1. GAITE vs.

FONACIER
G.R. No. L-11827 July 31, 1961
2 SCRA 380

Facts:
Fonacier was the owner and/or holder of 11 iron lode mineral claims, known as
the Dawahan Group. By a "Deed of Assignment" dated September 29, 1952,
Fonacier constituted and appointed Gaite as his true and lawful attorney-in-
fact to enter into a contract with any individual or juridical person for the
exploration and development of the mining claims. On March 19, 1954, Gaite in
turn executed a general assignment conveying the development and exploitation
of said mining claims into the Larap Iron Mines, a single proprietorship owned
solely by and belonging to him, on the same royalty basis provided by the Deed
of Assignment".
Fonacier decided to revoke the authority granted by him to Gaite to exploit and
develop the mining claims in question, and Gaite assented thereto subject to
certain conditions. As a result, a "Revocation of Power of Attorney and Contract"
was executed on December 8, 1954, wherein Gaite transferred to Fonacier, all
his rights and interests on development and exploitation of said mining claims,
in consideration of the sum of P75,000.00, P10,000.00 of which was paid upon
the signing of the agreement, and b. The balance of P65,000.00 will be paid
from and out of the first letter of credit covering the first shipment of iron ores
and of the first amount derived from the local sale of iron ore made by the
Larap Mines & Smelting Co. Inc., its assigns, administrators, or successors in
interests.
Payment of P65, 000.00 was secured by two surety bonds: One from Larap
Mines and its stockholders and the other from Far Eastern Surety and
Insurance Co.

Issue:
Whether or not Fonacier and his sureties are entitled to take full advantage of
the period granted them for making the payment.

Held:
SC agreed with the court below that the appellant have forfeited the right court
below that the appellants have forfeited the right to compel Gaite to wait for the
sale of the ore before receiving payment of the balance of P65,000.00, because
of their failure to renew the bond of the Far Eastern Surety Company or else
replace it with an equivalent guarantee. The expiration of the bonding
company's undertaking on December 8, 1955 substantially reduced the
security of the vendor's rights as creditor for the unpaid P65,000.00, a security
that Gaite considered essential and upon which he had insisted when he
executed the deed of sale of the ore to Fonacier (Exhibit "A"). The case squarely
comes under paragraphs 2 and 3 of Article 1198 of the Civil Code of the
Philippines:
"ART. 1198. The debtor shall lose every right to make use of the period: . . .
(2) When he does not furnish to the creditor the guaranties or securities which
he has promised.

1
(3) When by his own acts he has impaired said guaranties or securities after
their establishment, and when through fortuitous event they disappear, unless
he immediately gives new ones equally satisfactory.
Appellants' failure to renew or extend the surety company's bond upon its
expiration plainly impaired the securities given to the creditor (appellee Gaite),
unless immediately renewed or replaced.

2. KER & CO., LTD. vs. LINGAD

G.R. No. L-20871 April 30, 1971
38 SCRA 524

Facts:
CIR assessed the sum of P20,272.33 as the commercial brokers percentage tax,
surcharge, and compromise penalty against Ker & Co. There was a request on
the part of petitioner for the cancellation of such assessment, which request
was turned down. As a result, it filed a petition for review with the Court of Tax
Appeals. CTA ruled that that Ker & Co is liable as a commercial broker under
Section 194 (t) of the National Internal Revenue Code.
Ker & Co signed a contract with the United States Rubber International, the
former being referred to as the Distributor and the latter specifically designated
as the Company. The shipments would cover products for consumption in
Cebu, Bohol, Leyte, Samar, Jolo, Negros Oriental, and Mindanao except *the+
province of Davao. Ker & Co, as Distributor, was precluded from disposing
such products elsewhere than in the above places unless written consent would
first be obtained from the Company. It was required to exert every effort to have
the shipment of the products in the maximum quantity and to promote in every
way the sale thereof. The prices, discounts, terms of payment, terms of delivery
and other conditions of sale were subject to change in the discretion of the
Company.

Issue:
Wherther or not the relationship Ker & Co and US Rubber was that of a vendor-
vendee or principal-broker? PRINCIPAL- BROKER, hence liable under Section
194 (t) of the NIRC.

Held:
The relationship between them is one of brokerage or agency. That the
petitioner Ker & Co., Ltd. is, by contractual stipulation, an agent of U.S. Rubber
International is borne out by the facts that:
1. Petitioner can dispose of the products of the Company only to certain
persons or entities and within stipulated limits, unless excepted by the contract
or by the Rubber Company;
2. It merely receives, accepts and/or holds upon consignment the products,
which remain properties of the latter company
3. Every effort shall be made by petitioner to promote in every way the sale of
the products (Par. 3); that sales made by petitioner are subject to approval by
the company
4. On dates determined by the rubber company, petitioner shall render a
detailed report showing sales during the month

2
5. The rubber company shall invoice the sales as of the dates of inventory and
sales report (Par. 14); that the rubber company agrees to keep the consigned
goods fully insured under insurance policies payable to it in case of loss
6. Upon request of the rubber company at any time, petitioner shall render an
inventory of the existing stock which may be checked by an authorized
representative of the former
7. Upon termination or cancellation of the Agreement, all goods held on
consignment shall be held by petitioner for the account of the rubber company
until their disposition is provided for by the latter. 11

3. SCHMID & OBERLY, INC. vs. RJL MARTINEZ

3
G.R. No. 75198 October 18, 1988
166 SCRA 493

Facts:
RJL Martinez Fishing Corporation is engaged in deep-sea fishing. In the course
of its business, it needed electrical generators for the operation of its business.
Schmid and Oberly sells electrical generators with the brand of Nagata, a
Japanese product. D. Nagata Co. Ltd. of Japan was Schmids supplier. Schmid
advertised the 12 Nagata generators for sale and RJL purchased 12 brand new
generators. Through an irrevocable line of credit, Nagata shipped to the Schmid
the generators and RJL paid the amount of the purchase price. (First sale = 3
generators; Second sale = 12 generators).
Later, the generators were found to be factory defective. RJL informed the
Schmid that it shall return the 12 generators. 3 were returned. Schmid replaced
the 3 generators subject of the first sale with generators of a different brand. As
to the second sale, 3 were shipped to Japan and the remaining 9 were not
replaced.
RJL sued the defendant on the warranty, asking for rescission of the contract
and that Schmid be ordered to accept the generators and be ordered to pay
back the purchase money as well as be liable for damages. Schmid opposes
such liability averring that it was merely the indentor in the sale between
Nagata Co., the exporter and RJL Martinez, the importer. As mere indentor, it
avers that is not liable for the sellers implied warranty against hidden defects,
Schmid not having personally assumed any such warranty.

Issue:
1) WON the second transaction between the parties was a sale or an indent
transaction? INDENT TRANSACTION
2) Even if Schmid is merely an indentor, may it still be liable for the warranty?
YES, under its contractual obligations it may be liable. But in this case, Schmid
did not warrant the products.

Held:
An indentor is a middleman in the same class as commercial brokers and
commission merchants. A broker is generally defined as one who is engaged, for
others, on a commission, negotiating contracts relative to property with the
custody of which he has no concern; the negotiator between other parties, never
acting in his own name but in the name of those who employed him; he is
strictly a middleman and for some purpose the agent of both parties. There are
3 parties to an indent transaction, (1) buyer, (2) indentor, and (3) supplier who
is usually a non-resident manufacturer residing in the country where the goods
are to be bought. The chief feature of a commercial broker and a commercial
merchant is that in effecting a sale, they are merely intermediaries or middle-
men, and act in a certain sense as the agent of both parties to the transaction.
RJL MARTINEZ admitted that the generators were purchased through indent
order. RJL admitted in its demand letter previously sent to SCHMID that 12 of
15 generators were purchased through your company, by indent order and
three (3) by direct purchase. The evidence also shows that RJL MARTINEZ paid
directly NAGATA CO, for the generators, and that the latter company itself
invoiced the sale and shipped the generators directly to the former. The only

4
participation of Schmid was to act as an intermediary or middleman between
Nagata and RJL, by procuring an order from RJL and forwarding the same to
Nagata for which the company received a commission from Nagata.

4. FILINVEST CREDIT CORPORATION vs. THE COURT OF APPEALS

G.R. No. 82508 September 29, 1989
178 SCRA 188
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.

Issue:
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

5
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 13

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-cum-rentals
already paid.

5. LUZON BROKERAGE Co vs. MARITOME BUILDING Co.

G.R. No. L-25885 January 31, 1972
43 SCRA 93
Facts:
In Manila, Myers owned 3 parcels of land w/ improvements. Myers then entered
into a contract called a Deed of Conditional Sale with Maritime Building.
Myers sold the land for P1million. They agreed on the manner of payment
(installment, initial payment upon execution of contract, interest rate). In the
contract it was stipulated that in case of failure of buyer to pay any of the
installments, the contract will be annulled at the option of the seller and all
payments made by the buyer is forfeited. Later on, the stipulated installment of
P10k with 5%interest was amended to the P5k with 5.5% per annum. Maritime
paid the monthly installments but failed to pay the monthly installment of
March. VP of Maritime wrote to Pres of Myers requesting for a moratorium on
the monthly payment of the installments because the company was undergoing
financial problems. Myers refused. For the months of March, April, and May,
Maritime failed to pay and did not heed the demand of Myers. Myers wrote
Maritime cancelling the Deed of Conditional Sale Myers demanded return of
possession of properties. Held Maritime liable for use and occupation
amounting to P10k per month.
In the meantime, Luzon Brokerage was leasing the property from Maritime.
Myers demanded from Luzon the payment of monthly rentals of P10k Myers
also demanded surrender of property. While actions and cross claims between
Myers and Maritime were happening, the contract between Maritime and Luzon
was extended for 4 more years. Turns out, Maritimes suspension of its
payments to Myers corp arose from a previous event: An award of backwages

6
made by the Court of Industrial Relations in favor of Luzon Labor Union
(employees employed by Luzon). FH Myers was a major stockholder of Luzon
Brokerage. FH Myers promised to indemnify Schedler (who controlled Maritime)
when Shedler purchased FH Myerss stock in Luzon Brokerage company. (This
indemnification is for the award of backwages by the CIR) Schedler claims that
after FH Myers estates closed, he was notified that the indemnity on the Labor
Union case will not be honored anymore. And so, Schedler advised Myers corp
that Maritime is withholding payments to Myers corp in order to offset the
liability when Myers heirs failed to honor the indemnity agreement. TC ruled
Maritime in breach of contract.

Issue:
1. Has there been a breach of contract?
2. Can Myers extrajudicially terminate the contract?

Held:
Yes. Failure to pay monthly installments constitute a breach of contract.
Default was not made in good faith. The letter to Myers corp means that the
non-payment of installments was deliberately made to coerce Myers corp into
answering for an alleged promise of the dead FH Myers. Whatever obligation FH
Myers had assumed is not an obligation of Myers corp. No proof that board of
Nyers corp agreed to assume responsibility to debts of FH Myers and heirs.
Schaedler allowed the estate proceedings of FH Myers to close without providing
liability. By the balance (of payment) in the Deed of Conditional Sale, Maritime
was attempting to burden the Myers corp with an uncollectible debt, since
enforcement against FH Myers estate was already barred. Maritime acted in bad
faith. Maritimes contract with Myers is not the ordinary sale contemplated in
NCC 1592 (transferring ownership simultaneously with delivery). The
distinction between contracts of sale and contract to sell with reserved title has
been recognized by this Court in repeated decisions upholding the power of
promisors under contracts to sell in case of failure of the other party to
complete payment, to extrajudicially 15

terminate the operation of the contract, refuse conveyance and retain the sums
or installments already received, where such rights are expressly provided for,
as in this case.

6. DIGNOS vs. COURT OF APPEALS

G.R. No. L-59266 February 29, 1988
158 SCRA 375

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

7
(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:
Whether or not the contract between the parties a contract of sale or a contract
to sell?

Held:
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

7. MARTIN vs. REYES

G.R. No. L-4402 July 28, 1952

Facts:
Respondent Pedro Revilla and Maria Reyes obtained from the La Previsora
Filipina sometime before November 18, 1939 a loan of P6,500; and with the
money, they the price of a lot, with improvements, which they paid had
previously purchased from the Archibishop of Manila. And they mortgaged the
property to La Previsora for the purpose of guaranteeing repayment of the debt
in installments with interest at 12 per cent per annum. It turned out later that
Monte de Piedad y Caja de Ahorros had obtained a judgment against Pedro
Revilla for the sum of P45,000 and had levied execution therefor upon the
property and its rentals. Apprised of this development, the La Previsora started
foreclosure proceedings, alleging non-payment of its credit by the mortgagors. It
seems that La Previsora at the same time, or immediately thereafter conveyed
the property by Exhibit C to petitioner Canuto Martin, who then executed the
document Exhibit D undertaking to allow respondents to repurchase the

8
property within sixty days from October 31, 1941, but at the price of P14,000.
This document Exhibit D was signed by Maria Reyes signifying her assent.

Issue:
Whether or not the respondents properly exercised their right to repurchase?

Held:
No. The Court of Appeals stated that in December 1941, Maria Reyes
accompanied by Marcela Mota de Malonso went to the office of La Previsora, not
for the purpose of repurchasing the property, but to ask for extension of the
period. Nevertheless, that Court opined that inasmuch as the complaint to
compel repurchase had been filed on January 2, 1952 within the sixty-day
period mentioned in Exhibit E, the vendors had preserved their redemption
option. Upon a move to reconsider, the Court of Appeals amplified its decision
saying, In view of the refusal of Atty. Pete A. Revilla who was acting in behalf of
appellee Canuto Martin, to receive any amount less than P14,000, nor to accept
in behalf of the La Previsora Filipina, claiming that the latter's right were
already ceded to appellee Canuto Martin, we hold that the question to the
efficiency of the amount offered at the time is not as vital to the issue as the
necessity of making one. We find that the plaintiff Maria Reyes, accompanied to
one Marcela Mota de Malonso did make an offer to redeem the property in the
property days of December, 1941. Whether or not the amount they had on that
occasion was sufficient to redeem the property at P8,204.60 or P10,204.60 is
not vital to the preservation of the rights of the plaintiff's in view of the refusal
to accept any amount less than P14,000.

8. MINDANAO ACADEMY, INC. vs. YAP

G.R. No. L-17681 February 26, 1965
13 SCRA 190

Facts:
By deed entitled "Mutual Agreement", executed on May 10, 1964, Rosenda A. de
Nuqui and her son Sotero Dionisio, Jr. sold three parcels of residential land in
Oroquieta, Misamis Occidental, and another parcel in Ozamis City in favor of
Ildefonso D. Yap. Included in the sale were certain buildings situated on said
lands as well as laboratory equipment, books, furniture and fixtures used by
two schools established in the respective properties, the Mindanao Academy in
Oroquieta and the Misamis Academy in Ozamis City. The aggregate price stated
in the deed was P100,700.00, to be paid according to the terms and conditions
specified in the contract. Besides Rosenda and her son Sotero, Jr., both of
whom signed the instrument, Adelaida Dionisio-Nuesa is also named therein as
co-vendor, but actually did not take part either personally or through her uncle
and supposed attorney-in-fact, Restituto Abuton. These three Rosenda and
her two children above named are referred to in the deed as the owners pro-
indiviso of the properties sold. The truth, however, was that there were other
co-owners of the lands. The buyer, Ildefonso D. Yap, obtained possession of the
properties by virtue of the sale, took over the operation of the two schools and
even changed their names to Harvardian Colleges.

Issue:

9
Whether or not the Mindanao Academy can reimburse even in bad faith?

Held:
Yes. The appellant claims reimbursement for the value of the improvements he
allegedly introduced in the schools, consisting of a new building worth
P8,000.00 and a toilet costing P800.00, besides laboratory equipment,
furniture, fixtures and books for the libraries. It should be noted that the
judgment of the trial court specifies, for delivery to the plaintiffs, only "the
buildings and grounds described in the mutual agreement together with all the
permanent improvements thereon." If the defendant constructed a new
building, as he alleges, he cannot recover its value because the construction
was done after the filing of the action for annulment, thus rendering him a
builder in bad faith who is denied by law any right of reimbursement. In
connection with the equipment, books, furniture and fixtures brought in by
him, he is not entitled to reimbursement either, because the judgment does not
award them to any of the plaintiffs in these two actions. What is adjudged is for
the defendant to restore to the Mindanao Academy, Inc. all the books,
laboratory apparatus, furniture and other equipment "described in the Mutual
Agreement and specified in the Inventory attached to the records of this case; or
in default thereof, their value in the amount of P23,500.00." In other words,
whatever has been brought in by the defendant is outside the scope of the
judgment and may be retained by him.

