RONGAVILLA V. CA G.R. NO.

83974
Facts:
The Dela Cruz sisters were the aunts of Dolores Rongavilla. They borrowed P2,000
from the Rongavillas to have their rooftop repaired. Later, petitioners went back to
their aunts to have them sign a contract. Taking advantage of their lack of
education, the sisters were made to believe that such document, typewritten in
English, was just for the acknowledgment of their debt. After four years, petitioners
asked their aunts to vacate the land subject to litigation claiming that she and her
husband were the new owners. After verifying with the Registry of Deeds, the aunts
were surprised that what they have signed was actually a deed of sale. Their land
title was cancelled and the ownership was transferred to their nephews. The land
was mortgaged with the Cavite Development Bank.
Issue: Was the deed of sale void?
Held:
Yes. While petitioners claimed they were regularly paying taxes on the land in
question, they had no second thoughts stating at the trial and on appeal that they
had resorted to doctoring the price stated in the disputed Deed of Sale, allegedly to
save on taxes. While it is true that public documents are presumed genuine and
regular under the Rules of Court, this presumption is a rebuttable presumption
which may be overcome by clear, strong and convincing evidence.

9.Melliza v. Iloilo City [G.R. No. L-24732. April 30, 1968.]

Facts: Juliana Melliza during her lifetime owned, among other properties, 3 parcels
of residential land in Iloilo City (OCT 3462). Said parcels of land were known as Lots
Nos. 2, 5 and 1214. The total area of Lot 1214 was 29,073 sq. m. On 27 November
1931 she donated to the then Municipality of Iloilo, 9,000 sq. m. of Lot 1214, to
serve as site for the municipal hall. The donation was however revoked by the
parties for the reason that the area donated was found inadequate to meet the
requirements of the development plan of the municipality, the so- called Arellano
Plan. Subsequently, Lot 1214 was divided by Certeza Surveying Co., Inc. into Lots
1214-A and 1214-B. And still later, Lot 1214-B was further divided into Lots 1214-B1, Lot 1214-B-2 and Lot 1214-B-3. As approved by the Bureau of Lands, Lot 1214-B1, with 4,562 sq. m., became known as Lot 1214-B; Lot 1214-B-2, with 6,653 sq. m.,
was designated as Lot 1214-C; and Lot 1214-B-3, with 4,135 sq. m., became Lot
1214-D. On 15 November 1932, Juliana Melliza executed an instrument without any

caption providing for the absolute sale involving all of lot 5, 7669 sq. m. of Lot 2
(sublots 2-B and 2-C), and a portion of 10,788 sq. m. of Lot 1214 (sublots 1214-B2
and 1214-B3) in favor of the Municipal Government of Iloilo for the sum of P6,422;
these lots and portions being the ones needed by the municipal government for the
construction of avenues, parks and City hall site according the Arellano plan. On
14 January 1938, Melliza sold her remaining interest in Lot 1214 to Remedios Sian
Villanueva (thereafter TCT 18178). Remedios in turn on 4 November 1946
transferred her rights to said portion of land to Pio Sian Melliza (thereafter TCT
2492). Annotated at the back of Pio Sian Mellizas title certificate was the following
that a portion of 10,788 sq. m. of Lot 1214 now designated as Lots 1412-B-2 and
1214-B-3 of the subdivision plan belongs to the Municipality of Iloilo as per
instrument dated 15 November 1932. On 24 August 1949 the City of Iloilo, which
succeeded to the Municipality of Iloilo, donated the city hall site together with the
building thereon, to the University of the Philippines (Iloilo branch). The site donated
consisted of Lots 1214-B, 1214-C and 1214-D, with a total area of 15,350 sq. m.,
more or less. Sometime in 1952, the University of the Philippines enclosed the site
donated with a wire fence. Pio Sian Melliza thereupon made representations, thru
his lawyer, with the city authorities for payment of the value of the lot (Lot 1214-B).
No recovery was obtained, because as alleged by Pio Sian Melliza, the City did not
have funds. The University of the Philippines, meanwhile, obtained Transfer
Certificate of Title No. 7152 covering the three lots, Nos. 1214-B, 1214-C and 1214D.

