earlier stated, both the former Court of First Instance of Rizal and the Court
of Appeals decided the case against petitioner.

The trial court issued an order of execution pending appeal but it was stayed
upon the filing of a supersede as bond by petitioner.

ISSUE: The property was delivered to it after the execution of the Deed of
Conditional Sale.

HELD: Finally, petitioner claims that because the property was delivered to it
after the execution of the Deed of Conditional Sale, the ownership thereof was
transferred to it in accordance with Articles 1477 and 1496 of the Civil Code of
the Philippines. This claim is without basis. Petitioner fails to distinguish
between a contract of sale and a contract to sell, between a deed of absolute
sale and a deed of conditional sale. In a contract of sale or in a deed of absolute
sale, ownership is transferred simultaneously with the delivery of the real
property sold; whereas in a contract to sell or in a deed of conditional sale,
ownership is transferred after the full payment of the installments of the
purchase price or the fulfillment of the condition and the execution of a definite
or absolute deed of sale. In the case at bar, ownership could have been
transferred to petitioner only after it had fully paid the installments of the
purchase price and a deed of absolute sale had been executed in its favor.
WHEREFORE, the petition is hereby dismissed for lack of merit and the
decision appealed from is affirmed, with costs against petitioner.
G.R. No. 244232, November 03, 2020
FELIPA BINASOY TAMAYAO AND THE HEIRS OF ROGELIO TAMAYAO VS.
FELIPA LACAMBRA, NATIVIDAD LACAMBRA, FRANCISCA LACAMBRA,
SOTERO LACAMBRA,CIRILO LACAMBRA, CATALINO LACAMBRA AND
BASILIO LACAMBRA

FACTS: The main problem in this situation is about three important land
sales. The first sale, which occurred on January 23, 1962, involved Tomasa
and Jose Balubal, who were the children of Vicente Balubal, collectively
referred to as the heirs of Vicente. They purportedly sold the entire Lot No.
2930, covered by Original Certificate of Title (OCT) No. 6106, to Juan Lacambra
in an Extrajudicial Settlement and Sale.

The next sale occurred on January 21, 1980, when some of Juan's family
members sold a part of Lot No. 2930 to the Tamayao couple through a
document called "Deed of an Undivided Share in a Registered Parcel of Land."

The last sale occurred on December 24, 1981, involving the heirs of Vicente
Balubal, who allegedly sold the entire Lot No. 2930 to the Spouses Tamayao in
an Extrajudicial Settlement of a Parcel of Land with Sale.

The Balubal heirs claimed that they were the first owners of the land and that
it was never properly sold to Juan. They said that Tomasa couldn't read and
Jose was too sick to go before a notary public on the day of the first sale,
making it unlikely that the sale was legitimate.

The Regional Trial Court (RTC) confirmed that the first sale between Jose,
Tomasa, and Juan was valid. It also said the second sale was legal. However,
for the third sale, the RTC decided that the Tamayao couple couldn't be
considered innocent buyers. This is because, during their second purchase
from the Balubal heirs, they already knew that the Lacambra heirs were the
real owners of Lot No. 2930. The Court of Appeals (CA) agreed with the RTC's
decision without making significant changes.

ISSUE: Did the Court of Appeals make a mistake by confirming the validity of
the initial sale to Juan and asserting their entitlement to ownership and
possession of Lot No. 2930?

RULINGS:
The Regional Trial Court (RTC) confirmed that the first sale between Jose,
Tomasa, and Juan was valid. It also said the second sale was legal. However,
for the third sale, the RTC decided that the Tamayao couple couldn't be
considered innocent buyers. This is because, during their second purchase
from the Balubal heirs, they already knew that the Lacambra heirs were the
real owners of Lot No. 2930. The Court of Appeals (CA) agreed with the RTC's
decision without making significant changes.
G.R. No. 231936 December 2, 2020
FIL-ESTATE PROPERTIES, INC., v. HERMANA REALTY, INC.
Second DIVISION Ponente: LAZARO-JAVIER, J. Nature of Action: Petition
for Review

