VILLONCO REALTY COMPANY v. BORMAHECO, GR No.
L-26872, 1975-07-25
Facts:
Francisco N. Cervantes and his wife, Rosario P. Navarra-Cervantes, are the owners of Lots 3,
15 and 16 located at 245 Buendia Avenue
In the early part of February, 1964 there were negotiations for the sale of the said lots and
the improvements thereon between Romeo Villonco of Villonco Realty Company "and
Bormaheco, Inc., represented by its president, Francisco N. Cervantes, through the
intervention of Edith Perez de Tagle, a real estate broker."
During the negotiations, Villonco Realty Company assumed that the lots belonged to
Bormaheco, Inc. and that Cervantes was duly authorized to sell the same.
Bormaheco, Inc., through Cervantes, made a written offer dated February 12, 1964, to
Romeo Villonco for the sale of the property.
Then, unexpectedly, in a letter dated March 30, 1964, or twenty-six days after the signing of
the contract of sale, Exhibit D, Cervantes returned the earnest money, with interest
amounting to P694.24 (at ten percent per annum). Cervantes cited as an excuse the...
circumstance that "despite the lapse of 45 days from February 12, 1964 there is no certainty
yet" for the acquisition of the Punta property
Issues: Whether or not elements of contract of sale are present.
Ruling:
Yes. Bormaheco's acceptance of Villonco Realty Company's offer to purchase the Buendia
Avenue property, as shown in Teofilo Villonco's letter dated March 4, 1964 (Exh. D),
indubitably proves that there was a meeting of minds upon the subject matter and
consideration of the sale.
Therefore, on that date the sale was perfected. Not only that Bormaheco's acceptance of the
part payment of one hundred, thousand pesos shows that the sale was conditionally
consummated or partly executed subject to the purchase by Bormaheco, Inc. of the Punta
property.
On February 18, 1964 Bormaheco's bid for the Punta property was already accepted by the
Nassco which had authorized its General Manager to sign the corresponding deed of sale.
What was necessary only was the approval of the sale by the Economic Coordinator and a
request for that approval was already pending in the office of that functionary on March 4,
1964.
[ GR No. L-36083, Sep 05, 1975 ] SPS. RAMON DOROMAL v. CA
Facts: A parcel of land in Iloilo were co-owned by 7 siblings all surnamed Horilleno. 5 of the
siblings gave an SPA to their niece Mary Jimenez, who succeeded her father as a co-owner,
for the sale of the land to father and son Doromal. One of the co-owner, herein petitioner,
Filomena Javellana however did not gave her consent to the sale even though her siblings
executed a SPA for her signature. The co-owners went on with the sale of 6/7 part of the land
and a new title for the Doromals were issued.
Carlos had received in check as earnest money from defendant Ramon Doromal, Jr., the sum
of P5,000.00 and the price therein agreed upon was five (P5.00) pesos a square meter, as
indeed in another letter also of Carlos to Filomena Javellana in 5 November, 1967, Exh. 6, he
had told her that the Doromals had given the earnest money of P5,000.00 at P5.00 a square
meter, at any rate, plaintiff not being agreeable, did not sign the power of attorney, and the
rest of the co-owners went ahead with their sale of their 6/7.
Issue: Whether P5000.00 paid to Carlos was given as earnest money or not.
Ruling: No. While P5,000 might have indeed been paid to one of the co-owners, there is
nothing to show that the same was in the concept of the earnest money contemplated in
Article 1482 of the Civil Code as signifying perfection of the sale. Viewed in the backdrop of
the factual milieu thereof extant in the record, the said P5,000 were paid in the concept of
earnest money as the term was understood under the Old Civil Code, that is, as a guarantee
that the buyer would not back out, considering that it is not clear that there was already
definite agreement as to the price then and that the vendees were decided to buy 6/7 only of
the property should one of the co-owners refuse to agree to part with her 1/7 share.