On 10 December 1955 Pio Sian Melizza filed an action in the CFI Iloilo against Iloilo
City and the University of the Philippines for recovery of Lot 1214-B or of its value.
After stipulation of facts and trial, the CFI rendered its decision on 15 August 1957,
dismissing the complaint. Said court ruled that the instrument executed by Juliana
Melliza in favor of Iloilo municipality included in the conveyance Lot 1214-B, and
thus it held that Iloilo City had the right to donate Lot 1214-B to UP. Pio Sian Melliza
appealed to the Court of Appeals. On 19 May 1965, the CA affirmed the
interpretation of the CFI that the portion of Lot 1214 sold by Juliana Melliza was not
limited to the 10,788 square meters specifically mentioned but included whatever
was needed for the construction of avenues, parks and the city hall site.
Nonetheless, it ordered the remand of the case for reception of evidence to
determine the area actually taken by Iloilo City for the construction of avenues,
parks and for city hall site. Hence, the appeal by Pio San Melliza to the Supreme
Court.

The Supreme Court affirmed the decision appealed from insofar as it affirms that of
the CFI, and dismissed the complaint; without costs.

Held: Requirement, that sale must have a determinate thing as object, is fulfilled if
object of sale is capable of being made determinate at the time of the contract

The requirement of the law that a sale must have for its object a determinate thing,
is fulfilled as long as, at the time the contract is entered into, the object of the sale
is capable of being made determinate without the necessity of a new or further
agreement between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil
Code). The specific mention of some of the lots plus the statement that the lots
object of the sale are the ones needed for city hall site; avenues and parks,
according to the Arellano plan, sufficiently provides a basis, as of the time of the
execution of the contract, for rendering determinate said lots without the need of a
new and further agreement of the parties.

8.Case of Luis Pichel vs. Prudencio Alonzo

G.R.No. L- 36902 30January1982

FACTS OF THE CASE:

That Prudencio Alonzo (VENDOR) executed a deed of sale for the coconut fruits of
his land in Balactasan Plantation in Lamitan, Basilan, 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 vendors rights to the land were
reinstated in 1972)
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 the 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 RA No. 477, in which they
equated the deed of sale executed by the parties as a contract of lease.

ISSUES OF THE CASE:

Was the Deed of Sale valid?

- 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 S.C. relied upon ART 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 does not necessarily mean a transfer of principal, it is the
other way around.
- The vendor after 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

HELD:
The Judgment of the lower court has been set aside, and another one entered in its
place, dismissing the complaint.

Obligations and Contracts Terms:

Difference between a contract of sale and a lease of things: that the delivery of
the thing sold transfers ownership, while in a lease no such transfer of ownership
results as the rights of the lessee are limited to the use and enjoyment of the thing
leased.
Contract of Lease- defined as giving or the concession of the enjoyment or use of
a thing for a specified time and fixed price.

7.Heirs of Juan San Andres vs. Rodriguez

Juan San Andres sold a portion of his property to Rodriguez as evidenced by a Deed
of Sale. Upon his death Ramon San Andres was appointed as administrator of the
property. He hired a land surveyor and found that Rodriguez enlarged the property
he bought from late Juan. Ramon demanded form the Rodriguez to vacate the
portion allegedly occupied but the latter refused hence the present action.

Rodriguez said that the excess portion was also sold to him by late Juan the
following day after the first sale. He argued that the full payment of the whole sold
lot would be effected within five years from the execution of the formal deed of sale
after a survey of the property is conducted, as evidenced by a receipt of sale. The
balance of the purchase price was consigned.

RTC ruled in favor of petitioner while CA reversed the ruling. In SC petitioner argued
that there is no certain object of the contract of sale as the lot was not described
with sufficiency that there should be another contract to finally ascertain the
identity.

SC: Petition has no merit. The contract of sale has the following elements: 1.
consent or meeting of the minds, 2. determinate subject matter, 3. price certain in
money.

There is no dispute that Rodriguez purchased a potion of Lot 1914-B consisting of

345 square meters. The said portion is located at the middle of the lot. Since the lot
subsequently sold is said to adjoined the previously paid lot, the subject is capable
of being determined without the need of another contract.

