INTRODUCTION
Buenaventura vs CA (2003)FACTS:
Defendant spouses Leonardo Joaquin and Feliciana Landrito are parents of co-defendants Fidel, Tomas, Artemio, Clarita, Felicitas, Fe, and Gavino.
They are also the parents of plaintiffs Consolacion, Nora, Emma, and Natividad.
A deed of sale was executed by the defendant spouses in favor of their co-defendant children.
However, such deed of sale is sought to be declared null and void by the plaintiffs. Plaintiffs argue that:
1. There was no actual consideration
2. Even assuming there was consideration, the properties are more than 3-fold times more valuable than the measly sums appearing therein.
3.
the sale was the result of a deliberate conspiracy to unjustly deprive the rest of the compulsory heirs of their legitime. RTC: ruled in favor of the defendants and dismissed the complaint. On the grounds that:
1.
plaintiffs do not have a valid cause of action against defendants since there can be no legitime to speak of prior to the death of their parents.2.
legitime is computed as of the time of the death of the decedent. CA: affirmed the decision of the RTCISSUE: I. W/N the Deeds of Sale are void for lack of consideration HELD: I. DEED OF SALE VALID.
1. A contract of sale is not a real contract, but a consensual contract.
2. As a consensual contract, a contract of sale becomes a binding and valid contract upon the meeting of the minds as to price.
3. If there is a meeting of the minds of the parties as to the price, the contract of sale is valid, despite the manner of payment, or even the breach of that manner of payment. 4. It is not the act of payment of price that determines the validity of a contract of sale. 5. Payment of the price has nothing to do with the perfection of the contract.
6. Failure to pay the consideration is different from lack of consideration.
7.
Petitioners do not have any legal interest over the properties. Their rights over the properties are merely inchoate and vests only upon their parents death.Gaite vs Fonacier (1961) Facts:
–
Fonacier owned 11 iron lode mineral claims, known as the Dawahan Group, located in Camarines Norte. He appointed Gaite as his attorney-in-fact to enter into contracts with individual or juridical persons for the exploration and development of the mining claims. Gaite in turn executed a general assignment conveying the development of the mining claims into the Larap Iron Mines, a single proprietorship owned by him. Then he started the development of those mining claims.–
Fonacier decided to revoke the authority granted by him to Gaite, and Gaite assented, subject to certain conditions. They entered into a contract, where Gaite transferred to Fonacier, for P20k, all his rights and interests on the roads and facilities in the claims, plus the right to use the business name “Larap Iron Mines.” Gaite also transferred to Fonacier, for P75k, all this rights and interests over the tons of iron ore that he already extracted from the mineral claims. P10k of this was paid upon signing and the contract stated that “the balance of P65k will be paid from and out of the first letter of credit covering the first shipment of iron ores and of the first account derived from the local sale of iron ore made by Larap.” To seucre the payment, Fonacier delivered to Gaite a surety bond. Gaite wanted another bond, so Fonacier executed a second one, but it provided that the liability of the surety company would attach only when there had been an actual sale of iron ore for an amount of no less than P65k, and that the liability of said surety company would automatically expire on Dec 1955.– Up to Dec 1955, when the bond expired with respect to the surety company, no sale of the tons of iron ore had been made by Larap, nor had the P65k balance of the price of said ore
been paid to Gaite by Fonacier and his sureties, the second bond automatically expired. And when Fonacier and his sureties failed to pay, Gaite filed the present complaint against them for the payment of the P65k balance.
○
The defendants set up the defense that the obligation sued upon by Gaite was subject to a condition that the amount of P65k would be payable out of the first letter of credit covering the first shipment of iron ore and/or the first amount derived from the local sale of the iron ore by Larap, and that up to the time of the filing of the complaint no sale of the iron ore had been made. Therefore, the obligation was not due and demandable yet.○
The lower court held in favor of Gaite, and the defendants were ordered to pay the P65k. The lower court held that the oblig of the defendants to pay Gaite was one with a term: that it would be paid upon the sale of sufficient iron ore, such sale to be effected on or before Dec 1955, and that as the latter failed to put up a good and sufficient security after the bond expired, the oblig became due and demandable.Issue: Is the obligation of Fonacier to pay Gaite the P65k an obligation with a period or term and not one with a suspensive condition?
Held: Obligation was subject to a suspensive period or term. Lower court decision affirmed.
– A contract of sale is normally commutative and onerous. Not only does each of the parties assume a correlative obligation (the seller to deliver and transfer ownership of the thing sold and the buyer to pay the price), but each party anticipates performance by the other from the very start. While in a sale the obligation of one party can be lawfully subordinated to an uncertain event, so that the other understands that he assumes the risk of receiving nothing for what he gives, it isn’t in the usual course of business to do so. Hence, the contingent character of the obligation must clearly appear. Nothing is found in the record to evidence that Gaite desired or assumed to run the risk of losing his right over the ore without getting paid for it, or that Fonacier understood that Gaite assumed any such risk. This is proven by the fact that Gaite insisted on a bond to guarantee payment of the P65k. – Plus, to subordinate the oblig to pay the remaining P65k as condition precedent would be
tantamount to leaving the payment at the discretion of the debtor, for the sale or shipment could not be made unless steps were taken to sell the ore.
– Fonacier has forefeited the right to compel Gaite to wait for the sale of the ore before receiving payment of the balance of P65k, because of their failure to renew the bond or else replace it with an equivalent guarantee.
CELESTINO CO & CO. VS. COLLECTOR OF INTERNAL REVENUE Contract of sale vs. Contract for a piece of work
Facts:
– Celestino Co & Co. is a registered copartnership doing business under the trade name of Oriental Sash Factory, which makes sash, windows and doors
– For years, they paid percentage taxes of 7% on gross receipts (for manufacturers), but in 1952 they began to claim that they should be paying only 3% under sec 191 of the National Revenue Code (for contractors)
– They contend that Oriental Sash Factory does not manufacture ready-made doors, sash and windows for the public but only upon special order of its select customers and That the things, had they not been ordered, would not have existed.
– They filed a petition w/ the Bureau of Internal Revenue and appealed to the CTA, which both held that they did not come under the purview of Sec. 191.
Issue: whether Celestino Co & Co. is a manufacturer or a contractor? Held: manufacturer, in the business of selling goods, not services
– Celestino Co & Co. habitually makes sash, windows and doors, as it has represented in its stationery and advertisements to the public.
– The fact that windows and doors are made by it only when customers place their orders, does not alter the nature of the etablishment, for it only accepted such orders as called for the employment of such materials as it ordinarily manufactured or was in a position habitually to manufacture.
– They do not serve special customers only or confine its services to them alone. Anyone who has the ability to pay may have such things manufactured by them.
–
That the doors and windows must meet desired specifications is neither here nor there. If the specifications do not happen to be of the kind they habitually manufacture, they would not accept the order and no sale is made.– It is only when this factory accepts a job that requires the use of extraordinary or additional equipment, or involves services not generally performed by it---ir thereby contracts for a piece-of-work---filling special orders within the meaning of Art. 1467. The orders, however, were not shown to be special.