299 SCRA 141, G.R. No. 126812 November 24, 1998/ Goldenrod, Inc. vs. Court of Appeals
Fact: Barretto owned parcels of land which were mortgaged to UCPB. Barretto failed to pay;
the properties were foreclosed. Goldenrod made an offer to Barretto that it would buy the
properties and pay off the remaining balance of Barretto’s loan with UCPB. It paid Barretto 1
million pesos as part of the purchase price. The remaining balance would be paid once
Barretto had consolidated the titles. On the date that Goldenrod was supposed to pay,
Goldenrod asked for an extension. UCPB agreed. When the extension date arrived,
Goldenrod asked for another extension. UCPB refused. Barretto successfully consolidated the
titles. Goldenrod informed Barretto that it would not be able to push through with their
agreement. It asked Barretto to return the 1 million pesos. Barretto did not give in to
Goldenrod’s rescission. Instead, it sold the property that was part of their agreement to
Asiaworld.
Issue: Should Barreto return the earnest money to Goldenrod?
Ruling: Yes. Under Art. 1482 of the Civil Code, whenever earnest money is given in a contract
of sale, it shall be considered as part of the purchase price and as proof of the perfection of
the contract. Petitioner clearly stated without any objection from private respondents that
the earnest money was intended to form part of the purchase price. It was an advance
payment which must be deducted from the total price. Hence, the parties could not have
intended that the earnest money or advance payment would be forfeited when the buyer
should fail to pay the balance of the price, especially in the absence of a clear and express
agreement thereon. By reason of its failure to make payment petitioner, through its agent,
informed private respondents that it would no longer push through with the sale. In other
words, petitioner resorted to extrajudicial rescission of its agreement with private
respondents.
De Leon vs. Salvador, 36 SCRA 567, No. L-30871, No. L-31603 December 28, 1970
FACTS: Eusebio Bernabe’s (judgment debtor) properties were garnished and sold in an auction
sale to satisfy ajudgment in favor of EnriqueDe Leon. The highest bidder for the total sum of
P30,194.00 was Aurora de Leon, sister of judgmentcreditor. Bernabe was given a redemption
period of 1 year commencing from thetime of the auction sale. However, instead of redeeming
his properties, he filed a case to annul theauction sale on the ground of gross inadequacy of
price and ordered a new auction sale. Heclaimed that his properties can cost around
P400,000.00. The court of Judge Serafin Salvador issued a writ of injunction against
respondents andsummarily granted the motions of Bernabe.
ISSUE: WON the auction sale be annulled on the ground of inadequacy of price.
Ruling: While in ordinary sales for reasons of equity a transaction may be invalidated on the
ground of inadequacy of price, or when such inadequacy shocks one's conscience as to justify
the courts to interfere, such does not follow when the law gives to the owner the right to
redeem, as when a sale is made at public auction, upon the theory that the lesser the price
the easier it is for the owner to effect the redemption. And so it was aptly said that when
there is the right to redeem, inadequacy of price should not be material, because the
judgment debtor may reacquire the property or also sell his right to redeem and thus recover
the loss he claims to have suffered by reason of the price obtained at the auction sale.
VELASCO v. CA 51 SCRA 439, June 29, 1973
Facts: Petitioner: On November 29, 1962 parties entered into contract of sale of land for
P100,000. The payment terms would be a down payment of P10,000 and 20,000 and the
P70,000 is payable in installment. Petitioner then paid the P10,000 down payment on
November 29, 1962. On January 8, 1964 he paid the remaining 20,000 but the respondent
refused to accept and execute a deed of sale.
Respondent: No contract of sale was perfected because the minds of the parties did not
meet. The property was leased by Socorro Velasco and the defendant indicated willingness in
selling the property for 100,000 under the terms of P30,000 down payment, 20,000 of which
to be paid on November 30, 1962 and the remaining 70,000 is payable in 10 years with 9%
interest per annum. On November 29, 1962 Socorro paid 10,000, short of the alleged 20,000
agreed down payment. However, said payment was accepted. On January 8, 1964 Socorro
tendered the 20,000 down payment but defendant refused to accept because the latter
considered the contract rescinded on the account the former’s failure to complete the down
payment on or before December 31, 1962.
