Acap

vs CA
Facts:
The parcel of land in dispute in this case is a lot located in Hinigaran, Negros Occidental and owned by one
Cosme Pido by virtue of a Declaration of Heirship and Absolute Sale executed by Felixberto Vasquez, who
inherited the lot from spouses Santiago Vasquez and Lorenza Oruma.
Since 1960, a certain Teodoro Acap, herein petitioner, had been the tenant of the subject lot in question.
He had also been a tenant of the lot even until Pidos death. He had been religiously paying rentals to
Pidos wife Laurenciana after the formers death in 1981.
Upon Pidos death in 1981, his heirs executed a notarized document entitled Declaration of Heirship and
Waiver of Rights over the subject lot. The document was signed by all of Pidos heirs. Upon the signing of
that document, private respondent Ely de los Reyes filed a notice of adverse claim over the subject
property with the Declaration of Heirship and Waiver of Rights attached to it.
After filing the notice, private respondent went to Acap to tell him that he was the new owner of the
subject property. The two parties went on to agree that Acap would pay PR 10 cavans of palay per annum
as the lease rental over the subject property.
After one year of complying with the agreement, petitioner Acap suddenly refused to pay the cavans of
palay starting in 1983. This prompted PR to seek the assistance of the Ministry of Agrarian Reform, who
organized a meeting between the two parties. Petitioner failed to attend the meeting but was
represented by his wife, who told the MAR that they did not recognize private respondents ownership
over the subject land.
Four years later, PR would file for the recovery of possession over the subject property claiming
ownership over it by virtue of by virtue of the Declaration of Heirship and Waiver of Rights signed by the
heirs of Cosme Pido.
Petitioner Acap said that he had no knowledge about the transfer of ownership to PR and that he had
been religiously paying rentals to Pidos wife Laurenciana even after her departure for abroad.
Both the lower court and the CA rendered a decision in favor of PR saying that the Declaration of Heirship
and Waiver of Rights, although not registered, was prima facie evidence of a transfer of ownership from
the heirs of Pido to PR since it was notarized. Furthermore, the CA also said that Acap was estopped from
denying he knew of PRs ownership over the subject land because he had paid rentals to PR for a period of
about one year before claiming in 1983 that he did not recognize such ownership.

Issue: WON the Declaration of Heirship and Waiver of Rights effectively transferred ownership to PR and WON
such a document can be considered a sale in favor of PR

Held:
No
The court said that an asserted right or claim of ownership over a thing arising from a juridical act is not
sufficient to give rise to ownership over the subject lot. That right must be accompanied by the
completion of certain conditions imposed by the law. Hence, ownership and real rights are acquired only
pursuant to a legal mode or process. While title is the juridical justification, mode is the actual process of
transfer of ownership over a thing.
There are two modes of acquiring ownership under Art. 712 of the Civil Code. The first one is the original
mode, which is through occupation, acquisitive prescription, law or intellectual creation. The second one
is the derivative mode, which is through succession mortis causa or tradition as a result of contracts such
as sale, barter, donation, or assignment.
The SC, in this case, said that the lower courts were confused in equating the Declaration of Heirship and
Waiver of Rights to that of a deed of sale. A contract of sale is one where one party obligates himself to
transfer ownership and to deliver a determinate thing to another. On the other hand, the Declaration of
Heirship and Waiver of Rights is more of a extrajudicial settlement under Rule 74 of the ROC. It was not a
sale of hereditary right but rather a waiver of such.
A sale of hereditary rights presumes the existence of a contract of sale between the parties. A waiver of
hereditary rights is merely a mode of extinction of ownership over a particular thing in favor of co-heirs.

PR, in this case, was a stranger to the succession because he was not a co-heir. As such, he cannot claim
ownership over the subject land by virtue of a waiver of hereditary rights.
Furthermore, the notice of adverse claim filed by PR is also not conclusive of a deed of sale executed by
the heirs of Pido because the claim was neither identified by the heirs nor was it registered with the
Registry of Deeds.
Neither can the PR claim that Acap was already estopped from claiming they did not recognize PRs
ownership because, as the Court said, they must have only believed in good faith that ownership was
transferred. It was only after a year that they stopped paying rentals to PR because they had misgivings
over PRs ownership over the subject property.

