SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.

%22,%2018%|%CivRev2

Case
Basic Facts & Issue Ruling Why?
Name
9. Earnest Money – NCC 1482
Petitioner spouses Lencio and Aurora Cifra, represented by their atty-in-
fact, Catalan, entered into an agreement with respondent Manuel Chua.
Contract was named as "Earnest Money" and it was for a sale of a
Mandaluyong house and lot for P1.1M. P5k was given as earnest money
This is an agreement to sell by which the P5k earnest money forms part
by Chua and the mortgage on the property was also assumed by Chua.
of the P1.1M consideration. Balance is to be paid upon removal of the
An addendum was also included to the contract where it gave both
tenants/occupants of the real property in issue. Also, the addendum said
Miguel

Cifra v parties the right/freedom to back out from the contract. But the catch is
NO. that both parties have the freedom to back out from the agreement. So,
CA that if it's the sellers (Spouses) who backs out, they must return the P5k
spouses must return the P5k earnest money BUT NOT LIABLE to pay
plus P20k as damages and attorneys fees. If it's the buyer, he forfeits
the P20k as damages and attorneys fees BECAUSE it was respondent
the P5k plus he pays P20k too as damages and attorneys fees. Later,
who filed this case, not the spouses.
spouses backed out because the business (to which the proceeds from
this sale was to applied to) didn't prosper. But respondent didn't want to
rescind this contract, so, it filed this action for specific performance (SP)
ISSUE: WON SP action will prosper
Art. 1482 provides that whenever earnest money is given in a contract
Cannot seek of sale, it shall be considered as part of the price and proof of the
Serrano v Caguiat offered to buy the lot of Serrano so he paid 100k as partial specific perfection of the contract. In here, title never passed to Caguiat since
Caguiat payment. He was given a receipt for partial payment which bore the performance. the receipt was evidence that it was a contract to sell, not of sale. Most
(2007, promise of Caguiat to pay the balance. When Caguiat was ready to buy, Art. 1482 importantly, Caguiat's 100k only formed part of the consideration upon
Pam

Sandoval- Serrano informed him that they were cancelling the transaction and that applies only tofull payment of purchase price because is a contract to sell. It would
Gutierrez he can claim back his earnest money. Caguiat sought for specific earnest money have been different if it was a contract for sale because the earnest
) performance. in a contract of
money would have constituted as evidence of perfection of the contract.
sale. Since no full payment was made, title did not pass; hence, Caguiat
cannot compel petitioners to transfer title.
SSSI's offer to purchase the subject property was never accepted by
FORC at any instance, even after negotiations were held between them.
Thus, as between them, there is no sale to speak of. "When there is
merely an offer by one party without acceptance of the other, there is no
SSSI wanted to buy the property of FORC, During the negotiations with
First contract. Since there is no perfected sale between the parties, SSSI had
the VP of FORC - Ms. Young, SSSI offered to pay money already but
Optima no obligation to make payment through the check; nor did it possess the
Ms. Young declined to accept the money and told him that she had to There was no
Realty right to deliver earnest money to FORC in order to bind the latter to a
talk to the Board of Directors first. A few days later, SSSI sent a check to perfected
Corporati sale. As contemplated under Art. 1482 of the Civil Code, "there must first
Tristan

Ms. Young worth 100k as earnest money for the property which was contract to sell
on vs. be a perfected contract of sale before we can speak of earnest
later on deposited to FORC's account. SSSI then demanded that FORC thus no earnest
Securitro money.”Where the parties merely exchanged offers and counter-offers,
proceed with the sale however Ms. Young replied that they are formally money to
n no contract is perfected since they did not yet give their consent to such
declining to sell the property because the BoD did not agree to it. Thus speak of.
Security offers. Earnest money applies to a perfected sale.
SSSI filed suit against FORC alleging that there was a perfected
Services
contract to sell because FORC accepted the earnest money.
In a potential sale transaction, the prior payment of earnest money even
before the property owner can agree to sell his property is irregular, and
cannot be used to bind the owner to the obligations of a seller under an
otherwise perfected contract of sale
10. Form of Contract of Sale
11. Performance of Contract of Sale
12. Double Sales - NCC 1544
The rules of De Leon surreptitiously paid Ong's outstanding obligation and took back
De Leon sold 3 parcels of land to Ong. Ong learned that De Leon sold
De Leon Double Sale his certificates of title. De Leon willfully prevented the condition vis-à-vis
the same properties to Viloria. When Ong inquired with Rizal Savings,
Bianca

v Ong
she found out that De Leon already paid the amount due and took back
(2010,
the TCTs. Ong filed a complaint for specific performance, nullity of the
Corona)
2nd sale, and damages against De Leon and Viloria.
The Church sold a very small lot to Pante. It sold another lot to Sps Rubi
which included Pante’s lot. Pante sought to annul the sale. Church
Roman
argued that the first sale was void because Pante misrepresented
Darwin
applies. The the payment of the remainder of the purchase price, the said condition is
owner of the considered fulfilled Viloria bought the properties from De Leon after the
land should latter sold them to Ong. Ong was therefore a purchaser in good faith.
also be Ong. Hence, the rules on double sale are applicable
The sale of the lot to Pante and later to the spouses Rubi resulted in a
double sale that called for the application of the rules in Article 1544 of
the Civil Code: Article 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the person who
may have first taken possession thereof in good faith, if it should be
movable property. Should it be immovable property, the ownership shall
belong to the person acquiring it who in good faith first recorded it in the

Catholic Sale to Pante

himself. Court ruled that the sale was valid because no mispresentation
Church v
was made by Pante. Also, the Church was in bad faith because it never
Pante
sought to annul the contract even though it knew that the circumstances
surrounding the case was different.
Garcia sold the lot to the Muertegui's. Thereafter, they sold the same lot
to Muertegui's lawyer, Atty. Sabitsana. Atty. Sabitsana first registered the
Sabitsan
sale. W/N Muertegui owns the lot. The Court held that the Muerteguis
Innoe
Registry of Property. Should there be no inscription, the ownership shall
upheld.
pertain to the person who in good faith was first in the possession; and,
in the absence thereof, to the person who presents the oldest title,
provided there is good faith. As neither Pante nor the spouses Rubi
registered the sale in their favor, the question now is who, between the
two, was first in possession of the property in good faith. In the present
case, it was Pante who was in possession, therefore the sale in his favor
must be upheld.
The mere registration of a sale in one's favor does not give him any right

av Martegui owns over the land if the vendor was no longer the owner of the land, having
own the lot because mere registration of a sale in one's favor does not
Muertegu the Lot previously sold the same to another even if the earlier sale was
give him any right over the land if the vendor was no longer the owner of
i unrecorded
the land, having previously sold the same to another even if the earlier
sale was unrecorded.

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 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2

Double sale: Art. 1544 requires that before the second buyer can obtain
priority over the first, he must show that he acted in GF from the time of
acquisition until the title is transferred to him by registration or delivery of
possession. A purchaser in GF is one who buys the property of another
without notice that some other person has a right to, or an interest in
Bagano sold a parcel of land to Sps Alfaro who immediately obtained a
such property, and pays a full and fair price for the same at the time of
new TCT in their names, paid real property tax and constructed a fence
such purchase, or before he has notice of some other person’s claim or
in 1995. The validity of the Deed of Sale was sustained by the Court in
interest in the property.
Alfaro et an action for delcaration of nullity filed by Bagano. Meanwhile, Sps
al v Dumalagan filed an action for Annulment of Title, contending that they
Bad faith: Cancellation of adverse claim is still necessary to render it
Isabel

Spouses purchased it from Bagano in Dec 1993, built a nipa hut thereon and
Dumalag rented it out to several tenants. They presented a Certificate of
an Completion and Certificate of Occupancy. Records reveal that there
(Perez) were two adverse claims dated Feb and April 1995 annotated in the title
by occupants of the property. Alfaros argue that they were purchasers in
GF because PD No. 1529 provides that an adverse claim is effective
only for 30 days from date of registration.
Gocolay, chairperson and president Keyser, entered into a contract to
sell with Bayfront Development for the purchase on installment basis of
a condominium unit in Bayfront Tower but was not registered, hence the
title remained clean. Sps. Suntay then purchased several condominium
Sps.
units with Bayfront including the one bought by Keyser. Bayfront failed to
Suntay
deliver so Sps. Suntay filed an action for rescission with HLURB. Sps.
vs.
Ivan
Sale to Alfaros
ineffective. Even assuming the annotations expired before their
is null and void.
purchase, Alforos still had prior knowledge of previous sales of portions
of the property to 3rd parties. They knew there were structures and
occupants other than the seller on the property. They were obliged to
look beyond Bagano’s title and make further inquiries about the extent of
his authority over the lot.
Other issue: Dumalagans are barred neither by res judicata (no identity
of cause of action) nor laches for failure to intervene. Double sale is an
independent controversy which cannot be injected into a suit by
intervention.
Sps Suntay properly relied on the Certificate of Title of Bayfront. Every
person dealing with a registered land may safely rely on the correctness
of the certificate of title issued therefor and the law will in no way oblige
him to go beyond the certificate to determine the condition of the
property. Here, the subject property was registered with Bayfront as the
registered owner. At the time that the Notice of Levy was annotated, the
Sale to Sps.
title had no previous encumbrances and liens. It was a clean title. The

Suntay won and they were granted a motion for execution, annotation to Suntay remain
Keyser contract to sell between Keyser and Bayfront was executed on Oct
the condo unit title was made in their favor. Meanwhile, a deed of valid
Mercantil 1989, but the deed of absolute sale was only made on Nov 1995 and
absolute sale was then executed between Bayfront and Keyser. When
e Inc. registered on Mar 1996. The Notice of Levy in favor of Spouses Suntay
Keyser was about to register the said deed of sale, it discovered the
was registered on Jan 1995, while the Certificate of Sale on Apr 1995,
Notice of Levy and the Certificate of Sale annotated at the back of the
both dates clearly ahead of Keyser’s registration of its Deed of Absolute
title in favor of Sps Suntay, hence he filed a complaint for annulment of
Sale. Applying the doctrine of primus tempore, potior jure (first in time,
auction sale and cancellation of notice of levy.
stronger in right), Spouses Suntay have a better right than Keyser.