Issue: WON a contracted sale was perfected between the parties.
Ruling: No. The minds of the parties did not meet “in regard to the manner of payment.” It is
not difficult to glean from the aforequoted averments that the petitioners themselves admit
that they and the respondent still had to meet and agree on how and when the down-
payment and the installment payments were to be paid. Such being the situation, it cannot,
therefore, be said that a definite and firm sales agreement between the parties had been
perfected over the lot in question. Indeed, this Court has already ruled before that a definite
agreement on the manner of payment of the purchase price is an essential element in the
formation of a binding and enforceable contract of sale.3 The fact, therefore, that the
petitioners delivered to the respondent the sum of P10,000 as part of the down-payment
that they had to pay cannot be considered as sufficient proof of the perfection of any
purchase and sale agreement between the parties herein under article 1482 of the new Civil
Code, as the petitioners themselves admit that some essential matter — the terms of
payment — still had to be mutually covenanted.
Sanchez vs. Rigos
FACTS: Sanchez and Rigos executed an instrument entitled “Option to Purchase”. Rigos
rejected several tenders of payments made within the stipulated period. Sanchez filed an
action for specific performance with damages contending that Rigos agreed and committed
to sell the land and the plaintiff agreed and committed to buy it in the option. Rigos rebutted
that the contract between them was only a unilateral promise to sell and unsupported by
valuable consideration distinct from the price, and null and void.
Issue: WON there is a perfected contract of sale between parties?
HELD: YES. Under the Civil Code, there is no valid contract without a cause or consideration,
the promisor is not bound by his promise and may withdraw it. However, pending the notice
of its withdrawal, his accepted promise is in the nature of an offer to sell which if accepted
results in a perfected contract of sale. In this case, the contract between parties became a
perfected contract of sale upon acceptance of Rigos of the offer within the stipulated period
even though he was only initially granted an option to buy.
Equatorial Realty Dev’t, Inc. vs. Mayfair Theater, Inc.
FACTS: Carmelo and Bauermann, Inc. leased its parcel of land with two-storey building to
Mayfair Theater, Inc. Carmelo informed Mayfair that they intend to sell the entire property.
Mayfair replied that they were interested to buy the entire property if the price is
reasonable. However, Carmelo sold the entire property to Equatorial. Mayfair filed an action
for specific performance and annulment of the sale because it violated their exclusive option
to purchase the property for 30 days as stipulated in the lease contract. Carmelo contended
that it informed Mayfair their desire to sell the property and the option to purchase by
Mayfair is null and void for lack of consideration.
ISSUE: WON the option to purchase in the leased contract is an option contract or a right of
first refusal?
WON the sale of the property to Equatorial is valid?
HELD: RIGHT OF FIRST REFUSAL. Under the law, an option is a contract granting a privilege to
buy and sell within an agreed period of time for a determined price and must be supported
by consideration distinct from the price. Whereas, right of first refusal is part of the entire
contract of lease. In this case, the right of first refusal is an integral part of the lease contract
between Carmelo and Mayfair and no separate consideration shall be needed to be binding.
The sale is rescissible. Both Carmelo and Equatorial acted in bad faith knowing that a right of
first refusal was agreed upon in the lease contract and Mayfair was an interested buyer of
the property.
Paredes vs. Espino
FACTS: Espino “had entered into the sale” to Paredes a parcel of land and the deal was closed
by letter and telegram. Espino refused to execute the deed of sale despite the willingness of
Paredes to pay the price. Paredes filed an action for specific performance and damages against
Espino. Espino contended that the contract was unenforceable under the Statute of Frauds.
ISSUE: WON the contract is barred by the Statute of Frauds and unenforceable?