However, there is a need to clarify what CA said is a conditional sale. CA considered

as a condition the stipulation of the parties that the full consideration, based on a
survey of the lot, would be due and payable within 5 years from the execution of the
formal deed of sale.

It is evident in the stipulation in the receipt that the vendor late Juan sold the lot to
Rodriguez and undertook the transfer of ownership without any qualification,
reservation or condition.

In can be gainsaid from the facts that the contract of sale is absolute, and not
conditional. There is no reservation of ownership nor stipulation providing for a
unilateral rescission by either party. In fact the sale was consummated upon the
delivery of the lot to Rodriguez. Art.1477 provides that the ownership of the thing
sold shall be transferred to the vendee upon the actual or constructive deliver
thereof.
The stipulation that the payment of the full consideration based on a survey shall be
due and payable in 5 years from the execution of the formal deed of sale is not a
condition which affects the efficacy of contract.
CA decision is AFFIIRMED.

6.Peoples Homesite vs. Court of Appeals

Peoples Homesite (PHHC) passd a resolution subject to the approval of the city
council of the Lot 4 as it is hereby awarded to Mendoza. The city council
disapproved the proposal. The Mendozas were notified through registered mail.
Another subdivision plan was passed and was approved by the city council. PHHC
passed a resolution recalling all awards to persons who failed to pay the agreed
downpayment. Mendoza never paid the down payment. The questioned award of lot
was withdrawn and was re-awarded to other 5 persons. Mendoza asked for
reconsideration but before it was acted, He instituted the action.

Trial court sustained the withdrawal while the CA reversed the decision.

SC: There was no perfect sale of Lot 4 to Mendoza. It was conditionally awarded to
Mendoza subject to city councils approval which was disapproved. When after the
city council approved such, Mendoza should have manifested his intention over the
said award but he did not so.

The contract of sale is perfected at the moment there is a meeting of the mind upon
the thing which is the object of the contract and upon the price. In conditional
obligation, the acquisition of rkights, as well as the extinguishment or loss of those
already acquired, shall depend upon the happening of the event which constitute
the condition. In this case, there was no meeting of the minds.

6.FACTS:

In February 1960, herein petitioner Peoples Homesite & Housing Corporation

(PHHC) passed a resolution, subject to the approval of the Court Court Council of the
PHHCs 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 Court Court 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 latters 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:

Was there a perfected sale of Lot 4, with its reduced area, between the parties?

COURT RULING:

The Supreme Court found that there was no perfected sale of Lot 4 because the said
lot was conditionally or contingently awarded to the Mendozas subject to the
approval by the Court 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 in 1964, the spouses Court 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. Article 1475 of the Civil
Court says [t]he 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. Indeed, there was a no meeting of the minds
between the parties on the purchase of Lot 4 with an area of 2,608.7 square meters
at P21 a square meter and the PHHC board of directors acted within its rights in
withdrawing the tentative award.

5.Dignos vs. Court of Appeals, and Jabil

158 SCRA 378
February 1988

FACTS:

In July 1965, herein petitioners Silvestre T. Dignos and Isabela Lumungsod de Dignos
(spouses Dignos) sold their parcel of land in Opon, LapuLapu 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 Cebus 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:

Is the contract between the parties a contract of sale or a contract to sell?

COURT RULING:

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 petitioners that he was already waiving his rights to the land in question.

4.G.R. No. 170405 February 2, 2010

RAYMUNDO S. DE LEON, Petitioner,

vs.
BENITA T. ONG. Respondent.