Toyota Shaw vs CA
Facts:
Respondent Luna Sosa, some time in 1989, wanted to buy a Toyota Lite Ace. Upon contacting Toyota
Shaw Inc., Sosa was informed that there was an available unit for purchase. Sosa would go to Toyota
Shaw where he met Popong Bernardo, a sales representative of Toyota.
Sosa told Bernardo that he needed the unit not later than June 17, 1989 because he needed it for
personal and family affairs. He also said that, if he did not arrive in his hometown of Marinduque with the
new car, he would become the laughing stock of the town.
Bernardo then assured Sosa that a unit will be available by 10am of June 17. After which, the two parties
signed a document entitled Agreements Between Mr. Sosa and Popong Bernardo. The agreements
states that all necessary documents should be submitted to Toyota a week after Sosas arrival in
Marinduque, that the downpayment of 100k will be paid by Sosa on June 15, and that the lite ace will be
released by Toyota Shaw at 10am of June 17.
On June 15, Sosa went to Toyota to pay the downpayment of 100k as said in the agreement. He and
Bernardo then accomplished a Vehicle Sales Proposal (VSP). Among others, the VSP stated that the
payment for the Lite Ace is by installment to be financed by BA Finance.
On June 17, Bernardo called Sosa to tell him that the unit will not be available by 10am but rather on 2pm
of the same day. An hour after 2pm, Bernardo allegedly told Sosa that unit could not be delivered because
it was given to another buyer.
Toyota, however, said that they could not deliver the unit to Sosa because BA Finance disapproved the
financing application of Sosa. Toyota also said that they offered to sell the unit to Sosa at the full purchase
price only to be refused by Sosa. Sosa asked for the refund of the downpayment, which was returned by
Toyota promptly.
Sosa, thereafter, sent two letters to Toyota. The first one demanded the return of the 100k downpayment
plus interest. The second one demanded that Toyota pay Sosa 1 million pesos worth of damages and
interest. After his demands fell on deaf ears, Sosa filed with the RTC a complaint for damages against
Toyota claiming that he had suffered moral damages as a result of Toyotas inability to comply with their
contract of sale.
Toyota would then allege that there was no perfected sale between the two parties and that Bernardo
had no authority to sign the Agreements on its behalf.
Both the trial court and the CA rendered their decisions in favor of Sosa saying that the Agreements
between Sosa and Bernardo constituted a perfected contract of sale between the two parties.

Issue: WON there was a perfected contract of sale between Sosa and Toyota

Held:
No
According to Article 1458 of the Civil Code, a contract of sale is one where a contracting party obligates
himself to transfer the ownership of and to deliver a determinate thing to the other party, who obligates
himself to pay a price certain in money or its equivalent.
Article 1475 also provides that a contract of sale is deemed perfected when there is a meeting of the
minds upon the thing which is the object of the contract and upon the price.

The SC said that the Agreements is not a contract of sale because there was no obligation on the part of
Toyota to transfer ownership of a determinate thing nor was there an obligation on the part of Sosa to
pay a price certain for the delivery of a thing. Though the Agreements stated that Sosa would pay 100k
as downpayment, there was no specific reference to the sale of a vehicle. There was no definiteness on
what the 100k was for and nothing was mentioned about the full purchase price of the vehicle and the
manner of installment it was to be paid.
The Court also said that it is essential that there be a definite agreement on the manner of payment for a
contract of sale to be enforceable. This is so because the agreement as to the manner of payment goes
into the price such that a disagreement on the manner of payment is tantamount to a failure to agree on
the price.
Moreover, the Agreements also shows that there was an absence of a meeting of the minds between
Sosa and Toyota. First of all, Sosa did not even sign the document and he was also well aware that
Bernardo, the one who singed it, was only a mere sales representative of Toyota and had no authority to
sell any vehicle on behalf of Toyota.
At best, the Agreeements may only be considered as part of the negotiation stage of a contract of sale.
The three stages are preparation, perfection, and consummation.
In this case, the execution of the VSP was the second stage of the contract of sale. However, the VSP also
stated that the balance of the purchase price was to be shouldered by BA Finance upon approval of Sosas
application. However, since BA Finance did not approve of Sosas application, there was no meeting of the
minds between Toyota and Sosa regarding the contract of sale for the lite ace. At best, the VSP is merely a
proposal which was aborted because of BA Finance disapproval of Sosas application for financing.

Polytechnic University of the Philippines vs CA
Facts:
The National Development Corporation, a government owned and controlled corporation, is the owner of
a ten-hectare property land, which is the disputed lot in this case.
In 1965, Firestone Ceramics Inc. leased portion of the NDC compound for its business purposes. The term
of the lease was for 10 years and was also renewable for another 10 years. Some time in 1978, Firestone
wrote NDC requesting for an extension of their lease. The lease was granted with an additional condition
that priority should be given to the lessee Firestone if ever NDC were to decide to sell the properties that
had the leased portions of Firestone.
In 1988, Firestone then informed NDC of their desire to extend the lease for another 10-year period.
While they were waiting for a response from NDC, it came to the knowledge of Firestone that NDC had
plans of disposing the property to respondent Polytechnic University of the Philippines (PUP) in exchange
for the cancellation of NDCs debt to the national government. Because of this, Firestone served notice
upon NDC to inform the latter of its desire to exercise its right of first refusal.
Firestone, subsequently, instituted an action for specific performance to compel NDC to sell the subject
property in its favor prior to its transfer to the PUP. In support of this was a letter submitted to then
President Corazon Aquino concerning the NDCs plans of transferring the subject property to the PUP. The
letter also expressly recognized the existence of Firestones right of first refusal over the subject property.
PUP would intervene in the case on the ground that it had an interest over the litigation as purchaser
pendete lite. The trial court accepted the PUPs intervention but subsequently ordered the sale of the
subject property to Firestone in exercise of its right of first refusal. The CA affirmed such decision.
PUP moved for the reconsideration of the case claiming that the trial court unfairly created a contract to
sell between NDC and Firestone by ordering the NDC to allow Firestone to exercise its right of first refusal.
They argued that the order of the court cannot substitute for the consent of all parties in determining
whether a contract was perfected or not. PUP also said that there was no consideration paid by Firestone
for the right of first refusal. As such, the stipulation should be voided.
On the other hand, the NDC also averred that since both the NDC and the PUP were government entities,
the transaction cannot be legally called a sale because ownership still rested with the government even
after transferring the property from NCD to PUP.

