CASE DIGESTS

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Fule vs. CA, [G.R. No. 112212] Gaite vs. Fonacier, [G.R. No. L-11827]
Polytechnic University vs. CA, [G.R. No. 143513]
Carrascos, Jr. vs. CA, [G.R. No. 123672]
Vda. De Ape vs. CA, [G.R. No. 133638]
Clarin vs. Rulona, [G.R. No. L-30786]
Province of Cebu vs. Heirs of Rufina Morales, [G.R. No. 170]
Hyatt Elevators vs. Cathedral Heights, [G.R. No. 173881]
Doles vs. Angeles, [G.R. No. 149353]
Montecillo vs. Reynes, [G.R. No.138018

1. Fule v. CA
Facts:
Gregorio Fule, a banker and a jeweller, offered to sell
his parcel of land to Dr. Cruz in exchange for P40,000
and a diamond earring owned by the latter. A deed of
absolute sale was prepared by Atty. Belarmino, and on
the same day Fule went to the bank with Dichoso and
Mendoza, and Dr. Cruz arrived shortly thereafter. Dr.
Cruz got the earrings from her safety deposit box and
handed it to Fule who, when asked if those were
alright, nodded and took the earrings. Two hours after,
Fule complained that the earrings were fake. He files a
complaint to declare the sale null and void on the
ground of fraud and deceit.
Issue:
Whether the sale should be nullified on the ground of
fraud
Held:
A contract of sale is perfected at the moment there is a
meeting of the minds upon the thing which is the
object of the contract and upon the price. Being
consensual, a contract of sale has the force of law
between the contracting parties and they are expected
to abide in good faith by their respective contractual
commitments. It is evident from the facts of the case
that there was a meeting of the minds between
petitioner and Dr. Cruz. As such, they are bound by the
contract unless there are reasons or circumstances
that warrant its nullification.
Contracts that are voidable or annullable, even though
there may have been no damage to the contracting
parties are: (1) those where one of the parties is
incapable of giving consent to a contract; and (2) those
where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud. The records,
however, are bare of any evidence manifesting that
private respondents employed such insidious words or
machinations to entice petitioner into entering the
contract of barter. It was in fact petitioner who resorted
to machinations to convince Dr. Cruz to exchange her
jewelry for the Tanay property.
Furthermore, petitioner was afforded the reasonable
opportunity required in Article 1584 of the Civil Code
within which to examine the jewelry as he in fact
accepted them when asked by Dr. Cruz if he was
satisfied with the same. By taking the jewelry outside

the bank, petitioner executed an act which was more

consistent with his exercise of ownership over it. This
gains credence when it is borne in mind that he himself
had earlier delivered the Tanay property to Dr. Cruz by
affixing his signature to the contract of sale. That after
two hours he later claimed that the jewelry was not the
one he intended in exchange for his Tanay property,
could not sever the juridical tie that now bound him
and Dr. Cruz. The nature and value of the thing he had
taken preclude its return after that supervening period
within which anything could have happened, not
excluding the alteration of the jewelry or its being
switched with an inferior kind.
Ownership over the parcel of land and the pair of
emerald-cut diamond earrings had been transferred to
Dr. Cruz and petitioner, respectively, upon the actual
and constructive delivery thereof. Said contract of sale
being absolute in nature, title passed to the vendee
upon delivery of the thing sold since there was no
stipulation in the contract that title to the property sold
has been reserved in the seller until full payment of the
price or that the vendor has the right to unilaterally
resolve the contract the moment the buyer fails to pay
within a fixed period.
While it is true that the amount of P40,000.00 forming
part of the consideration was still payable to petitioner,
its nonpayment by Dr. Cruz is not a sufficient cause to
invalidate the contract or bar the transfer of ownership
and possession of the things exchanged considering
the fact that their contract is silent as to when it
becomes due and demandable.