FACTS: Jose C. Alvarez, chairperson of respondent Hermana Realty, Inc. (HRI),

placed an option to purchase one condominium unit in Fil-Estate Properties,
Inc. 's (FEPI) West Tower Condominium Corporation. FEPI and HRI executed a
contract to sell the unit for P20,998,400.00. After payment FEPI executed an
undated and unnotarized Deed of Absolute Sale in favor of HRI pending the
payment of Documentary Stamp Tax (DST) and other requirements. HRI
demanded for the delivery upon payment of full price. Due to FEPI's refusal to
perform its obligation caused Century Properties, Inc. (CPI) to withdraw its
offer.

HRI filed with the Housing and Land Use Regulatory Board Expanded National
Capital Region Field Office (HLURB-ENCRFO) a complaint against FEPI for
specific performance with damages and attorney's fees. HLURB-ENCRFO ruled
in favor of HRI and it affirmed with modification its decision on appeal. The
Office of the President affirmed the HLURB-ENCRFO's decision and it denied
the motion for reconsideration. The Court of Appeals (CA) ruled in favor of HRI
and denied FEPI's motion for reconsideration.

In its petition, FEPI seeks affirmative relief from the Supreme Court. It
contended that HRI's payment of DST and local transfer taxes is a condition
sine qua non to the delivery of the owner's duplicate copy of the CCT per the
parties' contract to sell. Without such, HRI's right to demand the delivery of the
owner's duplicate copy of the CCT has not arisen.

ISSUES: Whether or not Hid became rightfully entitled to the execution of a

Deed of Absolute Sale in its favor upon payment of full price.

Whether or not Hill may demand as a matter of right a notarized Deed of

Absolute Sale in its favor.

RULINGS: Yes, Hill became rightfully entitled to the execution of a Deed of

Absolute Sale in its favor upon payment of full price. A contract to sell has
been defined as "a bilateral contract whereby the prospective seller, while
expressly reserving the ownership of the subject property despite delivery
thereof to the prospective buyer, binds itself to sell the property exclusively to
the prospective buyer upon fulfillment of the condition agreed upon, that is,
full payment of the purchase price." In a contract to sell, "ownership is retained
by the seller and is not to pass until the full payment of the price."2 °
Consequently, once the buyer has paid the purchase price in full, the contract
to sell is converted to an absolute sale and the buyer has the right to demand
the execution of a Deed of Absolute Sale in its favor.

Here, there is no question that Hill has paid in full the contract price in the
amount of P20,998,400.00. There is no question either that by operation of
law, HRI as the buyer has become rightfully entitled to the execution of a Deed
of Absolute Sale in its favor.

Yes, HRI may demand as a matter of right a notarized Deed of Absolute Sale in
its favor. Article 1358 provides that the following must appear in a public
document: 1. Acts and contracts which have for their object the creation,
transmission, modification or extinguishment of real rights over immovable
propel ty; sales of real propel ty or of an interest therein are governed by
articles 1403, No. 2, and 1405; In Cenido v. Spouses Apacionado,2 1 the Court
ruled that contrary to petitioner's claim, the "Pagpapatunay " is a valid contract
of sale despite being unnotarized since under Article 1358, a private document,
though not reduced to a public one, remains to be valid and is merely
unenforceable. So that after the existence of the contract has been admitted, a
party to the sale, if he or she is so minded, has the right to compel the other
pal iy to execute the proper document following Article 135722 of the Civil
Code.

Section 135 of the Local Government Code (LGC) further speaks of the
requirements for registration of deeds on transfer of real property and the
corresponding duty of notaries public who notarized the deeds.
On the strength of Article 1357 of the Civil Code and relevant jurisprudence, in
relation to Section 135 of the LGC, therefore, HRI has the right to compel FEPI
to execute a notarized Deed of Absolute Sale in its favor for purposes of
registration.