Issue: WON Firestone could exercise its right of first refusal and WON the transfer of the properties from NDC to
PUP is a sale

Held:
As to whether or not the transfer from NDC to PUP constitutes a sale, the court said yes. It cannot be said
that there was only one party to the transaction upon the transfer of the properties by the NDC to PUP.
Both the NDC and PUP have separate and distinct charters to counter the claim that it was merely the
government that was involved in the transaction. Being GOCCs, both the NDC and the PUP have distinct
legal personalities of their own and that the transaction between these two entities constitutes a
transaction between two different personalities.
Furthermore, all three essential requisites of a sale is present in this case. First, Memorandum Order No
214 explicitly stated that both parties consented to the sale of the subject property. Second, the
memorandum also stated that the subject properties were the definite subject matter of the sale. And
third what constituted as the consideration of the sale was the cancellation of NDCs outstanding debt to
the government.
With all those stated, the SC came to the conclusion that there was not a mere transfer of the properties
from one government entity to another but there was actually a sale that involved the subject property
for a consideration.
Furthermore, the PUPs subsequent actions belie the NDCs claim that there was only a mere transfer.
First, when the PUP acquired the properties, it itself posted notices within the property to advise the
residents to vacate it. Second, when it intervened, PUP admitted that it purchased the property when it
claimed that it was a purchaser pendeted lite.
On whether or not Firestone should be allowed to exercise its right of first refusal, the SC said that there
was a consideration paid for the right of first refusal because such a stipulation was part and parcel of the
lease. As such, whatever the consideration was for the lease contract was also the consideration for the
right of first refusal. Given that, the NDC should have first allowed Firestone to exercise its right. Only
when Firestone was not amenable to the purchase price should the NDC have sold the property to PUP.


Manila Container vs PNB
Facts:
Petitioner Manila Container was the owner of the parcel of land subject of the case at bar. They would
later execute a REM over the subject property as security for a 900k loan from respondent PNB. On March
1981, petitioner would again secure another loan from PNB by still using the subject property as security
for the loan.
About a year later, PNB sought for the extrajudicial foreclosure of the REM and sought to have the subject
property sold at public auction to answer for petitioners outstanding balance. PNB was the highest bidder
and was declared the winner of the public auction.
On August 1983, petitioner wrote PNB requesting for an extension of time to redeem the property. A year
later, they reiterated their request for a one-year extension to redeem the subject parcel of land on a
installment basis. They were then informed that the bank, as a matter of policy, did not accept partial
redemption. Since the petitioners could not redeem the property in time, the parcel of land was
consolidated in the name of PNB.
In the meantime, the Special Assets Management Department (SAMD) of PNB prepared a detailed
statement of account of petitioners outstanding obligation, which amounted to about 1.5 million pesos.
When told of the amount, petitioner remitted 725k to PNB as a deposit to repurchase.
SAMD also recommended the same amount to the PNB Board of Directors only for them to inform the
petitioners that they were rejecting the recommended amount of about 1.5 million and offered the
property at about 2.6 million. They also told petitioners that if they would not act on the proposal, the
725k would be returned to them.
Instead of accepting the 2.6 million offer to redeem the property, petitioner reiterated to PNB that it had
already accepted the 1.5 million offer made by the SAMD. Hence the 725k deposit they made.

PNB would later inform petitioners that it had decreased the redemption price to about 1.9 million pesos
minus the 725k deposit already made. However, petitioner still maintained that they had already
accepted the 1.5 milion offer. PNB rejected the offer.
Petitioner then filed a complaint against PNB for specific performance claiming that there was already a
perfected sale when they accepted the 1.5 million offer to redeem by PNBs SAMD.
In its answer, PNB said that there was no contract of sale perfected between it and petitioner.
While the case was pending, petitioner again offered to purchase the property at 3.5 million only to be
rejected by PNB.
The trial court then rendered a decision saying that there was no perfected contract of sale between the
parties and that, because of this, petitioners had no cause of action for specific performance. The CA
affirmed the decision.
Petitioner now claims that they had already accepted the 1.5 million offer made by the SAMD. Upon their
acceptance, they deposited the 725k as partial payment. Petitioner also averred that when the SAMD
accepted their deposit, they also accepted the offer to repurchase at 1.5 million. Because of that, they
aver that respondent PNB could no longer unilaterally withdraw the offer to sell the property at 1.5
million since they were was already an acceptance on the part of petitioner and that the 725k
represented earnest money as contemplated under Article 1482 of the Civil Code.
PNB now contends that the parties never graduated from the negotiation stage as there was no definite
agreement regarding the repurchase price. They insist that what transpired were merely exchanges of
counter-proposals regarding the redemption price. Since there was no agreement, PNB insists that there
was no perfected contract.
They also said that the SAMDs statement of account cannot be considered as a counter-offer because it
was merely a recital of petitioners obligation to PNB and it had no capacity to bind PNB since only the
Board of Directors had the authority to do so. Moreover, it was merely a recommendation that needed
the approval of PNBs Board of Directors.
The 725k deposit could not be considered as earnest money as well because, as PNB stated, they merely
accepted the deposit as part of the repurchase price pending the approval of the Board of Directors on
the SAMDs recommendation. Since a condition was imposed, there was no absolute acceptance of the
offer.