9. ESTOQUE vs. PAJIMULA

G.R. No. L-24419 July 15, 1968

Facts:
Lot No. 802 of the Cadastral survey of Rosario, was originally owned by the late
spouses, Rosendo Perez and Fortunata Bernal, who were survived by her
children, namely, Crispina Perez, Lorenzo Perez and Ricardo Perez. Ricardo
Perez is also now dead. On October28, 1951, Crispina P. Vda. de Aquitania sold
her right and participation in Lot No. 802consisting of 1/3 portion with an area
of 640 square meters to Leonora Estoque. On October29, 1951, a deed of
extrajudicial settlement was entered into wherein Lorenzo Perez, Emilia P.
Posadas and her minor children. On December 30, 1959, Crispina Perez and
her children Rosita Aquitania Belmonte, Remedios Aquitania Misa, Manuel
Aquitania, Sergio Aquitania and Aurora Aquitania sold to Elena Pajimula, the
remaining 2/3 western portion of Lot No. 802with an area of 958 square
meters. Plaintiff based her complaint for legal redemption on a claim that she is
a co-owner of Lot No. 802, for having purchased 1/3 portion thereof, containing
an area of 640 square meters as evidenced by a deed of sale, which was
executed on October 28, 1951 by Crispina Perez de Aquitania, one of the co-
owners, in her favor. On the other hand, the defendant, who on December 30,
1959 acquired the other 2/3portion of Lot No. 802 from Crispina Aquitania and
her children, claimed that the plaintiff bought the 1/3 south-eastern portion,
which is definitely identified and segregated, hence there existed no co-
ownership at the time and after said plaintiff bought the aforesaid portion, upon
which right of legal redemption can be exercised or taken advantage of.
Estoques stand is that the deed in her favor was inoperative to convey the
south-eastern third of Lot 802 of the Rosario Cadastre notwithstanding the

10
description in the deed itself, for the reason that the vendor, being a mere co-
owner, had no right to sell any definite portion of the land held in common but
could only transmit her undivided share, since the specific portion
corresponding to the selling co-owner is not known until partition takes place
(Lopez vs. Ilustre, 5 Phil. 567; Ramirez vs. Bautista, 14 Phil. 528). From this
premise, the appellant argues that the sale in her favor, although describing a
definite area, should be construed as having conveyed only the undivided 1/3
interest in Lot 802 owned at the time by the vendor, Crispina Perez Vda. de
Aquitania. Wherefore, when the next day said vendor acquired the 2/3 interest
of her two other co-owners, Lot 802 became the common property of appellant
and Crispina Perez. Therefore, appellant argues, when Crispina sold the rest of
the property to appellee Pajimula spouses, the former was selling an
undivided2/3 that appellant, as co-owner, was entitled to redeem, pursuant to
Article 1620 of the New Civil Code ART. 1620. A co-owner of a thing may
exercise the right of redemption in case the shares of all the other co-owners or
of any of them are sold to a third person. If the price of the alienation is grossly
excessive the redemptioner shall pay only a reasonable one. Should two or more
co-owners desire to exercise the right of redemption, they may only do so in
proportion to the share they may respectively have in the thing owned in
common.

Issue:
Whether or not right of redemption can be exercised by Estoque?

Held:
NO. Appellant Estoque became the actual owner of the South eastern third of
lot 802on October 29, 1951. Wherefore, she never acquired an undivided
interest in lot 802. And when eight years later Crispina Perez sold to the
appellee Pajimula the western two-thirds of the same lot, appellant did not
acquire a right to redeem the property thus sold, since their respective portions
were distinct and separate.(1) The deed of sale to Estoque (Annex A of the
complaint) clearly specifies the object sold as the south-eastern third portion of
Lot 802 of the Rosario Cadastre, with an area of 840square meters, more or
less. Granting that the seller, Crispina Perez Vda. de Aquitania could not have
sold this particular portion of the lot owned in common by her and her two
brothers, Lorenzo and Ricardo Perez, 20

by no means does it follow that she intended to sell to appellant Estoque her
1/3 undivided interest in the lot for mentioned. There is nothing in the deed of
sale to justify such inference. That the seller could have validly sold her one-
third undivided interest to appellant is no proof that she did choose to sell the
same. While on the date of the sale to Estoque said contract may have been
ineffective, for lack of power in the vendor to sell the specific portion described
in the deed, the transaction was validated and became fully effective when the
next day (October 29, 1951) the vendor, Crispina Perez, acquired the entire
interest of her remaining co-owners and thereby became the sole owner of Lot
No. 802 of the Rosario Cadastral survey (Llacer vs. Muoz, 12 Phil. 328). Article
1434 of the Civil Code of the Philippines clearly prescribes that .When a
person who is not the owner of a thing sells or alienates and delivers it, and

11
later the seller or grantor acquires title thereto, such title passes by operation of
law to the buyer or grantee." CA decision affirmed

10. SEGURA VS. SEGURA

G.R. No. L-29320 September 19, 1988

Facts:
The land in question consists of 4,060 square meters and was originally
registered under Original Certificate of Title No. 1994 in the Registry of Deeds of
Iloilo in the name of Gertrudes Zamora. 1 She died intestate and without debts
in 1936 and was survived by four children, who never got around to dividing
the property among themselves. This controversy is not among the four
brothers, who are now also deceased. It is Gertrudes grandchildren by three of
her sons (the fourth having died without issue) who are involved in this
complaint for recovery of ownership and possession of the disputed inheritance,
plus damages. The conflict began when on April 6, 1941, three of these nine
grandchildren, executed a deed of extrajudicial partition arrogating the entire
property to themselves alone as equal pro in diviso owners. This partition was
not registered immediately, but only in 1946, or five years later.

Issue:
Whether or not the plaintiff can apply prescription in acquiring the land.

Held:
It is noted that when Amojido secured the registration of the land in his name
following the deed of sale executed in his favor by the parties to the
extrajudicial partition, his certificate of title carried an express reservation of
whatever rights might pertain to the other heirs. This annotation constituted an
acknowledgement of the possibility that a portion of the land might not belong
to him and the commitment that he would be holding such part as impliedly
conveyed to him in trust by and for its true owners. However, when Amojido
himself sold the land to Mirope Mascareas vda. de Elison on March 13, 1953,
the transfer certificate of title issued in her name no longer carried the said
encumbrance. By the deletion of this annotation, Mirope, as the new transferee,
repudiated as of the date of registration the claim of the other heirs to their
shares in the property. From then on her assertion of ownership over the whole
land became adverse even as against the appellants herein. And as the
certificate of title was notice to the whole world of her exclusive title to the land,
such rejection was binding on the said heirs and started as against them the
period of prescription.
The record does not show when TCT No. T-19396 in the name of Mirope
Mascareas vda. de Elison was issued, but it can be conjectured that this was
done before February 14, 1957, when she sold the land to Mildred Elison vda.
de Javelosa. On the assumption that the land was registered in the name of
Mirope in 1953 following her purchase without acknowledgement of the co-
heirs' rights, the 10-year prescriptive period would have started from that year.
Suspended on May 28, 1956, when the first complaint was filed, it began
running again on February 16, 1958, 30 days after it was dismissed, and was
completed after seven more years in 1965, two years before the second

12
complaint was filed in 1968. Hence, that complaint was barred by prescription,
as correctly held by the trial court, although the different starting point it used,
erroneously, was 1941, date of the extrajudicial partition.

11. REPUBLIC OF THE PHILIPPINES VS. COURT OF APPEALS AND VICENTE

L. YUPANGCO, JR.,
G.R. No. 128531. October 26, 1999
165 SCRA 480

Facts:
Private respondent Vicente Yupangco is the owner of a unit in a condominium
building in Legaspi Street, Makati City, as evidenced by Certificate of Title No.
7648. Because his aforesaid certificate could not be located, he filed, on
January 28, 1994, in the Regional Trial Court, Branch 136, Makati, a petition
for the issuance of a new duplicate certificate of title in lieu of his lost copy,
pursuant to 109 of P.D. No. 1529 (Property Registration Decree). The trial court
ordered the Register of Deeds of Makati to comment on the petition and
thereafter set the case for initial hearing.

Issue:
Whether or not in a proceeding for the issuance of an owners duplicate
certificate of title, the Solicitor General is required to be notified, such that
failure to give such notice would render the proceedings void.

Held:
The decision of the Court of Appeals is AFFIRMED. This is not correct.
Considering that the law does not impose such notice requirement in
proceedings for the issuance of a new owners duplicate certificate of title, the
lack of notice to the Solicitor General, as counsel for the Registrar of Deeds, was
at most only a formal and not a jurisdictional defect.
This case should be distinguished from our rulings in cadastral registration
cases and original land registration proceedings which require that the Solicitor
General be notified of decisions and hold as decisive, for the purpose of
determining the timeliness of the appeal filed by the government, the date of his
receipt of the decisions therein and not that of the Director of Lands or of his
other representatives. The issue and the applicable laws in those cases are
different.

12. TOMAS T. TEODORO vs. THE COURT OF APPEALS

G.R. No. 140799. September 10, 2002
170 SCRA 620

Facts:
PAMI Development Corporation registered with the Mining Records of Bulacan
its mining claims to a parcel of land consisting of 185.8611 hectares, located at
San Mateo, Norzagaray, Bulacan. it was issued Placer Lease Contracts, later
renamed Mining Lease Contracts (MLC), Nos. V-202 and V-203, for a period of
twenty-five years. On January 5, 1965, PAMI sold its mining claims to
respondent Continental Cement Corporation.

13
Almost fifteen years later, on April 10, 1980, Francisco and Tomas Teodoro
applied for quarry permits with the Bureau of Mines, denominated as AQP-551
and AQP-552, over their property located at Barrio Pinagkamaligan,
Norzagaray, Bulacan. The Bureau of Mines denied the Teodoros application
since it will conflict with the mining claims of respondent.
Subsequently, the Teodoros filed with the then Ministry of Natural Resources a
petition for cancellation of respondents MLC Nos. V-202 and V-203 on the
ground of non-development of mineral lands. The said mining lease contracts of
respondent were cancelled for non-compliance with the work obligations under
the law.

Issue:
Whether or not there was extrinsic fraud.

Held:
Extrinsic fraud refers to any fraudulent act of the prevailing party in the
litigation, which is committed outside of the trial of the case, whereby the
unsuccessful party has been prevented from exhibiting fully his case, by fraud
or deception practiced on him by his opponent. Fraud is regarded as extrinsic
where it prevents a party from having a trial or from presenting his entire case
to the court, or where it operates upon matters pertaining not to the judgment
itself but to the manner in which it is procured. The overriding consideration
when extrinsic fraud is alleged is that the fraudulent scheme of the prevailing
litigant prevented a party from having his day in court. None of these conditions
obtain in the case at bar

13. YU TEK & CO. vs. GONZALES

29 PHIL, 384

Facts:
A contract was executed between the herein parties, whereby Mr. Basilio
Gonzales acknowledges the receipt of P3,000 from Yu Tek & Co., and that in
consideration of which he obligates himself to deliver to the latter 600 piculs of
sugar of the first and second grade, according to the result of polarization,
within 3 months. There is a stipulation providing for rescission with P1,200
penalty in case of failure to deliver. No sugar was delivered, so plaintiff filed a
case praying for the judgment of P3,000 plus P1,200. P3,000 was awarded,
thus, both parties appealed.

Issues:
(1) Whether compliance of the obligation to deliver depends upon the
production in defendants plantation; (2) Whether there is a perfected sale; and
(3) Whether liquidated damages of P1,200 should be awarded to the plaintiff

Held:
(1) There is not the slightest intimation in the contract that the sugar was to be
raised by the defendant. Parties are presumed to have reduced to writing all the
essential conditions of their contract. While parol evidence is admissible in a
variety of ways to explain the meaning of written contracts, it cannot serve the
purpose of incorporating into the contract additional contemporaneous

14
conditions which are not mentioned at all in the writing, unless there has been
fraud or mistake. It may be true that defendant owned a plantation and
expected to raise the sugar himself, but he did not limit his obligation to his
own crop of sugar. Our conclusion is that the condition which the defendant
seeks to add to the contract by parol evidence cannot be considered. The rights
of the parties must be determined by the writing itself.
(2) We conclude that the contract in the case at bar was merely an executory
agreement; a promise of sale and not a sale. At there was no perfected sale, it is
clear that articles 1452, 1096, and 1182 are not applicable. The defendant
having defaulted in his engagement, the plaintiff is entitled to recover the
P3,000 which it advanced to the defendant, and this portion of the judgment
appealed from must therefore be affirmed.
(3) The contract plainly states that if the defendant fails to deliver the 600
piculs of sugar within the time agreed on, the contract will be rescinded and he
will be obliged to return the P3,000 and pay the sum of P1,200 by way of
indemnity for loss and damages. There cannot be the slightest doubt about the
meaning of this language or the intention of the parties. There is no room for
either interpretation or construction. Under the provisions of article 1255 of the
Civil Code contracting parties are free to execute the contracts that they may
consider suitable, provided they are not in contravention of law, morals, or
public order. In our opinion there is nothing in the contract under
consideration which is opposed to any of these principles.

14. ONG JANG CHUAN vs. WISE AND CO.

33 PHIL 339

An appeal from a judgment of the Court of First Instance of Manila condemning

the defendant to pay the plaintiff the sum of P1,237.50, together with interest
and costs, as damages for a breach of contract. PARTIES: ONG JANG CHUAN -
plaintiff-appellee WISE & CO. (LTD) - defendant-appellant PONENTE: TRENT, J.
: *The contract: Jang Chuan, Manila. following goods, on this 29th day of July,
1914: One thousand (1,000) sacks of flour, "Mano" brand, at the net price of
P11.05 (eleven pesos and five centavos) per barrel, the expenses of
transportation from the Binondo Canal to be borne by the purchaser, 500 sacks
to be delivered in September and 500 in October, which we bind ourselves to
deliver . .. for which we shall receive a commission of . .. per cent of the total
amount. Payment of the goods mentioned shall be made within 30 days
counted from the date of delivery, and interest at rate of . .. Per annum on any
unpaid amount that may still be due after the . .. Days mentioned.

Facts:
Contract. The reason for the said nonfulfillment, on the part of the "Mano"
brand of flour which the defendant bound itself to deliver during the months of
September and October had to come from Australia, and at the time the
contract was said brand of flour; and that, as the government of Australia
prohibited the exportation of flour, because of the scarcity of grain in that
country, due to the war that had been declared between Great Britain, of which
Australia is an integral part and the German Empire, it was impossible for the
importers to the latter, in turn, to serve its customers.

15
Issue:
Whether or not the contract and the facts found show a perfected sale

Held:
In the case under consideration, the undertaking of the defendant was to sell to
the plaintiff 1,000 sacks of "Mano" flour at P11.05 per barrel, 500 sacks to be
delivered in September and 500 in October. There was no delivery at all under
the contract. If called upon to designate the article sold, the defendant could
only say that it was "Mano" flour. There was no appropriation of any particular
lot of flour. The flour mentioned in the contract was not "physically segregated
from all other articles.' In fact, the defendant did not have in its possession in
Manila, at the time the contract was entered into, the 1,000 sacks of flour,
which it agreed to deliver in September and October. It is therefore clear that
under the rule laid down in the case of Yu Tek & Co., supra, and the case cited
in that opinion, the sale here in question was not a perfected one.

15. BUNGE CORPORATION., ET. AL.., vs.ELENA CAMENFORTE and

COMPANY, doing business or trading under the name andstyle of Visayan
Products Company, ET AL.,
48 OFF.GAZ. 3377

Facts:
Plaintiffs brought action against the defendants to recover certain damages they
have allegedly sustained in view of the failure of the latter to deliver to the
former the amount of Philippine copra which they had agreed to deliver within
the time and under the conditions specified in the contract celebrated between
them on October 22, 1947.After trial, which both parties presented their
respective evidence, the court rendered decision ordering defendant Elena
Camenforte & Company to pay to the plaintiffs. Defendants interposed the
present appeal. Consequently, appellants now contend that the lower court
erred in condemning them for damages despite the fact that their failure to fulfil
the contract is due to force majeure.

Issue:
WON VISAYAN PRODUCT IS LIABLE FOR FAILURE TO DELIVER COPRA EVEN
IF LOSTBY FORCE MAJEURE.