Commissioner of Internal Revenue vs. Engineering Equipment and Supply Company
1. EESC is an engineering and machinery firm and is engaged, among others, in the design and installation of central type air conditioning system, pumping plants and steel fabrications.
2. One Juan dela Cruz wrote the Collector, now Commissioner of CIR, denouncing EESC for tax evasion and failing to pay the correct percentage taxes due in connivance with foreign suppliers. EESC was likewise denounced to the Central Bank for alleged fraud in obtaining its dollar allocations.
3. Revenue Examiners reported and recommended to the Collector that Engineering be assessed for P480K+ for not declaring its importations which are subject of tax under Section 185 of the Tax Code (30% of the gross selling price).
4.
Assessment was revised and raised to P916K+ inclusive of 25% and 50% surcharges. EESC appealed with the Court of Tax Appeals (CTA) and reduced liabilities to P740K+. Commissioner not satisfied filed appeal to the Court; EESC filed with CTA a motion for recon.Issue: whether or not EESC is a manufacturer of air conditioning units under Sec. 185, or a contractor under Sec. 191 of the Tax Code
Held: Contractor.
1. Contract of sale vs. contract of furnishing services, labor, and materials
a.
Test: whether the thing transferred is one not 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 has been the subject of sale to some other persons even if the order had not been given. If the article ordered by the purchaser is exactly as such as the plaintiff makes and keeps on hand for sale to anyone, and no change or modification of it is made at defendant’s request, it is a contract of sale, even though it may be entirely made after, and in consequence of, the defendants order for it.2. We find that EESC did not manufacture air conditioning units for sale to the general public, but imported some items which were used in executing contracts entered into by it. EESC undertook negotiations and execution of individual contracts for the design, supply, and installation of air conditioning units of the central type.
3. EESC definitely did not and was engaged in the manufacture of air conditioning units but had its services contracted for the installation of a central system.
4. EESC should be held liable to pay taxes prescribed in Section 190. This compensating tax is not a tax on the importation of the goods but tax on the use of imported goods not subject to sales tax. (30% compensating tax but without the 50% markup)
Issue: fraud Held:
1. The Commissioner charged Engineering with misdeclaration of the imported air conditioning units and parts or accessories thereof so as to make them subject to a lower rate of percentage tax (7%) under Section 186 of the Tax Code, when they are allegedly subject to a higher rate of tax (30%) under its Section 185(m). This charge of fraud was denied by Engineering but the Court of Tax Appeals in its decision found adversely and said"
... We are amply convinced from the evidence presented by respondent that petitioner deliberately and purposely misdeclared its importations. This evidence consists of letters written by petitioner to its foreign suppliers, instructing them on how to invoice and describe the air conditioning units ordered by petitioner. ...
2. Despite the above findings, however, the Court of Tax Appeals absolved Engineering from paying the 50% surcharge prescribe by Section 183(a) of the Tax Code by reasoning out as follows: The imposition of the 50% surcharge prescribed by Section 183(a) of the Tax Code is based on willful neglect to file the monthly return within 20 days after the end of each month or in case a false or fraudulent return is willfully made, it can readily be seen, that petitioner cannot legally be held subject to the 50% surcharge imposed by Section 183(a) of the Tax Code. Neither can petitioner be held subject to the 50% surcharge under Section 190 of the Tax Code dealing on compensating tax because the provisions thereof do not include the 50% surcharge. Where a particular provision of the Tax Code does not impose the 50% surcharge as fraud penalty we cannot enforce a non-existing provision of law notwithstanding the assessment of respondent to the contrary. Instances of the exclusion in the Tax Code of the 50% surcharge are those dealing on tax on banks, taxes on receipts of insurance companies, and franchise tax. However, if the Tax Code imposes the 50% surcharge as fraud penalty, it expressly so provides as in the cases of income tax, estate and inheritance taxes, gift taxes, mining tax, amusement tax and the monthly percentage taxes. Accordingly, we hold that
petitioner is not subject to the 50% surcharge despite the existence of fraud in the absence of legal basis to support the importation thereof.
3. The communications of EESC to its foreign importers are strongly indicative of the fraudulent intent of Engineering to misdeclare its importation of air conditioning units and spare parts or accessories thereof to evade payment of the 30% tax. And since the commission of fraud is altogether too glaring, We cannot agree with the Court of Tax Appeals in absolving Engineering from the 50% fraud surcharge, otherwise We will be giving premium to a plainly intolerable act of tax evasion.
4. Since the imported air conditioning units-and spare parts or accessories thereof are subject to the compensating tax of 30% as the same were used in the construction business of Engineering, it is incumbent upon the latter to comply with the aforequoted requirement of Section 190 of the Code, by posting in its books of accounts or notifying the Collector of Internal Revenue that the imported articles were used for other purposes within 30 days. ... Consequently; as the 30% compensating tax was not paid by petitioner within the time prescribed by Section 190 of the Tax Code as amended, it is therefore subject to the 25% surcharge for delinquency in the payment of the said tax.
WHEREFORE, the decision appealed from is affirmed with the modification that Engineering is hereby also made liable to pay the 50% fraud surcharge.
Quiroga v Parsons Hardware Co.
Quiroga and Parsons, both merchants in Manila, executed a contract between themselves for the “exclusive sale of Quiroga beds in the Visayan Islands.” The provisions of the contract essentially stipulated that Parsons would order the beds by the dozen, and would make an allowance of 25% of the invoiced prices. Parsons was also bound to pay for the received beds no later than 60 days after shipment. The matters of dispute center on two issues: 1) Parsons’ obligation to charge customers no higher than the invoiced prices, and 2) order the beds strictly by the dozen and in no other manner.
Was this contract one of agency, or one of purchase and sale?
The contract is one of purchase and sale. In order to classify a contract, due regard must be given to its essential clauses. In the contract in question, what was essential is that Quiroga was to furnish Parsons with the beds which the latter might order, at the price stipulated, and that the defendant was to pay the price in the manner stipulated. The contract exhibited the features of a contract of purchase and sale. The rule to remember is that when the supposed “agent” has to pay the “principal” the price of the goods, the contract ceases to be one of agency. In agency, the agent surrenders the amount received from the sale of goods, as well as the unsold goods themselves. In this case, it did not matter how many were sold; payment had to be made for delivered beds 60 days upon delivery. Thus, Parsons is not subject to the contract terms in question since it, as purchaser, acquires ownership of delivered goods.
SONNY LO vs KJS ECO-FORMWORK SYSTEM PHIL, INC.
•
Lo, doing business under the name San’s Enterprises, ordered scaffolding equipments from KJS worth P540,425.80. Lo paid a downpayment of P150,000 and the balance was to be paid in 10 monthly installments.• KJS delivered the scaffoldings to Lo, who paid the first two installments. However, his business encountered financial difficulties and he was unable to settle his obligation despite oral and written demands.