Pastrano can’t sell the whole land to Sps. Bragat since as early as 1970
when Pastrano sold it to Ledesma, they weren’t the owner of it anymore.
One can sell only what one owns or is authorized to sell, and the buyer
acquires no better title than the seller. Also, Bragat can’t claim good faith
In 1968, Sps PASTRANO sold the entire land to Ledesma. In 1970 since she knew of Pastrano’s lack of ownership. It was noted that Sps.
Ledesma sold a portion of 200m to Sps Padailla it wasn’t in writing but it (1) Sps. Badilla Bragat themselves bought the remaining portion of the land from
was delivered to Sps Padilla & they immediately took possession of said - 152m portion Ledesma in 1978.
Sps.
portion. The remaining portion was bought by Sps. Bragat from Sps occupied by
Magdalin
Izzy

Ledesma in 1978. BUT in 1984, Sps. PASTRANO sold the ENTIRE land them Doctrines:
o vs.
again this time to Sps. Bragat. A TCT was issued in the name of Bragat (2) Sps. Bragat a. Ownership of the thing sold is transferred to the vendee upon the
Bragat
covering the whole land. Who between Sps. Bragat & Sps Ledesma is - remaining actual or constructive delivery of the same.
the rightful owner of the land? portion b. No one can give what one does not have — nemo dat quod non habet
— and, accordingly, one can sell only what one owns or is authorized to
sell, and the buyer acquires no better title than the seller.
c. When neither buyer registered, in good faith, the sale of the properties
with the register of deeds, the one who took prior possession of the
properties shall be the lawful owner thereof

The heirs of Manuel Uy filed a civil case for specific performance relating
to multiple land titles, wherein they prayed for the registered land owners
to sell them their property. Even prior to filing the case, the heirs had
already registered an adverse claim on the subject lands. After filing
the case, the Register of Deeds of Lucena (RD Lucena) entered a
notice of lis pendens on their entry book; and sent a letter to all the The annotation The court held that entry or notation of an involuntary instrument in the
respective owners to send their duplicate copies so they can be of notice of lis primary entry book or day book amounts to a valid registration, and such
annotated with the notice of lis pendens. The subject land of the present pendens on registration constitutes notice to all persons dealing with the registered
case, owned by Jalbuena, was not sent to RD Lucena. The original title Spouses land from the date of entry or notation. In addition, it was found by the
Mendoza was also not annotated by the notice because it was missing from RD Armando's title court that both Spouses Garana and BPI did not act in good faith as they
JR

vs. Sps. Lucena's vault at the time it needed to be annotated, and when it was is granted. both failed to exercise the diligence required from a buyer in good faith.
Armando found, it was still not annotated with the notice of lis pendens. The [NOTE: NO Spouses Garana should have investigated further the adverse claim on
notice of adverse claim by the heirs was also cancelled out through MENTION OF the property that was cancelled by a different person (Umali) that was
an affidavit made by a certain Umali. So the Spounses Garana bought DOUBLE not the named adverse claimant. The same goes for BPI, as it would
Jalbuena's property allegedly under the impression that it was clean, SALE IN THIS have discovered that the cancelation of the adverse claim of the heirs
and was not under a notice of lis pendens or that there was still an CASE] was made by a different person, if it exercised due diligence.
existing adverse claim. RD Lucena, represented by Mendoza, filed a
case to remedy their mistake and annotate the title, to which Spouses
Garana and BPI (with whom Sps. Garana mortgaged the property)
opposed as it prejudiced their rights. The spouses Garana later on sold
the property to the Spouses Armando.