Facts:
On March 10, 1993, Raymundo S. De Leon (petitioner) sold 3 parcels of land to
Benita T. Ong(respondent). The said properties were mortgaged to a financial
institution; Real Savings & Loan Association Inc. (RSLAI). The parties then executed
a notarized deed of absolute sale with assumption of mortgage. As indicated in the
deed of mortgage, the parties stipulated that the petitioner (de Leon) shall execute
a deed of assumption of mortgage in favor of Ong (respondent)after full payment of
the P415,000. They also agreed that the respondent (Ong) shall assume the
mortgage. The respondent then subsequently gave petitioner P415,000 as partial
payment. On the other hand, de Leon handed the keys to Ong and de Leon wrote a
letter to inform RSLAI that the mortgage will be assumed by Ong. Thereafter, the
respondent took repairs and made improvements in the properties. Subsequently,
respondent learned that the same properties were sold to a certain Viloria after
March 10, 1993 and changed the locks, rendering the keys given to her useless.
Respondent proceeded to RSLAI but she was informed that the mortgage has been
fully paid and that the titles have been given to the said person. Respondent then
filed a complaint for specific performance and declaration of nullity of the second
sale and damages. The petitioner contended that respondent does not have a cause
of action against him because the sale was subject to a condition which requires the
approval of RSLAI of the mortgage. Petitioner reiterated that they only entered into
a contract to sell. The RTC dismissed the case. On appeal, the CA upheld the sale to
respondent and nullified the sale to Viloria. Petitioner moved for reconsideration to
the SC.

Issue:
Whether the parties entered into a contract of sale or a contract to sell?

Held:
In a contract of sale, the seller conveys ownership of the property to the buyer upon
the perfection of the contract. The non-payment of the price is a negative resolutory
condition. Contract to sell is subject to a positive suspensive condition. The buyer
does not acquire ownership of the property until he fully pays the purchase price.In
the present case, the deed executed by the parties did not show that the owner
intends to reserve ownership of the properties. The terms and conditions affected

only the manner of payment and not the immediate transfer of ownership. It was
clear that the owner intended a sale because he unqualifiedly delivered and
transferred ownership of the properties to the respondent

3.178 SCRA 188, G.R. No. 82508

September 29, 1989

FILINVEST CREDIT CORPORATION, petitioner,

vs.
THE COURT OF APPEALS, JOSE SY BANG and ILUMINADA TAN SY BANG,*respondents

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-cumrentals already paid.

2.G.R. No. 122039 May 31, 2000

VICENTE CALALAS, petitioner,vs.COURT OF APPEALS, ELIZA JUJEURCHE SUNGA and

FRANCISCO SALVA, respondents.

Facts:

Eliza Jujeurche G. Sunga, a college freshman at the Siliman University, took a

passenger jeepney owned and operated by petitioner Vicente Calalas. Sunga was
given by the conductor an "extension seat," at the rear end of the vehicle. Sunga
gave way to the outgoing passenger.Just as she was doing so, an Isuzu truck driven
by Iglecerio Verena and owned by Francisco Salva bumped the left rear portion of
the jeepney. As a result, Sunga was injured and confinement in the hospital. Her
attending physician certified she would remain on a cast for a period of three
months and would have to ambulate in crutches during said period.Sunga filed a
complaint for damages against Calalas, alleging violation of the contract of carriage.
Calalas, on the other hand, filed a third-party complaint against Francisco Salva, the
owner of the Isuzu truck. The lower court rendered judgment against Salva as thirdparty defendant and absolved Calalas of liability, holding that it was the driver of
the Isuzu truck who was responsible for the accident. It took cognizance of another
case, filed by Calalas against Salva and Verena, for quasi-delict, the same court held
Salva and his driver Verena jointly liable to Calalas for the damage to his jeepney.
On appeal to the Court of Appeals, the ruling of the lower court was reversed and
dismissed the third-party complaint against Salva and adjudged Calalas liable for
damages to Sunga. Hence this petition.

Issues:

(1)Whether or not the negligence of Verena was the proximate cause of the accident
negates the liability and that to rule otherwise would be to make the common
carrier an insurer of the safety of its passengers.
(2) Whether or not that the bumping of the jeepney by the truck owned by Salva
was a caso fortuito.
(3) Whether or not the award of moral damages to Sunga is supported evidence.

Held:

(1) Finding Salva and his driver Verena liable for the damage to petitioner's
jeepney, should be binding on Sunga. It is immaterial that the proximate cause of
the collision between the jeepney and the truck was the negligence of the truck
driver. The doctrine of proximate cause is applicable only in actions for quasi-delict,
not in actions involving breach of contract. The doctrine is a device for imputing
liability to a person where there is no relation between him and another party. In
such a case, the obligation is created by law itself. But, where there is a pre-existing
contractual relation between the parties, it is the parties themselves who create the
obligation, and the function of the law is merely to regulate the relation thus
created. Insofar as contracts of carriage are concerned, some aspects regulated by
the Civil Code are those respecting the diligence required of common carriers with
regard to the safety of passengers as well as the presumption of negligence in
cases of death or injury to passengers.