•
Lo and KJS executed a Deed of Assignment, whereby Lo assigned to KJS his receivables in the amount of P335,462.14 from Jomero Realty Corporation. The agreement also stipulated: “The ASSIGNOR further agrees and stipulates as aforesaid that the said ASSIGNOR, his heirs, executors, administrators, or assigns, shall and will at times hereafter, at the request of said ASSIGNEE, its successors or assigns, at his cost and expense, execute and do all such further acts and deeds as shall be reasonably necessary to effectually enable said ASSIGNEE to recover whatever collectibles said ASSIGNOR has in accordance with the true intent and meaning of these presents.”• When KJS tried to collect the said credit from Jomero, it refused to honor the Deed of Assignment because it claimed that Lo was also indebted to it. KJS sent a letter to Lo demanding payment but he refused claiming that his obligation had been extinguished when they executed the Deed of Assignment.
• KJS filed an action for recovery of a sum of money against Lo with the RTC, which dismissed the complaint on the ground that the assignment of credit extinguished the obligation. However, the CA held that the Deed of Assignment did not extinguish the
obligation of Lo.
Issue: W/N the Deed of Assignment extinguished Lo’s obligation. NO, he failed to comply with his warranty.
•
In dacion en pago1, as a special mode of payment, the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt. The undertaking really partakes in one sense of the nature of sale – the creditor is really buying the thing or property of the debtor, payment for which is to be charged against the debtor’s debt.•
The assignment of credit, which is in the nature of a sale of personal property, producedthe effects of a dation in payment, which may extinguish the obligation. However, as in any other contract of sale, the vendor or assignor is bound by certain warranties. Paragraph 1 of Article 1628 of the Civil Code provides: The vendor in good faith shall be responsible for the existence and legality of the credit at the time of the sale, unless it should have been sold as doubtful; but not for the solvency of the debtor, unless it has been so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge.
• Lo, as assignor, is bound to warrant the existence and legality of the credit at the time of the sale or assignment. When Jomero claimed that it was no longer indebted to Lo since the latter also had an unpaid obligation to it, it essentially meant that its obligation to Lo has been extinguished by compensation. As a result, KJS alleged the non-existence of the credit and asserted its claim to Lo’s warranty under the assignment. Lo was therefore required to make good its warranty and pay the obligation.
•
Furthermore, Lo breached his obligation under the Deed of Assignment as he did not “execute and do all such further acts and deeds as shall be reasonably necessary to effectually enable said ASSIGNEE to recover whatever collectibles said ASSIGNOR has in accordance with the true intent and meaning of these presents.” By warranting the existence of the credit, Lo should have ensured its performance in case it is found to be inexistent. He should be held liable to pay to KJS the amount of his indebtednessJudgment Affirmed.
II - PARTIES TO A
SALE
Paragas vs. Heirs of Dominador Balacano (2005)FACTS:
Gregorio and Lorenza Balacano owned Lots 1175-E and 117-F.
Spouses Balacano had 3 children, namely Domingo, Catalino, and Alfredo. Lorenza died during Dec. 11, 1991, while Gregorio died on July 28, 1996.
Prior to Gregorio’s death, he was admitted in Veteran’s General Hospital in Nueva Vizcaya, and later transferred to Veteran’s Memorial Hospital in QC, until he died. It was alleged that Gregorio, barely a week prior to his death, sold the 2 lots to spouses Rudy and Corazon Paragas.
The said sale appeared in a deed of absolute sale notarized by Atty. De Guzman. The spouses Paragas then sold a portion of one of the lots to Catalino.
Domingo’s children filed a complaint for the annulment of the sale against Catalino and the spouses Paragas.
Domingo’s children argue that:
1. Grandfather Gregorio was seriously ill at the time of the execution of the deed of sale.
2. Gregorio’s consent was vitiated.
3. That the lots form part of the conjugal partnership properties of Gregorio and Lorenza.
Spouses Paragas moved to dismiss the complaint, arguing that
1. Plaintiffs do not have a cause of action and have no legal ground for the annulment of the deed of sale.
1
Requisites: (1) There must be the performance of the prestation in lieu of payment (animo solvendi) which may consist in the delivery of a corporeal thing or a real right or a credit against the third person; (2) There must be some difference between the prestation due and that which is given in substitution (aliud pro alio); (3) There must be an agreement between the creditor and debtor that the obligation is immediately extinguished by reason of the performance of a prestation different from that due.2. Gregorio and Paragas already agreed on the sale of the Lots, that the execution of the Deed of Sale was merely a confirmation of the said agreement.
RTC: declared the deed of sale null and void, and the lots were CP properties. Grounds: 1. Gregorio was ill
2. Deed of sale was improperly notarized.
3. Atty. De Guzman explanations regarding the erroneous entries on the actual place and date of execution of the deed of sale were justifications for a lie. (He testified that the deed was only a “confirmation” of a previous agreement bet. Gregorio and Paragas).
4. Rudy Paragas refused or failed to testify about the signing of the deed of sale. CA: affirmed, with modifications: lots were estate of Gregorio
ISSUE: I. W/N the Deed of Sale is null and void. HELD: I. DEED OF SALE NULL AND VOID
1. Gregorio, died due to complications caused by cirrhosis of the liver, had been fighting the said disease for a month.
2. Due to his condition, there are serious doubts at to whether he could read, or fully understood the contents of the deed of sale.
3.
There are no conclusive evidence that show that the evidence of the deed were sufficiently explained to Gregorio before he affixed his signature.4. Art. 24 of the NCC provides that in all contractual, property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.
c alimlim-Canullas vs. Fortun (1984) FACTS:
Petitioner Mercedes Calimlim-Canullas and Fernando Canullas were married in 1962 and had 5 children.
They lived in a house on the residential lot in question.
After Fernando’s father died in 1965, Fernando inherited the said land.
In 1978, Fernando abandoned his family and lived with private respondent Corazon Daguines.
Both were convicted of concubinage by the CFI. In 1980, Fernando sold the said land to Daguines.
In the document of sale, Fernando described the house as “also inherited by me from my deceased parents.”
Unable to take possession of the lot and house, Daguines filed a complaint against Mercedes.
Mercedes however, claimed that the sale is null and void for reason that the said house and land were conjugal properties and she had not given her consent to the sale.
CFI: declared Daguines as the lawful owner of the house and lot.
ISSUE: I. W/N the construction of a conjugal house on the exclusive property of the husband gave the land the character of conjugal property.
II. W/N the sale of the lot together with the house and improvements was valid HELD: I. LAND CONJUGAL PROPERTY
1. NCC provides that “buildings constructed at the expense of the partnership during marriage on land belonging to one of the spouses also pertain to the partnership, but the value of the land shall be reimbursed to the spouse who owns the same.