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 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2
Manzano and the Domingos entered into a contract to sell. The
Domingos failed to pay the whole amount on the deadline. When they
Domingo
Joana
offered to pay the remaining balance, Manzano refused to accept
v Domingos and
payment. Manzano told them that the property was no longer for sale
Manzano
because he sold it to Aquino. Domingos claim that the sale to Aquino
was not valid because it constituted a double-sale.
13. Risk of Loss
14. Remedies of Unpaid Seller
15. Warranties
Alfonso De Leon mortgaged a property (in Esteban Abada, Loyola
Heights QC) in favor of Resp. Union Bank. The property was foreclosed,
sold at auction, and was issued a TCT in the name of Union Bank . In
1988, Rosario (wife of Alfonso) filed a claim for annulment of the
Bignay v
mortgage alleging lack of consent and that her signature was forged.
Union
While the case was pending, in 1989 Union Bank sold the property to
Lalaine
Bank
Pet. Bignay. The deed of sale stated that "the Vendor will defend its title
[2014,
to the land against the claim of any person whatsoever”. However in
Del
1991, the court declared the mortgage between Alfonso and Union Bank
Castillo]
null and void (in favor of Rosario). Bignay was evicted from the property.
Bignay filed a case against Union Bank for breach of warranty against
eviction under Art. 1547 and 1548 of the Civil Code. Issue: WON
petitioner is entitled to the warranties against eviction
Petitioners are the owners of the land by virtue of a sale between their
and respondents' predecessors-in-interest. That respondents Ramoses
and ARC Marketing illegally dispossessed them by having the same
property registered in respondents' names. ISSUE: WON the action filed by
petitioners before the RTC is one for reconveyance or for annulment of judgment. -
*Petitioners are entitled to the reconveyance of the property: Petitioners have alleged a
legal right over the property and presented ample documentary evidence to support
their claim. In fact, the complete payment of the purchase price by petitioners (and/or
their predecessors-in-interest) is not disputed. While the contract to sell indeed provided
for the ipso facto cancellation of the contract “without need of notification or judicial
Marie
Toledo action,” jurisprudence requires, for cancellation to be effective, that written notice be
vs. CA sent to the defaulter informing him of said cancellation/rescission. In this case, it does
not appear that ARC Marketing (nor its predecessors-in-interest) took any steps to
cancel the contract and/or eject petitioners from the premises (much less notify
petitioners about said cancellation) prior to the latter’s institution of the action for
reconveyance. ARC Marketing’s predecessors-in-interest also seemed to have
continued to accept payments for the property without protest or qualification.
Respondent Antonio A. Ramos, representing the heirs of Socorro A. Ramos, even
issued a certification acknowledging full payment for the property, long before the same
was allegedly adjudged in ARC Marketing’s favor in 1993. ARC Marketing is thus
estopped from invoking cancellation of the contract to defeat petitioners’ rights over the
property.
Respondent Eduard Quinones filed this case for damages against
petitioner PhilSteel because a sales engineer and manager of the latter,
Richard Lopez and Angbengco, offered the former their new product, a
prime-coated galvanized G.I. sheets, to be used in Quinones' business
(Amianan Motors; Manufacturer and seller of busses). However,
Quinones received several complaints from its customers who bought
Phil.
his busses, claiming that the paint on the busses was breaking and
Miguel
Steel
peeling off. Now, Quinones is invoking the warranties given by petitioner YES
Coating v
for the hidden defects of prime-coated sheets or its incompatibility with
Quinones
the Guilder accrylic painting process of the busses of Quinones.
Petitioner discovered that this was happening because of respondent's
wrong painting application and it also argued that the representations
made by its sales engineer were made orally, thus, cannot be invoked as
warranties. ISSUE: WON the oral statements made by the seller can be
considered as warranty.
There is no
double sale.
Article 1544 (Rules on Double Sale) cannot apply. Since failure to pay
The sale to
the price in full in a contract to sell renders the same ineffective and
Aquino is valid,
without force and effect, then there is no sale to speak of. Petitioners
the contract
failed to pay the purchase price in full, while Aquino did, and thereafter
between the
she was able to register her purchase and obtain a new certificate of title
in her name. As far as this Court is concerned, there is only one sale —
Manzano being
and that is, the one in Aquino’s favor. “Since there is only one valid sale,
a Contract to
the rule on double sales under Article 1544 of the Civil Code does not
Sell which is
apply.
ineffective for
failure to pay
the full amount.
Yes. Bignay
has the right to
demand from
Union Bank the
return of the Bignay purchased the property without knowledge of the pending Civil
value of the Case. Union Bank is answerable for its express undertaking under the
property at the deed of sale to "defend its title ...." By this warranty, Union Bank
time of eviction represented to Bignay that it had title to the property, and by assuming
(be it greater or the obligation to defend such title, it promised to do so at least in good
lesser the sale faith and with sufficient prudence, if not to the best of its abilities.
price), the Further, the record reveals that Union Bank was grossly negligent in the
expenses of handling and prosecution of Civil Case which resulted to the eviction of
the contract, if Bignay.
any, damages,
interests, and
ornamental
expenses.
*Article 1456 of the Civil Code provides that a person acquiring property
through fraud becomes, by operation of law, a trustee of an implied trust
for the benefit of the real owner of the property. The presence of fraud in
this case, as shown by the disposition of the property to ARC Marketing
by Lourdes Ramos despite knowledge of petitioners' title over the same,
created an implied trust in favor of petitioners Toledo, et al. This gives
petitioners the right to seek reconveyance of the property from the
subsequent buyers. *Here, petitioners' undisturbed possession of the
property is uncontroverted. Petitioners have alleged that they have been
in continued, open and uninterrupted possession of the property for over
forty (40) years, as evidenced not only by their payment of real property
taxes but also the construction of their house thereon. This was notably
never disputed by ARC Marketing. As plaintiffs in possession of the
disputed property, petitioners are not barred from seeking relief from the
court via an action for reconveyance. *Neither can petitioners be
RECONVEYA considered to have slept on their rights for laches to operate against
NCE. them. Petitioners have clearly taken steps to protect their interests in the
property. While respondents correctly point out that the sale of the
property between the predecessors-in-interest of petitioners and
respondents was not registered, the records show that petitioners
(and/or their predecessors-in-interest) have registered their adverse
claim over the property as early as October 20, 1960. Petitioners also
previously requested for the release of the owner's duplicate certificate
of title sometime in 1973 but was given a Certification/Acknowledgment
of Full Payment instead as the title then could not be released due to a
pending case involving the property. *More importantly, petitioners
were not parties to Civil Case between respondents Ramos, Cruz
and ARC Marketing. They cannot therefore be presumed to be
aware of the January 13, 1993 decision in said case for their
action for reconveyance filed four years after (or in 1997) to be
barred by laches.
SC said that warranty need not necessarily be in writing. It cited
NCC1546 where it said that "no affirmation of the value of the thing, nor
any statement purporting to be a statement of the seller's opinion only,
shall be construed as a warranty, unless the seller made such
affirmation or statement as an expert and it was relied upon by the
buyer." Here, PhilSteel Coating's sales engineer and manager, made
express and repeated affirmations that the sheets would be compatible
with the accrylic painting process of Quinones' business. Angengco even
invoked laboratory tests to show the compatibility. In the eyes of
Quinones, PhilSteel, through its representatives (Lopez and
Angbengco), was an expert whose word can be relied upon. Other
discussions on warranties is the requisites as laid down by Carrascoso,
Jr. vs. CA - In order to prove that there is an express warranty in a
contract of sale: (1) the express warranty must be an affirmation of fact
or any promise by the seller relating to the subject matter of the sale; (2)
the natural effect of the affirmation or promise is to induce the buyer to
purchase the thing; and (3) the buyer purchases the thing relying on that
affirmation or promise. As to prescription of an express warranty, period
applicable is that prescribed in the contract. In the absence of such, the
rule on rescission of contracts, which is 4 years.
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 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2
15.1. Recoupment, NCC 1599
FUCC and Blue Star ordered 6 dump trucks from Bayanihan. They
established a good relationship so Bayanihan allowed FUCC to pay
First
according to its terms and Bayanihan does repairs for the trucks
United v.
ordered. There was a stop payment order on the check used in buying
Bayaniha
Pam
another truck therefore Bayanihan asked the full settlement of the
n (2014,
obligation from FUCC. FUCC refused to pay alleging that Bayanihan
Bersamin
refused to make repairs on the trucks. Bayanihan filed an action for
) Bayanihan.
collection. ISSUE: W/N FUCC's refusal to pay is justified as an exercise
of their right of recoupment
Philsteel offered Quinones their new product (primer-coated rolled
galvanized iron sheets GI Sheets) representing that they were
compatible with the paint process used Amianan Motors (Quinones'
business). Quinones was induced to purchase the products and use it in
Phil.
the manufacture of bus units. Quinones received complaints from
Tristan
Steel
customers that the paint used on the purchased products from Philsteel
Coating v
was peeling off. Quinones thus refused to pay the balance of the
Quinones
purchase price to Philsteel and filed a complaint invoking the warranties
reprsented by Philsteel that the products were compatbile to Amianan
Motor's paint process. Philsteel on the other hand, takes issue with
Quinones' non-payment of the balance of the purchase price.
16.1. Sale of Movables - NCC 1484 - 1486
Sps Amado and Angeles Tajanlangit bought from SMI two tractors and a
Tajanglan
thresher. PN was executed as payment. The note stipulated that if
git v
default be made in the payment of interest or of any installment, then the
Southern
Bianca
total principal sum still unpaid with interest shall at once become
Motors
demandable. Sps. Armado defaulted so the tractors and tresher were
(1957,
publicly auctioned. The issue in this case started when the value of said
Bengzon
machineries were not enough to satisfy the obligation prompting SMI to
J)
go to court to have Sps Tajanlangit' real properties attached.
Philippine Acetylene Co., Inc., purchased from one Alexander Lim, as
evidenced by a Deed of Sale marked as Exhibit G, a motor vehicle
described as Chevorlet, 1969 model with Serial No. 136699Z303652 for
P55,247.80 with a down payment of P20,000.00 and the balance of
P35,247.80 payable, under the terms and conditions of the promissory
note thirty-four (34) monthly installments. As security for the payment of
said promissory note, the appellant executed a chattel mortgage over
Filinvest
Darwin
the same motor vehicle in favor of Alexander Lim. Subsequently, on
v Phil.
November 2, 1971. Alexander Lim assigned to the Filinvest Finance
Acetylene
Corporation all his rights, title, and interests in the promissory note and
chattel mortgage by virtue of a Deed of Assignment. Thereafter, the
Filinvest Finance Corporation, as a consequence of its merger with the
Credit and Development Corporation assigned to the new corporation,
the herein plaintiff-appellee Filinvest Credit Corporation, all its rights,
title, and interests on the aforesaid promissory note and chattel
mortgage.
Sps De La Cruz bought Hino trucks (installment basis). They Executed
Chattel mortgage to secure payment. The defaulted in payment,
De La therefore Asian went to foreclose the mortgage, but they failed because
Cruz v the truck was not turned over. Subsequently, the truck was turned over
Innoe
Asian to Asian but Asian filed an ordinary action for collection. W/N Asian can
Consume still file an ordinary action. The SC held that Asian can file ordinary
r action there being no actual foreclosure of the mortgaged property,
ASIAN is correct in resorting to an ordinary action for collection of the
unpaid balance of the purchase price.
Recoupment (reconvencion) is the act of rebating or recouping a part of
a claim upon which one is sued by means of a legal or equitable right
resulting from a counterclaim arising out of the same transaction. It is the
setting up of a demand arising from the same transaction as the
NO, FUCC
plaintiff’s claim, to abate or reduce that claim. The claim of FUCC for
cannot validly
breach of warranty is therefore not a proper subject of recoupment since
resort to
it does not arise out of the contract or transaction sued on or the claim of
recoupment
Bayanihan for unpaid balances on the last two (2) purchases.
against
Recoupment must arise out of the contract or transaction upon which the
plaintiff’s claim is founded. To be entitled to recoupment, therefore, the
claim must arise from the same transaction. That there was a series of
purchases made by petitioners could not be considered as a single
transaction.
Since there was breach of express warranty, the nonpayment of the
unpaid
purchase price of P448K was justified. In seeking a remedy, Quinones
opted not to pay the balance of the purchase price, in line with a
proportionate reduction of the price under Article 1567 Civil Code, which
states:
In the cases of articles 1561, 1562, 1564, 1565 and 1566, the vendee
may elect between withdrawing from the contract and demanding a
proportionate reduction of the price, with damages in either case.
There was a
Article 1599 of the Civil Code applies when an express warranty is
breach of
breached, which provides that:
warranty by
Where there is a breach of warranty by the seller, the buyer may, at his
Philsteel
election:
therefore
(l) Accept or keep the goods and set up against the seller, the breach of
Quinones was
warranty by way of recoupment in diminution or extinction of the price
justified in the
non-payment
Quinones opted for a reduction in price or nonpayment of the unpaid
of the balance
balance of the purchase price, which the Court granted. Recoupment
by virtue of
refers to the reduction or extinction of the price of the same item, unit,
recoupment.
transaction or contract upon which a plaintiff’s claim is founded.
Quinones refused to pay the unpaid balance after complaints piled up
from his customers regarding the blistering and peeling-off of the paints
applied to the bus bodies they had purchased from his Amianan Motors.
The unpaid balance of the purchase price covers the same G .I. sheets.
*** Since there was seller's breach of express warranty, Quinones has
legitimately defended his claim for reduction in price and is no longer
liable for the unpaid balance of the purchase price.
The real
properties can
It is true that there was a chattel mortgage on the goods sold. But SMI
also be
elected to sue on the- note exclusively, i.e. to exact fulfillment of the
attached and
obligation to pay. It had a right to select among the three remedies
sold at public
established in Article 1484. In choosing to sue on the note, it was not
auction to
thereby limited to the proceeds of the sale, on execution, of the
satisfy the
mortgaged good.
unpaid
obligation
There is a specific provision in the Deed of Sale that Lim warrants the
sale of the car to be free from liens and encumbrances. When Filinvest
accepted the assignment of credit from Lim, there is a specific
agreement that Lim continued to be bound by the warranties he had
Mortgagor, given to Filinvest and that if it appears subsequently that "there are such
Phil. counterclaims, offsets or defenses that may be interposed by the debtor
Acetylene/Alex at the time of the assignment, such counterclaims, offsets or defenses
ander Lim are shall not prejudice FILINVEST FINANCE CORPORATION. Alexander
liable for the Lim further warrant and hold the said corporation free and harmless from
unpaid taxes of any such claims, offsets, or defenses that may be availed of.". Since as
the motor earlier shown, the ownership of the mortgaged property never left the
vehicle mortgagor, the Phil Acetylene Co., the burden of the unpaid taxes should
be borne by him, who, in any case, may not be said to be without
remedy under the law, but definitely not against appellee to whom were
transferred only rights, title and interest, as such is the essence of
assignment of credit.
In a contract of sale of personal property the price of which is payable in
Asian can file installments, the vendor may exercise any of the following remedies: (1)
ordinary action Exact fulfillment of the obligation, should the vendee fail to pay; (2)
there being no Cancel the sale, should the vendee's failure to pay cover two or more
actual installments; (3) Foreclose the chattel mortgage on the thing sold, if one
foreclosure of has been constituted, should the vendee's failure to pay cover two or
the mortgaged more installments. In this case, he shall have no further action against
property the purchaser to recover any unpaid balance of the price. Any
agreement to the contrary shall be void
4
 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2