Issue: WON there was a perfected contract of sale between the parties

Held:
No
A contract of sale is consensual in nature and is perfected upon the meeting of the minds. When an offer
is made without the acceptance of the other party, there is no perfected contract of sale.
There are also three stages to a contract: 1. Negotiation, 2. Perfection, and 3. Consummation. At the
negotiation stage, an offer definite must be made. The offer may be withdrawn at any time before it is
accepted. Once accepted, a contract is perfected and the acceptance must be made unequivocally and
unconditionally. A qualified acceptance is but a mere counter offer which must also be accepted by the
other party for a perfected contract to arise.
As the facts shows, petitioner was given a statement of account by the SAMD after they reiterated their
offer to redeem the subject property. However, the amount given by the SAMD cannot constitute as an
unqualified acceptance to petitioners offer to repurchase because it was merely a computation of
petitioners obligation to PNB.
Moreover, there was also no evidence that the SAMD had the authority to accept the offer to repurchase
the property absent a resolution by the Board of Directors. A corporation can only transact business
through its Board of Directors and its agents and officers authorized by a board resolution.
In this case, it appeared that the computation made by the SAMD was but a mere recommendation that
needed the approval of the Board of Directors. By setting the purchase price at 2.6 million, the Board
effectively rejected the SAMDs recommendation and it constituted a counter-offer made to petitioners.
And since petitioners did not accept the counter offer, there was no perfected contract of sale.

It cannot also be said that the 725k deposit was earnest money because, as the facts showed, the deposit
was merely made to be deducted from the repurchase price pending the Board of Directors approval of
what the purchase price was. Therefore, it was merely a deposit to be applied to the purchase price
pending the Boards decision on the matter.

Velarde vs CA
Facts:
Defendant David Raymundo and petitioners Avelina Velarde executed a Deed of Sale with Assumption of
Mortgage wherein Raymundo sold a parcel of land located in Dasmarinas Village, Makati, to Velarde.
The conditions of the sale stated that Velarde would assume payment of the 1.8 million loan that
Raymundo secured by mortgaging the subject parcel of land with the BPI. And while Velardes application
for the assumption of mortgage obligations on the property is not yet approved by BPI, Velarde would pay
the mortgage obligations on the subject property in the name of Raymundo.
The Deed of Sale with Assumption of Mortgage also included a clause that said that if ever Velarde were
to violate any of the terms and conditions of the Deed of Real Estate Mortgage, her downpayment of
800k and all the payments made to BPI shall be forfeited in favor of Raymundo as liquidated damages,
that Raymundo shall resume ownership and possession over the subject property, and that the Deed of
Sale with Assumption of Mortgage shall be deemed automatically cancelled.
Pursuant to the agreement, Velarde religiously paid BPI the monthly interests on the loan by the
mortgage for three straight months.
However, Velarde was informed that BPI did not approve the Application for Assumption of Mortgage.
Because of that, they refused to make further payments.
Thru counsel, Raymundo told Velarde that their failure to pay the outstanding balance with BPI
constituted non-performance of their obligation.
On the other hand, Velarde wrote back to Raymundo a month after stopping their payments. In the letter,
Velarde said that she was willing to pay the balance in cash provided that Raymundo comply with certain
conditions namely: the deliver of the property to Velarde, the release of the title and mortgage from BPI
and to make the title free from any liens and encumberances, and to execute a deed of absolute sale over
the subject property in favor of Velarde.
Raymundo, on the other hand, promptly sent a notice to Velarde telling the latter that he was unilaterally
rescinding the contract for Velardes failure to comply with the terms and conditions of the Deed.
Consequently, Velarde filed for specific performance against Raymundo.
The lower court and the CA rendered a decision in favor of Raymundo.
Velarde now claims that they did not breach the contract by failing to pay Raymundos mortgage
obligation considering that their application to assume the obligation had been denied by BPI. And since
such application was denied, Velarde claims that the obligation to pay the mortgage befell upon
Raymundo again.
They also claim that the unilateral rescission made by Raymundo was not justified because they had
expressed their willingness to pay the balance of the purchase price a month after they were stopped
paying the mortgage. They said that it was not a substantial breach and that it should not have warranted
the automatic rescission of the deed

Issue: WON Velarde breached the terms and conditions of the Deed of Sale with Assumption of Mortgage and
WON such a breach warrants the rescission of the deed

Held:
Yes to both
According to the agreement executed by the parties, petitioner Velarde should have paid the balance of
the purchase price upon BPIs disapproval of their application for assumption of mortgage.
However, instead of paying the purchase price, Velarde altogether stopped payments to BPI for one
month. It was only after a month when she expressed her willingness to pay the purchase price but with
additional conditions that were not agreed upon in the original Deed.