2. Therefore, both the land and the house belonged to the conjugal partnership, but the cp is indebted to the husband for the value of the land.
3. Husband’s power to alienate conjugal property must be with wife’s consent. 4. Mercedes did not consent to the sale.
II. SALE NULL AND VOID.
2.
Sale was made by a husband in favor of a concubine after he had abandoned his family and left the conjugal home.3. NCC provides that contracts whose cause, object, or purpose is contrary to law, morals, good customs, public order, or public policy are void and inexistent from the very beginning.
Rubias vs Batiller (1973) Facts:
–
Francisco Militante claimed that he owned a parcel of land located in Iloilo. He filed with the CFI of Iloilo an application for the registration of title of the land. This was opposed by the Director of Lands, the Director of Forestry, and other oppositors. The case was docked as a land case, and after trial the court dismissed the application for registration. Militante appealed to the Court of Appeals.– Pending that appeal, he sold to Rubias (his son-in-law and a lawyer) the land. – The CA rendered a decision, dismissing the application for registration. – Rubias filed a Forcible Entry and Detainer case against Batiller.
– In that case, the court held that Rubias has no cause of action because the property in dispute which Rubias allegedly bought from Militante was the subject matter of a land case, in which case Rubias was the counsel on record of Militante himself. It thus falls under Article 1491 of the Civil Code. (Hence, this appeal.)
Issue: Whether the sale of the land is prohibited under Article 1491.
Held: YES. Article 1491 says that “The following persons cannot acquire any purchase, even at a public or judicial auction, either in person or through the mediation of another…. (5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property and rights in litigation or levied upon an execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyesr, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession.” The present case clearly falls under this,
especially since the case was still pending appeal when the sale was made. Issue: Legal effect of a sale falling under Article 1491?
Held: NULL AND VOID. CANNOT BE RATIFIED.
Manresa considered such prohibited acquisitions (which fell under the Spanish Civil Code) as merely voidable because the Spanish Code did not recognize nullity. But our Civil Code does recognize the absolute nullity of contracts “whose cause, object or purpose is contract to law, morals, good customs, public order or public policy” or which are “expressly prohibited or declared void by law” and declares such contracts “inexistent and void from the beginning.” The nullity of such prohibited contracts is definite and permanent, and cannot be cured by ratification.
The public interest and public policy remain paramount and do not permit of compromise or ratification. In this aspect, the permanent disqualification of public and judicial officers and lawyers grounded on public policy differs from the first three cases of guardians agents and administrators (under Art 1491). As to their transactions, it has been opined that they may be “ratified” by means of and in “the form of a new contract, in which case its validity shall be determined only by the circumstances at the time of execution of such new contract.” In those cases, the object which was illegal at the time of the first contract may have already become lawful at the time of the ratification or second contract, or the intent, or the service which was impossible. The ratification or second contract would then be valid from its execution; however, it does not retroact to the date of the first contract.
Phil Trust Co. vs Roldan (1956) Facts:
–
Mariano Bernardo, a minor, inherited properties from his father, deceased. Included in these were 17 parcels of land located in Bulacan. Socorro Roldan was appointed his guardian. (Socorro was the stepmother of Mariano.) In the guardianship proceedings, Socorro filed a motion asking for authority to sell as guardian the 17 parcels of land for P14.7k to Dr. Fidel C. Ramos, her brother-in-law, the purpose of the sale being allegedly to invest the money in a residential house which the minor wanted to have. The motion was granted. Socorro then sold the parcels of land to Ramos for P14.7k. But the very next day, Ramos sold the land to Socorro for P15k. And eventually, Socorro sold 4 out of the 17 parcels to another party, reserving to herself the right to repuchase.– The Phil Trust Company replaced Socorro Roldan as guardian. And this present case seeks to undo what she did, claiming that it was void for falling under Art 1459 which prohibits the guardian from purchasing “either in person or through the mediation of another” the property of her ward.
– The CFI held that Art 1459 was not controlling because there was no proof that Ramos had previously agreed to buy the parcels from Socorro for her benefit. The CFI upheld the contracts but allowed the minor to repurchase all the parcels by paying P15k. The CA affirmed the judgment, adding that the minor knew the particulars thereof and approved the transaction.
Issue: Valid sale?
Held: NO. NULL AND VOID.
As guardianship is a trust of the highest order, the trustee cannot be allowed to have any inducement to neglect his ward’s interest. Whenever the guardian acquires the ward’s property through an intermediary, he violates the provisions of Art 1459 and such transaction and subsequent ones emanating therefrom shall be annulled.
The transactions show that Socorro bought the 17 parcels on the day following the sale to Ramos. There may not have been a previous agreement between her and Ramos to the effect that the latter would buy the lands for her, but the stubborn fact remains that she acquired her
protégé’s properties, through her brother-in-law. That she planned to get them for herself at the time of selling them to Ramos may be deduced from the very short time between the two sales.
Also, the third sale is void because Socorro could pass no title to the third party. The annulment carries with it the obligation of Socorro to return the 17 parcels of land together with the fruits and the duty of the minor, through his guardian to repay P14.7k with legal interest.
Fabillo vs IAC (1991) Facts:
–
Justina Fabillo bequeathed to her brother Florencio a house and lot in San Salvador, Palo, Leyte, and to her husband a piece of land in Pugahanay, Palo, Leyte. After Justina’s death, Florencio filed a petition for the probate of said will. The court approved the project of partition but said that the ownership of the land of Florencio be litigated and determined in separate proceedings. So two years later, Florencio asked Atty. Murillo to assist him in recovering the San Salvador property. Murillo asked him for 40% of the money value of the house and lot as a contingent fee in case of success. Murillo and Florencio then entered into a contract: Florencio agreed to pay Murillo, in case of success, the sum equivalent to 40% of whatever benefit Florencio may derive from such cases. Also, if the house and lot or a portion thereof is just occupied by Florencio or his heirs, Murillo shall have the option of either occupying or leasing to any interested party 40% of the house and lot.–
Murillo, pursuant to the contract, filed a case against Justina’s husband to recover the San Salvador property. The case was terminated when the court, upon the parties’ compromise agreement, declared Florencio the lawful owner of the San Salvador and Pugahanay property. So Murillo then proceeded to exercise ownership over 40% of said properties and installed a tenant in the Pugahanay property.– Eventually, Florencio claimed exclusive rights over the properties and refused to give Murillo the share of the produce of the properties. Murillo then filed a complaint, asking that he be declared owner of 40% of the two properties. Florencio asked that the contract be declared null and void, plus that they had vitiated consent.
– The lower court: There was insufficient evidence to prove that the consent was vitiated. Ordered Florencio to pay 40% of the net produce of the property. Declared Murillo as owner of 40% of both the properties. IAC affirmed.
– Note: The case is being carried on by Florencio and Murillo’s heirs. Issue: Stipulation valid?
Held: YES. A contingent fee does not fall under prohibition in Art 1491 par 5.