HELD: Under Article 1403 of Civil Code, Statute of Frauds does not require that the contract
itself be in writing. It is clear that a written note or memorandum make the verbal agreement
enforceable. In this case, the deal had been closed by letter and telegram. Therefore, the
contract of sale is not under the Statute of Frauds.
Inigo VS. Maloto
FACTS: Inigo paid Maloto the purchase price for the house and lot which is the object of
contract of sale. No deed of sale was executed nor receipt printed. Inigo filed suit to compel
the heirs of Maloto to execute the deed of sale as she was rejected in her demands.
ISSUE: WON the contract of sale is unenforceable?
HELD: Under the civil code, a verbal agreement of sale is unenforceable unless ratified.
However, this rule is only applicable to fully executory contracts not to contracts which are
totally or practically performed. In this case, Inigo paid the purchase price and performed acts
of ownership over the property (house and lot). These shows that the contract was already
consummated. Therefore, the contract of sale is not within the ambit of statute of frauds and
it does not matter whether the receipt or the sale was in writing.
Cuyugan vs. Santos
FACTS: A deed of sale was executed as a security for loan that Guillerma have with Santos. In
the deed of sale, Guillerma shall continue to have possession of the land and pay the loaned
amount. Cuyagan offered to pay the balance of the amount that his mother owed to Santos
but the latter refused. Santos filed an action alleging that the period of the right to repurchase
has expired. Cuyugan contended that the sale was only a security of the loan or mortgage.
ISSUE: WON the transaction is a sale or mortgage?
HELD: MORTGAGE. Under the law, the intention of the parties shall be given force not the
provisions of the instrument on its face. In the case at bar, what was intended by the parties
was for the deed of sale to be a consideration for a loan or mortgage. Therefore, the
transaction was mortgage.
Dalion vs. CA
FACTS: Dalion and Sabasaje executed a contract of sale of parcel of land in a private document.
Dalion challenged the validity of the sale contending that it was conveyed in a private
document but the law requires that it must be in a public document.
ISSUE: WON the contract of sale is valid?
HELD: YES. The provision of Article 1358 of the Civil Code on the necessity of a public document
is only for convenience, not for validity or enforceability. In this case, the contract of sale was
embodied in a private document and it does not affect the validity of the contract. Therefore,
the contract of sale is valid.
Yuvienco vs. Dacuycuy
FACTS: Atty. Gamboa sent a letter to Yao King Ong stating the willingness to sell the land to
latter. Yao King Ong replied by telegram with the following words “we agree to buy proceed
to Tacloban to negotiate details”. Yao King Ong filed a suit for specific performance against the
petitioners. Petitioners contended that the contract of sale is unenforceable under the Statute
of Frauds and there was no absolute acceptance made by the respondents. Hence, there was
no perfected contract of sale.
ISSUE: WON there was a perfected contract of sale?
HELD: The court ruled that the acceptance was not absolute under Article 1319 of the Civil
Code. In this case, the respondents only said that they are open to negotiate which is opposite
to the idea that an agreement had been reached. Therefore, there was no perfected contract
of sale.
DE JOMOC V. CA
FACTS: A parcel of land in owned by late PantaleonJomoc was fictitiously sold to third persons
in which the last transferee are the spouses Mariano and Maria So. Maria Vda de Jomoc filed
suit to recover the property and won. While pending appeal, Vda de Jomoc executed executed
a Deed of Extrajudicial Settlement and Sale of Land with private respondent for P300,000.00.
The document was not yet signed by all the parties nor notarized but in the meantime, Maura
So had made partial payments amounting to P49,000.00.
So demanded from the heirs of Jomoc for the execution of final deed of conveyance but the
latter did no comply. As such, So filed a civil case and a notice of lispendens were placed in the
title of the land.On the same date, the heirs of Jomoc executed another extra-judicial
settlement with absolute sale in favor of intervenors Lim Leong Kang and Lim Pue claiming that
they believe that So already backed-out from the agreement.