2. Gaite v. Fonacier
Facts:
Gaite was appointed by Fonacier as attorney-in-fact to
contract any party for the exploration and
development of mining claims. Gaite executed a deed
of assignment in favor of a single proprietorship owned
by him. For some reasons, Fonacier revoked the
agency, which was acceded to by Gaite, subject to
certain conditions, one of which being the transfer of
ores extracted from the mineral claims for P75,000, of
which P10,000 has already been paid upon signing of
the agreement and the balance to be paid from the
first letter of credit for the first local sale of the iron
ores. To secure payment, Fonacier delivered a surety
agreement with Larap Mines and some of its
stockholders, and another one with Far Eastern
Insurance. When the second surety agreement expired
with no sale being made on the ores, Gaite demanded
the P65,000 balance. Defendants contended that the
payment was subject to the condition that the ores will
be sold.
Issue:

(1) Whether the sale is conditional or one with a period

(2) Whether there were insufficient tons of ores
Held:
(1) The shipment or local sale of the iron ore is not a
condition precedent (or suspensive) to the payment of
the balance of P65,000.00, but was only a suspensive
period or term. What characterizes a conditional
obligation is the fact that its efficacy or obligatory force
(as
distinguished
from
its
demandability)
is
subordinated to the happening of a future and
uncertain event; so that if the suspensive condition
does not take place, the parties would stand as if the
conditional obligation had never existed.

A contract of sale is normally commutative and

onerous: not only does each one 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 (as in the case of a sale of hopes or expectations,
emptio spei), it is not 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 proved by the fact
that Gaite insisted on a bond a to guarantee payment
of the P65,000.00, an not only upon a bond by
Fonacier, the Larap Mines & Smelting Co., and the
company's stockholders, but also on one by a surety
company; and the fact that appellants did put up such
bonds indicates that they admitted the definite
existence of their obligation to pay the balance of
P65,000.00.

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.

(2) The sale between the parties is a sale of a specific

mass or iron ore because no provision was made in
their contract for the measuring or weighing of the ore
sold in order to complete or perfect the sale, nor was
the price of P75,000,00 agreed upon by the parties
based upon any such measurement.(see Art. 1480,
second par., New Civil Code). The subject matter of the
sale is, therefore, a determinate object, the mass, and
not the actual number of units or tons contained
therein, so that all that was required of the seller Gaite
was to deliver in good faith to his buyer all of the ore
found in the mass, notwithstanding that the quantity
delivered is less than the amount estimated by them.

3. Polytechnic University of the Philippines vs

Court of Appeals and Firestone Ceramics
National Development Corporation vs Firestone
Ceramics Inc.
[GR No. 143513 and 143590.
November 14, 2001]
Facts:
Petitioner National Development Corp., a government
owned and controlled corporation, had in its disposal a
10 hectares property. Sometime in May 1965, private
respondent Firestone Corporation manifested its desire
to lease a portion of it for ceramic manufacturing
business. On August 24, 1965, both parties entered
into a contract of lease for a term of 10 years
renewable for another 10 years. Prior to the expiration
of the aforementioned contract, Firestone wrote NDC
requesting for an extension of their lease agreement. It
was renewed with an express grant to Firestone of the
first option to purchase the leased premise in the event
that it was decided "to dispose and sell the properties
including the lot..."
Cognizant of the impending expiration of the leased
agreement, Firestone informed NDC through letters
and calls that it was renewing its lease. No answer was
given. Firestone's predicament worsened when it
learned of NDC's supposed plans to dispose the subject
property in favor of petitioner Polytechnic University of
the Philippines. PUP referred to Memorandum Order No.
214 issued by then President Aquino ordering the
transfer of the whole NDC compound to the National
Government. The order of conveyance would
automatically result in the cancellation of NDC's total
obligation in favor of the National Government.
Firestone instituted an action for specific performance
to compel NDC to sell the leased property in its favor.
Issue:
1. Whether or not there is a valid sale between NDC
and PUP.
Ruling:

A contract of sale, as defined in the Civil Code, is a

contract where one of the parties obligates himself to
transfer the ownership of and to deliver a determinate
thing to the other or others who shall pay therefore a
sum certain in money or its equivalent. It is therefore a
general requisite for the existence of a valid and
enforceable contract of sale that it be mutually
obligatory, i.e., there should be a concurrence of the
promise of the vendor to sell a determinate thing and
the promise of the vendee to receive and pay for the
property so delivered and transferred. The Civil Code
provision is, in effect, a "catch-all" provision which
effectively brings within its grasp a whole gamut of
transfers whereby ownership of a thing is ceded for a
consideration.
All three (3) essential elements of a valid sale, without
which there can be no sale, were attendant in the
"disposition" and "transfer" of the property from NDC
to PUP - consent of the parties, determinate subject
matter, and consideration therefor.
Consent to the sale is obvious from the prefatory
clauses of Memorandum Order No. 214 which explicitly
states the acquiescence of the parties to the sale of
the property. Furthermore, the cancellation of NDC's
liabilities in favor of the National Government
constituted the "consideration" for the sale.