Held:
It appearing that the obligation of appellant is to deliver copra in a generic
sense, the obligation cannot be deemed extinguished by the destruction or
disappearance of the copra stored in San Ramon, Samar. Their obligation
subsists as long as that commodity is available. A generic obligation is not
extinguished by the loss of a thing belonging to a particular genus. Genus
nunquan perit. Wherefore, the decision appealed from is affirmed, with costs
against appellants.
Separate OpinionsBENGZON, J., concurring:I concur. However I wish to add a
few remarks.The copra was to be delivered at the Pacific Coast of the U.S.
"during November/December1947." The sellers' duty to deliver matured at the
end of December 1947. In the absence ofspecial circumstances, failure of the
sellers to comply with their obligation gave to buyer theright to damages based

16
upon the price of Philippine copra at the end of December 1947 in theU.S.
Pacific Coast. Such price, according to the decision not challenged by
appellants was$260 per short ton. On that basis, the judgment for damages
in the amount of P79,744 may be ffirmed

16. PATERNO vs. SALUD

G.R. No. L-15620, September 30, 1963
9 SCRA 81

Facts:
Defendant claims to be the owner of the land which plaintiffs seek to recover
having been in adverse possession thereof since 1890 and having registered it
in his name Registration Case No. 23 of the same court on April 16, 1940 for
which he obtained a Torrens title.
On March 1912, Jose T. Paterno, as administrator of the estate Maximino Molo
Agustin Paterno, acquired at an auction sale certain parcels of land that were
levied in execution belonging to Esteban de Villa. These includes the land in
question which contained 5 hectares. In 1927, all these lands were adjudicated
to Concepcion Paterno Vda. de Padilla, daughter of the late Maximino Molo
Agustin Paterno as her share in the estate. In that year, the lease of the lands
to the De Villas was not renewed and so their possession was returned to the
Paternos. In 1943, Concepcion Paterno died leaving all the lands she owned in
Batangas, including the one in question, to plaintiffs as her heirs. Hence, from
1927, when the lease to the De Villas was terminated, to 1949, plaintiffs had
been in possession of the lot with an area of 5 hectares.
The Court of Appeals ruled in favor of the defendant that land in question and
the bigger Parcel of 30.5285 hectares of which it was originally a part, were not
included in the auction in 1912 of the properties of Esteban de Villa.

ISSUE:
Whether or not the 5 hectares of land is owned by the defendant

HELD:
The Supreme Court ruled that the Court of Appeals erred in declaring
defendant owner of the parcel of land claimed in his counterclaim. The evidence
shows that plaintiff predecessor-in-interest Concepcion Paterno Vda. de Villa
secured in 1928 Original Certificate of Title No. 49 over a parcel of land of
which the land involved here was a part. This parcel of land was originally
acquired by the Paternos in 1912. This was leased to Esteban Villa and Pia de
Villa from 1917 to 1925; surveyed Jose T. Paterno on September 25, 1924; was
the subject of petition for registration by the Paternos in 1926, due notice of
which was given to the De Villas, and upon the death of Concepcion Paterno
Vda. de Padilla, it was transmitted to plaintiffs by succession. Since the land in
question was registered in the name of the Paternos in 1928 and it was only on
November 19, 1952, date of defendant' answer, that he sought its reconveyance
to him, that title became indefeasible under Section 38, Act No. 496, as
amended by Act No. 3630.

17. JOSE SANTA ANA, JR. VS. ROSA HERNANDEZ

G.R. No. L-16394, December 17, 1966

17
18 SCRA 973

Facts:
Spouses Jose Santa Ana, Jr. and Lourdes Sto. Domingo sold a land in Bulacan
to respondent Rosa Hernandez for 11,000 pesos lump sum. (There were two
other previous sales to different vendees of other portions of the land).
The boundaries of the land were stated in the deed of sale and its approximate
land area. Petitioner spouses caused the preparation of the subdivision plan
but Hernandez didnt agree to the partition. As such, petitioners-spouses filed a
case alleging that Hernandez is occupying in excess of 17000 square meter of
the land sold. Hernandez claims that the excess area is part of the land she
bought.

ISSUE:
Whether or not the excess area occupied by Hernandez is part of the land sold.

HELD:
The sale involves a definite and identified tract, a corpus certrum that obligated
the vendors to deliver to the buyer all the lands within the boundaries,
irrespective of whether its real area should be greater or smaller than what is
recited in the deed.
To hold the buyer to no more than the area recited on the deed, it must be
made clear therein that the sale was made by unit of measure at a definite price
for each unit. The sale in this case only involves the definite boundaries but
only approximate land areas. As such, Article 1542 concerning the sale of lump
sum must be considered.

18. SIBAL vs. VALDEZ

G.R. No. L-26278, August 4, 1927
50 Phil. 512

Facts:
Plaintiff alleged that the defendant Vitaliano Mamawal, deputy sheriff of the
Province of Tarlac, by virtue of a writ of execution issued by the Court of First
Instance of Pampanga, attached and sold to the defendant Emiliano J. Valdez
the sugarcane planted by the plaintiff and his tenants on seven parcels of
lands. Plaintiff offered to redeem said sugarcane and tendered to the defendant
Valdez the amount sufficient to cover the price paid by the latter, the interest
thereon after the purchase, and the interest corresponding thereto. However,
Valdez refused to accept the money and to return the sugarcane to the plaintiff.
Meanwhile, defendant argued that the sugar cane was personal property hence
not subject to redemption.

ISSUE:
Whether or not future crops to be harvested can be considered a valid object of
sale.

HELD:

18
Yes. A valid sale may be made of a thing, which though not yet actually in
existence, is reasonably certain to come into existence as the natural increment
or usual incident of something already in existence and then belonging to the
vendor, and then title will vest in the buyer the moment the thing comes into
existence. (Emerson vs. European Railway Co. ., 67 Me, 387; Cutting vs.
Packers Exchange, 21 Am. St. Rep, 63)
A man may sell property of which he is potentially and not actually possessed.

19. PICKEL vs. ALONZO

111 SCRA 341

Facts:
Respondent Prudencio Alonzo was awarded by the Government that parcel of
land in Basilan City in accordance with Republic Act No. 477. The award was
cancelled by the Board of Liquidators on January 27, 1965 on the ground that,
previous thereto, plaintiff was proved to have alienated the land to another, in
violation of law. In 1972, plaintiff's rights to the land were reinstated.
On August 14, 1968, plaintiff and his wife sold to defendant Luis Pichel all the
fruits of the coconut trees which may be harvested in the land in question for
the period, September 15, 1968 to January 1, 1976, in consideration of
P4,200.00. Even as of the date of sale, however, the land was still under lease
to one, Ramon Sua, and it was the agreement that part of the consideration of
the sale, in the sum of P3,650.00, was to be paid by defendant directly to
Ramon Sua so as to release the land from the clutches of the latter. Pending
said payment plaintiff refused to allow the defendant to make any harvest. In
July 1972, defendant for the first time since the execution of the deed of sale in
his favor, caused the harvest of the fruit of the coconut trees in the land.
Alonzo filed for the annulment of the contract on the ground that it violated the
provisions of R.A. 477, which states that lands awarded under the said law
shall not be subject to encumbrance or alienation, otherwise the awardee shall
no longer be entitled to apply for another piece of land. The lower court ruled
that the contract, which it held as a contract of lease, is null and void.

Issues:
Whether the contract is one for lease of the land, or for sale of coconut fruits

Held:
The contract was clearly a "sale of the coconut fruits." The vendor sold,
transferred and conveyed "by way of absolute sale, all the coconut fruits of his
land," thereby divesting himself of all ownership or dominion over the fruits
during the seven-year period. The possession and enjoyment of the coconut
trees cannot be said to be the possession and enjoyment of the land itself
because these rights are distinct and separate from each other, the first
pertaining to the accessory or improvements (coconut trees) while the second,
to the principal (the land). A transfer of the accessory or improvement is not a
transfer of the principal. It is the other way around, the accessory follows the
principal. Hence, the sale of the nuts cannot be interpreted nor construed to be
a lease of the trees, much less extended further to include the lease of the land

20. BUCTON vs. GABAR

19
55 SCRA 499

Facts:
Plaintiff Nicanora Gabar Bucton (wife of her co-plaintiff Felix Bucton) is the
sister of defendant Zosimo Gabar, husband of his co-defendant Josefina
Llamoso Gabar. This action for specific performance prays, inter-alia, that
defendants-spouses be ordered to execute in favor of plaintiffs a deed of sale of
the western half of a parcel of land having an area of 728 sq. m. Josefina
entered into a verbal agreement with her sister-in-law, plaintiff Nicanora Gabar
Bucton, that the latter would pay one-half of the price (P3,000) and would then
own one-half of the land.
Meanwhile, after Josefina had received in January, 1946 the initial amount of
P1,000 as above stated, plaintiffs took possession of the portion of the land
indicated to them by defendants and built a modest nipa house therein. About
two years later plaintiffs built behind the nipa house another house for rent.
And, subsequently, plaintiffs demolished the nipa house and in its place
constructed a house of strong materials, with three apartments in the lower
portion for rental purposes.
In January, 1947 the spouses Villarin executed the deed of sale of the land
abovementioned in favor of defendant Josefina Llamoso Gabar . Plaintiffs then
sought to obtain a separate title for their portion of the land in question.
Defendants repeatedly declined to accommodate plaintiffs. Plaintiffs continued
enjoying their portion of the land, planting fruit trees and receiving the rentals
of their buildings. In the meantime, plaintiffs continued to insist on obtaining
their separate title. Defendants remained unmoved, giving the same excuse.
Frustrated, plaintiffs were compelled to employ Atty. Bonifacio Regalado to
intercede; counsel tried but failed. Plaintiffs persevered, this time employing
Atty. Aquilino Pimentel, Jr. to persuade defendants to comply with their
obligation to plaintiffs; this, too, failed. Hence, this case, which has cost
plaintiffs P1,500 in attorney's fees.

Issue:
WON the action to compel the vendors to execute a formal deed of conveyance
so that the fact of their ownership may be inscribed in the corresponding
certificate of title, had not yet prescribed when they filed the present action.

Held:
The prevailing rule is that the right of a plaintiff to have his title to land quieted,
as against one who is asserting some adverse claim or lien thereon, is not
barred while the plaintiff or his grantors remain in actual possession of the
land, claiming to be owners thereof, the reason for this rule being that while the
owner in fee continues liable to an action, proceeding, or suit upon the adverse
claim, he has a continuing right to the aid of a court of equity to ascertain and
determine the nature of such claim and its effect on his title, or to assert any
superior equity in his favor. He may wait until his possession is disturbed or his
title in attacked before taking steps to vindicate his right. But the rule that the
statute of limitations is not available as a defense to an action to remove a
cloud from title can only be invoked by a complainant when he is in possession.
One who claims property which is in the possession of another must, it seems,
invoke remedy within the statutory period. (44 Am. Jur., p. 47)

20
The doctrine was reiterated recently in Gallar v. Husain, et al., 4 where We
ruled that by the delivery of the possession of the land, the sale was
consummated and title was transferred to the appellee, that the action is
actually not for specific performance, since all it seeks is to quiet title, to
remove the cloud cast upon appellee's ownership as a result of appellant's
refusal to recognize the sale made by his predecessor, and that as plaintiff-
appellee is in possession of the land, the action is imprescriptible. Considering
that the foregoing circumstances obtain in the present case, We hold that
petitioners' action has not prescribed.

21. REPUBLIC of the PHILIPPINES vs. LICHAUCO, et al.

G.r. No. L-21436 august 18, 1972

Facts:
The Republic of the Philippines, by authority of Republic Act No. 1400,
represented by the Land Tenure Administration, filed on December 2, 1957, in
the Court of First Instance of Pangasinan a complaint against the defendants
for the expropriation of the lands of the "Hacienda El Porvenir", having an area
of 1,352.84245 hectares, situated in the municipalities of Tayug, Natividad, San
Quintin and Sta. Maria, province of Pangasinan. In the complaint it was
alleged, among other things, that the aggregate assessed value of the property
was P434,440.00, and that the continuous agrarian conflicts between
defendants and their tenants could be solved only through the purchase of said
property by the government. Defendants, in their amended motion to dismiss,
sought the dismissal of the complaint, alleging that the hacienda was no longer
a co-ownership but had been partitioned among the several heirs of Crisanto
Lichauco, and that Republic Act No. 1400 was unconstitutional. On March 23,
1961, the plaintiff and the defendants filed in court an Agreement and Joint
Motion. Acting on the foregoing Agreement and Joint Motion, the Court of First
Instance of Pangasinan issued, on March 23, 1961, the order of condemnation
of the property sought to be expropriated and set the provisional value of the
property at P990,172.50.
Inasmuch as the defendants were not agreeable to the price of P1,787,048.80,
or an average of P1,945.36 per hectare offered by the plaintiff in its
memorandum-report dated June 15, 1961, the court created a Committee on
Appraisal and appointed as members thereof Atty. Rodolfo E. Vinluan to
represent the Court; Mr. Alfredo Balingao of Tayug, Pangasinan, to represent
the plaintiff; and Mr. Hermenegildo Acosta, also of Tayug, to represent the
defendants.On November 29,1961 Commissioners Rodolfo E. Vinluan and
Hermenegildo Acosta submitted the majority report of the Committee on
Appraisal. The other commissioner submitted on December 2, 1961 the
minority report.
After hearing on the reports, the Court rendered its decision decreeing the
condemnation of the properties of the defendants declaring the plaintiff to be
the owner of said portion of 990 hectares, 17 ares, and 25 centares upon
previous payment to the defendants a certain amount. From this decision,
plaintiff appealed, by reason of the amount involved, directly to this Court.

Issue:

21
In considering as a guide in endeavoring to fix the resonable and fair market
value of the lands now under expropriation the case of "Municipality of Bustos
vs. Natividad Santos et al., CA-G.R. No. 22547-R; the case of "Commonwealth of
the Philippines vs. Pedro de Guzman," Civil Case No. 8425 of the Court of First
Instance of Pangasinan, Lingayen Branch, and CA-G.R. No. 20358-R; and the
case of "Republic of the Philippines vs. Irene R. Ombac," Civil Case No. 13555 of
the same Court of First Instance of Pangasinan, without basis in fact and in law
and contrary to existing jurisprudence.

Held:
We find plaintiff-appellant's first assigned error untenable. We gather, upon
reading the decision, that the trial court did not base the market value of the
Hacienda El Porvenir on the prices of the land expropriated in the cases
mentioned by the plaintiff-appellant. The trial court simply considered the
principles enunciated in those cases as guided in fixing the market value of the
lands sought to be expropriated in the present case. The principles regarding
evaluation enunciated in the Bustos case, namely: that the reasonable market
value of a property is what it would bring when offered for sale by one who
desires but is not obliged to sell, and is purchased by one who is under no
necessity of having it; that the value of the property should be fixed as of the
date of proceedings; and that the sales of properties in the same locality are
creditable in determining the market value of lots in that vicinity, can not be
said to be erroneous and without basis in law, as claimed by plaintiff-appellant,
because said principles are taken from the decisions of this Court in the cases
of Manila Railroad Co. vs. Caligsahan, 40 Phil. 326; and Manila Railroad Co. vs.
Fabie, 17 Phil. 206. The trial court, therefore, did not err when it relied on the
principles enunciated in those cases.

22.RUDENCIO TIU and CLARITA TIU vs. CA and sps. EXEQUIEL MONTEBON
and JACINTA MAXILOM
G.R. No. 142596; July 10, 2006

Facts:
On August 1, 1979, spouses Exequiel Montebon and Jacinta Maxilom executed
a document denominated as Deed of Absolute Sale whereby, in consideration of
the sum of P15,000,00, they purportedly sold, transferred and conveyed,
absolutely and irrevocably, to Rudencio Tiu x x x his house and lot situated at
Poblacion, Tuburan, Cebu. Of the P15,000.00 price, Exequiel Montebon
received advance payment in the sum of P1,000.00 from appellant Tiu on July
10, 1979. For said advance payment, Exequiel issued a receipt of even date.
Upon instruction of appellant Tiu, Exequiel brought the receipt to Judge
Vicente Bornia for the latter's signature. After reviewing the receipt, Judge
Bornia signed it as an instrumental witness. An additional amount of P200.00
was obtained by Exequiel from appellant Tiu per his receipt of even date. Upon
learning that the questioned instrument states that the sale of the subject
property was absolute and not with right of repurchase, the Montebon spouses,
thru (sic) their lawyer, wrote a letter to Tiu asking for its reformation. However,
their efforts to forge an amicable settlement were unsuccessful.
Consequently, on October 5, 1979, the Montebon spouses filed an action
against Tiu and his wife Clarita Parrilla in the Court of First Instance of Cebu

22
for reformation of instrument or rescission of contract and damages. The action
is anchored on the averments that the questioned instrument does not express
the true intention of the contracting parties; which is sale con pacto de retro;
that the subject property could easily fetch a price of P50,000.00; and that the
Montebon spouses agreed to the price of P15,000.00 because it was their
covenant with Tiu that they could repurchase the subject property within one
year and they were in dire need of money.