While Art 1491 par 5 prohibits lawyers from acquiring by purchase the properties and rights which are the objects of litigation in which they may take part by virtue of their profession, this prohibition applies only if the sale of the assignment of the property takes place during the pendency of the litigation involving the client’s property. A contract between a lawyer and his client stipulating a contingent fee is not covered by said prohibition. The payment of such fee is not made during the pendency of the litigation but only after judgment has been rendered in the case handled by the lawyer. As long as the lawyer does not exert undue influence and no fraud is committed, a contract for contingent fee is valid and enforceable.
However, a careful look at the contract shows that the parties intended 40% of the value of the properties as Murillo’s contingent fee. Plus, the stipulation on Murillo having the option to occupy or lease to any interested party 40% of the house and lot is declared vague. The ambiguity should be resolved against Murillo because it was he who drafted the contract.
IAC decision reversed. Florencio’s heirs ordered to pay Murillo’s heirs the amount of P3k as his contingent fee.
III – SUBJECT MATTER
PUP V. CA– Firestone Ceramics (Firestone) entered into a lease contract w/ the National Development Corporation (NDC) for a portion of its property in Sta. Mesa. 2 more lease agreements were entered into for NDC’s 4-unit fabricated reparation steel warehouse and 6-unit
pre-fabricated reparation steel warehouse. Such agreements provided for extenion of the terms of the lease.
–
Firestone requested for an extension, which was granted w/ the condition that in the event NDC "with the approval of higher authorities, decide to dispose and sell these properties including the lot, priority should be given to the LESSEE” first refusal–
Firestone again requested for an extension, but the communications were unacknowledged. FIRESTONE's predicament worsened when rumors of NDC's supposed plans to dispose of the subject property in favor of petitioner Polytechnic University of the Philippines (PUP) came to its knowledge. Forthwith, FIRESTONE served notice on NDC conveying its desire to purchase the property in the exercise of its contractual right of first refusal.– The PUP-NDC agreement revolved around Memorandum No. 24 issued by Pres. Aquino ordering the transfer of the property to PUP.
–
PUP and NDC claim that there was no sale between them:○ The right of first refusal invoked was limited to the warehouse and not the lot
○
The courts supposedly created a contract to sell b/w the parties. It argued that the "court cannot substitute or decree its mind or consent for that of the parties in determining whether or not a contract (has been) perfected between PUP and NDC ○ NDC posits that the transaction did not amount to a sale considering that "ownershipof the property remained with the government." Petitioner NDC introduced the novel proposition that if the parties involved are both government entities the transaction cannot be legally called a sale.
Issues:
1. w/n there was a contract of sale b/w PUP and NDC
2. w/n Firestone should be allowed to exercise its right of refusal Held:
1. YES
–
Aside from the fact that the intention of NDC and PUP to enter into a contract of sale was clearly expressed in the Memorandum Order No. 214, a close perusal of the circumstancesof this case strengthens the theory that the conveyance of the property from NDC to PUP was one of absolute sale, for a valuable consideration, and not a mere paper transfer as argued by petitioners.
–
there is not just one party involved in the questioned transaction. Petitioners NDC and PUP have their respective charters and therefore each possesses a separate and distinct individual personality– All elements of asale were present:
○
Consent Memorandum No. 214: “WHEREAS, PUP has expressed its willingness to acquire said NDC properties and NDC has expressed its willingness to sell the properties to PUP”○
Consideration the cancellation of NDC's liabilities in favor of the National Government in the amount of P57,193,201.64 constituted the "consideration" for the sale○ PUP asserted its ownership over the property by posting notices within the compound advising residents and occupants to vacate the premises
1. YES
-the right of first refusal is an integral and indivisible part of the contract of lease and is inseparable from the whole contract. , it is not correct for petitioners to insist that there was no consideration paid by FIRESTONE to entitle it to the exercise of the right, inasmuch as the stipulation is part and parcel of the contract of lease making the consideration for the lease the same as that for the option
Atilano vs Atilano Facts:
–
Atilano I bought from Villanueva Lot 535 of the then municipality of Zamboanga cadastre. Atilano I had the lot subdivided into five parts (referred to as Lots A-E from hereon). He then sold Lot E in favor of his brother, Atilano II. Lots B-D were sold to other persons. Atilano I kept Lot A for himself. When he died, title of the lot passed to Ladislao Atilano.–
Atilano II and his children then obtained the transfer of certificate of title over Lot E in their names as co-owners. When they decided to have the land resurveyed, they discovered that they were actually occupying Lot A and not Lot E, as referred to in the deed, while the land which remained in the possession of the vendor (Atilano I) and which passed to his successor Ladislao Atilano was Lot E and not Lot A. [They basically switched around lots without their knowledge.]–
Atilano II passed away. His heirs filed the present action. They claimed that they had offered to surrender to Atilano I’s heirs (defendants) the possession of Lot A anddemanded in return Lot E, but that the defendant’s had refused to accept the exchange. (That’s understandable since Lot E is much bigger than Lot A.) The defendants, on the other hand, claim that the reference to Lot E in their deed of sale was an involuntary error and that the intention of the parties was to convey the lot correctly identified as Lot A.
○ The trial court held in favor of the plaintiffs.
Issue: What is binding, the intent of the parties or the lots named in the deeds?
Held: Intent. Plaintiffs ordered to execute a deed of conveyance of Lot E in favor of the defendants, and the latter are ordered to give Lot A to them.
When one sells or buys real property, one sells or buys the property as he sees it, in its actual setting and by its physical metes and bounds, and not by the mere lot number assigned to it in the certificate of title. In this case, the portion correctly referred to as Lot A was already in the possession of the vendee, Atilano II, even before the sale in his favor. In like manner, Atinalo I had his house on Lot E. The two brothers continued in possession of the respective portions for the rest of their lives, obviously ignorant of the initial mistake.
The real issue here is not adverse possession, but the real intention of the parties to that sale. From all the facts and circumstances, it shows that the object was that portion where the vendee was already residing, and where his heirs continued to reside thereafter; namely, Lot A, and that its designation as Lot E in the deed of sale was a simple mistake.
The Civil Code provides a remember for such a situation by means of reformation of the instrument. In this case, the deed of sale executed need no longer be reformed. The parties have retained possession of their respective properties and all they should do is to execute mutual deeds of conveyance.
LONDRES V CA
– Filomena vidal (mother of the petitioners) sold 2 parcels of land (Lots 1320, 1333) to Consolacion and Julian Alovera
–
Petitioners seek for the declaration of nullity of the contract, because the validity fo the Absolute Sale is in doubt due to alleged tampering. (+just compensation vs. DPWH)○
The cadastral lot number of the second lot mentioned in the Absolute Sale was altered to read Lot 1333 when it was originally written as Lot 2034. Lot 2034 was also written in the copy of the Records Mgt. and Archives Ofc.– The Aloveras explained that Julian was in good faith and that he was deaf and dumb, so he was placed at a disadvantageous position. When they discovered that the Absolute Sale indicated Lot 2034, they went back to Filomena, who made the correction. However, the copy of the notary remained unchanged.