3. G.R. No. 143513 November 14, 2001

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES,
petitioner,vs. COURT OF APPEALS and FIRESTONE
CERAMICS, INC., respondents.x-G.R. No. 143590 November 14, 2001NATIONAL
DEVELOPMENT
CORPORATION,
petitioner,vs.
FIRESTONE CERAMICS, INC.,
respondents. BELLOSILLO, J
Facts: National Development Corporation (NDC) and
Firestone Ceramics Inc. Entered into a contract of lease
covering the part of the property to be used as
manufacturing plant for ten years. Three and a half
years later Firestone entered into a second contract of
lease covering the four-unit pre-fabricated reparation
steel warehouse. The parties then signed a similar
contract concerning six-unit pre-fabricated steel
warehouse to be expired in two years. Prior to its
expiration, Firestone requested NDC for an extension of
their lease agreement which was granted by NDC
subject to several conditions such as in the event NDC
wanted to dispose it priority should be given to the
lessee. The lessor-lessee relationship between the two
was smooth until Firestone informed NDC that it was
extending its lease over the property. NDC sold the
subject property to Polytechnic University of the
Philippines despite the notice of desire to purchase the
property in the exercise of its contractual sent by
Firestone

Issue: Whether or not the the contract of sale between

NDC and PUP was valid?
Held: No. Though all the elements of a valid sale were
attendant in the disposition and transfer of property
from NDC to PUP namely consent of the contracting
parties, price or consideration and determinate subject
matter, the sale is invalid because it violated the right
of first refusal of Firestone which was one of the
conditions under their lease contract granted by NDC
4. G.R. No. 123672: Fernando Carrascoso, Jr. v.
Court of Appeals and Lauro Leviste December
14, 2005. 477 scra 666
Contract to Sell vs Contract of Sale
In March 1972, El Dorado Plantation Inc, through board
member Lauro Leviste, executed a Deed of Sale with
Carrascoso. The subject of the sale was a 1825 hectare
of land. It was agreed that Carrascoso is to pay P1.8M.
P290K would be paid by Carrascoso to PNB to settle the
mortgage placed on the said land. P210k would be paid
directly to Leviste. The balance of P1.3M plus 10%
interest would be paid over the next 3 years at P519k
every 25 th of March. Leviste also assured that there
were no tenants hence the land does not fall under the
Land Reform Code. Leviste allowed Carrascoso to
mortgage the land which the latter did. Carrascoso
obtained a total of P1.07M as mortgage and he used
the same to pay the downpayment agreed upon in the
contract. Carrascoso defaulted from his obligation
which was supposed to be settled on March 25, 1975.
Leviste then sent him letters to make good his end of
the contract otherwise he will be litigated. In 1977,
Carrascoso executed a Buy and Sell Contract with
PLDT. The subject of the sale was the same land sold to
Carrascoso by Leviste but it was only the 1000 sq m
portion thereof. The land is to be sold at P3M. Part of
the terms and conditions agreed upon was that
Carrascoso is to remove all tenants from the land
within one year. He is also given a 6 month extension
incase hell need one. Thereafter, PLDT will notify
Carrascoso if whether or not PLDt will finalize the sale.
PLDT gained possession of the land. El Dorado filed a
civil case against Carrascoso. PLDT intervened averring
that it was a buyer in good faith. The RTC ruled in favor
of Carrascoso. CA reversed the RTC ruling.
ISSUE:
What is the nature of each contract?
HELD:
The contract executed between El Dorado and
Carrascoso was a contract of sale. It was perfected by
their meeting of the minds and was consummated by
the delivery of the property toCarrascoso. However, El
Dorado has the right to rescind the contract by reason
of Carrascosos failure to perform his obligation. A
contract of sale is a reciprocal obligation. The seller
obligates itself to transfer the owner shipof and deliver
a determinate thing, and the buyer obligates itself to
pay therefor a price certain in money or its equivalent.