Issue:
That in rendering said decision and the consequent order of denial of the
petitioners' Motion for Reconsideration, the respondent Court of Appeals acted
with grave abuse of discretion amounting to lack or in excess of jurisdiction as
it is clearly contrary to the provisions of law quoted above and of the ruling of a
case of similar nature or issues.

Held:
Petitioners cite the ruling in Lustan v. Court of Appeals (not Luctan as indicated
by petitioners) where it was held that "the meetings of minds in a contract
speaks of the intent of the parties x x x and if the words of the contract appear
to be contrary to the evident intention of the parties, the latter shall prevail over
the former."[12]cralaw This Lustan case however has done more harm than
good to petitioners' cause. This Court ruled that even when a document appears
on its face to be a sale, the owner of the property may prove that the contract is
really a loan with mortgage. Thus the Deed of Definite Sale was declared as an
equitable mortgage. In the case at bar, the stipulation in the Deed of Absolute
Sale that respondents Montebon have agreed to unconditionally sell their lots to
petitioners must give way to the true intent of the parties-that the sale is
subject to the right of repurchase in favor of private respondents. This is
unequivocally revealed in the receipt issued by respondent Exequiel Montebon
signed by petitioners' witness, Judge Bornia. Thus, it was clearly established
that the conveyance is one with pacto de retro and not an absolute and
unrestricted transfer. The petition is denied.

23. DEL ROSARIO VS SANTOS

108 SCRA 43

Facts:
Amparo Del Rosario entered into a contract with Atty. Andres Santos and his
wife Aurora Santos whereby the latter sold to the former a 20,000 sq. m. of land
which is to be segregated from lot 1. Said lot forms part of the several lots
belonging to a certain Teofilo Custodio, of which lots, Atty. Santos, by
agreement with the latter, as his Attyoneys fees, owns interests thereof.
Parties agreed that spouses Andres shall thereafter execute a Deed of
Confirmation of Sale in favor Del Rosario as soon as the title has been release
and the subdivision plan said Lot 1 has been approved by the Land Registration
Commissioner.
They further alleged that the deed of sale was only an accommodation
graciously extended, out of close friendship between the defendants and the
plaintiff, hence, tantamount to waiver, abandonment or otherwise
extinguishment of the demand set forth in the complaint.

23
Finally, defendants alleged that the claim on which the action or suit is founded
is unenforceable under the statute of fraud s and that the cause or object of the
contract did not exist at the time of the transaction.
The lower court resolved to deny the motion to dismiss.
After actions by respective parties, the lower court ordered the defendants to
execute and convey to plaintiff the 20,000 sq. m. of land to be taken either from
Lot 4 or from Lot 5-A of Custodios lots, which defendants own interests
thereof.
Aggrieved by the aforesaid decision, the defendants filed an appeal with the
court of Appeals which certified the records of the case to the Supreme Court
for final determination..

Issue:
Whether or not the sale is valid as to the cause or object of the contract?

Held:
The judgment appealed from is hereby affirmed in toto, with costs against the
appellants.
The Supreme Court held that the execution of the Deed of Sale is Valid
notwithstanding the lack of any title to the lot by the appellants at the time of
execution of the Deed of Sale in favor of the appellee as there can be a sale of
expected things in accordance with ART 1461 of the Civil Code
Art 1461. Things having a potential existence may be the object of the contract
of sale.
The efficacy of the dale of a mere hope or expectancy is deemed subject to the
condition that the thing will come into existence. The sale of a vain hope or
expectancy is void
The case at bar is not a case of vain hope or expectancy or which is void under
the law. The expectant right came into existence or may materialized for the
appellants actually derived titles from lot 1 which subsequently became the
object of subdivision

24. LUTERO v. SIULIONG & CO

54 PHIL 272

Facts:
Plaintiff entered into a contract with defendant to sell the formers future sugar
crop harvest to the latter at a price depending on the class of the sugar. The
defendant bound itself to pay an advance amount of Php. 3,000 and the
remainder shall be paid from time to time. The contract also stated that should
the plaintiff fail to deliver, he shall pay the amount of the undelivered portion to
the defendant. The plaintiff also entered into a mortgage agreement to secure
his performance in the contract.

Issue:
Whether or not future products are invalid subjects in a contract of sale?

Held:

24
No. The contracts of sale of agricultural products to be delivered in future,
fixing a selling price, are not usurious or illegal, even when the market price of
the products sold should turn out to be higher at the time of delivery.
Contracts of sale of agricultural products to be delivered in future, fixing a
selling price, are not usurious or illegal, even when the market price of the
products sold should turn out to be higher at the time of delivery.

25. KERR & CO., VS LINGAD

38 SCRA 524

Facts:
CIR assessed the sum of P20,272,33 as the commercial broker s percentage
tax, surcharge, and compromise penalty against Kerr & Co. Kerr and Co
requested for the cancellation of the assessment and filed a petition for review
with the Court of Tax Appeals . The Kerr is the distributor of the said company.
Kerr was precluded from disposing the products elsewhere unless there has
been a written consent from the company. The prices, discounts, terms of
payment, terms of delivery and other conditions of sale were subject in the
discretion of the company.

Issue:
Whether the relationship of Kerr and Co. and US rubber was that of a vendor-
vendee or principal- broker?

Held:
The relationship of Kerr and Co. and US rubber was that of principal-broker
agency. Kerr and Co. is only an agent of the US rubber because it can dispose
products of the company only to certain persons or entities and within
stipulated limits, unless excepted by the contract or by the Rubber Company, it
merely receives, accept and/or holds upon consignment the products, which
remain properties of the latter company, every effort shall be made to promote
in every way the sale of the products ad that sales made by the petitioner are
subject to approval by the company. Since the company retained ownership of
the goods, even as it delivered possession unto the dealer for resale for
customers, the price and terms of which were subject to the companys control,
the relationship between the company and the dealer ids one of agency.

26. ASAPHIL CONSTRUCTION and DEVELOPMENT CORPORATION vs

VICENTE TUASON Jr., INDUPLEX, Inc. and MINES ADJUDICATION BOARD
G.R. No. 134030, April 25, 2006

Facts:
Tuason entered into a contract to sell (1st Contract)( with Duplex wherein
Induplex agreed to buy all the Perlite Ore that can be found and mined in
Tuasons mining claim and in return, induplex will assist Tuason to secure his
rights over the mining claim. Then, Tuason executed an Agreement to operate
mining claims (2nd Contract) in favor of Asaphil. Tuason thereafter filed with
the Bureau of Mines- DENR against Induplex and Asaphil for nullity of the two
contracts alleging that the stockholders of Induplex created Ibalon Mineral
Resources Inc. and them extracted in Ibalon Mineral Resources Inc. and then

25
extracted in Ibalons mining claim and thereafter entered into a joint Venture
with Grefo, Inc. which would violate their agreement.

Issue:
Whether or not DENR has jurisdiction over the case?

Held:
No, Section 7 of P.D. 1281 provides
Section 7. In addition to its regulatory and adjudicative functions over
companies, partnerships or persons engaged in mining, development and
exploitation, the Bureau of mines shall have original and exclusive jurisdiction
to hear and decide cases over the following:
a. A mining property subject of different agreements entered into by the claim
holder thereof with several mining operators;
b. Complaints from claimowners that the mining property subject of an
operating agreement has not been placed into actual operations within the
period stipulated therein; and
c. C. cancellation and/or or enforcement of mining contracts due to the refusal
of the claimowner/operator to abide by the terms and conditions thereof.
Tuasons case based on its facts is not a mining dispute, the 2nd contract
although a mining contract does not make a mining dispute, the resolution of
its nullity is not based on Asaphils violation of the conditions but due to
Induplex violation in entering into a joint venture with Grefo ltd. Which is a
judicial question is raised when the determination of the question involves the
exercise of judicial function, which involves the determination of what the law is
all about and what are legal rights of the parties.

27. INCHAUSTI AND CO. VS. ELLIS CROMWELL

G.R. No. L-6584 October 16, 1911
20 Phil 345

Facts:
Inchausti is engaged in the business of buying and selling at wholesale hemp. It
is customary to sell hemp in bales. The operation of bailing hemp is designated
among merchants by the word prensaje. In all sales of hemp by the plaintiff
firm, the price is quoted to the buyer at so much per picul, no mention being
made of bailing; but with the tacit understanding, unless otherwise expressly
agreed, that the hemp will be delivered in bales and that, according to the
custom prevailing among hemp merchants and dealers in the Philippine
Islands, a charge, is to be made against the buyer under the denomination of
prensaje. This charge is made in the same manner in all cases, even when
the operation of bailing was performed by the plaintiff or by its principal long
before the contract of sale was made.
Plaintiff Inchausti has always paid to the defendant Collector of Internal
Revenue or to his predecessor in the office of the Collector of Internal Revenue
the tax collectible upon the selling price expressly agreed upon for all hemp sold
by the plaintiff firm, but has not, until compelled to do so, paid the said tax
upon sums received from the purchaser of such hemp under the denomination
of prensaje.

26
Subsequently, the defendant acting in his official capacity as Collector of
Internal Revenue of the Philippine Islands, made demand in writing upon
plaintiff frim for the payment as tax on sums of money collected from
purchasers of hemp under the denomination of prensaje.
The plaintiff firm paid to the defendant under protest that the tax for the
collected money under the denomination of prensaje is illegal upon the
ground that said charge does not constitute a part of the selling price of the
hemp, but is a charge made for the service of baling the hemp. It is the
contention of the defendant that the said charge made under the denomination
of prensaje is in truth and in fact a part of the gross value of the hemp sold
and of its actual selling price.

Issue:
Whether or not the baled hemp constitute a contract of sale

Held:
The distinction between a contract of sale and one for work, labor, and
materials is tested by the inquiry whether the thing transferred is one no in
existence and which never would have existed but for the order of the party
desiring to acquire it, or a thing which would have existed and been the subject
of sale to some other person, even if the order had not been given. It is clear
that in the case at bar the hemp was in existence in baled form before the
agreements of sale were made, or, at least, would have been in existence even if
none of the individual sales here in question had been consummated. It would
have been baled, nevertheless, for sale to someone else, since, according to the
agreed statement of facts, it is customary to sell hemp in bales. When a person
stipulates for the future sale of articles which he is habitually making, and
which at the time are not made or finished, it is essentially a contract of sale
and not a contract for labor. It is otherwise when the article is made pursuant
to agreement. Where labor is employed on the materials of the seller he cannot
maintain an action for work and labor. If the article ordered by the purchaser is
exactly such as the plaintiff makes and keeps on hand for sale to anyone, and
no change or modification of it is made at the defendant's request, it is a
contract of 40 sale, even though it may be entirely made after, and in
consequence of, the defendant's order for it.
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 to which
the statute of frauds applies. But if the goods are to be manufactured especially
for the purchaser and upon his special order, and not for the general market,
the case is not within the statute.
It is clear to our minds that in the case at bar the baling was performed for the
general market and was not something done by plaintiff which was a result of
any peculiar wording of the particular contract between him and his vendee. It
is undoubted that the plaintiff prepared his hemp for the general market.

28. MAJARABAS, ET. AL. VS. LEONARDO

G.R. No. 4348 September 12, 1908
11 Phil 272

27
Facts:
The plaintiff had rendered services as wet nurse and governess to an infant
daughter of the defendant by virtue of a verbal agreement entered into with the
now deceased parents of the defendant, who, to use the language of the
complaint, " promised to liberally compensate the services of the plaintiff,
providing the maintenance of herself, her husband and their child, during all
the time that the services of the plaintiff where required as such wet nurse and
governess."
It is maintained in the demurrer that the obligation contracted by the parents of
the defendant was to support the plaintiff and her family, and that the reason of
the death of the former, as stated in the complaint, under the provision of
article 150 of the Civil Code, the said obligation has been extinguished in fact
and in law, and the plaintiff cannot therefore, bring suit for compliance
herewith. The demurrer was overruled by the court below on the ground that
aforesaid agreement constituted a contract for services, although the price was
to be measured by the cost of the maintenance of the plaintiff. This ruling has
been assigned as error by the appellant in his brief.

Issue:
Whether or not a contract of services exist although no specified or fixed price
was stipulated

Held:
Yes. It is not necessary that the certainty of the price be actual or determined at
the time of executing the contract, but that it is sufficient compliance with the
law if the same can be determined by the speculations of the contract made by
the party thereto. In the present case the contracting parties fixed the
maintenance of the plaintiff and her family as the price for the services required
of her. Said maintenance is the specific and determinate thing that in its turn
fixes the price, inasmuch as its cost determines the price according to the
agreement of the parties to the contract. There might be a question as to the
actual cost of the plaintiffs maintenance, but this is a matter of fact which in
such a case would have to be proven. Be it as it may, whatever might be the
cost of said subsistence, it would constitute the price for the services rendered
by the plaintiff; said price is unquestionably the specified one since it refers to a
specified thing designated by the parties as the rate regulating the amount
thereof. Therefore, the appellant's allegation is unfounded, and the order of the
court below overruling the demurrer must be affirmed.

29. MITSUI BUSSAN KAISHA VS. THE MANILA E. R. AND L. CO.

G.R. No. L-13753 February 15, 1919
39 Phil 624

Facts:
Prior to December 23, 1914, the plaintiff corporation, Mitsui Bussan Kaisha,
had contracted to sell large quantities of coal to the defendant, the Manila
Electric Railroad and Light Company. Deliveries under this contract were made
from time to time to meet the requirements of the defendant company from
shipments arriving from Japan. The basic price fixed in the contract was P9.45
per long ton, but it was stipulated that the price was subject to modification "in

28
proportion to variations in calories and ash content, and not otherwise." This
means of course and ash contend, and not otherwise." This means of course
that the price could be made certain by the application of known factors.
While extensive deliveries were still to be made under the contract above
referred to, the Legislature, by Act No. 2432, passed December 23, 1914, and
imposed a specific tax of one pose per metric ton on coal. Shortly thereafter this
Act was amended in certain respects by Act No. 2445.
In the period embracing the months from March to October, inclusive, of the
year 1915, the plaintiff company brought to Manila from Japan large quantities
of coal amounting in all to 11,874.75 metric tons for delivery to the defendant
company upon the contract above-mentioned. In order to effect the entrance of
said coal, through the Bureau of Customs, at the port of Manila, it was
necessary for the plaintiff company to pay the new internal-revenue tax
imposed by Acts Nos. 2432 and 2445; and it did in fact pay in satisfaction of
said tax the aggregate sum of P11,874.75. The plaintiff then demanded
reimbursement of said sum from the defendant, basing its claim upon the
provision from Act No. 2445. The defendant refused to accede to this demand,
and the present action was instituted by the plaintiff to recover the amount so
paid out by it. From judgment entered in favor of the plaintiff the defendant has
appealed.

Issue:
Whether or not the parties have already agreed as to a fixed price when a
contract entered into states "in proportion to variations in calories and ash
content and not otherwise"

Held:
Yes. The stipulation means that the price could be made certain by the
application of known factors (Civil Code, art. 1447), and for the purposes of this
case it may be assumed that the price was fixed at P9.45 per long ton. This
provision has exclusive reference to the quality of the coal delivered, and has no
other purpose than to supply a means of ascertaining the value of the coal by
determining its utility combustion.