In a contract of sale, the seller obligates himself to transfer the ownership of a determinate thing while
the buyer obligates himself to pay a price certain in money or its equivalent.
In this case, Raymundo had already performed their obligation by executing the original Deed of Sale with
Assumption of Mortgage in favor of Velarde. Physical delivery of the subject matter is not required and
the execution of the deed was already substantial compliance of delivery.
On the other hand, Velarde failed to perform their end of the contract of sale. Instead of paying the
purchase price like they had agreed upon in the deed, Velarde only agreed on doing so with additional
conditions that were not present when they executed the deed.
Regarding the issue on rescission, the Court said that it was only right under Article 1191 of the Civil Code
that respondents Raymundo rescind the Deed of Sale. Although Velarde had later expressed her
willingness to comply with the obligation, it was only after a month that she decided to do so and it was
with additional conditions and obligations on the part of Raymundo.
Given that there was a substantial breach on the part of Velarde and given that the contract is a reciprocal
one, it was only right for Raymundo to rescind the contract and to effect mutual restitution between the
parties.

San Miguel Properties vs Sps. Huang
Facts:
Herein petitioner San Miguel Properties own two parcels of land, which were the subject properties in the
case at bar. These properties were offered for sale for about 52 million pesos in cash.
The offer to sell the properties were made to a certain Atty. Dauz representing herein respondents. The
first terms offered by respondents was that they would pay 500k in earnest money and would pay the
balance in eight monthly installments. Such an offer was declined.
Dauz then proposed a new scheme wherein respondents would pay 1 million pesos in earnest money
subject to the condition that they would be given 30 days to purchase the properties and that, during the
said period, both petitioner and respondents would negotiate on a payment scheme suitable for both
parties.
During the meeting of parties, petitioner first offered to sell the property at a 90-day scheme.
Respondents countered by saying they were willing to buy it in a six-month period. After petitioner failed
to act on their counter offer, respondents then offered to buy the properties at a four-month
amortization period.
Petitioner failed to act upon the offer again and respondent then asked for a 45-day extension to exercise
their option to buy the property.
Though the 45-day extension was granted, no payment scheme was agreed upon. Petitioner wrote
respondent telling them that they had failed to agree upon the terms and conditions of the sale and that
they were returning the 1 million peso deposit previously made by the respondents.
Respondents then demanded that petitioner execute a deed of sale covering the subject properties. They
would also later on file a complaint for specific performance against the petitioner.
The trial court would dismiss the complaint but the CA would render a decision favoring the respondents
saying that there was a perfected contract of sale in connection with which the earnest money of 1 million
pesos had already been accepted by petitioners and that the fact that the parties failed to agree upon a
mode of payment does not affect the contract because it is not an essential element.
Petitioner now contends that there was no perfected contract because the offer accepted by petitioner
merely resulted into an option contract that respondents failed to exercise and was albeit unenforceable
due to the absence of a consideration. They also argue that the absence of a mode of payment was fatal
to the perfection of the contract of sale.

Issue: WON there was a perfected contract of sale

Held:
No.

The SC held that the CA erred in holding that there was a contract of sale by relying on the earnest money
given and on documentary evidence showing that there was a perfected contract of sale between the
parties.
According to the Court, the 1 million pesos is not the earnest money contemplated under Article 1482 but
rather it was just a deposit that would have been earnest money had a mode of payment been agreed
upon by the parties. However, no contract of sale was ever perfected in the 30-day period originally
agreed upon. Such acceptance of the 30-day period also did not constitute as a perfected contract of sale
because the option to buy given to the respondents is separate and distinct from the possible contract of
sale that the parties could have entered into.
Furthermore, the lack of a consideration for the option period is also fatal to the cause of respondents.
According to Article 1479, an accepted unilateral promise to buy or sell a determinate thing is binding
upon the promisor only when the promise is supported by a distinct consideration. In this case, there was
no consideration given for the 30-day option period granted to the respondents.
Moreover, what is even more fatal to the cause of the respondents was that, during the 30-day period of
negotiation, there was no meeting of the minds between the two parties. In the three stages of a contract
of sale, they never even got past the negotiation stage because no terms of payment were ever agreed
upon.
Finally, it was wrong for the CA to say that the absence of a mode of payment does not affect the
perfection of a contract of sale. It was held in Navarro vs Sugar Producers Cooperative that the manner of
payment of purchase price is an essential element before a valid and binding contract of sale can exist
despite the fact that the Civil Code does not mention such.