(2) This is also true of petitioner's contention that the jeepney being bumped while
it was improperly parked constitutes caso fortuito. The jeepney was not properly
parked, its rear portion being exposed about two meters from the broad shoulders
of the highway,and facing the middle of the highway in a diagonal angle and that
petitioner's driver took in more passengers than the allowed seating capacity of the
jeepney. Petitioner should have foreseen the danger of parking his jeepney with its
body protruding two meters into the highway.

(3) In this case, there is no legal basis for awarding moral damages since there
was no factual finding by the appellate court that petitioner acted in bad faith in the
performance of the contract of carriage. Sunga's contention that petitioner's
admission in open court that the driver of the jeepney failed to assist her in going to
a nearby hospital cannot be construed as an admission of bad faith. The fact that it
was the driver of the Isuzu truck who took her to the hospital does not imply that
petitioner was utterly indifferent to the plight of his injured passenger. If at all, it is
merely implied recognition by Verena that he was the one at fault for the accident.

1.ENGINEERING AND MACHINERY CORP. VS. COURT OF APPEALS

G.R. No. 52267 January 24, 1996
Facts:

Almeda and Engineering signed a contract, wherein Engineering undertook to

fabricate, furnish and install the air-conditioning system in the latters building along
Buendia Avenue, Makati in consideration of P210,000.00. Petitioner was to furnish
the materials, labor, tools and all services required in order to so fabricate and
install said system. The system was completed in 1963 and accepted by private
respondent, who paid in full the contract price.
Almeda learned from the employees of NIDC of the defects of the air-conditioning
system of the building. Almeda spent for the repair of the air-conditioning system.
He now sues Engineering for the refund of the repair. Engineering contends that the
contract was of sale and the claim is barred by prescription since the responsibility
of a vendor for any hidden faults or defects in the thing sold runs only for 6 months
(Arts 1566, 1567, 1571). Almeda contends that since it was a contract for a piece of
work, hence the prescription period was ten years (Hence Art 1144 should apply on
written contracts).
RTC found that Engineering failed to install certain parts and accessories called for
by the contract, and deviated from the plans of the system, thus reducing its
operational effectiveness to achieve a fairly desirable room temperature.

Issue:

1) Whether the contract for the fabrication and installation of a central airconditioning system in a building, one of sale or for a piece of work? CONTRACT
FOR PIECE OF WORK.
2) Corrollarily whether the claim for refund was extinguished by prescription? NO.

Held:

1) A contract for a piece of work, labor and materials may be distinguished from a
contract of sale by the inquiry as to whether the thing transferred is one not in
existence and which would never have existed but for the order, of the person
desiring it. In such case, the contract is one for a piece of work, not a sale. On the
other hand, if the thing subject of the contract would have existed and been the
subject of a sale to some other person even if the order had not been given, then
the contract is one of sale.
A contract for the delivery at a certain price 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 of sale, but if the goods
are to be manufactured specially for the customer and upon his special order, and
not for the general market, it is a contract for a piece of work .
The contract in question is one for a piece of work. It is not petitioners line of
business to manufacture air-conditioning systems to be sold off-the-shelf. Its
business and particular field of expertise is the fabrication and installation of such
systems as ordered by customers and in accordance with the particular plans and
specifications provided by the customers. Naturally, the price or compensation for
the system manufactured and installed will depend greatly on the particular plans
and specifications agreed upon with the customers.
2)The original complaint is one for damages arising from breach of a written
contract and not a suit to enforce warranties against hidden defects we here
with declare that the governing law is Article 1715 (supra). However, inasmuch as
this provision does not contain a specific prescriptive period, the general law on
prescription, which is Article 1144 of the Civil Code, will apply. Said provision states,
inter alia, that actions upon a written contract prescribe in ten (10) years. Since
the governing contract was executed on September 10, 1962 and the complaint
was filed on May 8, 1971, it is clear that the action has not prescribed.