30. PNB MANAGEMENT AND DEVELOPMENT CORPORATION represented by

ATTY. ARNOLD NAVAL, Complainant, versus CARMELO CACHERO, Sheriff IV,
Regional Trial Court, Manila, Branch 11 and LUISITO GALLARDO, Sheriff IV,
Regional Trial Court, Manila, Branch 38, Respondents.,

Facts:
On 10 June 2002, PNB Management and Development Corporation (PNB
Madecor) filed this administrative complaint against respondents Carmelo
Cachero, Sheriff IV, Regional Trial Court of Manila, Branch 11, and Luisito
Gallardo, Sheriff IV, RTC of Manila, Branch 38. PNB Madecor accused Cachero
and Gallardo of grave misconduct relative to the execution of the trial courts
decision in Civil Case No. 96-72685 entitled Gerardo Uy v. Pantranco North
Express, Inc.
In that case, the trial court ordered Pantranco North Express, Inc. (PNEI) to pay
Gerardo Uy (Uy) P8,397,440.95 consisting of P4,660,558 as principal
obligation, P2,057,394.76 as interest, and P1,679,488.19 in attorneys fees.[1]

29
PNEI, however, had an existing credit against PNB Madecor in the principal
amount of P7,884,921.10. Thus, Gallardo levied on three parcels of land owned
by PNB Madecor and sold them at auction on 24 May 2002.
Before the period for redemption lapsed, the PNB offered to redeem the
properties based on the contract of pledge on PNB Madecor shares of stock
between PNB, as pledgee, and Mega Prime Realty and Holdings Corporation
(Mega Prime), as pledgor. This contract of pledge was executed to secure a loan
agreement between PNB and Mega Prime. It appears that Mega Prime
contracted the loan to buy all of PNBs stockholdings in PNB Madecor, including
the pledged shares and the auctioned real properties.
On 20 February 2003, Gallardo executed a Certificate of Redemption in favor of
PNB.

Issue:
Whether PNB had the right to redeem the auctioned parcels of land.

Held:
The issue of whether PNB had the right to redeem the auctioned parcels of land
cannot be resolved within the confines of an administrative case. We can only
determine if Gallardo exceeded his lawful authority in performing his duties as
sheriff. Gallardo executed a certificate of redemption in favor of PNB based on
its offer to redeem as successor-in-interest of Mega Prime and upon its claim
that PNB Madecor was its wholly-owned subsidiary. Gallardo assumed that
PNB could redeem the properties under Section 27, Rule 39 of the Rules,
whether as pledgee of PNB Madecor shares or as owner of PNB Madecor assets.
Whether Gallardo was legally correct in making such assumption is not an
issue, and cannot be resolved, in this administrative case.
However, we find respondents Luisito Gallardo, Sheriff IV, Regional Trial Court,
Manila, Branch 38, and Carmelo Cachero, Sheriff IV, Regional Trial Court,
Manila, Branch 11, guilty of GRAVE MISCONDUCT. We DISMISS respondent
Luisito Gallardo from the service, with forfeiture of all retirement benefits except
for accrued leave credits, and with prejudice to reemployment in any branch or
instrumentality of the government, including government-owned or controlled
corporations. We SUSPEND respondent Carmelo Cachero for one year, with the
STERN WARNING that a repetition of the same or similar act in the future shall
merit a more severe sanction.

31. MCCULLOUGH VS. AENLLE & CO

3 PHIL 285

Facts:
That there was a perfected contract of sale made by the defendant to the
plaintiff on the 27th day of August, 1901, of all of the tobacco belonging to the
company "La Maria Cristina" and contained in its factory, and in which contract
of sale no particular kind or description of tobacco was sold; nor was there any
sample of the tobacco shown the plaintiff at or before the purchase. That the
transaction was an absolute sale is also clearly expressed in the contract itself.
It states that R. Aenlle & Co. "sell absolutely and in fee simple to E. C.
McCullough, the tobacco and cigarette factory known as "La Maria Cristina"
located at No. 36 Calle Echague, Plaza de Goiti, Santa Cruz as shown in

30
inventory to be drawn up for the purpose of making formal delivery of the said
property."
It is further stated in the contract that "the value of the tobacco, both in leaf
and in process of manufacture, will be fixed at the invoice price." The inventory
which was to be drawn up was for the purpose of ascertaining with exactness
(among other property conveyed) the amount of the tobacco in leaf and the
invoice price at which the plaintiffs had purchased it.
It was the intention of the defendants to sell and the plaintiffs to buy the leaf
tobacco on hand in the factory known as "La Maria Cristina" without reference
to its description or kind. It is true that the inventory afterwards made out
continued a description of the tobacco, and that the kind delivered was not in
accordance with this description. If the contract was doubtful in its terms the
act of the parties in making the inventory as placing this construction upon
that part relating to the inventory might be important, but the contract is too
plain in this particular to invoke rules of construction. That the tobacco sold
had defects which diminished its value in such a way that had the plaintiff
known of them he would not have given the price which he paid, but would
have given a lower price for it.
That the defects in said tobacco, by reason of the tobacco being contained in
bales, were hidden defects. There being no sample of the tobacco exhibited by
the defendants at or before the sale, and no description of the kind of tobacco
contained in the contract of sale, the plaintiff was entitled to receive the tobacco
contained in the factory of "La Maria Cristina" free from hidden defects; and the
measure of his damages is the difference between the value of the tobacco, had
it been free from hidden defects, and the value of the tobacco delivered as
reduced in value by the hidden defects.

Issue:
Whether or not such defects in the quality of the tobacco were hidden defects.

Held:
There is no evidence to show that any representations as to the quality of the
tobacco were made to the plaintiff by the defendant prior to the contract of
August 27, nor that there was any agreement prior to that time as to an
exhibition of samples nor that the plaintiff prior to that 45

time made any examination or inquiry as to the quality of the tobacco. The fact
is that the plaintiff in order to get the building had to buy the factory and
everything that went with it. He saw himself obliged to take all the tobacco
which the defendant had, no matter what its quality was. The defendant was
not willing to sell him the building and the good tobacco which it had on hand,
retaining itself of poorer quality. He had to take it all or not get the building. He
probably though that he was safe in agreeing to pay no more than the
defendant had paid. But, however this may be and whatever may have been his
reasons therefor, it is certain that the plaintiff bound himself by the contract of
August 27 to take all the tobacco which the defendant then had any pay
therefor the prices that the company had paid. He could relieve himself from
this obligation only by showing either that the tobacco in the inventory was not
owned by the defendant on August 27 or that the prices stated therein were not
the prices which the defendant paid for it. He undertook to do neither of these

31
things, and his action must fail. The right to rescind a contract for lesion when
the value is less than half of the purchase price, given by Law 56, title 5,
partida 5, has been expressly taken away by article 1293 of the Civil Code.
Article 1474 of the Civil Code has no application in this case. The fact that an
article is of one grade or quality instead of another does not constitute a hidden
defect within the meaning of that article.
By section 497, Code of Civil Procedure, we are authorized in cases of this kind
to find the facts from the evidence and "render such final judgment as justice
and equity require."
The judgment below is reversed. We find the facts to be as hereinbefore stated
and upon such facts we hold as a conclusion of law that the plaintiff can not
recover. Judgment will be entered that the plaintiff take nothing by the action
and that the defendant recover the costs of both instances, and after the
expiration of twenty days the cause shall be returned to the lower court for
execution.

32. ROBLES vs. LIZARRAGA

50 PHIL. 387

Facts:
A parcel of land was originally owned by the parents of the present plaintiff,
Zacarias Robles. Upon the death of his father, plaintiff leased the parcel of land
from the administrator with the stipulation that any permanent improvements
necessary to the cultivation and exploitation of the hacienda should be made at
the expense of the lessee without right to indemnity at the end of the term. As
the place was in a run-down state, and it was foreseen that the lessee would be
put to much expense in bringing the property to its productive capacity, the
annual rent was fixed at the moderate amount of P2,000 per annum.
The plaintiff made various improvements and additions to the plant. The firm of
Lizarraga Hermanos was well aware of the nature and extent of these
improvements.
When the plaintiffs mother died, defendant came forward with a proposal to
buy the heirs portion of the property. In consideration that the plaintiff should
shorten the term of his lease to the extent stated, the defendant agreed to pay
him the value of all betterments that he had made on the land and furthermore
to purchase from him all that belonged to him personally on the land. The
plaintiff agreed to this.
On the ensuing instrument made, no reference was made to the surrender of
the plaintiffs rights as lessee, except in fixing the date when the lease should
end; nor is anything said concerning the improvements which the plaintiff had
placed. At the same time the promise of the defendant to compensate for him
for the improvements was wanting. Accordingly, the representative of the
defendant explained that this was unnecessary in view of the confidence
existing between the parties.
On the part of the defendant it was claimed that the agreement with respect to
compensating the plaintiff for improvements and other things was never in fact
made.

Issue:

32
1.Whether or not the lessee may contest the validity of a written contract with
oral evidence 2. Whether or not the appreciation value can be used to determine
the price

Held:
1. Yes. In case of a written contract of lease, the lessee may prove an
independent verbal agreement on the part of the landlord to put the leased
premises in a safe condition. The verbal contract which the plaintiff has
established in this case is therefore clearly independent of the main contract of
conveyance, and evidence of such verbal contract is admissible under the
doctrine above stated. In the case before us the written contract is complete in
itself; the oral agreement is also complete in itself, and it is collateral to the
written contract, notwithstanding the fact that it deals with related matters.
2. Yes. The stipulation with respect to the appraisal of the property did not
create a suspensive condition. The true sense of the contract evidently was that
the defendant would take over the movables and the improvements at an
appraised valuation, and the defendant obligated it to promote the appraisal in
good faith. As the defendant partially frustrated the appraisal, it violated a term
of the contract and made itself liable for the true value of the things contracted
about; as such value may be established in the usual course of proof.
Furthermore, an unjust 47 enrichment of the defendant would result from
allowing it to appropriate the movables without compensating the plaintiff
thereof.

33. ASKAY vs COSALAN

46 PHIL. 179

Facts:
The plaintiff Askay is an illiterate Igorrote between 70 and 80 years of age,
residing in the municipal district of Tublay, Province of Benguet, who at various
time has been the owner of mining property. The defendant is Fernando A.
Cosalan, the nephew by marriage of Askay, and municipal president of Tublay,
who likewise has been interested along with his uncle in mining enterprises.
About 1907, Askay obtained title to the Pet Kel Mineral Claim located in Tublay,
Benguet. On November 23, 1914, if we are to accept defendant's Exhibit 1,
Askay sold this claim to Cosalan. Nine years later, in 1923, Askay instituted
action in the Court of First Instance of Benguet to have the sale of the Pet Kel
Mineral Claim adhered null, to secure possession of the mineral claim, and to
obtain damages from the defendant in the amount of P10,500. Following the
presentation of various pleadings including the answer of the defendant, and
following trial before Judge of First Instance Harvey, judgment was rendered
dismissing the complaint and absolving the defendant from the same, with
costs against the plaintiff. On being informed of the judgment of the trial court,
plaintiff attacked it on two grounds: The first, jurisdiction, and the second,
formal. Both motions were denied and an appeal was perfected. Acting under
the authority granted by the order of the Secretary of Justice, Judge Harvey
proceeded to hear the case of Askay vs. Cosalan, without protest from anyone
until after an adverse decision for the plaintiff and until after Judge Harvey had
left the district.

33
The point which plaintiff now presses is that Act No. 3107, amendatory of
section 155 of the Administrative Code, which authorizes a Judge of First
Instance to be detailed by the Secretary of Justice to temporary duty, for a
period which shall in no case exceed six months, in a district or province other
than his own, for the purpose of trying all kinds of cases, excepting criminal
and election cases, was not in force until fifteen days after the completion of the
publication of the statute in the Official Gazette, or not until August 3, 1923.
Also, plaintiff contends that the sale of the Pet Kel Mineral Claim was
accomplished through fraud and deceit on the part of the defendant. Plaintiff
may be right but in our judgment he has failed to establish his claim. Fraud
must be both alleged and proved.

Issue:
Whether or not, Judge George R. Harvey had jurisdiction to try the case.
Whether or not, the plaintiff has established his cause of action by a
preponderance of the evidence.

Held:
1.Yes. Judge Harvey had jurisdiction to try this case,that his findings of fact are
in accordance with the evidence, that no prejudicial error was committed in the
trial, and that the complaint was properly dismissed. Because that Act No.
3107 went into effect on March, 17, 1923, and that it was subsequent thereto,
on April 16, 1923, that Judge Harvey was authorized to hold court at Baguio,
beginning with May 2, 1923, appellant's argument along this line is found to be
without persuasive merit. 49

2. But the fact that the bargain was a hard one, coupled with mere inadequacy
of price when both parties are in a position to form an independent judgment
concerning the transaction, is not a sufficient ground for the cancellation of a
contract. The document itself executed in the presence of witnesses and before
a notary public and filed with the mining recorder. The notary public, Nicanor
Sison, and one of the attesting witnesses, Apolonio Ramos, testified to the effect
that in the presence of the plaintiff and the defendant and of the notary public
and the subscribing witnesses, the deed of sale was interpreted to the plaintiff
and that thereupon he placed his thumb mark on the document. Two finger
print experts, Dr. Charles S. Banks and A. Simkus, have declared in
depositions that the thumb mark on Exhibit 1 is that of Askay. No less than
four other witnesses testified that at various times Askay had admitted to them
that he had sold the Pet Kel Mine to Fernando A. Cosalan.

34. SPOUSES MARIO ONG and MARIA CARMELITA ONG, and DEMETRIO
VERZANO vs SPOUSES ERGELIA OLASIMAN and LEONARDO OLASIMAN
GR. No. 162045, March 28,2006

Facts:
Paula Verzano (Paula) sold an unregistered parcel of land covered by Tax
Declaration No. 18-270-A, in her name to her niece Bernandita Verzano-
Matugas (Bernandita)-daughter of her brother Isebero, situated at Mampas,
Valencia, Negros Oriental, bounded on the North by Crisanta Abequibel, 62.00
m.; on the East by Victoria Verzano, 90.00 m.; on the South by Demetrio

34
Abante, 62.00 m.; and, on the West by Vicente Darong, 90.00 m., containing an
area of .5518 square meters, more or less. A road traversed the land, dividing it
into two lots: Lot 4080, Cad. 903, with an area of approximately 3,624 sq. m.,
covered by Tax Declaration No. 20-020-0174;[4] and Lot 4091, Cad. 903, with
an area of approximately 506 sq. m. Bernandita took initial steps to register the
land but failed to complete the registration process.
Verzano executed a public document entitled Extrajudicial Settlement by Sole
Heir and Sale, wherein he adjudicated exclusively unto himself Lot 4080, Cad.
903 (the questioned lot) and sold it to petitioner Carmelita Ong. On November
28, 1997, respondents filed a Complaint against petitioners, for annulment of
the Extrajudicial Settlement by Sole Heir and Sale, quieting of title, and
damages before the Regional Trial Court (RTC) of Dumaguete City. They alleged,
inter alia, that they, through their predecessors-in-interest, have been in actual,
continuous and adverse possession of the questioned lot since time immemorial
until mid-February 1996 when petitioners spouses Ong disturbed them in their
possession by fencing the same; and petitioner Verzano executed the
Extrajudicial Settlement by Sole Heir and Sale fraudulently.
In their Answer (with Affirmative Defenses and Compulsory Counterclaim),
petitioners alleged that respondents, not being co-heirs, are not the real parties
in interest; and the RTC has no jurisdiction over the case as their cause of
action is more of forcible entry.

Issue:
Whether or not that the said lot involve a double sale

Held:
No. The case does not involve a double sale, The trial courts application of
Article 1544 of the Civil Code was erroneous. For respondents bought the
questioned lot from Bernandita to whom it was sold by the original owner
Paula, whereas petitioners bought it from Verzano whose claim to ownership
arose from the Extrajudicial Settlement by Sole Heir and Sale. When Paula sold
to Bernandita by Deed of Absolute Sale dated June 1, 1992 the parcel of land of
which the questioned lot formed part, ownership thereof was transferred to the
latter in accordance with Article 1496 of the Civil Code reading:
ART. 1496. The ownership of the thing sold is acquired by the vendee from the
moment it is delivered to him in any of the ways specified in articles 1497 to
1501, or in any other manner signifying an agreement that the possession is
transferred from the vendor to the vendee,
When Paula died on November 26, 1992, she no longer owned the questioned
lot and, therefore, her brother petitioner Verzano could not have inherited it.
The Extrajudicial Settlement by Sole Heir and Sale did not thus confer upon
Verzano ownership of the questioned lot; hence, he could not have conveyed it
to petitioners spouses Ong. Parenthetically, the execution by 51

Verzano of the Extrajudicial Settlement by Sole Heir and Sale is fraudulent, he

having falsely stated therein that his deceased sister Paula left no known debts,
neither has she left any ascendants or descendants or any other heirs, except
myself being his brother despite the fact that other heirs his sister Victoria and
the four children of his deceased brother Isebero were still alive. Petitioners
insistence that Article 1544 on double sales should apply does not lie. Article

35
1544 applies where the same thing is sold to different vendees by the same
vendor .It does not apply where the same thing is sold to different vendees by
different vendors as in the case at bar. Finally, petitioners claim of good faith
does not lie too as it is irrelevant:
[T]he issue of good faith or bad faith of the buyer is relevant only where the
subject of the sale is registered land and the purchaser is buying the same from
the registered owner whose title to the land is clean xxx in such case the
purchaser who relies on the clean title of the registered owner is protected if he
is a purchaser in good faith for value. Since the properties in question are
unregistered lands, petitioners as subsequent buyers thereof did so at their
peril. Their claim of having bought the land in good faith, i.e., without notice
that some other person has a right to or interest in the property, would not
protect them if it turns out, as it actually did in this case, that their seller did
not own the property at the time of the sale.
WHEREFORE, the assailed October 14, 2003 Decision of the Court of Appeals
is AFFIRMED. This Decision is WITHOUT PREJUDICE to the filing of any action
which petitioner-spouses Mario Ong and Maria Carmelita Ong may maintain
against their co-petitioner Demetrio Verzano.