Quijada vs CA
Facts:
The petitioners in this case are the children of the late Trinidad Corvera Vda. De Quijada, who inherited
two parcels of land from the late Pedro Corvera. Trinidad and her siblings executed a conditional deed of
donation over the subject properties in favor of the Municipality of Talacogon on the condition that the
parcels of land shall be used exclusively for the campus of the proposed provincial high school. Despite
the donation, Trinidad remained in possession of the parcel of land.
Despite the donation, Trinidad later sold a hectare of the property to Regalado Mondejar.
In 1980, the petitioners in the case at bar filed for a forcible entry case against Mondejar. However, the
complaint was dismissed for failure to prosecute.
In 1987, the Sangguniang Bayan of the Municipality of Talacogon enacted a resolution returning the
parcels of land over to the donors, herein petitioners, for the failure of the high school to materialize.
In the meantime, Mondejar had already sold portions of the property to respondents Bautista, Goloran,
and Guden.
The petitioners in this case later filed the present action against respondents claiming that their mother
never sold the properties to Mondejar and, at the time of the supposed sale, the parcels of land were
under the ownership of the Municipality of Talacogon. Hence, they claim that there was no valid sale to
Mondejar.

Issue: WON there was a valid sale of the parcels of land to Mondejar

Held:
Yes
The donation made by Trinidad and her siblings was subject to the resolutory condition that the
Municipality had to erect a provincial high school on the parcels of land donated. Notwithstanding the
condition imposed upon them, the Municipality was already the owners of the parcels of land when they
made their acceptance known to the donors.
Thus, at the time of the supposed sale made by Trinidad to Mondejar, the Municipality owned the parcels
of land. So long as the resolutory condition subsists and is capable of fulfillment, the donation remained
effective and the donee remained the owner of the property.

However, by virtue of the resolution of the Municipality saying they could not comply with the condition
imposed upon them, the ownership over the parcels of land were reverted back to the donors because of
the donees failure to fulfill the resolutory condition.
In the meantime while the resolutory condition was not yet fulfilled, the donor of the parcels of land had
an inchoate right over the properties in question. In this case, Trinidad sold the parcels of land, which she
did not own, to Mondejar.
However, although Trinidad did not own the parcels of land at the time of the sale to Mondejar,
ownership is not an essential requisite for the perfection of a contract of sale. Sale, being consensual is
perfected only by mere consent as to the elements required by law. The law only requires three elements
namely subject matter, price, and terms of the payment.
What the law merely requires is that the seller has the right to transfer ownership at the time the thing
sold is delivered. Hence, the sale is still valid because it is not the perfection stage that transfers
ownership but rather it is when the thing sold is actually or constructively delivered.
In this case, the consummation of the contract of sale happened upon the reversion of the ownership of
the parcels of land when the Municipality failed to comply with their resolutory condition. Consequently,
Mondejar and those who claim right from him immediately became the owner of the subject properties
upon the reversion of ownership over to the petitioners since, according to Article 1434 of the Civil Code,
title passes by operation of law to the buyers.

Laforteza vs Machuca
Facts:
In the exercise of the authority of Special Power Of Attorney, on January 20, 1989, the heirs of the late
Francisco Q. Laforteza represented by Roberto Z. Laforteza and Gonzalo Z. Laforteza, Jr. entered into a
Memorandum of Agreement (Contract to Sell) with the plaintiff over the subject property for the sum of
SIX HUNDRED THIRTY THOUSAND PESOS (P630,000.00) payable as follows:
(a) P30,000.00 as earnest money, to be forfeited in favor of the defendants if the sale is not effected due
to the fault of the plaintiff;
(b) P600,000.00 upon issuance of the new certificate of title in the name of the late Francisco Q. Laforteza
and upon execution of an extra-judicial settlement of the decedent's estate with sale in favor of the
plaintiff (Par. 2, Exh. "E", record, pp. 335-336).
Significantly, the fourth paragraph of the Memorandum of Agreement (Contract to Sell) dated January 20,
1989 (Exh. "E", supra.) contained a provision as follows:
. . . . Upon issuance by the proper Court of the new title, the BUYER-LESSEE shall be notified in writing and
said BUYER-LESSEE shall have thirty (30) days to produce the balance of P600,000.00 which shall be paid
to the SELLER-LESSORS upon the execution of the Extrajudicial Settlement with sale.
On January 20, 1989, plaintiff paid the earnest money of THIRTY THOUSAND PESOS (P30,000.00), plus
rentals for the subject property .
On September 18, 1998 3, defendant heirs, through their counsel wrote a letter to the plaintiff furnishing
the latter a copy of the reconstituted title to the subject property, advising him that he had thirty (3) days
to produce the balance of P600,000.00 under the Memorandum of Agreement which plaintiff received on
the same date.
On October 18, 1989, plaintiff sent the defendant heirs a letter requesting for an extension of the THIRTY
(30) DAYS deadline up to November 15, 1989 within which to produce the balance of P600,000.00.
Defendant Roberto Z. Laforteza, assisted by his counsel Atty. Romeo L. Gutierrez, signed his conformity to
the plaintiff's letter request. The extension, however, does not appear to have been approved by Gonzalo
Z. Laforteza, the second attorney-in-fact as his conformity does not appear to have been secured.
On November 15, 1989, plaintiff informed the defendant heirs, through defendant Roberto Z. Laforteza,
that he already had the balance of P600,000.00 covered by United Coconut Planters Bank Manager's
Check dated November 15, 1989 . However, the defendants, refused to accept the balance .Defendant
Roberto Z. Laforteza had told him that the subject property was no longer for sale .
On November 20, defendants informed plaintiff that they were canceling the Memorandum of Agreement
(Contract to Sell) in view of the plaintiff's failure to comply with his contractual obligations.