16.2. Rep. Act 6552, An Act To Provide Protection To Buyers Of Real Estate On Installment Payments
De Los Santos family entered into a contract to sell with Pasig Realty
and Devt Corp (PRDC) for the purchase of a parcel of land in Parkwood
De los
Greens. Only 15/60 amortizations were paid despite demand. PRDC
Isabel
RA 6552 grants the vendee a 60 day grace period from the date the
installment became due. If the vendee fails to pay, the vendor may
cancel the contract 30 days after receipt by the vendee of the notice of
cancellation. The contract to sell in this case also granted the vendor an
Cancellation of
option to cancel the contract and forfeit payments already made should
contract to sell
the vendee fail to pay any of the monthly amortizations within 60 days

Santos v and forfeiture

opted to cancel the contract w/ forfeiture of payments made, sent the
CA
corresponding notice, and asked them to vacate. De Los Santos filed an
(Corona)
action for specific performance and damages with the HLURB, alleging
that PRDC failed to develop the subdivision.
FDC (Fedman) and Interchem entered into a contract to sell wherein
Interchem will purchase one of FDC’s condominium unit. Interchem
transferred its rights to Agcaoili. Agcaoili agreed to pay the installment
Fedman
Ivan
from due date. Here, they defaulted on the payment of the amortizations
of payments
despite the lapse of more than 60 days. While PD 957 provides for non-
made was
forfeiture when the vendee desists from further payment due to the
upheld.
failure of the developer or owner to develop the subdivision, the ocular
inspection report in this case showed substantial compliance on the part
of the corporation insofar as the development of the subdivision was
concerned.
In order for FDC to have validly cancelled the existing contract to sell, it
must have first complied with Section 3 (b) of RA 6552 or the Maceda
Law. FDC should have refunded Agcaoili the cash surrender value of the
Fedman's
payments on the property equivalent to fifty percent of the total
cancellation of

balance in 135 equal monthly installments. FDC’s centralized air-
v Agcaoili
conditioning unit broke down. Since Agcaoili’s demands for the repair
went unheeded he suspended the payment of monthly amortizations.
Thus, FDC cancelled the contract to sell.
Manuel & Valbueco Inc., executed 2 conditional deeds of sale, payment
Manuel is on installment basis. But Valbueco suspended payment since it wasn’t
Uy & satisfied how Manuel complied w/ its obligation under the deeds. Before Can Manuel
Izzy
payments made. The declared public policy espoused by RA No. 6552 is
the contract to
"to protect buyers of real estate on installment payments against
sell is improper
onerous and oppressive conditions." The contract to sell which FDC
cancelled remains valid and subsisting. FDC cannot by its own forfeit the
payments already made by the Agcaoili.
Sec 4 of RA 6552 (Realty Installment Buyer Act) applies in the said
contracts to sell. “Sec. 4. In case where less than two years of
installments were paid, the seller shall give the buyer a grace period of
not less than sixty days from the date the installment became due. If the
buyer fails to pay the installments due at the expiration of the grace
period, the seller may cancel the contract after thirty days from
receipt by the buyer of the notice of cancellation or the demand for
rescission of the contract by a notarial act.”
HERE, Valbueco paid less than 2 yrs of instalment. It was wrong for CA
to state that there was no valid notice of notarial rescission to Valbueco

Sons, the suspension of payment, only LESS THAN 2 YRS of installments
Inc. vs. were paid. Due to this suspension of payment, Manuel informed
Valbueco Valbueco of its intention to rescind the deeds & attached a NOTARIAL
rescission. Valbueco filed a complaint for specific performance.
rescind the
because it was sent to the wrong address. BUT SC NOTED here that
contract? YES.
when Valbueco filed its complainant for specific performance in 1994,
Manuel filed an Answer to said complaint & attached a copy of the
written notice (dated: 03/17/1878) & copies of the notarial acts of
rescission (dated:03/15/1978). Hence, Valbueco is deemed have notice
of the notarial rescission when it received Manuel’s Answer to its
complaint & can no longer deny not having received such notices.

Petitioner spouses were employees of respondent BPI Family. As part of
their benefits, Petitioners were extended a housing loan by BPI Family
which was to be paid in installments automatically deducted from their
salaries. However, after two years and four months from obtaining the
Sebastia
housing loan but before its full payment, Petitioners were terminated
n vs. BPI
JR
Also, under RA 6552: Right of the buyer to REFUND accrues only when
has PAID at LEAST 2 YRS of instalments. HERE, he paid LESS than 2
yrs of installment. So he is not entitled to a refund.
Petitioners argue that they are entitled to the grace period provided in
RA 6552 to settle their unpaid monthly amortizations without interest as
they have paid for two years and four months already, beyond the
required two year period. Otherwise, the foreclosure of the mortgaged
property should be deemed premature inasmuch as their obligation was
not yet due and demandable. The petitioners’ insistence would have
been correct if the monthly amortizations being paid to BPI Family arose
from a sale or financing of real estate. In their case, however, the
Injunction monthly amortizations represented the installment payments of a

from service (the husband for loss of trust and confidence, while the wife
Family
was terminated for abandonment of work). The Petitioners filed a case
Bank
for illegal dismissal with the NLRC. Pending a decision of the NLRC, BPI
filed for foreclosure of mortgage to which the Petitioners respondend to
by filing a petition for injunction, arguing that the loan was not yet due
and demandable since there was still a pending case with the NLRC.
DENIED housing loan that BPI Family had extended to them as an employee’s
benefit. The monthly amortizations they were liable for was derived
from a loan transaction, not a sale transaction, thereby giving rise to
a lender-borrower relationship between BPI Family and the petitioners. It
bears emphasizing that Republic Act No. 6552 aimed to protect
buyers of real estate on installment payments, not borrowers or
mortgagors who obtained a housing loan to pay the costs of their
purchase of real estate and used the real estate assecurity for their
loan.

Gacutan must
pay the
interest. On the
other hand,
Tagaytay shall
execute the The Court has held that the buyer has the option to demand the
deed of reimbursement of the total amounts paid, or to await the further
Gacutan and Tagaytay Realty entered into a contract to sell to be paid absolute sale development of the subdivision; when the buyer opts for the latter
by 84 installments with 12% annual interest. Gacutan suspended the covering the alternative, he may suspend the payment of his installments until the
amortizations because Tagaytay failed to complete the construction of property and time when the developer has fulfilled its obligation to him; should the
Tagaytay amenities. Instead, Tagaytay sent Gacutan the account of the balance deliver the developer persist in refusing to complete the facilities, the National
Joana