ISSUE: W/N the private respondent Maura So backed out from the agreement for the
purchase of a lot belonging to the heirs of PantaleonJomoc, so that the subsequent sale to
petitioner spouses Lim is null and void.
RULING: Article 1544 of the Civil Code provides:
“..Should it be immovable property, the ownership shall belong to the person acquiring it who
in good faith first recorded it in the Registry of Property..”
In view of this provision, the two courts below correctly ruled that the spouses Lim do not have
a better right. They purchased the land with full knowledge of a previous sale to private
respondent and without requiring from the vendors-heirs any proof’ of the prior vendee’s
revocation of her purchase. They should have exercised extra caution in their purchase
especially if at the time of the sale, the land was still covered by TCT No. 19648 bearing the
name of Mariano So and was not yet registered in the name of petitioners- heirs of
PantaleonJomoc (Original Records, p. 80), although it had been reconveyed to said heirs. Not
having done this, petitioners spouses Lim cannot be said to be buyers in good faith. When they
registered the sale on April 27, 1983 after having been charged with notice
of lispendens annotated as early as February 28, 1983 (the same date of their purchase), they
did so in bad faith or on the belief that a registration may improve their position being
subsequent buyers of the same lot. Under Article 1544, mere registration is not enough to
acquire new title. Good faith must concur.
SANTOS V MANALILI
FACTS: At the core of the controversy is a 4,608 square-meter parcel of land in the District of
Toril, Davao City. On August 6, 1970, Reynaldo Manalili, predecessor-in-interest of respondent
Ronald C. Manalili, filed with the BOL an application to purchase the subject property,
attaching therewith his Occupants Affidavit. The application was favorably acted upon and on
March 27, 1972, the BOL required Manalili to pay the downpayment of 10% of the purchase
price or P1,865.28. Thereafter, Manalili declared the land for taxation purposes.
On March 25, 1981, after the lapse of nine (9) years and even as the BOL had already issued a
Certification of Full Payment endorsing the approval of the sale of the land in question to
applicant Reynaldo Manalili, herein petitioner Rodolfo Santos wrote an undated letter to the
BOL protesting Manalilis application.
On December 16, 1981, following Manalilis compliance with other requirements, the BOL
issued to him the corresponding Deed of Absolute Sale which was duly approved by the Office
of the President on December 21, 1981.
On April 26, 1982, petitioner filed the aforementioned complaint for Reconveyance, Damages,
Attorneys Fees and/or Annulment of Title against the BOL and the Manalilis.
The trial court rendered its September 20, 1993 decision in favor of the Manalilis. The Court of
Appeals affirmed the decision.
ISSUE: W/N Manalili has the better right of possession over the lot in question.
RULING: The two (2) courts below, in unanimously upholding the validity of the sale of the land
in question to the Manalilis, likewise affirmed the BOLs finding that the Manalilis had a better
right of possession thereto. Preponderant evidence of respondent have sufficiently
established that as early as 1970, Reynaldo Manalili, respondents predecessor-in-interest, had
already filed an Affidavit of Occupancy with the BOL, the government agency tasked to
administer it; that the Manalilis administered the land before they left for Manila in 1972; that
after they moved to Manila they appointed an administrator to oversee the land and the
improvements and crops they have planted thereon, such as bananas and coconut trees; and
that the Manalilis have been paying the real estate taxes for the subject land even before the
sale thereof to them.