Thereafter, plaintiff reiterated his request to tender payment of the balance of P600,000.00. Defendants,
however, insisted on the rescission of the Memorandum of Agreement. Thereafter, plaintiff filed the
instant action for specific performance.
The lower court rendered judgment in favor of the Alonzo Machuca and against the defendant heirs of
the late Francisco Q. Laforteza,.
Petitioners appealed to the Court of Appeals, CA: This affirmed with the decision of the lower court.
Hence this petition wherein the petitioners raise the issues:

Issue: Whether or not the MOA is an OPTION CONTRACT, CONTRACT TO SELL or a CONTRACT OF SALE. WON the
six-month period during which the respondent would be in possession of the property as lessee was a period
within which to exercise an option.

Held:
In the case at bench, there was a perfected agreement between the petitioners and the respondent
whereby the petitioners obligated themselves to transfer the ownership of and deliver the house and lot
located at 7757 Sherwood St., Marcelo Green Village, Paraaque and the respondent to pay the price
amounting to six hundred thousand pesos (P600,000.00). All the elements of a contract of sale were thus
present.The elements of a valid contract of sale under Article 1458 of the Civil Code are (1) consent or
meeting of the minds; (2) determinate subject matter and (3) price certain money or its equivalent.
Even assuming for the sake of argument that the petitioners were ready to comply with their obligation
(and Machuca cannot), the Court found that rescission of the contract will still not prosper. The rescission
of a sale of an immovable property is specifically governed by Article 1592 of the New Civil Code, which
reads:
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 a notarial act. After the demand, the
court may not grant him a new term.
It is not disputed that the petitioners did not make a judicial or notarial demand for rescission.
As to the issue WON the six-month period during which the respondent would be in possession of the
property as lessee was a period within which to exercise an option, The Court held that the six-month
period, during which the respondent would be in possession of the property as lessee, was clearly not a
period within which to exercise an option.
An option is a contract granting a privilege to buy or sell within an agreed time and at a determined price.
An option contract is a separate and distinct contract from that which the parties may enter into upon the
consummation of the option. An option must be supported by consideration. An option contract is
governed by the second paragraph of Article 1479 of the Civil Code, which reads:
Art. 1479. An accepted unilateral promise to buy or to sell a determinate thing for a price certain
is binding upon the promissor if the promise is supported by a consideration distinct from the
price.
In the present case, the six-month period merely delayed the demandability of the contract of sale and
did not determine its perfection for after the expiration of the six-month period, there was an absolute
obligation on the part of the petitioners and the respondent to comply with the terms of the sale.

Vda. De Ape vs CA
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: WON there was a valid contract of sale

Held:
No. Fortunato was a no read no write person. It was incumbent for 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.

Villanueva vs PNB
Facts:
The Special Assets Management Department (SAMD) of the Philippine National Bank (PNB) issued an
advertisement for the sale of certain PNB properties in Calumpang, General Santos City, including Lots 17
and 19 with advertised floor prices of P1,409,000.00 and P2,268,000.00 respectively.
Villanueva offered to purchase the lots for P3,677,000.00. He also manifested that he was depositing
P400,000.00 to show his good faith but with the understanding that said amount may be treated as part
of the payment of the purchase price only when his offer is accepted by PNB.
PNB forwarded the letter of Villanueva to Ramon Guevara, Vice President, SAMD. Guevara informed
Villanueva that only Lot No. 19 is available and that the asking price therefor is P2,883,300.00. Guevara
also said that if the price was acceptable to Villanueva, the latter should submit an offer to purchase and
that the sale was still subject to the approval of the Board of Directors.
Instead of submitting a revised offer, Villanueva merely inserted at the bottom of Guevaras letter a note
that proposed a two-year amortization offer.
Villanueva paid P200,000.00 to PNB which the latter issued a receipt to acknowledge receipt of the
"partial payment deposit on offer to purchase."
Thereafter, however, Guevara wrote Villanueva that SAMD is deferring negotiations with him over said
property and returning his deposit of P580,000.00.
Undaunted, Villanueva attempted to deliver postdated checks covering the balance of the purchase price
but PNB refused the same.
Thus Villanueva filed a Complaint for specific performance which the RTC granted anchoring its judgment
on the finding that there existed a perfected contract of sale between PNB and Villanueva.
PNB appealed to the CA which reversed and set aside the decision, stating that in the case at bench,
consent, in respect to the price and manner of its payment, is lacking.