Realty v. price plus interest and penalty. Gacutan contended that he is not liable property to Housing Authority may take over or cause the development and
Gacutan for the interest and the penalty. SC held that he is liable for the interest Gacutan completion of the subdivision at the expense of the developer.
but not for the penalty because Tagaytay failed to complete its together
undertaking in the construction of the said amenities. certificate of In this case, Gacutan initially opted to suspend the payment of his
title. Also, amortizations, but then offered to complete the payment upon realizing
Tagaytay is not that Tagaytay Realty did not anymore intend to build the amenities.
relieved from
its statutory
and contractual
obligations to
complete the
amenities.
5
 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2
17. Extinguishment of sale
18. Redemption - NCC 1619-1623
Jose V. Ramirez was a co-owner (1/6 ownership) of a house and lot (in
Sta. Cruz, Manila). He died. He bequethed his estate to his children and
1/3 of the free portion to Pet. Angela Butte. While the distribution of
shares in the testate proceeding is pending, the other co-owner of the
Butte v
property Marie Garnier Vda de. Ramirez sold her undivided 1/6 share to
Lalaine
Uy [1962,
Resp. Manuel Uy and Sons. When Pet. Butte learned of the sale, she
JBL
offered to redeem the 1/6 share acquired by Respondent. Respondent
Reyes]
refused. Issue: WON petitioner, having been bequethed 1/3 of the free
portion of the estate of JVR can exercise the right of legal redemption
over the 1/6 share sold by MGR despite the pendancy of the testate
proceedings.
On October 4, 1952, Conejeros filed a complaint in the CFI of Cebu,
seeking to be declared entitled to redeem the half interest of Enrique
Torres; to which the Raffiñans made answer, claiming absolute title to
Marie
Conejero
the property in dispute and pleading that plaintiffs lost their right of
v CA
redemption because they failed to exercise it within the statutory period.
ISSUE: WON there was a valid and effective offer to redeem
5 brothers and sisters inherited in equal shares a parcel of land in Tarlac.
In 1963, 1 sibling (Celestino Padua) sold his share to petitioners Carlos
and Casimira Alonzo by absolute sale. In 1964, Eustaquia Padua sold
hershare as well to petitioner via "Con Pacto de Retro sale". Hence,
petitioners occupied the lot. On Feb. 25, 1976, Mariano Padua sought to
Miguel
Alonzo v redeem the area sold but was dismissed because he was already a US
CA citizen. On May 27, 1977, Tecia Padua filed a complaint invoking the
same right of redemption. It was also dismissed because it wasn't filed
w/in 30 days from the sale even if there was no notice to them by their
siblings because they only lived in the same area. CA reversed it
because notice should be in writing. ISSUE: WON action to redeem
has prescribed
Leoncia and her 3 sons executed a Kasunduan ng Biling Mabibiling Muli
whereby they sold their land to Sps. Francia for P500. There is a
stipulation in such deed for the vendor's right of repurchase: "sa oras na
sila'y makinabang." They remained in the property but did not repay
Reyes v P500. Alejandro (son of Jose Sr, son of Leoncia) paid the P500 and was
Reyes able to secure a Pagsasa-ayos at Pagsasalin executed by Sps. Francia.
Pam
(2010, Alejandro executed a Kasulatan ng Pagmeme-ari and acknowledged the
Bersamin rights of Leoncia, Jose Sr., Jose Jr. to repurchase the property. Alejandro
) died, survived by his wife Amanda (respondent). Amanda asked heirs of
Jose Jr. (petitioners) to vacate the property ISSUE: (1) W/N the
transaction was a pacto de retro sale; (2) W/N petitioners are now
barred from claiming that the transaction was an equitable mortgage for
failure to redeem the property for a long time
Sps. Hojas failed to pay their loan to Philippine Amanah Bank (PAB).
PAB set a foreclosure sale on April 21, 1987. Sps. Hojas thus had until
April 21, 1988 to redeem. PAB sent a letter to Hojas which said: Our
records show that the above account has already been foreclosed by the
bank. However, the borrowers concerned can still exercise the one (1)
year right of redemption over the foreclosed properties until April 21,
1988; As the Bank has adopted an incentive scheme whereby payments
are liberalized to give chances to former owners to repossess their There was no
Tristan
Hojas v properties, we suggest that you advise your parents to drop by at our exercise of
Amanah Zamboanga Office so they can avail of this rare privilege which shall be tight to
good only up to December 31, 1988. redemption.
Hojas manifested their intention to avail of the liberalized payment
scheme. However, they thought that availing of the payment scheme
amounted to an extension of the redemption period.
A public bidding was conducted on November 4, 1988, wherein the
mortgaged properties were sold. Hojas thus filed action to set aside the
foreclosure.
By law, the rights to the succession of a deceased persons are
transmitted to his heirs from the moment of his death, and the right of
succession includes all property rights and obligations that survive the
decedent.
Yes. Petitioner
Butte is entitled
A co-owner of an undivided share is necessarily a co-owner of the
to exercise the
whole.
right of legal
All that the law requires is that the legal redemptioner should be a co-
redemption.
owner at the time the undivided share of another co-owner is sold to a
stranger. Whether or not the redemptioner will continue being a co-
owner after exercising the legal redemptioner is irrelevant for the
purposes of law.
The law grants unto the co-owner of a property the right of redemption.
But in so granting that right, the law intended that the offer must be valid
and effective, accompanied by an actual tender of an acceptable
redemption price. In the case at bar, the evidence shows that the
appellees had offered only P10,000.00 in check with which to redeem
the property with a promise to pay the balance by means of a loan which
they would apply for and obtain from the bank. SC held that the offer
Conejero not
was not in pursuance of a legal and effective exercise of the right of
entitled to
redemption as contemplated by law; hence, refusal of the offer on the
redeem
part of the appellants is justified. The conditions precedent for the valid
Enrique's half
exercise of the right do not exist. DOCTRINE: The right of legal re-
interest for
emption or redemption shall not be exercised except within thirty days
34,000 php
from the notice in writing by the prospective vendor, or by the vendor, as
the case may be. The deed of sale shall not be recorded in the Registry
of Property, unless accompanied by an affidavit of the vendor that he
has given written notice thereof to all possible redemptioners.
ART. 1623 The right of redemption of co-owners excludes that of
adjoining owners
The co-heirs/siblings were undeniably informed of the 2 sales although
no notice in writing was given them (There was actual notice because
they lived in the same fucking lot). The right of redemption was invoked
not days but years after the sales were made in 1963 and 1964. The
complaint filed by Tecla Padua in 1977, 13 years after the 1st sale and
14 years after the 2nd sale. The delay invoked by the petitioners extends
YES to more than a decade, assuming of course that there was a valid notice
that tolled the running of the period of redemption. These are the
justifications for this exception. Additional info: JBL REyes said that the
giving of a copy of the deed of sale is sufficient written notice based on
NCC1088. This is the reckoning period of the 30-days. NCC1623 also
states that the giving of such notice by the vendees would not toll the 30
days. It should be the vendors.
(1) No, it is an
equitable
mortgage; (2) (1) Petitioners remained in the property. The taxes were still in the name
Not barred - If of Leoncia; (2) The original intention of the parties as embodied in the
petitioner's Kasunduan ng Biling Mabibiling Muli shall govern w/o taking prescription
claim is already because both parties failed to enforce their rights within 10 years. The
barred, stipulation "sa oras na sila'y makinabang" signified no definite period,
respondent's the period to redeem should be ten years from the execution of the
claim was contract, pursuant to Art. 1142 and 1144 of the Civil Code. In this case,
already barred mortgagees Sps. Francia should have foreclosed the mortgage upon the
because 10 lapse of 10 years, but they did not do so. Instead, they accepted
years had Alejandros payments, until the debt was fully satisfied. The acceptance
already lapsed of the payments even beyond the 10-year period of redemption
when they estopped the mortgagees heirs from insisting that the period to redeem
assailed their the property had already expired. Their actions impliedly recognized the
right to the continued existence of the equitable mortgage.
equitable
mortgage
Even if the Sps. Hojas signified their intention to avail of the incentive
scheme, this does not amount to an exercise of redemption that
precluded the public sale.
A person who wishes to exercise the right of redemption cannot just
manifest his desire to do so. His intention to redeem must be
accompanied by an actual and simultaneous tender of payment, which
thus constitutes the exercise of the right to repurchase.
The redemption period was also not extended. • A perusal of the letter
shows that December 31, 1988 refers only to the last day when the Sps.
Hojas can avail of the liberalized payment scheme and submit their
payment proposals to the bank. It did not refer to last day of the
redemption period, which remained to be April 21, 1988.
• The liberalized payment scheme merely allowed the Sps. Hojas a
chance to repossess their properties on an easy term basis.
6
 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2

Sps Tolosa entered into a Credit Agreement with respondent United

Coconut Planters Bank (UCPB). To secure their credit availments, Sps
Tolosa executed deeds of REM over 4 properties. For failure of the
Spouses Tolosa to pay their principal obligation, UCPB foreclosed the
mortgage on the aforesaid realties and filed a petition for the extra-
judicial sale. After the due notice and publication, the mortgaged
properties were sold at a public auction where UCPB tendered the
Upon failure of the Spouses Tolosa to exercise their right of redemption
highest bid. The proceeds of the sale were credited towards the partial
within the one-year period therefor prescribed. Subsequent to the
satisfaction of the Spouses Tolosa’s mortgage obligation which, inclusive There is a
issuance of the certificates of title and tax declarations over the same
Tolosa v of interests, penalties and other charges. Issued the corresponding VALID
properties in its name, UCPB complied with the requirements under Act
Bianca

UCPB certificate of sale, UCPB caused the same to be registered with the issuance of
3135 by filing its ex-parte petition for issuance of a writ of possession
(2013, Office of the Register of Deeds and for failure of the Spouses Tolosa to Writ of
before the RTC. Since UCPB had already become the absolute and
Perez J,) exercise their right of redemption within the prescribed one year period, Possession in
registered owner of said properties, the CA correctly ruled that it was the
UCPB went on to consolidate its ownership over the subject realties. favor of UCPB.
ministerial duty of the RTC to issue the writ of possession in favor of the
former.
This was opposed by Sps. Tolosa wherein the latter prayed that the
issuance of a writ of possession be held in abeyance because of a
pendency of another case for declaration of nullity of promissory notes,
foreclosure, and certificate of sale. In the latter case, they alleged that
UCPB imposed illegal interest rates. RTC issued an order holding the
issuance of writ of possession in the interest of equity and substantial
justice.

On November 29, 1985, petitioner Goldenway Merchandising

Corporation executed a Real Estate Mortgage in favor of Equitable PCI
Bank over three parcels of land as security for a Php2,000,000 loan
The shorter
granted to the petitioner. Petitioner eventually failed to settle its loan
period under Section 47 of R.A. 8791 did not divest juridical persons of the right to
obligation, leading respondent to extrajudicially foreclose the mortgage
RA 8791 in redeem their foreclosed properties but only modified the time for the
on December 13, 2000. Subsequently, a Certificate of Sale was issued
relation with exercise of such right by reducing the one-year period originally provided
to respondent on January 26, 2001. In a letter dated March 7, 2001,
Act. 3135 as in Act No. 3135. The new redemption period commences from the date
Goldenw petitioner offered to redeem the foreclosed properties by tendering a
Darwin

the parties of foreclosure sale, and expires upon registration of the certificate of sale
ay v check. Petitioner and respondent met on March 12, 2001. However,
expressly or three months after foreclosure, whichever is earlier. There is likewise
PCIBank petitioner was told that redemption was no longer possible since the
agreed that no retroactive application of the new redemption period because Section
certificate of sale had already been registered; the title to the foreclosed
foreclosure 47 exempts from its operation those properties foreclosed prior to its
properties were consolidated in favor of the respondent on March 9,
would be in effectivity and whose owners shall retain their redemption rights under
2001. Petitioner filed a complaint for specific performance and damages
accordance Act No. 3135.
contending that the 1-year period of redemption under Act 3135 should
with Act 3135
apply, and not the shorter redemption period under RA 8791 as applying
RA 8791 would result in the impairment of obligations of contracts and
would violate the equal protection clause under the constitution.
Eduardo sold lot and others (trucks etc) to Roberto (2M + pay 4M to
DBP), with right to repurchase. There was a memorandum of agreement
where they sold the lot for 10M to third parties. Roberto gave the 2.8M to
Eduardo out of 10M. Eduardo is claiming the trucks as he exercised the
right to repurchase. W/N Eduardo has the right to repurchase. SC held In sales with the right to repurchase, the title and ownership of the
that Eduardo had complied with the conditions stipulated in the deed of property sold are immediately vested in the vendee, subject to the
sale and prescribed by Article 1616 of the Civil Code to repurchase. Eduardo has resolutory condition of repurchase by the vendor within the stipulated
Innoe