35. WARNER, BARNES & CO., LIMITED VS. SANTOS

G.R. No. L-4932 November 16, 1909 14 Phil. 446

Facts:
Plaintiff brought an action for the purpose of foreclosing a mortgage. Later the
cause was brought on for trial, and after hearing the evidence adduced during
the trial, the lower court rendered a judgment in favor of the plaintiff. The
judgment of the lower court further provided that if the defendant failed to pay
the amount of aid judgment that an execution might issue against the property.
On the 6th day of March, 1908, upon the petition of the plaintiff, the amount of
said judgment not having been paid, judge of said court, issued an order of
execution, directing the sheriff to sell the property covered by the said
mortgage. The mortgaged property, under said execution, was duly sold on the
10th day of April, 1908. On the 21st day of April, 1908, the defendant appeared
in the court and objected to the confirmation of the sale upon the ground that
there was another person who would pay the sum of P5,500 for the property
sold. The return of the sheriff shows that he sold the property for the sum of
P4,715.
The defendant in said motion requested that the property be put up and sold
again. It will be noticed that the defendant appeared and objected to the
confirmation of the sale eleven days after the sale had been consummated, and
so far as the record discloses this was his first appearance during the pendency
of the cause in the lower court. On the 21st day of April, 1908, after duly
considering the objection made by the defendant, the lower court overruled the
said objection and confirmed the sale of said property.

Issue:
Whether or not the objection of the defendant to the confirmation of the sale
constituted a sufficient cause for refusing to confirm such sale.

Held:

36
The basis of the objection of the defendant in the lower court was that he was
able to obtain from another person about P800 more than the sheriff received
from the person to whom he sold said property. This person was not discovered
by the defendant until ten or twelve days after the sale took place. No objection
is made by the defendant that the sale was not duly advertised or that there
was any collusion on the part of the sheriff or the other parties interested in the
sale. It is the duty of the court, of course, in the sale of the property under the
conditions of the present case, to obtain as much money for the judgment
debtor out of his property as it is possible. This duty on the part of the court,
however, does not justify negligent delay in an attempt to protect his rights on
the part of the said judgment debtor. In the present case the defendant made
no attempt to defend his rights until some days after judgment, execution, and
sale. The Supreme Court of the United States has held in numerous decisions,
that a sale under foreclosure proceedings would not be set aside upon the
ground that the sheriff did not receive as much money as he might have
received, providing all of the proceedings were valid and regular, unless the sale
was made for a sum grossly inadequate in comparison with the real value of the
property. 53

36. PHILIPPINE NATIONAL BANK VS. GONZALEZ

45 Phil. 693 , November 23, 1921

Facts:
On November 23, 1921, Philippine National Bank commenced a suit against
Manuel Ernesto Gonzales to foreclose a real mortgage made to secure a
promissory note for P15,000. March 17, 1922, the plaintiff bank filed an
amended complaint against the same defendant, in which the original was
reproduced, to foreclose a second mortgage for P15,000 upon the same land
described in the original complaint. The bank filed for default and the court
subsequently declared defendant in default.
On January 11, 1923, an execution was issued for the sale of the real property
described in the mortgages to satisfy the amount of the judgment. On August
28, 1922, the total of the judgment in the first cause of action, including the
interest, was P17,313.59, and in the second mortgage, on the same date, it was
P17,755. February 16, 1923, the sheriff filed a motion to confirm the sale to
Lopez and the court made an order duly conforming the sale. April 5, 1923, the
defendant Gonzales, through his then attorney, filed a motion for
reconsideration of the order entered in this case April 16, 1923, the court
rendered a decision in which he found as a fact that all of the necessary
requisites for the notice of sale had been duly complied with but that it
appeared that the value of the land, which was sold to the appellant, was
P45,940, for which he did only 15,000, and on account of this difference in
value for taxation purposes and the value for which the land was sold, the court
set aside the confirmation, and ordered a resale "thereby giving the aforesaid
defendant a greater opportunity in order that he may obtain a better price, if
possible, from the sale of the aforesaid lands."
From that order, Lopez appeals, assigning as error that "the trial court erred in
setting aside, without good cause having been shown, the prior order
confirming the judicial sale, and ordering the resale of the land in question.

37
Issue:
Whether or not the trial court erred in setting aside the decision.

Held:
It will be noted that in the first instance, the trial court confirmed the sale on
the motion of the sheriff, and that in the last order, he specifically found as a
fact that there had been a compliance of all of the essential requisites for a sale
on execution, and that the order, confirming the sale, was set aside upon the
sole ground of inadequacy of consideration. It will also be noted that in the
motion to set aside the sale, the only ground specified is "that order is not in
accordance with law." In other words, in the motion itself no grounds are
specifically set forth or alleged as to why the sale should be set aside, and that
in the body of the motion, it is not claimed that the land was sold for an
inadequate consideration. Not a witness was called to testify as to the value of
the land. In other words, the only evidence before the court as to value was the
certificate of the deputy municipal treasurer, and that was to the effect that the
four pieces of land therein described had an assessed valuation of P45,940.
Neither was there any showing made nor any evidence presented, that, in the
event the property in question was resold, that it would sell for more than
P15,000. That as to the land in question, it appears of record that on August
28, 1922, the amount of the bank's judgment was P17,313.59. It also appears
that the bank was personally represented at the sale, and that it refused to bid
more than P15,000. For such reason, the property was sold to Lopez, as the
highest bidder. In other words, it appears of record that the bank itself
consented and agreed to the sale of the property in question for more than
P3,000 less than the amount of its claim. 54

37. THE DIRECTOR OF LANDS VS. ABARCA

G.R. No. L-38581 December 18, 1934 61 Phil. 70

Facts:
The lot now in question was the subject of litigation between Datu Bualan and
his coclaimants, on the one hand, and Ciriaco Lizada, on the other. Juan A.
Sarenas and Domingo Braganza were the attorneys for Datu Bualan and his co-
claimants in that suit, wherein a judgment was rendered declaring Datu Bualan
and his co-claimants the owners of the land involved in the litigation.
Subsequently, a controversy arose between the Bagobos and their attorneys as
to the amount of fees due the latter, whereupon the attorneys took possession
of the property now in question. Action was brought by the Bagobos against
their former attorneys for the recovery of the land. In this action (civil case No.
607) judgment was rendered ordering the attorneys to return the property
seized by them, and requiring the Bagobos to pay their former attorneys the
sum of P6,000 as fees.
As a result of this judgment Datu Bualan and his coclaimants paid Sarenas
and Braganza the sum of P5,126.13. They also paid to the municipal treasurer
of Davao in the name of Sarenas and Braganza, for taxes and penalties due on
the property in the year 1926, while the same was in the possession of the
latter, the sum of P1,035.87. The Bagobos assumed that, by these payments
which amounted in all to P6,162, the judgment rendered against them for
P6,000 together with interests due thereon, was fully satisfied. Claiming that

38
the sum paid to the municipal treasurer of Davao should not be credited on the
amount of the judgment obtained by them, Sarenas and Braganza caused the
clerk of the court to issue a writ of execution on the said judgment. By reason
of the writ of execution so issued, the sheriff levied on the property here in
question and sold it to Sarenas and Braganza for the sum of P877.25. Upon the
failure of the Bagobos to redeem the property, they filed their claim in the
present cadastral case, alleging that they were the absolute owners of lot No.
700.

Issue:
Whether or not the sum paid by the Bagobos to the municipal treasurer should
be credited.

Held:
Yes, it should be credited. In fairness and equity, which after all are the true
aims of the law, the amount paid by Datu Bualan and his co-claimants for
taxes and penalties due on the contested property should be credited on the
judgment obtained by Sarenas and Braganza in civil case No. 607. Such taxes
and penalties accrued while the property was in that possession under a claim
of ownership. It follows that the error assigned by Datu Bualan and his
coclaimants against the judgment below, to the effect that the lower court erred
in subjecting the property sought to be registered to a lien in favor of Sarenas
and Braganza for P877.25 with interests, must be sustained.

38.HEIRS OF SPOUSES EUGENIO NATONTON and REGINA ARCILLA, namely:

EMILIANA, EUGENIO, JR., MARIA CORAZON and ENRIQUE, all surnamed
NATONTON, Petitioners, vs. SPOUSES EULOGIO MAGAWAY and LILY P.
MAGAWAY, Respondents.
G.R. No. 147011 , March 31, 2006

Facts:
Spouses Eugenio and Regina Natonton were the registered owners of a parcel of
land covered by Transfer Certificate of Title (TCT) No. 18660 of the Registry of
Deeds of Quezon City. On December 23, 1968, Regina died. The property was
then transferred and registered in the name of her husband Eugenio under TCT
No. 150333.
Subsequently, Eugenio died. Shortly thereafter, herein petitioners Emiliana,
Eugenio, Jr., Maria Corazon, and Enrique, all surnamed Natonton, heirs of the
deceased couple, found that their father, during his lifetime, sold the property
to spouses Eulogio and Lily Magaway, respondents, for a consideration of
P230,000.00, as shown by a deed of absolute sale dated July 27, 1979. TCT No.
150333 in the name of Eugenio was then cancelled and in lieu thereof, TCT No.
2839333 was issued in the names of spouses Eulogio and Lily Magaway.
On June 18, 1990, petitioners filed with the Regional Trial Court, Branch 82,
Quezon City, a "Complaint for Declaration of the Inexistence of Contract,
Cancellation of Title and of Mortgage and Damages" against Responlogio and
Lily Magaway in the trial court wrote a letter to Eulogio Magaway tendering his
irrevocable resignation as their legal counsel effective April 30, 1997.
Whereupon, on September 3, 1999, the law firm of Inocentes Untalan and
Untalan entered its appearance as counsel for the appellants-spouses "in view

39
of the resignation of the counsel of record, Atty. Victorino Alba attaching
thereto a copy of the letter resignation of the latter. On September 14, 1999,
this Court noted the entry of appearance of the said law-firm "in view of the
resignation of the former counsel". It is not; therefore, true that Atty. Victorino
Alba was not properly substituted by the law firm of Inocentes Untalan and
Untalan. Hence, the appellants' brief filed by the same law firm, through Atty.
Jonathan Amoroso, is valid and it effectively prevented the appealed decision
from becoming final and executory.
The appellees surmise that the letter of resignation of Atty. Alba is false because
in it, Atty. Alba indicated that he was to retire as counsel effective April 30,
1997, yet on November 7, 1997, it was he who remitted the lacking appellate
docket fee in the amount of P5.00 and that, furthermore, on September 3,
1997, he filed the appellants' Opposition to Partial Motion for Reconsideration.
Atty. Alba, however, cannot be blamed for taking such actions because at that
time, no counsel had yet filed an appearance in his stead. The Inocentes
Untalan & Untalan Law Office entered its appearance only on September 3,
1999 as aforestated, which was noted by this court on September 14, 1999.
On August 25, 2000, a petitioner filed a Motion for Reconsideration but was
denied for lack of merit by the Court of Appeals in its second assailed
Resolution dated January 31, 2001.

Issue:
Whether the Appellate Court erred in not dismissing the appeal interposed by
respondents for their failure to file their brief on time.

Held:
The petition must fail. It must be stressed that respondents filed their notice of
appeal within the reglementary period. Consequently, the Court of Appeals
acquired jurisdiction over the case. However, respondents failed to file their
appellants' brief on time. When the Appellate 56

Court has already obtained jurisdiction over the appealed case, this Court has
exempted cases (wherein appellants' briefs were not seasonably filed) from the
strictures of procedural rules.
Technically, the Court of Appeals may dismiss an appeal for failure to file
appellant's brief on time. However, the dismissal is directory, not mandatory. It
is not the ministerial duty of the court to dismiss the appeal. The failure of an
appellant to file his brief within the time prescribed does not have the effect of
dismissing the appeal automatically. The court has discretion to dismiss or not
to dismiss an appellant's appeal. It is a power conferred on the court, not a
duty. The discretion must be a sound one, to be exercised in accordance with
the tenets of justice and fair play, having in mind the circumstances obtaining
in each case. We observe that petitioners' arguments are based on technical
grounds. While indeed respondents did not file their brief seasonably, it was not
mandatory on the part of the Court of Appeals to dismiss their appeal. As held
by this Court in the above-cited cases, late filing of brief may be excused. In
other words, the dismissal of respondents' appeal on that ground is
discretionary on the part of the Appellate Court.
Significantly, there is no showing that petitioners suffered a material injury or
that their cause was prejudiced when respondents failed to submit their brief

40
promptly. What is clear is that the latter incurred delay in the filing of their
brief because when the deadline fell due, they were not yet represented by a
new counsel.
The Rules of Court was conceived and promulgated to set forth guidelines in the
dispensation of justice, but not to bind and chain the hand that dispenses it,
for otherwise, courts will be mere slaves to or robots of technical rules, shorn of
judicial discretion. That is precisely why courts, in rendering justice, have
always been, as they in fact ought to be, conscientiously guided by the norm
that on the balance, technicalities take a backseat to substantive rights, and
not the other way around. As applied to the instant case, in the language of
then Chief Justice Querube Makalintal, technicalities "should give way to the
realities of the situation.
Lastly, the demands of substantial justice and fair play make it absolutely
necessary for the Appellate Court to judiciously resolve the issues before it.
Dismissing respondents' appeal might give rise to the impression that it may be
fostering injustice should their case turn out to be meritorious. Hence, it is a
more prudent course of action for the Appellate Court to excuse a technical
lapse and afford respondents herein a review of their case to attain the ends of
justice.
The petition is DENIED. Costs against petitioners.

39. AURORA DE LEON vs. HON. SERAFIN SALVADOR and EUSOBIO

BERNABE
36 SCRA 567, G.R. No. L-30871, December 28, 1970
EUSEBIO BERNABE vs. HON. FERNANDO CRUZ and AURORA P. DE LEON
36 SCRA 567, G.R. NO. L- 31603, December 28, 1970

Facts:
On November 8, 1966 two parcels of land of 682.5 square meters each
registered in the names of Bernabe of Caloocan City was levied on execution for
damages incurred to Enrique de Leon by herein respondent-debtor, the said
properties were sold to Aurora (sister of the judgment creditor) as the highest
bidder. Thereafter, the sheriff executed the corresponding certificate of sale of
the latters favor, which was duly registered on February 21, 1967 with the
Caloocan City register of deeds.
On February 7, 1968, just about two weeks before the expiration of the one-
year period to redeem the properties sold in execution, the judgment debtor
Bernabe filed a separate civil action against Enrique and Aurora de Leon for the
setting aside or annulment of the execution sale for being anomalous and
irregular, and for ordering of a new auction sale. Instead of filing this case to
Judge Cruz which had issued the writ of execution, the other branch of the
Rizal Court of First Instance presided by Judge Serafin Salvador, who later
issued a writ of preliminary injunction enjoining therein defendants from taking
further proceedings against the properties of Bernabe. Pending his decision,
Judge Salvador issued an order ordering the sheriff to allow respondent-debtor
to redeem the two properties sold at public auction.

Issue:
Which of the courts has the exclusive jurisdiction to set aside for alleged
irregularities of the execution sale.