The circumstance that after the sale, the Manalilis resided in Manila and Pangasinan is of no
moment. As it is, possession may be exercised in ones own name or in that of another. [5] It is
not necessary that the owner or holder of the thing exercise personally the rights of
possession. Rights of possession may be exercised through agents.[6]
CUIZON V REMOTO
FACTS: Petitioners-spouses Encarnacion L. Cuizon and Salvador Cuizon rely on Transfer
Certificate of Title (TCT) No. RT-3121 in the name of Encarnacion L. Cuizon, married to Salvador
Cuizon, issued by the Registry of Deeds of Agusan del Norte on March 15, 1984,[1] pursuant to
a notarized Extra-Judicial Settlement with Sale dated August 3, 1983 (1983 Extra-Judicial
Settlement with Sale) executed by the heirs of Placida Tabada-Lambo (Placida), wherein they
adjudicated unto themselves the one-fourth share of Placida, and, at the same time, sold said
portion to their co-heir, Encarnacion L. Cuizon.[2]
On the other hand, respondents have in their favor a notarized Deed of Sale of Real Property
dated September 19, 1968, (1968 Deed of Sale) involving a portion of the same property
covered by TCT No. RT-183, measuring 4,300 square meters, executed by Placida in favor of
Angel Remoto (Angel), husband of respondent Mercedes C. Remoto, and father of the other
respondents, Leonida R. Meynard, Celerina R. Rosales and Remedios C. Remoto.[4]
RTC rendered a decision in favour of respondents which was affirmed by the Court of Appeals.
ISSUE: Who has a better right to the property in dispute?
RULING: As correctly ruled by both the trial court and the CA, the 1968 Deed of Sale executed
by Placida in favor of Angel should prevail over the 1983 Extra-Judicial Settlement with Sale
made by the heirs of Placida in favor of petitioners-spouses Cuizon. Prior tempore, potior jure.
It simply means, He who is first in time is preferred in right. The only essential requisite of this
rule is priority in time, and the only one who can invoke this is the first vendee.[14] Records bear
the fact that when Placida sold her one-fourth portion of the property covered by TCT No. RT-
183 in 1968, the 1983 Extra-Judicial Settlement with Sale was still inexistent, and more
importantly, said portion was yet to be transferred by succession to Placidas heirs. The records
also show that after Placida sold her portion to Angel, the latter immediately took possession
of the same. Applying the principle of priority in time, it is clear that Angel, and consequently
his heirs, the respondents herein, have a superior right to the property.
SUN BROS V. VELASCO
FACTS:
The petitioner delivered to Lopez an Admiral refrigerator under a “Conditional Sale
Agreement”. Out of the P1,700 purchase price, only P500 was paid as downpayment. They
stipulated that Lopez shall not remove the refrigerator from his address nor part possession
therewith without the express written consent of Sun brothers. In violation thereof, Sun
Brothers may rescind the sale, recover possession and the amounts paid shall be forfeited. The
refrigerator shall remain the absolute property of Sun Brothers until Lopez has fully paid the
purchase price.
Lopez sold the refrigerator to JV Trading (owned by Jose Velasco) without knowledge of Sun
brothers for P850, misrepresented himself as Jose Lim and executed a document stating that
he is the absolute owner. Thereafter, Velasco displayed the refrigerator in his store abd Co
Kang Chui bought it for P985.
ISSUE: W/N Co Kang Chiu, an innocent buyer from a store, has a better right as owner than
Sun Brothers, a conditional vendor
RULING: Article 1505 of the Civil Code provides:
“Subject to the provisions of this Title, where goods are sold by a person who is not the owner
thereof, and who does not sell them under authority or with the consent of the owner, the
buyer acquires no better title to the goods than the seller had, unless the owner if the goods
is by his conduct precluded from denying the seller’s authority to sell.
“Nothing in this Title, however, shall affect:
(3) Purchases made in a merchant’s store, or in fairs, or markets, …”
Since Co Kang Chui purchased the refrigerator from JV Trading, a merchant store and
displayed thereat, the 3rd paragraph of Art. 1505 applies, from which Co Kang Chui should be
declared as having acquired a valid title to the refrigerator, although his predecessors in
interest did not have any right of ownership over it. This is a case of imperfect or void title
ripening into a valid one, as a result of some intervening causes. The policy of the law which
we do not feel justified to deviate, has always been that where the rights and interests of a
vendor comes into clash with that of an innocent buyer for value, the latter must be protected.