The non-payment of the price by the buyer is a

resolutory condition which extinguishes the transaction
that for a time existed, and discharges the obligations
created there under. Such failure to pay the price in the
manner prescribed by the contract of sale entitles the
unpaid seller to sue for collection or to rescind the
contract. The contract between Carrascoso and PLDT is
a contract to sell. This is evidenced by the terms and
conditions that they have agreed upon that after
fulfillment of Carrascosos obligation PLDT has to
notify Carrascoso of its decision whether or not to
finalize the sale.Carrascoso also averred that there
was a breach on El Dorados part when it comes to
warranty. Carrascoso claimed that there were tenants
on the land and he spent about P2.9Mrelocating them.
The SC ruled that Carrascoso merely had a bare claim
without additional proof to support it
Requisites of Express warranty in a Contract of
Sale
(1) the express warranty must be an affirmation of fact
or any promise by the seller relating tothe subject
matter of the sale;
(2) the natural tendency of such affirmation or promise
is to induce the buyer to purchase thething; and
3) the buyer purchases the thing relying on such
affirmation or promise thereon
5.

Vda. De Ape vs. CA, [G.R. No. 133638]

456 SCRA 193 Civil Law Law on Sales

Elements of a Contract of Sale Consent Vitiated
FACTS:
Cleopas Ape died in 1950 and left a parcel of land (Lot
2319) to his 11 children. The children never formally
divided the property amongst themselves except
through hantal-hantal whereby each just occupied a
certain portion and developed each.
On the other hand, the spouses Lumayno were
interested in the land so they started buying the
portion of land that each of the heirs occupied. On 11
Apr 1973, one of the children, Fortunato, entered into a
contract of sale with Lumayno. In exchange of his lot,
Lumayno agreed to pay P5,000.00. She paid in
advance P30.00. Fortunato was given a receipt
prepared by Lumaynos son in law (Andres Flores).
Flores also acted as witness. Lumayno also executed
sales transactions with Fortunatos siblings separately.
In 1973, Lumayno compelled Fortunato to make the the
delivery to her of the registrable deed of sale over
Fortunatos portion of the Lot No. 2319. Fortunato
assailed the validity of the contract of sale. He also
invoked his right to redeem (as a co-owner) the
portions of land sold by his siblings to Lumayno.
Fortunato died during the pendency of the case.
ISSUE: Whether or not there was a valid contract of
sale?

HELD: No. Fortunato was a no read no write person.

It was incumbent for the the other party to prove that
details of the contract was fully explained to Fortunato
before Fortunato signed the receipt.
A contract of sale is a consensual contract, thus, it is
perfected by mere consent of the parties. It is born
from the moment there is a meeting of minds upon the
thing which is the object of the sale and upon the price.
Upon its perfection, the parties may reciprocally
demand performance, that is, the vendee may compel
the transfer of the ownership and to deliver the object
of the sale while the vendor may demand the vendee
to pay the thing sold. For there to be a perfected
contract of sale, however, the following elements must
be present: consent, object, and price in money or its
equivalent.
For consent to be valid, it must meet the following
requisites:
(a) it should be intelligent, or with an exact notion of
the matter to which it refers;
(b) it should be free and
(c) it should be spontaneous. Intelligence in consent is
vitiated by error; freedom by violence, intimidation or
undue influence; spontaneity by fraud.
Lumayno claimed that she explained fully the receipt
to Fortunato, but Flores testimony belies it. Flores said
there was another witness but the other was a maid
who also lacked education. Further, Flores himself was
not aware that the receipt was to transfer the
ownership of Fortunatos land to her mom-in-law. It
merely occurred to him to explain the details of the
receipt but he never did.
6.
Clarin vs Rulona
Civil Law Law on Sales Perfected Contract of
Sale
Facts:
Olegario Clarin was the owner of a 10-hectare land in
Carmen, Bohol. The same was said to be his share from
the other co-owners. In 1959, he executed a Contract
of Sale with Alberto Rulona. It was agreed that the
purchase price would be P2,500.00. Downpayment
would be P1,000.00 and the remaining balance would
be paid monthly at P100.00 per month. Rulona paid the
downpayment as well as the 1stinstallment but then
later on Clarin returned the P1,100.00 against Rulonas
will. Clarin said he could not convince the other coowners about the selling of his share. Clarin also said
there was no perfected sale between him and Rulona
as he said that the sale was subject to the condition
that the other co-owners should give their consent to
the sale.
ISSUE:
Whether or not there was a perfected contract of sale.
HELD:
Yes there is. During trial there were 3 documents
shown. Exhibit A shows that upon payment of P800.00