Issue: WON there was a perfected contract of sale between Villanueva and PNB

Held:
No
Contracts of sale are perfected by mutual consent whereby the seller obligates himself, for a price certain,
to deliver and transfer ownership of a specified thing or right to the buyer over which the latter agrees.
Mutual consent being a state of mind, its existence may only be inferred from the confluence of two acts
of the parties: an offer certain as to the object of the contract and its consideration, and an acceptance of
the offer which is absolute in that it refers to the exact object and consideration embodied in said offer.
While it is impossible to expect the acceptance to echo every nuance of the offer, it is imperative that it
assents to those points in the offer which, under the operative facts of each contract, are not only
material but motivating as well. Anything short of that level of mutuality produces not a contract but a
mere counter-offer awaiting acceptance.
More particularly on the matter of the consideration of the contract, the offer and its acceptance must be
unanimous both on the rate of the payment and on its term. An acceptance of an offer which agrees to
the rate but varies the term is ineffective.
Tracing the transactions and letters between Villanueva and PNB, it can be said that there was no
perfected contract of sale between the parties.
The first letter of PNB stating that only Lot 19 was available was certainly not an acceptance but a mere
counter-offer. Further, such counter-offer imposed two more conditions that Villanueva submit a revised
offer to purchase based on the new price and that such sale of property be approved by the Board of
Directors.
However, Villanuevas reply to said counter-offer was not an acceptance but a further counter-offer since
he qualified his acceptance proposing a two-year payment.
Moreover, Villanuevas contention that the repudiation was belated since PNB already agreed to his
counter-offer when it accepted his downpayment, the Court ruled that acceptance of Villanuevas
payments did not amount to an implied acceptance of his last counter-offer. PNB-GenSan Branch had no
authority to bind PNB to a contract of Sale with Villanueva. Neither did SAMD have authority to bind PNB.
Both clearly stated that whatever is offered will be subject to approval of PNBs higher authorities.
In sum, the amounts paid by petitioner were not in the nature of downpayment or earnest money but
were mere deposits or proof of his interest in the purchase of Lot No. 19. Acceptance of said amounts by
respondent does not presuppose perfection of any contract.


Cortes vs CA
Facts:
For the purchase price of 3.7M, Villa Esperanza Development Corporation and Antonio Cortes entered
into a contract of sale over the lots located at Baclaran, Paraaque, Metro Manila. The Corporation
advanced to Cortes the total sum of P1,213,000.00.
Later, in September 1983, the parties executed a deed of absolute sale on the terms that the Corporation
shall advance 2.2 million as downpayment and that Cortes shall deliver the TCT for the three subject lots.
The Corporation filed the instant case for specific performance seeking to compel Cortes to deliver the
TCTs and the original copy of the Deed of Absolute Sale.
According to the Corporation, despite its readiness and ability to pay the purchase price, Cortes refused
delivery of the sought documents.
Cortes claimed that the owners duplicate copy of the three TCTs were surrendered to the Corporation
and it is the latter which refused to pay in full the agreed down payment.
RTC rendered a decision rescinding the sale and directed Cortes to return to the Corporation the amount
of P1,213,000.00, plus interest. CA reversed the decision and directed Cortes to execute a Deed of
Absolute Sale conveying the properties and to deliver the same to the Corporation together with the

TCTs, simultaneous with the Corporations payment of the balance of the purchase price of
P2,487,000.00.
Issue: WON there was delay in the performance of the parties obligation that would warrant a rescission

Held:
There is no doubt that the contract of sale in question gave rise to a reciprocal obligation of the parties.
Reciprocal obligations are those which arise from the same cause, and which each party is a debtor and a
creditor of the other, such that the obligation of one is dependent upon the obligation of the other. They
are to be performed simultaneously, so that the performance of one is conditioned upon the
simultaneous fulfillment of the other.
In the present case, the Deed of Sale contained a stipulation that the Corporation shall pay in full the
downpayment upon execution of the contract.
However, based on Cortes admission, he agreed that the Corporations full payment of the downpayment
would depend upon the delivery of the TCTs of the three subject lots. As such, the corresponding
reciprocal obligation of the Corporations payment was the transfer of titles by Cortes. His obligation is
not only to affix the signature in the Deed, but to set into motion the process that would facilitate transfer
of title of the lots.
As correctly found by the CA, Cortes never surrendered said documents to the Corporation. Cortes avers
that he delivered the TCTs through the brokers son. He further avers that the brokers son delivered it to
the broker, who in turn delivered them to the Corporation.
However, Marcosa Sanchezs unrebutted testimony is that, she did not receive the TCTs. She also denied
knowledge of delivery thereof to her son, Manny.
What further strengthened the findings of the Court of Appeals that Cortes did not surrender the subject
documents was the offer of Cortes counsel at the pre-trial to deliver the TCTs and the Deed of Absolute
Sale if the Corporation will pay the balance of the down payment.
Indeed, if the said documents were already in the hands of the Corporation, there was no need for Cortes
counsel to make such offer.
Considering that their obligation was reciprocal, performance thereof must be simultaneous. The mutual
inaction of Cortes and the Corporation therefore gave rise to a compensation morae or default on the
part of both parties because neither has completed their part in their reciprocal obligation.
Cortes is yet to deliver the original copy of the notarized Deed and the TCTs, while the Corporation is yet
to pay in full the agreed down payment of P2,200,000.00. This mutual delay of the parties cancels out the
effects of default, such that it is as if no one is guilty of delay.
Additionally, under Article 1169 of the Civil Code, from the moment one of the parties fulfills his
obligation, delay by the other begins. Since Cortes did not perform his part, the provision of the contract
requiring the Corporation to pay in full the down payment never acquired obligatory force.