– TC decided in favor of the Aloveras:
○
The description in the Absolute Sale corresponds to Lot 1333.○
The Absolute Sale states that the lot is in Brgy. Baybay, where Lot 1333 is situated. Lot 2034, on the other hand, can be found in Brgy. Culasi.○ Plus, there was no evidence that pet’s family owned Lot 2034 at any time. Issue: w/n the Absolute Sale is valid
Held: YES: the true object of the sale is Lot 1333
–
The correction was made to reflect the true object of the sale, Lot 1333.–
Petitioners rely on the technical descriptions of Lots 1320 and 1333 that were issued by the Bureau of Lands on November 8, 1988. When private respondents and Filomena executed the sale, they based the description of the two lots on the tax declarations of Filomena.. What really defines a piece of land is not the area mentioned in its description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In this case, the boundaries of the two lots are sufficiently designated in the Absolute Sale , leaving no room to doubt the identity of the objects of the sale.–
Lot 2034 does not fit the description of the 2nd parcel in the Absolute Sale.–
when one sells or buys real property, one sells or buys the property as he sees it, in its actual setting and by its physical metes and bounds, and not by the mere lot number assigned to it in the certificate of title. As long as the true intentions of the parties are evident, the mistake will not vitiate the consent of the parties, or affect the validity and binding effect of the contract between them.○
evidence shows that the designation of the second parcel of land sold as Lot 2034 was merely an oversight or a typographical error. The intention of the parties to the Absolute Sale became unmistakably clear when private respondents, as vendees, took possession of Lots 1320 and 1333 in the concept of owners without the objection of Filomena, the vendor.– Even if the notarized copy indicated the wrong lot, the intent of the parties must prevail. Non-compliance w/ formal requirements does not adversely affect the validity of the contract or the rights and obligations of the parties.
MELLIZA vs. CITY OF ILOILO (1968) Sales – Part 3 of Outline (Subject Matter)
1.
Julian Melliza during her lifetime owned, 3 parcels or residential land in Iloilo City. (Lots 2, 5, and 1214). Total area of Lot 1214 was 29, 073 sq. meters.2.
Julian Meliiza donated to the Municipality of Iloilo 9,000 sq. meters of Lot 1214 to serve as site for the municipal hall. The donation was however revoked because of inadequacy to meet the requirements of the Arellano Plan.3.
Subsequently ,Lot 124 was divided to A and B. Still later, B was further subdivided into 1, 2, 3. Lot 1214-B-1 (4,563 sq. m) became as Lot 1214-B; Lot 1214-B-2 (6,653 sq. m) became as Lot 1214-C; Lot 1214-B3 (4,135 sq. m) became Lot 1214-D4. Julian Melliza sold her remaining interest to Remedios Villanueva who acquired title to the land. Villanueva transferred her rights to the portion of the land to Pio Sian Melliza who also obtained title. But there was annotation at the back of Pio’s certificate that:
a.
(a) that a portion of 10,788 square meters of Lot 1214 now designated as Lots Nos. 1214-B-2 and 1214-B-3 of the subdivision plan belongs to the Municipality of Iloilo as per instrument dated November 15, 1932....5.
On August 24, 1949 the City of Iloilo, which succeeded to the Municipality of Iloilo, donated the city hall site together with the building thereon, to the University of the Philippines (Iloilo branch). The site donated consisted of Lots Nos. 1214-B, 1214-C and 1214-D, with a total area of 15,350 square meters, more or less.6.
Sometime in 1952, the University of the Philippines enclosed the site donated with a wire fence. Pio Sian Melliza thereupon made representations, thru his lawyer, with the city authorities for payment of the value of the lot (Lot 1214-B). No recovery was obtained, because as alleged by plaintiff, the City did not have funds7. On December 10, 1955 Pio Sian Melliza filed an action in the Court of First Instance of Iloilo against Iloilo City and the University of the Philippines for recovery of Lot 1214-B or of its value.
8.
CFI: dismissed complaint of Pio Melliza; instrument already executed by Melliza included in the conveyance of Lot 1214-B.9. Ca: affirmed CFI decision
Issue: whether or not the conveyance by Juliana Melliza to Iloilo municipality included that portion of Lot 1214 known as Lot 1214-B.
HELD:
1.
It should be stressed, also, that the sale to Remedios Sian Villanueva — from which Pio Sian Melliza derived title — did not specifically designate Lot 1214-B, but only such portions of Lot 1214 as were not included in the previous sale to Iloilo municipality (Stipulation of Facts, par. 5, Record on Appeal, p. 23). And thus, if said Lot 1214-B had been included in the prior conveyance to Iloilo municipality, then it was excluded from the sale to Remedios Sian Villanueva and, later, to Pio Sian Melliza.Issue: true intention of the parties
1.
First of all, there is no question that the paramount intention of the parties was to provide Iloilo municipality with lots sufficient or adequate in area for the construction of the Iloilo City hall site, with its avenues and parks. For this matter, a previous donation for this purpose between the same parties was revoked by them, because of inadequacy of the area of the lot donated.2.
Secondly, reading the public instrument in toto, with special reference to the paragraphs describing the lots included in the sale, shows that said instrument describes four parcels of land by their lot numbers and area; and then it goes on to further describe, not only those lots already mentioned, but the lots object of the sale, by stating that said lots are the ones needed for the construction of the city hall site, avenues and parks according to the Arellano plan. If the parties intended merely to cover the specified lots — Lots 2, 5, 1214-C and 1214-D, there would scarcely have been any need for the next paragraph, since these lots are already plainly and very clearly described by their respective lot number and area.3.
The requirement of the law that a sale must have for its object a determinate thing, is fulfilled as long as, at the time the contract is entered into, the object of the sale is capable of being made determinate without the necessity of a new or further agreement between the parties (Art. 1273, old Civil Code; Art. 1460, New Civil Code). The specific mention of some of the lots plus the statement that the lots object of the sale are the ones needed for city hall site, avenues and parks, according to the Arellano plan, sufficiently provides a basis, as of the time of the execution of the contract, for rendering determinate said lots without the need of a new and further agreement of the parties.4. Furthermore, Pio Sian Melliza, from the stipulation of facts, was the notary public of the public instrument. As such, he was aware of its terms. Said instrument was also registered with the Register of Deeds and such registration was annotated at the back of the
corresponding title certificate of Juliana Melliza. From these stipulated facts, it can be inferred that Pio Sian Melliza knew of the aforesaid terms of the instrument or is chargeable with knowledge of them; that knowing so, he should have examined the Arellano plan in relation to the public instrument Exhibit "D"; that, furthermore, he should
have taken notice of the possession first by the Municipality of Iloilo, then by the City of Iloilo and later by the University of the Philippines of Lot 1214-B as part of the city hall site conveyed under that public instrument, and raised proper objections thereto if it was his position that the same was not included in the same.