Co Kang Chui who is now is possession of the refrigerator should be adjudged the owner
thereof, because he bought it at a merchant’s store in good faith and for value.
SALONGA V. CONCEPCION
FACTS: The spouses NatalioSalonga and FelicidadSalonga were the owners of eight (8) prime
parcels of land located in Dagupan City. They had a commercial building with four floors which
stood on their property located to which they are leasing ito traders and merchants.
To finance their business, the spouses secured a loan from several banks to which they excuted
a Real Estate Mortgage as payment thereof. An earthquake occurred and they latter defaulted
in payment. The banks threatened to foreclose the real estate mortgages. The spouses Salonga
secured a loan from spouses Concepcion, who were engaged in the business of lending money,
to repay their loan to the PNB and to release the mortgages in favour of the spouses
Concepcion.
The spouses Salonga failed to pay the loans, interest and commission despite the lapse of
several months. The spouses Salonga executed, in favor of the spouses Concepcion and
Florencoa Realty Corporation, a Deed of Absolute Sale.
The spouses Salonga and their daughter offered to redeem the property from the spouses
Concepcion. But the latter informed the Salonga family that the title to the property had
already been transferred to their names. Hence, Salonga filed a complaint against the spouses
Concepcion and the FlorenciaRealty Corporation with the RTC.
ISSUE: W/N the deeds of sale in favor of respondents are null and void as they are absolutely
simulated.
RULING: Article 1602 of the New Civil Code of the Philippines provides that a contract shall be
presumed to be an equitable mortgage, in any of the following cases:….
(2) When the vendor remains in possession as lessee or otherwise;…”
The provision shall apply to a contract purporting to be an absolute sale. [41] In case of doubt, a
contract purporting to be a sale with right to repurchase shall be considered as an equitable
mortgage.[42] In a contract of mortgage, the mortgagor merely subjects the property to a lien,
but the ownership and possession thereof are retained by him.[43]
The nomenclature given by the parties to the contract is not conclusive of the nature and legal
effects thereof.[46] Even if a document appears on its face to be a sale, the owner of the
property may prove that the contract is really a loan with mortgage, and that the document
does not express the true intent of the parties.[47]
After a thorough examination of the records, we find and so hold that the August 31 and
October 18, 1993 Deeds of Absolute Sale are mere equitable mortgages and not bona
fide absolute sale of the parcels of land therein described.
SIGAYA V. MAYUGA
FACTS: DionisiaAlorsabes owned a three hectare land in Dao, Capiz, denominated as Lot 3603.
In 1934, she sold a portion of the lot to Juanito Fuentes while the remainder was inherited by
her children Paz Dela Cruz, RoselaDela Cruz, and ConsorciaArroja (an adopted child), and a
grandson, Francisco Abas, in representation of his deceased mother Margarita Dela Cruz.
These four heirs executed an Extra-Judicial Settlement with Sale dated February 4,
1964 wherein Consorcia sold her share with an area of 6,694 square meters to spouses
BallerianoMayuga. On April 1, 1977, Paz also sold her share to Honorato de los Santos. Later,
another document entitled Extra-Judicial Partition with Deed of Sale dated November 2,
1972 was uncovered wherein the heirs of Dionisia purportedly adjudicated Lot 3603 among
themselves and sold their shares to Francisco. On January 9, 1978, Francisco executed a Deed
of Sale over Lot 3603 in favor of TeodulfoSigaya. Thus, the title over Lot 3603 was cancelled
and a new one was issued in the name of Teodulfo, predecessor-in-interest of the petitioners
herein.[1]
On October 14, 1986, the petitioners, who are the widow and children of Teodulfo, filed Civil
Case Nos. V-5325, V-5326, V-5327 and V-5328 for recovery of possession and damages against
DiomerMayuga, Honorato de los Santos, Sps. Jose Viva and RoselaDela Cruz-Viva, and Renato
Distor,[2] respectively, before the Regional Trial Court (RTC) of Roxas City.