David v
From the Php10 Million purchase price which was directly paid to the right to period.23 Accordingly, the ownership of the affected properties reverted
David
Roberto, the latter deducted his expenses plus interests and the loan, repurchase to Eduardo once he complied with the condition for the repurchase,
and the remaining amount he turned over to Eduardo. This only means thereby entitling him to the possession of the other motor vehicle with
that this is the excess amount pertaining to Eduardo and co-heirs after trailer.
the Roberto deducted the repurchase price of Php2.0 Million plus
interests and his expenses. Add to that is the fact that Roberto returned
one of the trucks and trailers subject of the Deed of Sale with
Assumption of Mortgage to the Eduardo.
There are times when redemptions made beyond the allowable period
are justified to promote the purpose sought to be achieved by statutory
provisions. The intention of the law is to protect the rights of the original
owner and to aid, rather than defeat, the original owner’s claim over the
Sps (Reynaldo and Fidelita) Garcia obtained a loan from the DBP
property. Allowing the exercise of redemptioner's right to redeem one
secured by REM. It was later foreclosed when they failed to pay their
day late will cause inconsiderable harm compared to the grave loss that
loan. A year after the registration of the certificate of sale, Sps Garcia
a redemptioner will suffer when deprived of his or her property. Further,
redeemed the property by tendering a total of the purchase price to the
there is nothing on record substantiating DBP’s 192k claim. DBP did not
sheriff. The int was paid only the ff day when the redemption period had
Isabel

DBP v Valid even submit nay document showing its computation.

already expired. They paid a total of 70k. The sheriff issued a certificate
Garcia
of redemption. The money was turned over to DBP which issued a
provisional receipt of the redemption money receipted. It later opposed
the redemption for insufficiency of the amount tendered considering its
claim was for 192k. DBP then issued a manager’s check to Reynaldo to
refund the 70k. The check was encashed.
redemption.
Since the redemption was valid, all acts proceedings thereafter done by
DBP and all issuances relative thereto (such as new TCT) are null and
void. It follows that Reynaldo must also return the 70k to DBP.
Considering there is no proof that their marriage was nullified or
declared void, it is presumed that the return of the amount redounded to
the benefit of their conjugal partnership. The fact that he was not
impleaded in the instant petition is not a hindrance to the return of the
amount to DBP to complete the redemption.

7
 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2
The late Asuncion Sadaya, mother of the Respondents, executed a
Deed of Sale covering a parcel of land in favor of Sudlon Agricultural
High School (SAHS). The sale was subject to the right of the vendor to
repurchase the property after SAHS shall have ceased to exist or shall
have transferred its school site elsewhere. BP 142 was enacted. It
incorporated and consolidated several schools in the Province of Cebu,
including the SAHS, as part of CSCST. It also transferred all personnel,
properties, including buildings, sites, and improvements, records,
obligations, monies and appropriations of SAHS to the CSCST. More
CSCST
than 5 years after, Respondents informed petitioner of their intention to Respondents
Ivan
vs.
exercise their right to repurchase under the Deed of Sale on the ground cannot redeem
Misterio
that the SAHS had ceased to exist. However, Petitioner informed
Respondent’s that SAHS still existed as only the name of the school was
changed. Respondents filed a Complaint before the RTC for Nullity of
Sale and/or Redemption (1st case) against Petitioner. In the 1st case,
SC ruled that the four-year period for the respondents to repurchase the
property was not suspended, hence, respondents are already barred to
redeem. While 1st case was not yet final, respondents filed an amended
complaint in RTC impleading the Province of Cebu and the Register of
Deeds. (this case)
Juana owned a land in Batangas. Dime filed a case before the RTC
alleging that Juana conveyed that land under A PACTO DE RETRO
contract in his favor for P2M and that Juana reserved her right to
repurchase the property for the same price w/n 9 mos. But despite
demands to exercise such, she didn’t do so. Hence, the petition by Dime
for consolidation of title in his name.
Rojales denied executing that pacto de retro sale alleging that it was
Rojales v
falisified since the fingerprint/thumbark therein was not hers. But after
Izzy
Dime
the examination of the thumb mark by NBI in the notarized pacto de
[Peralta]
retro & standard right thumbmark taken by the police, it showed that the
same belonged to the same person. Dime died while the case was
pending so he substituted by his heirs. The heirs filed a manifestation
that it was actually one Villamin who was the source of the fund in
buying the lot and said consolidation of ownership will be prejudicial to
Villamin & would unjustly enrich the heirs. RTC dismissed it stating the
case was not filed by Villamin, the indispensable party.
19. Assignment of Credits, NCC 1624-1635
The present case stems from a civil case that reached finality, wherein it
was decided that Spouses Cortez were liable to pay Spouses Serfino
the balance of their debt. The two parties agreed to a compromise
judgment, wherein the payment of the debt would be sourced from
Magdalena Cortez' retirement benefits. Despite the compromise
judgment, Spouses Cortez failed to pay because the proceeds of the
retirement benefits of Magdalena Cortez was transferred to the account
of their daughter with FEBTC. Later on, Magdalena was able to withdraw
Serfino v the deposited amount with FEBTC. Spouses Serfino filed a case for
JR
FEBTC recovery of money on deposit and the payment of damages against
Spouses Cortez and FEBTC. The RTC held that Spouses Cortez were
liable for fraudulently diverting the proceeds of the retirement benefits;
but the RTC absolved FEBTC. Spouses Serfino filed an appeal with the
SC questioning the decision of absolving FEBTC. By allowing
Magdalena to withdraw the deposit that is due them under the
compromise judgment, the spouses Serfino claim that FEBTC
committed an actionable wrong that entitles them to the payment of
actual and moral damages.
Since the parties did not agree on any period for the exercise of the right
to repurchase the property herein, respondents may use said right within
4 years from the happening of the allocated conditions contained in their
Deed of Sale: (a) the cessation of the existence of the SAHS, or (b) the
transfer of the school to other site. However, due to respondents’ failure
to exercise their right to redeem the property within the required 4 years
from the time when SAHS had ceased to exist, or from June 10, 1983,
the date of effectivity of BP Blg. 412, this Court held that respondents
are barred by prescription. Despite this, Respondents nevertheless insist
on the redemption of the subject property pursuant to the second
suspensive condition, namely, Petitioner’s transfer of its school site.
While the occurrence of the second suspensive condition may give rise
to a separate cause of action, the same must always be taken in
conjunction with the periods prescribed by law insofar as they frown
upon the uncertainty of titles to real property. Otherwise, vendors may
simply impose several resolutory conditions, the happening of each will
practically extend the life of the contract beyond the parameters set forth
by the Civil Code.
SC: Art. 1607 stated that the consolidation of ownership is in the name
of the vendee. Hence, in here the indispensable parties are the parties
In whose name
to the Pacto de Retro Sale: the vendor (Juna), the vendee (Dime), and
should the
their assigns and heirs (refers to relativity of contract).
consolidation
of the property
Parties to a contract are the real parties-in-interest in an action upon it.
be made? In
In this case, the vendee in here is Dime. And since Villamin is not a
the name of
party/privy to a contract and for whose benefit it was NOT expressly
the vendee
made, said Villamin can’t maintain an action on it.
(Art.1607: In
case of real
Privy: Idea of succession. He who by succession is placed in the
property, the
position of one of those who contracted the judicial relation & executed
consolidation
the private documents & appears to be substituting him in the personal
of ownership
rights & obligation is privy.
in the vendee
by virtue of the
Hence, for not being an heir/assignee of Dime (vendee), Villamin didn’t
failure of the
substitute Dime in the personal rights & obligation in the pacto de retro
vendor to
sale by succession. Since she is not a privy to the contract, she is not an
comply with the
indispensable party.
provisions of
Article 1616
Note: Here, there were conflicting claims Juana said that it was Dime who
shall not be mortgaged the property to the bank but her own daughter said it was Juana
recorded in the who mortgaged the property to the bank but it only Dime who redeemed it
Registry of from the bank. SC: Even if the contract is denominated as pacto de retro
Property the owner of the property may still disprove it by means of parole evidence
without a as long as the nature of agreement is placed in issue by the pleadings.
judicial order, Here, she didn’t do so, she merely said that the thumbmark was falsified.
after the She should have raised the issue that Dime merely borrowed the title from
vendor has her & promised to pay here in here pleadings. Since there were
been duly inconsistencies & she failed the overcome the presumption of presumption
heard.) of regularity of the notarized contract of Pacto de Retro sale, the said
transaction should be upheld as opposed to her allegation that it was a
contract of loan secured by a mortgage of the said property.
"An assignment of credit is an agreement by virtue of which the owner of
a credit, known as the assignor, by a legal cause, such as sale, dation in
payment, exchange or donation, and without the consent of the debtor,
transfers his credit and accessory rights to another, known as the
assignee, who acquires the power to enforce it to the same extent as the
assignor could enforce it against the debtor. It may be in the form of
sale, but at times it may constitute a dation in payment, such as when a
debtor, in order to obtain a release from his debt, assigns to his
creditor a credit he has against a third person." The terms of the
compromise judgment, however, did not convey an intent to equate
the assignment of Magdalena’s retirement benefits (the credit) as
Claim for
the equivalent of the payment of the debt due the spouses Serfino
actual and
(the obligation). There was actually no assignment of credit; if at all, the
moral damages
compromise judgment merely identified the fund from which payment for
against FEBTC
the judgment debt would be sourced. Only when Magdalena has
is DENIED
received and turned over to the spouses Serfino the portion of her
retirement benefits corresponding to the debt due would the debt be
deemed paid. In the present case, the judgment debt was not
extinguished by the mere designation in the compromise judgment of
Magdalena’s retirement benefits as the fund from which payment shall
be sourced. Since no valid assignment of credit took place, the
spouses Serfino cannot validly claim ownership of the retirement
benefits that were deposited with FEBTC. Without ownership rights
over the amount, they suffered no pecuniary loss that has to be
compensated by actual damages. The grant of actual damages
presupposes that the claimant suffered a duly proven pecuniary loss.
8
 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2