5.
The fact remains that, instead, for twenty long years, Pio Sian Melliza and his predecessors-in-interest, did not object to said possession, nor exercise any act of possession over Lot 1214-B. Applying, therefore, principles of civil law, as well as laches, estoppel, and equity, said lot must necessarily be deemed included in the conveyance in favor of Iloilo municipality, now Iloilo City.Yu Tek & Co. v Gonzalez
Yu Tek and Gonzalez entered into a contract of sale in which the former would pay the latter P3,000 and would in turn be bound to deliver 600 piculs of sugar (of the first and second grade) within a period of three months. Failing to do so within the specified time would result in the recission of the contract, the refund of the P3,000, as well as a penalty of P1,200 which Gonzalez would have to pay. Yu Tek proved before the court that three months had passed with no delivery of sugar. Gonzalez contended that a stipulation was verbally agreed upon, saying that the sugar was to come from the crops which he raised from his plantation. Gonzalez further contended that the crop failed miserably, and thus the delivery could not be possibly effected. The SC struck this down by saying that parol evidence which adds totally new stipulations which are not at all alluded to in the written contract cannot be entertained by the courts.
Given that the sugar subject of the contract could not be particularly designated or physically segregated, is there still a perfected contract of sale?
Yes there is, under the New Civil Code. Such contract is perfected upon the meeting of the minds between the parties as regards the subject matter of the contract, which should determinate or at least determinable. In the present case, the sugar can be considered a generic thing. Following the principle of “genus never perishes,” Gonzalez cannot now claim to be released from his obligation of delivery since it is, under the contract, impossible to lose. Generic things can always be replaced in fulfilling an obligation. He could have done so and effected a valid delivery of 600 piculs of sugar, but failed to do so within the three months agreed upon. Therefore, he is liable for the refund of the purchase price as well as the P1,200 penalty.
JOHANNES SCHUBACK & SONS PHIL. TRADING CORP vs CA
Sometime in 1981, Ramon San Jose (doing business under PHILIPPINE SJ INDUSTRIAL TRADING) contacted Schuback Hamburg through the Philippine Consulate General in Germany because he wanted to purchase MAN bus spare parts and he was referred to petitioner, their trading partner in the Philippines. San Jose submitted to petitioner a list of the parts he wanted to purchase with specific part numbers and description and petitioner replied with a letter with a quotation on the items.
Dec 17, petitioner submitted its formal offer containing the item number, quantity, part number, description, unit price and total.
Dec 24, San Jose informed petitioner of his desire to avail of the prices of the parts at that time and enclosed a Purchase Order w/c contained the item number, part number and description. He promised to submit the quantity per unit he wanted to order on December 28 or 29.
Dec 29, San Jose personally submitted the quantities he wanted to Mr. Reichert, General Manager of petitoner, w/c were written in ink by San Jose in the same Purchase Order previously submitted at the bottom of which, San Jose wrote in ink above his signature: "NOTE: Above P.O. will include a 3% discount. The above will serve as our initial P.O.” Petitioner ordered the items from Schuback Hamburg, who in turn ordered the items from NDK, a supplier of MAN spare parts in Germany. Schuback Hamburg sent petitioner a proforma invoice to be used by San Jose in applying for a letter of credit.
An order confirmation was later sent by Schuback Hamburg to petitioner w/c was forwarded to and received by San Jose.
Petitioner reminded San Jose to open the letter of credit to avoid delay in shipment and payment of interest, who replied, that he was having difficulty with that. In the meantime, Schuback Hamburg received invoices from NDK for partial deliveries and even paid NDK.
Petitioner again reminded San Jose of his order and advised that the case may be endorsed to its lawyers. San Jose replied that he did not make any valid Purchase Order and that there was no definite contract between him and plaintiff.
Schuback Hamburg issued a Statement of Account to petitioner charging plaintiff 30% cancellation fee, storage and interest charges in the total amount of DM 51,917.81 w/c was deducted from their account with Schuback Hamburg.
Demand letters were sent to San Jose to no avail. Thus, petitioner filed the case.
TC: in favor of petitioner CA: reverse decision of TC; no meeting of the minds as to the price
ISSUE: W/N a contract of sale has been perfected between the parties.
• A contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price (Art 1475 NCC)
•
A formal offer was made when petitioner submitted its proposal containing the item number, quantity, part number, description, the unit price and total to San Jose. On Dec 24, San Jose confirmed to purchase on the indicated prices and even issued a Purchase Order. However, it did not contain the quantities per unit but he merely bound himself to submit the quantities a week after, as they were confirmed later on Dec 29.•
A binding contract of sale existed upon issuance of the purchase order & not upon the confirmation of the buyer of the quantities covered by the order. Perfection did not take place on Dec 29 but on Dec 24. Although the quantity to be ordered was made determinate only on Dec 29, quantity is immaterial in the perfection of a sales contract. What is of importance is the meeting of the minds as to the object and cause, which from the facts disclosed, show that as of Dec 24, these essential elements had already occurred.•
The opening of a letter of credit in favor of Schuback Hamburg is only a mode of payment& it is not among the essential requirements of a contract of sale (Art 1305 & 1474 NCC) and therefore does not prevent the perfection of the contract between the parties.
PETITION GRANTED. REINSTATE ORDER OF TC.
IV – CONSIDERATION / PRICE
Mapalo v. MapaloMate v CA
Josie Rey and Inocencio Tan went to Fernando Mate’s residence, where Rey (being a cousin of Mate’s wife) appealed to Mate to help her stave off prosecution by Tan. It appears that Rey had issued several rubber checks in favor of Tan which amounted to over P4,000,000. Fearing prosecution under BP 22, Rey convinced Mate to cede to Tan his three lots in Tacloban City which would later on be repurchased by Rey for Mate (as in a pacto de retro sale). Mate agreed to sign the Deed of Sale with Right of Repurchase, on the condition that, among other things, the rate of interest would be 5% per month. It was also demanded by Mate that although the titles would be delivered to Tan, the sale would not be registered in the Register of Deeds. In consideration of this, Rey issued two checks in Mate’s favor (1.4 M for the selling price and 420 K for the interest). Sometime later, Mate deposited these checks in two different banks (he had both a Metrobank and a UCPB account) and (surprise surprise) the checks were dishonored for being drawn against a closed account. Mate tried to track Rey down but she had long gone into hiding. Mate now impugns the pacto de retro sale stating, amongst other things, that the sale was void for lack of consideration.
Was there valid consideration in the sale?
Yes, there was. While Mate did not actually get the 1.4 M from Tan (the vendee), he had in his possession a postdated check of Rey in an equivalent amount precisely to repurchase the two lots on or before the time provided (six months). He even got another check for 420 K representing the interest. There is absolutely no basis for Mate to file a complaint against Tan to annul the sale on the ground of lack of consideration, invoking his failure to encash the checks. His cause of action was to file a BP 22 case against Rey, which he did. But the filing of the criminal cases was
itself a tacit admission by Mate that there was a consideration of the pacto de retro sale. He is, in effect, stopped from questioning the same.