41
Held:
It is patent that such exclusive jurisdiction was vested in Judge Cruz court.
Having acquired jurisdiction over and rendered judgment that had become final
and executor, it retained jurisdiction over its judgment, to the exclusion of all
other coordinate courts for its execution and all incidents thereof, and to
control, in furtherance of justice, the conduct of its ministerial officers in
connection therewith. Execution of its judgment debtors properties, Eusebio
Bernabe as judgment debtor coyld not in the guise of a new and separate
second action ask another court of coordinate jurisdiction, to interfere by
injunction with the execution proceedings, to set them aside and to order the
holding of a new execution sale instead of seeking such relief by proper
motion and application from Judge Cruz court which had exclusive jurisdiction
over the execution proceedings and the properties sold at the execution sale.
Aside from the basic lack of jurisdiction of Judge Salvadors court to issue the
redemption order, the order per se suffered from other grave flaw for a reason
that Bernabes motions were presented on May 12 and May 15, 1969 and it was
self-evident from the record that the one-year period for redemption had long
expired more than a year ago. Furthermore, nothing in the record indicates that
the latter had ever timely made a valid offer of redemption so as to safeguard
his right thereto. 58

40. JOHANNA HOFER BORROMEO vs. DR. VENUSTANO H. J. BORROMEO,

et.al
G.R. No. L-7548, February 27, 1956

Facts:
Johanna Hofer Borromeo, widow of the late Dr. Maximo Borromeo who died on
July 31, 1948, alleged that during her marriage with the deceased, the latter
bought a certain real property situated in Cebu, this property becoming one of
the conjugal properties of her husband and herself, that in June 1948, before
his death and at the time when he was seriously ill and bedridden, her husband
signed, or was made to sign, a fictitious deed of sale of said property in favor of
Dr. Venustiano H.J. Borromeo and Dr. Jose Borromeo purporting to convey
said property to them for P3,000 and that the property was assessed at P42,480
and had a market value of P80,000 and there was a mortgage thereon of
P125,000 in favor of the Rehabilitation Finance Corporation.

Issue:
Whether or not the complaint made by the wife under a conjugal partnership is
a mere expectancy and does ripen into legal title until a liquidation has been
made.

Held:
According to Article 1413 of the Old Civil Code that the husband, as the
administrator is given the power to dispose of conjugal property under onerous
title without the consent of the wife, however the second paragraph thereof
states that this power has limited by the reservation that the wifes rights will
not be prejudicated by the assignment or sale made by the husband, when

42
such violates the provisions of the Code or is in fraud of the rights of the wife.
The instances, therefore, to which said refer those eases of sales, conveyances
or assignment which have been made under onerous title, violating such
provision. Said contract have the three essential requisites: a.) Consent of the
parties b.) Subject matter and c.) Consideration. In the latter case, said contract
or agreements lack one of the essential elements for their vailidity, namely,
cause or consideration, and therefore, they are considered as non-existent. It is
under this category that the fictitious sale, alleged in the case at bar to have
been executed by the husband without consideration or with false
consideration, falls.
Considering that one committed by the husband was of non-existent contract, it
is not correct therefore, to hold that the right of the wife to assail its
effectiveness is made to depend upon the outcome of the liquidation of the
conjugal partnership. 59

41. SANTIAGO CRUZADO vs. ESTAFANIA BUSTOS and MANUEL ESCALER

34 Phil 17, No. 10244, February 29, 1916

Facts:
On September 25, 1913 Cruzado alleged that he was the owner of a certain
rural property situated in the Barrio of Dolores formerly San Isidro,
Municipality of Bacolor, Pampanga containing an area of sixty five balitas which
the defendant Bustos together with the other defendant had, since the year
1906 been detaining the land and refused to deliver possession thereof to the
petitioner. Estafania Bustos, herein respondent, in defense, said that the title of
the land produced by the petitioner was not a lawful one, for the reason that
only a simulated sale of the land was made by and between herself and the
father of the petitioner. During the cross-examination set forth, it showed that
during the time of the purchased of Escaler to Bustos there was no record in
the property registry to show that the land in question belonged to a third
person or any other than the vendor.

Issue:
Whether or not the deed of sale was simulated not to defraud third party but to
show that the father of herein petitioner owns a real property in order to
faithfully discharged his duties as procurador.

Held:
It is unquestionable that the contract of sale of the sixty five balitas of land was
perfect and binding upon both contracting parties, since they both appear in
that instrument to have agreed upon the thing sold, but it is also undeniable
that the said contract was not consummated, inasmuch as, notwithstanding
that the deed of sale was accomplished and this document was kept by the
pretended purchaser, it is positively certain that the latter did not pay the
purchase price and never took possession of land apparently sold in the said
deed.
The simulation of that sale was effected by making a pretended contract which
bore the appearance of truth, when really and truly there was no contract,
because the contracting parties did not in fact intend to execute one, but only

43
to formulate a sale in such a manner that, for that particular purpose sought
by Cruzado and Bustos, it would appear to have been celebrated that the
former might hold his office of procurador on the strength of the security
afforded by the value of the land feignedly sold. 60

42. SPOUSES FRANCISCO and BERNARDINA RODRIGUEZ

vs.
HONORABLE COURT OF APPEALS, et.al
G.R. No. 142687, July 20, 2006

Facts:
On April 27, 1992, spouses Antonio and Maridel Calingo and spouses
Christopher and Ma. Angelica Barrameda entered into a contract of sale with
assumption of mortgage where the former sold to the latter their house and lot
located at No. 7903 Redwood St., Marcelo Green Village, Paraaque, Metro
Manila, under which, prior to the said contract it was mortgaged to the
Development Bank of the Philippines and was later absorbed by Home Mutual
Development Fund or Pag-ibig. Barrameda spouses wrote HMDF Mortagage and
Loands Division informing the office thay they have purchased the property to
Calingos spouses and that they filed a notice of adverse claim with the Register
of Deeds of Paraaque. However, not too long from the written notice of spouses
buyers, a notice of levy with attachment by virtue of writ of execution was
annotated at the back of the certification of title of the property issued by Judge
Abad Santos involving a claim by herein petitioners and granted the same.

Issue:
Whether or not respondents Barramedas adverse claim on the property should
prevail over the levy on execution issued by another court.

Held:
The Supreme Court decided that it cannot prevail. Section 51 of P.D. No. 1529
otherwise known as The Property Registration Decree requires that such
document shall be registered with the Register of Deeds in order to be binding
on third persons. The act of registration shall be the operative act to convey or
affect the land insofar as third persons are concerned. Section 55 of the same
Act requires the presentation of the owners duplicate certificate of title for the
registration of any deed or voluntary instrument with the Register of Deeds,
who in turn, makes a brief memorandum thereof upon the original and owners
duplicate certificate of title. However, when the owner refuses to surrender such
title, the grantee may file a statement setting forth his adverse claim, as
provided for in Section 110 of Act No. 496, such annotation of the instrument
upon the entry book is sufficient to affect the real estate to which it relates.
In the case at bar, respondents Barrameda and Calingos reasons for the non-
registration of the deed of sale with assumption of mortgage was that the
owners duplicate copy was in the possession of HMDF. However, they exerted
no effort to retrieve the same, furthermore, Calingo did not even seek to obtain
the consent of his mortgagee of the sale of the property, this despite the
provision in the contract of mortgage prohibiting the mortgagor from selling or
disposing the property without the written consent of the mortgagee. The deed

44
of sale was a registrable instrument however it was not shown that there was a
justifiable reason why the deed could not be registered.

43. GARDNER v. CA DIGEST

G.R. No. L-59952 ; 131 SCRA 585 ; August 31, 1984

Facts:
The case involve several transfers of the subject real property. It appears that
petitioners the Gardner spouse enter into an agreement with Respondent
spouses, the Santoses to subdivide 2 parcels of land and executed an absolute
deed of sale in favor of the latter. The real truth is that what occurred was a
sale in trust since the petitioner obtained an amount of money from the
respondents, who in turn promised to improve the land.
Apparently, the Santoses transferred the properties to the Cuencas who in turn
transferred it to the Verroyas who executive a mortgage over the lot. Then
Verroya executed a deed of transfers to the Natividads. Note that from the titles
of the Cuencas (the Second Transferees) to the titles of the Natividads (the
Fourth Transferee), the Adverse Claim of the Gardners continued to be carried,
and that throughout the successive transfers, the petitioners continued to
remain in possession, cultivation and occupation of the disputed properties.
In their Answer, the Santoses claimed that the sale to them was conditional in
the sense that the properties were to be considered as the investment of the
petitioners in the subdivision venture and that in the event that this did not
materialize they were to reconvey the lots to petitioners upon reimbursement by
the latter of all sums advanced to them; and that the deed of sale was to be
registered for the protection of the Santoses considering the moneys that the
latter would be advancing.
Hence, the Gardners filed an action for declaration of Nullity, Rescission and
damages against the 5 transferres and mortgagees. The RTC ruled in favor of
petitioners declaring the transfers null and void. The CA affirmed in toto the
RTC but reconsidered it decision and ruled that the sale of land to Natividads
are valid.

Issue:
Whether or not the admissions made by Santos in the pleadings are admissible

Held:
NO. The testimony of Ariosto Santos is at variance with the allegations in his
Answer. As a general rule, facts alleged in a party's pleading are deemed
admissions of that party and binding upon it, but this is not an absolute and
inflexible rule. An Answer is a mere statement of fact which the party filing it
expects to prove, but it is not evidence.
Santos himself, in open Court, had repudiated the defenses raised in his
answer and against his own interest, his testimony is deserving of weight and
credence. Both the Trial Court and the Appellate Court believed in his
credibility and we find no reason to overturn their findings thereon. Santos
likewise admitted against his own interest that the petitioners did not receive
from him any consideration, which corroborated the declarations of the
petitioners. The Subdivision Joint Venture Agreement and the Supplemental

45
Agreement express that the true and real nature of the agreement between the
parties, which was for a subdivision and not a sale transaction.
All Five Transfers were absolutely simulated and fictitious and were, therefore,
void ab initio and inexistent. Contracts of sale are void and produce no effect
whatsoever where the price, which appears therein as paid, has, in fact, never
been paid by the purchaser to the vendor. 63

44. ODEGAR vs. GUICO

180 SCRA 372
G.R. No. L-67548 ; December 20, 1989

Facts:
Fermina Maluto and her husband, Isidro P. Guico, to whom one of the five (5)
lots in controversy was sold by Rufino Tamisin on April 10, 1953, supra, took
no part. It was not until March 12, 1975-almost twenty-two (22) years after they
had purchased the lot from Rufino Tamisin, and after Fermina Maluto had
died-that Isidro P. Guico, Fermina's husband, and their two (2) children,
Emmanuel Guico and Lourdes G. Amoranto, finally went to Court to vindicate
their rights over the land sold to Fermina Maluto. They filed suit, described by
them as one "for annulment of documents and tax declaration and to quiet title
to property with damages," in the Court of First Instance of Laguna. Their
complaint named Ambrocio Odejar and Gliceria Gibas as defendants, but when
it was discovered soon thereafter that these two had already died, the pleading
was amended so as to include said spouses' heirs as defendants, namely: Ireneo
Odejar, Librada Odejar and Juanito Odejar. Also named as defendants were
Attorney Juan Baes, the Odejars' counsel, to whom they had conveyed one-half
(1/2) interest pro indiviso in the five (5) lots; the provincial sheriff, Cecilio
Bituin; and the Provincial Assessor of Laguna. The complaint prayed that the
sheriffs certificate of sale dated June 16, 1960, and the conveyance to Atty.
Juan Baes of an undivided interest over the land sold to Fermina Maluto, be
declared null and void.

Issue:
WON the sale can still be cancelled and be declared null and void even after the
lapse of 22 years.

Held:
The facts above detailed, considered conjointly, irresistibly conduce to the
conclusion that Rufino Tamisin and Fermina Maluto never intended to effect a
genuine, bona fide transfer of property when they entered into the sale of April
10, 1953, a reality made manifest and according to which the parties, vendors
and vendees as well as their privies guided their actions, during the period of
twenty (20) years or so following the transaction. The Tamisins' acts clearly
show that they considered themselves still the owners of the property and as
never having parted therewith even after the sale, publicly and openly
proclaiming their title and demanding recognition thereof on several occasions.
The Guicos, for their part, tacitly acquiesced, at least never presented any
opposition, to such assertions of title by the Tamisins until March 12, 1975,
when it had already become apparent that the latter had exhausted every

46
possible recourse for the recovery of the property from the Odejars. All
indications, therefore, are that the ostensible conveyance was executed solely to
prevent the property of the Tamisins from being levied upon in execution of the
judgment in Civil Case No. 9401, or ever applied in satisfaction of the Tamisins'
adjudicated liability to the Odejars. Such a stratagem cannot be allowed to
succeed.
The defect of the sale of April 10, 1953 thus produced effects transcending mere
rescissibility. The sale could not be treated merely as a simple conveyance of
"things under litigation ... entered into by the defendant without the knowledge
and approval of the litigants or of competent judicial authority," rescindable by
action within four (4) years. It was in reality "absolutely simulated or fictitious"
and hence " inexistent and void" in contemplation of Article 1409 of the Civil
Code. Since, as Article 1411 of the Civil Code provides, the "action or defense
for the declaration of the inexistence of a contract does not prescribe," the
Odejars were not precluded from invoking such nullity, as they did, even after
the lapse of twenty-two years.

45. CASTILLO vs. GALVAN

G.R. No. L-27841 ; 85 SCRA 526 ; October 20, 1978

Facts:
Paulino Galvan was the registered owner of an undivided one- half (1/2)
interest over two parcels of land, the other undivided half is owned by his two
daughters by a first marriage herein defendants Josefa and Natividad Galvan.
On 1961, Paulino Galvan died, Maria Castillo (the second wife and their 2
children), out of "delicadeza" waited for the defendants to initiate the move for
the settlement of his estate. But, after finding that none was forthcoming, the
plaintiffs became apprehensive, so that they began to go over the papers
concerning the properties of the decedent. In the office of the Register of Deeds
of Dagupan City, they were surprised to find a deed of sale, signed by the late
Paulino Galvan and the plaintiff, Castillo, whereby they had purportedly sold for
P500 the undivided portion of Paulino Galvan over said lots in favor of
defendants, so Maria Castillo remembered that way back in 1953, she and her
husband Paulino Galvan were made to sign a certain document by Josefa
Galvan through fraud. Wherefore, they prayed that the deed of sale be declared
null and void; that the plaintiffs be declared the owners of four-sixths (4/6) of
the undivided half share pertaining to Paulino Galvan.
The defendants filed a motion to dismiss the complaint upon the ground that
the action is barred by the statute of stations for the reason that the present
action for the annulment of the instrument of sale based upon fraud which
should be brought within four (4) years from the time of the discovery of the
same in accordance with Article 1391 of the Civil Code is already prescribe. The
lower court, thereafter, dismiss the case.

Issue:
WON the trial court improperly dismissed the complaint on the ground of
prescription

Held:

47
Yes. The court sustains defendants' contention. The basis of the annulment is
alleged fraud, and the action for the. annulment of the document should be
brought within 4 years from the discovery of fraud however, the plaintiffs'
action is to declare void and inexistent the deed of sale executed by Paulino
Galvan and Encarnacion Castillo on August 3. 1955 in favor of Josefa and
Natividad Galvan, upon 'the grounds that (a) there is fraud in securing the
signatures of the vendors in said deed of sale: and (b) there was no
consideration given at the time of the transaction. In other words, the plaintiffs
are seeking a judicial declaration that the deed of sale in question is void ab
initio, which action is imprescriptible.

46. STEVENS N. FUENTE vs. THE SANDIGANBAYAN and THE PEOPLE OF THE
PHILIPPINES
G.R. No. 139618 July 11, 2006

Facts:
This Criminal case stemmed from a Deed of Sale entered into by and between
Teresita Sta. Maria Raco and the Municipality of Banga, Aklan, represented by
petitioner in his capacity as Mayor of the said municipality. The object of the
sale was a 1,343-square meter lot located in the same municipality. Petitioner
paid Teresita Sta. Maria Raco P114,155.00 for the lot.
When the contract was presented to the Register of Deeds of Aklan, he required
the submission of a resolution from the Sangguniang Bayan of Banga
authorizing petitioner to purchase the lot.
On July 27, 1995, the Sangguniang Bayan of Banga held a special session, but
failed to pass the required resolution. In order to avoid any controversy,
Teresita Sta. Maria Raco returned to petitioner the amount paid for her lot.
That same day, petitioner executed an Affidavit of Rescission of Contract of
Sale. On August 30, 1995, Edgardo L. Ruiz, a member of the SB of Banga, filed
with the Office of the Deputy Ombudsman for the Visayas a complaint charging
petitioner with purchasing the lot at a price manifestly and grossly
disadvantageous to the government, in violation of Section 3 (g) of Republic Act
(R.A.) No. 3019.
On May 22, 1997, petitioner filed a Motion for Reconsideration and/or
Reinvestigation. After hearing, the Office of the Special Prosecutor found that
not all the elements of the offense charged are present. The Ombudsman filed
with the Sandiganbayan a Motion to Withdraw Information for insufficiency of
evidence.
On August 17, 1998, the Sandiganbayan denied the motion, holding that: The
motion at bar now is for the withdrawal of the information on the ground of
insufficiency of evidence

Issue:
WON how that judicial discretion should be exercised.