LEASE
1. Definitions
Petitioners filed separate complaints for unlawful detainer against
several persons, some of which are the respondents, alleging that they Petitioners Tan Siok Kuan and Ching have not shown any evidence of a
have been leasing portions of the property to the latter since 1972. The lease between them and respondents, be it express or implied. There
Tan Siok No contract of
Joana

other persons maintained that the lease agreements are void they being
Kuan v
Chinese nationals who are not entitled to own real property in the
Ho
Philippines. Respondents argued that there are no existing lease
contracts between them and the petitioners and that have been in
possession of the proerty for 37 years.
2. Some Distinctions
3. Rights and Obligations of Lessor and Lessee
was no mention of how and when the alleged contract of lease started,
lease exists in
there was no proof of prior payment of rentals or any prior demand for
this case
such payment considering petitioners' allegation that respondents failed
to pay rentals since 1997 and that the case was instituted only in 2003.

A fishpond which belonged to 3 co-owners was leased to Bernardo
Enriquez. When Enriquez died, his widow subleased the fishpond to Dr.
Manlapat Cruz and thereafter to Salazar. The heir of the co-owners Manlapat filed
Lalaine
The sublease is for a shorter period than the original lease. The
reservation of even so short a period as the last day of the term is
enough to make the transfer a sublease.
It is a sublease
based on the
The court also found conditions in the agreement that would show
examination of
inconsistency with the idea that the widow of Enriquez had entirely given

v Salazar an action to recover possession of the fishpond from Salazar alleging the terms of
up her interest in the estate which are: 1. Damages if the sublessee
[1956, that the lease and sublease was null and void because the arrangement the agreement
again sublease the fishpond; 2. sublessor will pay taxes over the
Reyes] between the widow and Salazar was not really a sublease but an between the
fishpond; 3. sublessee is forbidden to cut trees w/o consent; 4.
assignment of lease - which, without the consent of the original lessors, widow and
sublessee is required to return the fishpond in good condition to the
is void. Issue: WON the contract is a sub-lease or assignment of lease. Salazar.
sublessor upon the expiration of the sublease

Art. 1649; Art. 1650

The alleged
assignment or
cession could
not have been
In order that prohibition to sublease may be held binding upon the valid in this
Assignment of lease. In the case of assignment, the lessee transmits
lessee, the same must be contained expressly in the contract of lease case, because
absolutely his right, his personality disappears; there only remains in the
Nava v (ART. 1550 NCC), which, in the instant case DID NOT APPEAR; and if it the owner of
Marie

juridical relation two persons, the lessor and the assignee who is
Yaptincha did, was waived by the owner of the premises in question when he the premises
converted into a lessee. In sublease, no personality disappears; there
y allowed the sub-lessee to stay in the said premises and acceped the did not give his
are two leases and two distinct juridical relations, although intimately
rentals from him. GUYS WALA AKO MAKITANG CASE NITO :( YAN express
connected and related to each other.
NA TALAGA NAKITA KO :( consent to the
substitution of
the sub-lessee
in lieu of the
lessee

SC invoked NCC1649. SC said that the lease contract of Sime Darby

Macgraphics owned several billboards accros Metro Manila, one of
and Macgraphics didn't contain any stipulation that Sime Darby could
which, is the Magallanes Interchange billboard. It leased it to Sime
assign w/o Macgraphic's consent. Moreover, no proof that Macgraphics
Darby for P120k for 4 years. Later, Sime Darby executed a MOA with
even consented to the assignment of least. As ruled by the RTC and CA,
Goodyear where it agreed to sell to the latter its tire manufacturing
Macgraphics was never part of the negotiations between Sime Darby
plants and other assets. It also included the assignment of the leasehold
and Goodyear. Even if Macgraphics and Goodyear exchanged
Sime rights pursuant to the lease with Macgraphics. But Macgraphics refused
Miguel

proposals, there was never a meeting of the minds between them. It

Darby v to give its consent to the assignment because the transfer of Sime NO
didn't translate into Macgraphics' consent to the assignemnt. The
Goodyear Darby's leasehold rights to Goodyear would necessitate changes to the
consent of the lessor to an assignment of lease may indeed be given
design and structure of the neon display of the billboard, thus, incurring
expressly or impliedly. It need not be given simultaneously with that of
a lot of expenses. So, Goodyear demanded partial rescission of the
the lessee and of the assignee. Neither is it required to be in any specific
assignment and the refund of P1.239M of the pro-rata value of the
or particular form. It must, however, be clearly given. In this case, it
leasehold rights. ISSUE: WON the leasehold rights were properly
cannot be said that Macgraphics gave its implied consent to the
assigned to Goodyear
assignment of lease.

Lomises leased 2 market stalls from Baguio City. Lomises entered into Lomises was a mere lessee of the market stalls, and the Baguio City
an agreement w/ Suerte to transfer all his rights over the 2 market stalls. Government was the owner-lessor of the stalls. Under Art. 1649 of the
NO, Lomises
Aludos v Suerte paid 45kas downpayment. Suerte filed specific performance Civil Code, the lessee cannot assign the lease without the consent of the
(lessee) may
Suerte before RTC against Lomises compelling him to receive the balance of lessor, unless there is a stipulation to the contrary. As the permit issued
Pam

not assign his

(2012, his payment and to transfer the rights over the 2 market stalls. Lomises to Lomises did not contain any provision that the lease of the market
leasehold
Brion) contend that the agreement was one of loan and not sale of stalls could further be assigned, and in the absence of the consent of the
rights
improvements and leasehold rights. ISSUE: W/N the assignment of Baguio City Government to the agreement, the agreement between
leasehold rights is proper Lomises and Suerte null and void

VSD sought the nullification of the TCT in the name of Baello and the
recovery of possession of property that is being occupied by Uniwide by
virtue of a contract of lease with Baello. VSD contends that it is the
Additional
registered owner of the land and sought to recover possession and the
evidence may
payment of rent from Baello and Uniwide. Baello in turn, alleged that the
be allowed
VSD subject property was bequeathed to her through a will by her adoptive
Tristan
The Court recognizes the importance of protecting the country's Torrens
system from fake land titles and deeds. Considering that there is an
issue on the validity of the title of petitioner VSD, which title is alleged to
be traceable to OCT registered on April 19, 1917, which mother title was
held to be inexistent in a previous case - Manotok Realty, Inc. v. CLT
Realty Development Corporation, in the interest of justice, and to

notwithstandin
Realty v mother. The case reached the SC which held that VSD was able to safeguard the correct titling of properties, a remand is proper to
g the fact that
Uniwide establish that the technical description of its Torrens title, embodying the determine which of the parties derived valid title from the legitimate OCT
the case has
identity of the land claimed, covers the property that is being occupied registered on May 3, 1917.
already been
by Uniwide by virtue of a lease contract with Baello. Hence this MR
decided.
which prays for the allowance of additional evidence to ascertain which Since this Court is not a trier of facts and not capacitated to appreciate
of the conflicting claims of title should prevail. evidence of the first instance, the Court may remand this case to the
Court of Appeals for further proceedings.

9
 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2

Section 6 of the contract refers to transfers inter vivos and not

transmissions mortis causa. What Section 6 seeks to avoid is for the
lessee to substitute a third party in place of the lessee without the
lessor’s consent. Art. 1649. The lessee cannot assign the lease without
Subleasing is the consent of the lessor, unless there is a stipulation to the contrary · In
valid because any case, HDSJ also acknowledged that the son is a month-to-month
(1) subleasing lessee. Thus, the death of German did not terminate the lease contract
is not executed with HDSJ, but instead continued with the son as the lessee
Inocencio synonymous
Sec 6 of the Lease contract provides: "This contract is nontransferable
vs. with Assignment or transfer of lease, which is covered by Article 1649 of the
unless prior consent of the lessor is obtained in writing." When the
Hospicio assignment; Civil Code, is different from a sublease arrangement, which is governed
Bianca

original lessee ( German Inocencio) passed away, his son (Ramon

de San and (2) by Article 1650 of the same Code. In a sublease, the lessee becomes in
Inocencio) collected the rentals from the sublessees and paid rentals to
Jose subleasing was turn a lessor to a sublessee. The sublessee then becomes liable to pay
HDSJ. HDSJ was then saying that the subleasing done was violative of
(2013, not stipulated rentals to the original lessee. However, the juridical relation between the
the contract to which the Court ruled in the negative.
Carpio J) as a prohibitive lessor and lessee is not dissolved. The parties continue to be bound by
act in the the original lease contract.
contract on the
part of the Moreover in this case, Ramon had a right to sublease the premises
lessee. since the lease contract did not contain any stipulation forbidding
subleasing · Art. 1650. When in the contract of lease of things there is no
express prohibition, the lessee may sublet the thing leased, in whole or
in part, without prejudice to his responsibility for the performance of the
contract toward the lessor