(Note: Mate also alleged that there existed a condition upon the sale, a stipulation saying that if the checks ended up being dishonored, the sale would be annulled. That’s total BS. Tan was already poised to file criminal cases against Rey for the issuance of past worthless checks. It wouldn’t be logical for Tan to agree to this supposed stipulation since he would, in the event of the checks being rejected, still be left unserved.)
Ong v. Ong
P1.00 consideration AND OTHER VALUABLE CONSIDERATIONS
Imelda Ong executed for and in consideration of P1.00 and other valuable considerations, a Quitclaim Deed in favor of a minor, Sandra Maruzzo where she transferred all her rights over ½ of an undivided portion of a parcel of land. Subsequently, she revoked said Quitclaim and donated the whole property to her son, Rex Ong Jimenez. Maruzzo filed for recovery of ownership/possession and the nullification of the Deed of Donation. Ong contends that the Quitclaim Deed was void as it is equivalent to a Deed of Donation, where acceptance by the donee is required and at the time, Maruzzo was still a minor who was incapable of accepting.
TC: Quitclaim = Deed of Sale. There was valid conveyance.
Ong appealed and contended that the P1.00 consideration was not consideration at all to amount to a sale. CA affirmed, saying that it is usual practice in deeds of conveyance to place a nominal amount although there is a more valuable consideration given.
Issue: w/n there was valid consideration Held: YES, the conveyance to Maruzzo is valid.
The conveyance was for and in consideration of P1.00 and other valuable considerations paid by Maruzzo through her representative. It was not just the P1.00 that was the consideration. The execution of a deed conveying ownership of a realty is in itself prima facie evidence of the existence of valuable consideration, the party alleging lack of consideration has the burden of proving such allegation.
Bagnas v. CA
Republic v Phil. Resources
Macario Apostol, president of Phil. Resources, submitted the highest bids for two auctions held by the Bureau of Prisons, one for 100 tons of Palawan almaciga and another for three million board feet of logs. In both cases, he was not able to pay the full bid price, leaving outstanding obligations totaling more than P65,000. In payment thereof and without the company’s knowledge or consent, he surrendered certain goods (e.g. G.I. sheets, black sheets, M.S. plates, round bars and G.I. pipes) to the Bureau in an attempt to settle the said obligations. Upon discovery of this, Phil. Resources demanded the return of the goods from the Bureau but the latter refused.
Can the delivery of these goods be considered payment for the outstanding balance of Apostol’s obligations?
It is for the Court to decide. The Civil Code provides that price “is always paid in terms of money and the supposed payment being in kind, it is no payment at all.” However, the same article also provides that the purchaser may pay “a price certain in money or its equivalent” which means that payment of the price need not be in money. It is therefore within the province of the Court to decide whether the goods submitted are sufficient as payment. Should the ruling be in the affirmative, it will of course be considered that such is to the detriment of Phil. Resources, assuming that it can prove its ownership over the goods in question. The law, in this case, will certainly protect Phil. Resources’ interests, and it will have adequate legal remedies to resort to should they incur loss as a result of Apostol’s payment.
VELASCO vs CA
•
Lorenzo Velasco & Magdalena Estate, Inc. entered into a contract of sale involving a lot in New Manila for 100K.The agreement was that Lorenzo would give a down payment of 10K (as evidenced by a receipt) to be followed by 20K (time w/in which to make full down payment was not specified) and the balance of 70K would be paid in installments, the equal monthly amortization to be determined as soon as the 30K had been paid. Lorenzo paid the 10K but when he tendered payment for 20K, Magdalena refused to accept & refused to execute a formal deed of sale. Velasco filed a complaint for damages.•
Magdalena denied having any dealings/contractual relations w/ Lorenzo. It contends that a portion of the property was being leased by Lorenzo’s sister-in-law, Socorro Velasco who went to their office & they agreed to the sale of the property (30K down payment, 70K on installments+9% interest). Since Socorro was only able to pay 10K, it was merely accepted as deposit & on her request, the receipt was made in the name of Lorenzo. Socorro failed to complete the down payment & neither has she paid the 70K. It was only 2 years after that she tendered payment for 20K & by then, Magdalena considered their offer to sell rescinded.•
According to Lorenzo, he had requested Socorro to make the necessary contracts & he had authorized her to make negotiations w/ Magdalena on her own name, as he doesn’t understand English. He also uses as evidence the receipt to prove that there already had been a perfected contract to sell as the annotations therein indicated that earnest money for 10K had been received & also the agreed price (100K, 30K dp & bal in 10 yrs) appears thereon. To further prove that it was w/ him & not w/ Socorro that Magdalena dealt with, he showed 5 checks drawn by him for payment of the lease of the property.W/N there was a consummated sale? NO
• The minds of the parties did not meet in regard to the matter of payment. It is admitted that they still had to meet and agree on how & when the down payment & installments were to be paid. Therefore, it cannot be said that a definite & firm sales agreement between the parties had been perfected.
• The definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding & enforceable contract of sale.
• The fact that Velasco delivered to Magdalena the sum of 10K as part of the down payment that they had to be pay cannot be considered as sufficient proof of the perfection of any purchase & sale agreement between the parties under Art 1428, NCC.
V – FORMATION OF CONTRACT OF
SALE
OPTION CONTRACT
CARCELLER vs CA
•
Respondent State Investment House, Inc. (SIHI) owns 2 parcels of land in Cebu and it entered into a lease contract w/ option to purchase with Carceller at a monthly rental of 10K for a period of 18 months. The lease contract stated that should Carceller exercise his privilege to purchase, he would have to pay 1.8M (360K down payment & balance to be paid over 60 months w/ 24%interest/annum).
• 3 weeks before the expiration of the lease contract, SIHI notified Carceller of the impending termination of the lease & of the short time w/c he could still validly exercise the option.
•
Carceller wrote a letter to SIHI requesting for a 6 month extension of the lease contract alleging that he needed to raise sufficient funds to be able to exercise his option. 14 days after the expiration of the lease, SIHI informed Carceller that his request was disapproved and instead, offered to lease the property for 1 year at 30K/month and also informed him that the property would be offered for sale to the general public.• Four days later, Carceller notified SIHI of his decision to exercise the option to purchase & made arrangements for the payment of the 360K d/payment. SIHI responded saying that the option period had already lapsed & asked him to vacate w/in 10 days & to pay rental & penalties.
• Carceller filed a complaint for specific performance & damages against SIHI. RTC: SIHI to execute deed of sale in favor of Carceller.
CA: Affirmed but purchase price should be based on prevailing market value.
W/N Carceller should be allowed to exercise the option to purchase despite the alleged delay of SIHI in giving the required notice to him?