by Rulona, a survey of the land was authorized. Exhibit

B shows that P200.00, part of the down payment was
paid to Clarin and that the 1stinstallment of P100.00
was also made. Though these exhibits are not the
Contract of Sale, they show that there was a contract
of sale between Rulona and Clarin.
Construing Exhibits A and B together, it can be seen
that the Clarin agreed to sell and Rulona agreed to buy
a definite object, that is, 10 hectares of land which is
part and parcel of Lot 20 PLD No. 4, owned in common
by the Clarin and his sisters although the boundaries of
the 10 hectares would be delineated at a later date.
The parties also agreed on a definite price which is
P2,500.00. Exhibit B further shows that Clarin has
received from Rulona as initial payment, the amount of
P800.00. Hence, it cannot be denied that there was a
perfected contract of sale between the parties and that
such contract was already partially executed when the
petitioner received the initial payment of P800.00. The
latters acceptance of the payment clearly showed his
consent to the contract thereby precluding him from
rejecting its binding effect.
Further, Clarins letter to Rulona marked Exhibit C
stated;
My dear Mr. Rulona:
Replying to your letter of recent date, I deeply regret to
inform you that my daughter, Alice, who is now in
Manila, could not be convinced by me to sell the land
in question, that is, the ten (10) hectares of land
referred to in our tentative agreement. It is for this
reason that I hereby authorize the bearer, Mr. Paciano
Parmisano, to return to you in person the sum of One
Thousand and One Hundred (P1,100.00) Pesos which
you have paid in advance for the proposed sale of the
land in question.
The reasons given by the Clarin cannot operate against
the validity of the contract in question. A contract is
valid even though one of the parties entered into it
against his better judgment.

7. Province of Cebu vs. Heirs of Rufina Morales, [G.R. No. 170

Facts:
Province of Cebu leased in favor of Rufina Morales a
210-square meter lot. Petitioner donated the lot
occupied by Morales to the City of Cebu. The city, then,
sold the subject lot at public auction. The highest
bidder for the said lot was Hever Bascon but Morales

was allowed to match the highest bid since she had a

preferential right to the lot as actual occupant thereof.
Morales thus paid the required deposit and partial
payment for the lot. Later, the subject lot was returned
to petitioner and registered in its name. Morales died
and apart from the deposit and down payment, she
was not able to make any other payments on the
balance of the purchase price for the lot. Now the
surviving heirs of Morales are asking for the formal
conveyance of subject lot, in accordance with the
award earlier made by the City of Cebu. They also
consigned with the court the amount representing the
balance of the purchase price which petitioner
allegedly refused to accept.

Issue:
Can respondents still tender payment of the full
purchase price? Yes
Held:
Article 1592 of the Civil Code pertinently provides that
In the sale of immovable property, even though it may
have been stipulated that upon failure to pay the price
at the time agreed upon the rescission of the contract
shall of right take place, the vendee may pay, even
after the expiration of the period,
as long as no demand for rescission of the contract has
been made upon him either judicially or by notarial act
. After the demand, the court may not grant him a new
term. Thus, respondents could still tender payment of
the full purchase price as no demand for rescission had
been made upon them, either judicially or through
notarial act. While it is true that it took a long time for
respondents to bring suit for specific performance and
consign the balance of the purchase price, it is equally
true that petitioner or its predecessor did not take any
action to have the contract of sale rescinded. Article
1592 allows the vendee to pay as long as no demand
for rescission has been made.
The consignation of the balance of the purchase price
before the trial court thus operated as full payment,
which resulted in the extinguishment of respondents
obligation under the contract of sale.