Held:
We hold that the exercise of judicial discretion, with respect to a motion to
withdraw the Information filed by the prosecution, is not limited to the mere
approval or disapproval of the stand taken by the prosecution. The court must
itself be convinced that there is indeed no sufficient evidence against the

48
accused and this conclusion can only be reached after an assessment of the
evidence in the possession of the prosecution. What is required is the courts
own assessment of such evidence.
Here, the Sandiganbayan failed to make its own appraisal of the prosecutions
evidence in such case. As aptly observed by the Solicitor General, the
Sandiganbayan merely accepted the private complainants word that the
evidence against petitioner is sufficient. This is glaringly clear from its
Resolution dated August 17, 1998 stating that it relied upon the arguments of
the private complainant, and its Resolution of April 26, 1999 holding that a
mere cursory reading of the allegations in the Information clearly shows that
the facts alleged therein show an offense for violation of Sec. 3(g), R.A. 3019.
Significantly, these Resolutions contain no evaluation of the evidence for the
prosecution for the purpose of determining whether the Motion to Withdraw the
Information filed by the prosecution and Motion to Quash the Information filed
by herein petitioner should be granted or denied.
In sum, we find that the Sandiganbayan, in issuing the challenged Resolutions
denying the Ombudsmans Motion to Withdraw Information, gravely abused its
discretion amounting to lack or excess of jurisdiction.

47. LEOPOLDO DE BELEN vs. THE INSULAR COLLECTOR OF CUSTOMS

46 Phil. 241

Facts:
Timoteo Tienzo was a duly accredited customs broker in the City of Manila, and
in connection with his business as such broker, operated a number of trucks
for the purpose of conveying merchandise arriving at the port of Manila to
various consignees, his customers, throughout the city. On or about April 7,
1921, Tienzo procured a permit from the Insular Collector for the withdrawal of
12,500 sacks of flour from one of the piers for delivery to one Chua Soco, then a
merchant in the City of Manila. The bill of lading for said flour was not
produced by Tienzo at the time he procured the delivery permit, and in order to
get possession of the flour he obligated himself, upon his bond as a customs
broker, to have the bill of lading forthcoming in due time. Said bill of lading,
however, was never produced by Tienzo or his principal, Chua Soco, with the
result that the collector of customs caused an action of replevin to be begun in
the name of the Government on June 10, 1921, to recover the flour which had
been delivered as aforesaid, or in case the flour itself could not be secured, to
recover judgment for the value thereof in the amount of P47,816.32. an
attachment was sued out by the plaintiff against the property of the defendant
Tienzo, on the ground that he was about fraudulently to dispose thereof; and on
June 13, 1921, the sheriff levied said attachment on seven trucks that had
been operated by Tienzo in connection with his business as customs broker and
truckman. After the sheriff had taken the trucks into custody the plaintiff in
this case, Leopoldo de Belen, a brother-in-law of Tienzo, made claim to the
trucks, relying on a document of transfer (Exhibit A), dated June 1, 1921, and
executed by Tienzo and himself, in which Tienzo purports to convey to Belen all
of the trucks involved in this controversy. The consideration stated in this
instrument is the sum of P25,000, said to have been advanced upon previous
occasions to Tienzo by Belen. The sheriff having ignored the claim of Belen to
the ownership of the trucks, the present action of replevin was instituted by

49
Belen against the Collector of Customs and the sheriff for the recovery of the
trucks and compensation for the unlawful detention of the same. Upon hearing
the cause the trial judge found that the document referred to (Exhibit A) was
evidently a fictitious transfer, conceived and executed for the purpose of placing
the trucks in question beyond the reach of the creditors of Tienzo, and he held
said instrument to be completely without effect. He therefore absolved the
defendants from the complaint, and the plaintiff appealed.

Issue:
Whether or not that the document referred to (Exhibit A) was evidently a
fictitious transfer, conceived and executed for the purpose of placing the trucks
in question beyond the reach of the creditors of Tienzo.

Held:
Yes. It is sufficient to refer to the testimony of one Gerardo Garcia, specially
deputized by the sheriff to serve the summons and other papers relating to the
case No. 20110, instituted by the Government and the Collector of Customs
against Chua Soco and Timoteo Tienzo. This witness states that in a
conversation between himself and the present plaintiff soon after the service of
the complaint, the latter said that Tienzo was owner of the trucks and that he
(Belen) was merely an instrument of Tienzo. This admission of the plaintiff, in
connection with the relation of the parties and the financial difficulties then
impending over Tienzo, establish in our opinion a strong presumption that the
transfer referred to was made for the purpose of placing the trucks beyond the
reach of legal process directed against Tienzo. Nor is this presumption overcome
by the documents C to C-6, purporting to be receipts for money advanced by
Belen to Tienzo during the years, 1918, 1919, and 1920. The Court thinks the
trial judge was right in entertaining the suspicion that these receipts might
have been manufactured to meet the situation, without representing bona fide
debts of Tienzo to Belen. At any rate it is quite clear that Belen was aware of the
financial embarrassment in which Tienzo was involved, and the evidence in our
opinion establishes the conclusion drawn by the trial court, namely, that the
transfer of the trucks was a simulated transaction.

48. FRANCISCO IRURETA GOYENA vs. ILDEFONSO TAMBUNTING

G.R. No. L-956 November 18, 1902
1 Phil. 490

Facts:
The plaintiff's principal owned a tract of land and the building thereon known
as No. 20 Calle San Jose, Ermita, Manila. This tract contained 152.46 square
meters of land. A broker, representing the plaintiff, stated to the defendant that
this lot was for sale and, on information received from the plaintiff, that it
measured 23 meters in front and 8 meters in depth. The plaintiff and defendant
had certain negotiations between themselves concerning the sale. On March 12,
1901, the defendant signed the following document: On this date I have bought
from Don Francisco Yrureta Goyena a lot at No. 20 Calle San Jose, Ermita, for
the sum of thirty-two hundred pesos, this money to be paid as soon as the bill
of sale is signed. Manila, March 12, 1901. (Signed) Tambunting. The plaintiff
signed a similar document. What the negotiations between the parties were

50
prior to the signing of the these documents does not appear. There is no
evidence whatever in the record that they came to any agreement in regard to
the sale other than the one contained in the papers of March 12. On the day
assigned for the execution of the instrument, all the parties being in the office of
the notary, the defendant told the latter to insert in the writing the price,
$3,200, and then refused to sign it because the lot did not contain the area
which the plaintiff, through the broker, had represented that it contained. He
expressed his willingness to sign it if a proportional reduction was made in the
price. The plaintiff refused to make, and this action was brought under article
1451 of the Civil Code. The private contract expresses a specific thing as the
object of the contract. Upon this point there is no controversy. There is no
doubt as to which lot is No. 20 on Calle San Jose, of the District of Ermita of
the city of Manila. The private contract specifies a certain price, 3,200 pesos.
There is no controversy whatsoever upon this point. There is no question that
this sum is there specified plainly and specifically, and without being made
subject to any condition whatever.

Issue:
Whether or not there was a perfect contract

Held:
Evidently nothing is lacking for the existence of a perfect contract of purchase
and sale. Article 1445 of the Civil Code is as follows: "By the contract of
purchase and sale one of the contracting parties undertakes to deliver a specific
thing, and the other to pay therefore a price certain, in money or in something
representing it. Article 1450 of the same Code is a follows: "The sale shall be
perfected between vendor and vendee and shall be binding on both of them, if
they have agreed upon the thing which is the object of the contract and upon
the price, even when neither has been delivered." This private document was
not a more draft or project. It cannot be said that the purchase is not to be
understood as perfected until the execution of the public instrument. That
private document is not subject to any term or condition whatever. The least
that can be said about the private document is that it contains a promise to
buy, not a mere project of sale, and a promise to buy, according to article 1451,
confers upon the contracting parties the right to reciprocally demand the
performance of the contract. If the contract were not perfected no right would
accrue in favor of the contracting parties to reciprocally demand its
performance. A thing which has no existence can produce no effect. Because it
is merely a private document which contemplates the subsequent execution of a
public instrument, it does not follow that it is not enforceable as it now stands.
"Contracts," says article 1278, "shall be obligatory whatever may be the form in
which they have been entered into, provided that the essential elements for
their validity are present," to wit, a determinate thing, a price certain, and a
meeting of the minds with respect to the object of the contract. Hence the
contract in question is obligatory. 69

49. FILIPINAS COLLEGES, INC. vs. MARIA GARCIA TIMBANG, et. al.

51
G.R. No. L-12812 September 29, 1959
52 OFF. GAZ. 3624

Facts:
This is an appeal taken from an order of the Court of First Instance of Manila
dated May 10, 1957 (a) declaring the Sheriff's certificate of sale covering a
school building sold at public auction null and void unless within 15 days from
notice of said order the successful bidders, defendants-appellants spouses
Maria Garcia Timbang and Marcelino Timbang, shall pay to, appellee Maria
Gervacio Blas directly or through the Sheriff of Manila the sum of P5,750.00
that the spouses Timbang had bid for the building at the Sheriff's sale; (b)
declaring the other appellee Filipinas Colleges, Inc. owner of 24,500/3,285,934
undivided interest in Lot No. 2-a covered by certificate of tile No 45970, on
which the building sold in the auction sale is situated; and (c) ordering the sale
in public auction of the said undivided interest of the Filipinas Colleges, Inc., in
lot No. 2-a aforementioned to satisfy the unpaid portion of the judgment in
favor of appellee Blas and against Filipinas Colleges, Inc. in the amount of
P8,200.00 minus the sum of P5,750.00 mentioned in (a) above. The order
appealed from is the result of three motions filed in the court a quo in the
course of the execution of a final judgment of the Court of Appeals rendered in
2 cases appealed to it in which the spouses Timbang, the Filipinas Colleges,
Inc., and Maria Gervacio Blas were the parties. Filipinas Colleges, Inc. having
failed to pay or deposit the sum of P32,859.34 within the time prescribed, the
spouses Timbang, in compliance with the judgment of the Court of Appeals, on
September 28, 1956, made known to the court their decision that they had
chosen not of appropriate the building but to compel Filipinas Colleges, Inc., for
the payment of the sum of P32,859,34. The motion having been granted, a writ
of execution was issued on January 8, 1957. On January 16, 1957, appellee
Blas in turn filed a motion for execution of her judgment of P8,200.00
representing the unpaid portion of the price of the house sold to Filipinas
Colleges, Inc. Over the object of the Timbangs, the court grated the motion and
the corresponding writ of execution was issued on January 30, 1957, date of
the granting of the motion for execution, Blas through counsel, sent a letter to
the Sheriff of Manila advising him of her preferential claim or lien on the house
to satisfy the unpaid balance of the purchase price thereof under Article 2242 of
the Civil Code, and to withhold from the proceed of the auction sale the sum of
P8,200.00. Levy having been made on the house in virtue of the writs of
execution, the Sheriff of Manila on March 5, 1957, sold the building in public
auction in favor of the spouses Timbang, as the highest bidders, in the amount
of P5,750.00. Personal properties of Filipinas Colleges, Inc. were also auctioned
for P245.00 in favor of the spouses Timbang. As a result of these actuation,
three motion were subsequently filed before the lower court. The Timbang
spouses presented their opposition to each and all of these motions.

Issue:
Whether or not the appellants as owner of the land may seek recovery of the
value of the land by writ of execution, levy the house of the builder and sell it in
public auction.

Held:

52
No. The Court has already held in Matias vs. The Provincial Sheriff of Nueva
Ecija that while it is the inveriable practice, dictated by common sense, that
where the successful bidder is the execution creditor himself, he need not pay
down the amount of the bid if it does not exceed the amount of his judgement,
nevertheless, when there is a claim by a third-party, to the proceeds of the sale
superior to his judgment credit, the execution creditor, as successful bidder,
must pay in cash the amount of his bid as a condition precedent to the
issuance to him of the certificate of sale. In the instant case, the Court of
Appeals has already adjudged that appellee Blas is entitled to the payment of
the unpaid balance of the purchase price of the school building. Blas is actually
a lien on the school building are concerned. 70

The order of the lower court directing the Timbang spouses, as successful
bidders, to pay in cash the amount of their bid in the sum of P5,750.00 is
therefore correct. With respect to the order of the court declaring appellee
Filipinas Colleges, Inc. part owner of the land to the extent of the value of its
personal properties sold at public auction in favor of the Timbang, this Court
Likewise finds the same as justified, for such amount represents, in effect, a
partial payment of the value of the land. failure of the Timbang spouses to pay
to the Sheriff or to Manila Gervacio Blas said sum of P5,750.00 within fifteen
(15) days from notice of the final judgment, an order of execution shall issue in
favor of Maria Gervasio Blas to be levied upon all properties of the Timbang
spouses not exempt from execution for the satisfaction of the said amount.
TONY TAN a.k.a TONY Y. CHING vs PEOPLE
G.R. No. 153460, January 29, 2007

Facts:
Petitioner Tony Tan assails the Court of Appeals (CA) decision and resolution in
finding him guilty of estafa as defined and penalized under Article 315 (1) (b) of
the Revised Penal Code (RPC).
Sometime in 1992, Tony and his wife Rosalina sold a 1988 BMW 525i motor
vehicle to Profetiza P. Cabrera, wife of private complainant Roberto C. Cabrera,
Jr., for the price of P3 million. On September 19, 1992, Profetiza received the
car with its accompanying documents (certificate of registration and official
receipt) from Rosalina. Profetiza signed an acknowledgement receipt.
Registration of the car in Profetizas name, however, could not be accomplished
since the CR of the car was in the name of Rosita Tan, whereas the vendor of
the car indicated in the deed of sale was Rosalina Tan.
In the meantime, EO 90-93 was issued by then President Fidel V. Ramos
requiring importers of taxable motor vehicles, models 1988 to 1992, to obtain
clearances from the Bureau of Customs (BOC) and Bureau of Internal Revenue
(BIR) before the CRs of these imported vehicles could be renewed by the Land
Transportation Office.
On September 29, 1993, the BIR Commissioner informed Rosalina that the
clearance for the issuance of a CR for the car could be issued only upon
payment of P325,000 as compromise for the tax due on the imported car. The
BIR demanded payment and warned Rosalina of legal action against her. When
the spouses Cabrera became aware of the BIR letters, they offered to share the
tax burden with the spouses Tan.

53
Roberto drew check no. 20A027924P against his account with the Far East
Bank and Trust Company for P150,000 payable to cash as his share for the tax
due on the car. He delivered the check to Elsa Mendoza, representative of
petitioner. The spouses Cabrera discovered that the check was en cashed but
the tax was never paid.
The spouses Cabrera filed a complaint for rescission of contract of sale and
collection of sum of money with damages against the spouses Tan. Roberto also
initiated a criminal action against Tony. On April 25, 1995, he executed an
affidavit-complaint charging petitioner for estafa.
RTC found petitioner guilty of estafa under Article 315 (1) (b) of the RPC but the
civil case was dismissed. CA affirmed the decision.

Issue:
Whether or not Petitioner is liable for the crime of estafa.

Held:
The elements of estafa with abuse of confidence under this provision are as
follows: That money, goods, or other personal property be received by the
offender in trust, or on commission, or for administration, or under any other
obligation involving the duty to make delivery of, or to return, the same; That
there be misappropriation or conversion of such money or property by the
offender; or denial on his part of such receipt; That such misappropriation or
conversion or denial is to the prejudice of another; and That there is a demand
made by the offended party to the offender. 72
Both the RTC and CA found all the elements of estafa present.
Taking into consideration the Indeterminate Sentence Law, the appellate court
properly imposed a sentence of four years and two months of prision
correccional, as minimum, to twenty years of reclusion temporal, as maximum.
Petitioner is also directed to return the amount of P150, 000 with the proper
legal interest.

54