By retainin the car and Locsin's contribution, Mekeni will be unjustly

enriched. it is unfair to deny petitioner a refund of all his contributions to
the car plan.1âwphi1 Under Article 22 of the Civil Code, "[e]very person
who through an act of performance by another, or any other means,
acquires or comes into possession of something at the expense of the
CA was wrong latter without just or legal ground, shall return the same to him." Article
in ruling that 214227of the same Code likewise clarifies that there are certain lawful,
Locsin's voluntary and unilateral acts which give rise to the juridical relation of
Locsin was hired by Mekeni Foods as REgional Sales Manager. Part of
Locsin II contribution quasi-contract, to the end that no one shall be unjustly enriched or
his compensation package was a car plan (second hand Honda Civic).
v. Mekeni shoud be benefited at the expense of another. In the absence of specific terms
Darwin

Half of the cost will be shouldered by Locsin while the other half by
Food treated as rent and conditions governing the car plan arrangement between the
Mekeni. After two years, Locsin resigned. However, Mekeni Foods
Corporati for the car petitioner and Mekeni, a quasi-contractual relation was created between
retained both the car and the contributions made by Locsin amounting to
on during his them. Consequently, Mekeni may not enrich itself by charging petitioner
Php 112,500.
tenure as for the use of its vehicle which is otherwise absolutely necessaryto the
Regional Sales full and effective promotion of its business. There is unjust
Manager enrichment ''when a person unjustly retains a benefit to the loss of
another, or when a person retains money or property of another against
the fundamental principles of justice, equity and good conscience." The
principle of unjust enrichment requires two conditions: (1) that a person
is benefited without a valid basis or justification, and (2) that such benefit
is derived at the expense of another.

Section 7 of Republic Act No. 3844 provides that once there is an

Wilson designated Jorge as his agent to farm his land. Wilson sold the agricultural tenancy, the agricultural tenant's right to security of tenure is
Land to Timoteo. Jorge and TImoteo verbally agreed that Jorge will Timoteo cannot recognized and protected. The landowner cannot eject the agricultural
Jusayan retain possession of the land. And that Jorge will deliver 110 cavans of eject Jorge tenant from the land unless authorized by the proper court for causes
Innoe

vs. palay annually to TImoteo. When the lands was transferred to Timoteo's
Sombilla sons, Timoteo wanted to eject Jorge. W/N Timoteo can eject Jorge.The
Court held that Timoteo cannot eject because Jorge is an agricultural
tenant
because he is provided by law. Section 36 of Republic Act No. 3844, as amended by
an agricultural Republic Act No. 6389, enumerates the several grounds for the valid
tenant dispossession of the tenant. It is underscored, however, that none of
such grounds for valid dispossession of landholding was attendant in
Jorge's case.

Aquinos may appropriate w/o indemnity: Art 449 provides that he who
buils in BF on the land of another loses it w/o right to indemnity. Art 450
provides that the owner may also demand demolition, removal, compel
payment of price of land or rent in case it was built in BF.
Aquinos
(owners) have
Aguilars not entitled to reimbursement of useful expenses as builders in
the right to
BF: BF precludes them from invoking not only 1678 (assuming arguendo
appropriate
there was a lease cus this provisions is applicable only to imrpovements
Sps Aguilar stayed on the property of the Aquinos (with consent) who what was built
on leased property) but also 448 and other provisions requiring GF on
were then in the US. The original house was demolished and replaced on the property
the part of the builder. Here, the Aquinos actually prohibited the Aguilars
with a 3-storey building. They occupied the 3rd floor w/o payment of w/o paying
Spouses from building a structure on the property and putting up a shop because
rentals. Aquinos demanded for the return of the property because it was indemnity.
Aquino v. it was supposed to be sold later on- this is notice that possession is only
needed by an immediate family member. Aguilars refused. So, Aquinos Aquilars have
Isa

Spouses temporary in nature and by mere tolerance. They cannot be considered

filed an ejectment complaint. Aguilars argue that they contributed to the no right to a
Aguilar builders in GF despite BF simply because they introduced improvements
to the improvement of the property and the construction of the building, refund for any
(Sereno) to ½ of the 3rd floor. Lack of constant reminders about the prohibition is
both in terms of money and management/supervision services, in improvement
likewise immaterial. Moreover, there was no evidence showing that
exchange for the exclusive use of a portion of the building. (Note: Wives but may
Aquinos were immediately aware of the building and that they agreed to
are sisters; No lease contract here. Not analogous to a lease either.) recover
share the expenses.
necessary
expenses for
Aguilars may still recover necessary expenses for preservation of
preservation of
property but w/o right of retention: Art 452 provides that builder in BF is
the property.
entitled to recouop necessary expenses for preservation BUT as
builders in BF, they have no right of retention over the premises. Aquinos
acknowledged that Aguilars spent personal money for maintenance of
the property.

10
 SALES%(Part%2%of%2)%+%LEASE%0%Case%Guide%by%G01%|%Mar.%8%and%Mar.%22,%2018%|%CivRev2
Santos Car Check Center Corporation (Santos), owner of a showroom,
Comglas
leased out the said space to petitioner Comglasco Corporation
co
(Comglasco). Comglasco advised Santos through a letter that it was pre-
Corporati
terminating their lease contract. Santos refused to accede to the
on v.
Ivan
pretermination, reminding Comglasco that their contract was for five
Santos
years. Unheeded to Santos’ refusal, Comglasco vacated the leased
Car
premises and stopped paying any further rentals. Santos sent several
Check
demand letters, which Comglasco completely ignored. This promted
Center
Santos to file a suit for a breach of contract.
In 1974, Sps Arzaga (lessors) entered in a contract of lease w/ Peralta
(lessee) for 40 yrs. They agreed on the periods of payment, the mode of
payment was that Peralta will pay thru a bank account opened “in-trust-
for” Flaviano Arzaga (adopted son of the lessors), Peralta will construct a
building, to pay the taxes for it & develop a water system. In 1995,
Flaviano (son) under a Deed of Assignment assigned to Raval the said
Peralta v property for P5M, the titles of the land are now in his name. But Peralta
Izzy
Raval refused to recognize the said assignment but still deposited the rental
[Reyes,J] payment for the account of Flaviano Jr. Despite demands of Raval from
Peralta to pay the back rentals directly to him, to vacate the properties,
etc. Peralta refused and said that Raval was not his lessor. Due to this,
Raval filed an action for rescission of the lease contract. But Peralta said
that (1)action prescribed: 4 yr prescriptive period based on Art. 1398 (2)
he had been paying the rentals so there is no need for the accounting of
unpaid monthly rentals
The 1997 Asian Financial currency crisis does not render an impossibility to
comply with the obligation of a lessee to pay that would excuse the latter from
Comglasco's being liable for non-compliance. Article 1267 speaks of a prestation involving
pre-termination service which has been rendered so difficult by unforeseen subsequent events
of the lease as to be manifestly beyond the contemplation of the parties. The Asian currency
contract due to crisis befell the region from July 1997 and for sometime thereafter, but
Comglasco cannot be permitted to blame its difficulties on the said regional
the 1997 Asian
economic phenomenon because it entered into the subject lease only on
Financial Crisis
August 16, 2000, more than three years after it began, and by then Comglasco
is not proper.
had known what business risks it assumed when it opened a new shop in Iloilo
City.
SC: Deed of Assignment is valid, he is the lessor’s successor-in-interest.
It is not Art. 1398 w/c refers to rescissible contracts under Art 1380 &
1381 (subsidiary action; cases of lesion) but it should be based on Art.
1659 on rescission of lease agreement w/c has 10 yr prescriptive period.
Under Art. 1659, if the lessor doesn’t comply w/ the obligation in Art.
1654 & 1657, the aggrieved party may seek rescission & indemnification
for damages or the latter but still allow the contract to be in force. Art
1654 pertains to obligations of the LESSOR while Art. 1657 on
obligations of the LESSEE. Art. 1657, the lessee is obliged (1) to pay
the price of the lease according to the terms stipulated;(2) To use
the thing leased as a diligent father of a family, devoting it to the
use stipulated; and in the absence of stipulation, to that which may
be inferred from the nature of the thing leased, according to the
custom of the place;(3) To pay expenses for the deed of lease.
Action has not prescribed. The cause of action of Raval from the time
there was violation & default by Peralta in his obligations under the lease
Did Peralta fail
agreement. These violations happened either immediately prior to the
to comply w/ its
demands by Ravan in 1995 or after Peralta’s refusal to heed the
obligation in
demands. There was no indication that there were violations during the
paying the
1st few years of the lease agreement in 1970. So the filing of rescission
rentals? NO.
in 1998 is within the 10yr period.
Has the action
prescribed?
It was wrong for CA to order Peralta to pay the supposed unpaid rentals.
NO.
All payments made by Peralta thru the bank accounts in trust for
Flaviano Jr are valid payment for the monthly rentals. There was
proof that Peralta had been DEPOSITING the rentals to the “in-trust
for” accounts even until 2004 w/c was their agreed mode of
payment. So it was understandable for Peralta to pay the rentals by
depositing it there since he was not a privy in the Deed of
Assignment. The paid rentals was in the bank. And from the stand
point of the lessee (Peralta), he already COMPLIED w/ his
obligation to pay the monthly rentals due to the fact that this mode
of payment was valid. It was incumbent b/w Raval & Flaviano, the
parties to that deed of assignment to arrange on how to withdraw the
money from the bank.
Note: SC said that since the lease was for 40 yrs w/c ended in 2014 (this
case is a 2017 case), the issue whether it should be rescinded is moot &
academic. But SC still discussed the matters regarding the alleged non-
payment of rentals and issue on prescription.
11