RTC believed that the actual occupation and possession of the defendants had been
satisfactorily proven which was affirmed by the Court of Appeals.
ISSUE: W/N Teodulfo should be considered as a purchaser in good faith and thus enjoy the
protection of the Torrens system.
RULING: A purchaser in good faith is one who buys property without notice that some other
person has a right to or interest in such property and pays its fair price before he has notice of
the adverse claims and interest of another person in the same property.
Indeed, it is a well-settled rule that every person dealing with 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. However, this
rule shall not apply when the purchaser has knowledge of a defect.
In this case, preponderance of evidence shows that respondents had been in actual possession
of their respective portions even prior to 1960. Rolly Daniel even accompanied Francisco and
Teodulfo to the different houses of respondents. Hence, this Court cannot give credence
therefore to the claim of petitioners that Teodulfo found no occupants in the property.
There being occupants of the property, the Court cannot ascribe good faith to Teodulfo who
has not shown any diligence in protecting his rights.
PREMIERE DEVT BANK V. CA
FACTS: Two (2) different persons with exactly the same name, i.e., Vicente T. Garaygay, each
claimed exclusive ownership of Lot 23 by virtue of an owners duplicate certificate each had
possession of during the period material covering said lot.
On April 17, 1979, Garaygay of Cebu executed a deed of salein favor of his nephew, Joselito P.
Garaygay. In another transaction, Garaygay of Rizal sold to Liberto G. Yambao and Jesus B.
Rodriguez the same property. Buyers Yambao and Rodriquez would later sell a portion of their
undivided interests on the land to Jesus D. Morales.[6]
Then came the June 11, 1988 fire that gutted a portion of the Quezon City hall and destroyed
the document of Garayfay of Cebu but it was later reconstituted. It was later subdivided into
3 lots. One of which was sold to Lilian TOundjis and the other 2 lots were assigned to Century
Realty which mortgaged[13] the same to Premiere Development Bank, Inc. (Premiere Bank) to
secure a P2.5 Million loan.
Yambao, Rodriquez and Morales They then filed with the Regional Trial Court at Quezon City
suit against Joselito, Century Realty and Premiere Bank for quieting of title and annulment of
said defendants fake titles with prayer for damages.
The RTC rendered a decision in favour of Yambao, Rodriguez and Morales as rightful owners
which was affirmed by the Court of Appeals.
ISSUE: W/N the Court of Appeals erred in holding Garaygay of Rizal, instead of Garaygay of
Cebu, as the real owner of Lot 23.
RULING: The categorical conclusion of the Court of Appeals – confirmatory of that of the trial
court – is that Exhibit “B” is genuine and that Garaygay of Rizal is a real person. On the other
hand, Exhibit “1” was adjudged spurious. These factual determinations as a matter of long and
sound appellate practice must be accorded great weight, and, as rule, should not be disturbed
on appeal, save for the most compelling and cogent reasons.
Other than paying taxes from 1949 to 1990, however, Garaygay of Cebu – and this holds true
for his nephew Joselito – did not appear before the current stand-off to have exercised
dominion over Lot 23. For one, it has not been shown that Garaygay of Cebu was at any time
in possession of the property in question, unlike his namesake from Rizal who managed to
place the property under the care of certain individuals who built semi-permanent structure-
dwelling houses thereon without so much of a protest from Garaygay of Cebu or his nephew
Joselito after the latter purportedly bought the property. For another, neither Garaygay of
Cebu nor his nephew Joselito ever instituted any action to eject or recover possession from
the occupants of Lot 23. This passivity bespeaks strongly against their claim of ownership. Not
lost on this Court are circumstances noted by the trial court which negatively reflect on
Garaygay of Cebu’s and his nephew’s claim of ownership.
SIY CONG BIEN VS HSBC (HONGKONG SHANGHAI BANK CORP)
FACTS: Plaintiff is a corporation engaged in business generally, and that theDefendant HSBC is
a foreign bank authorized to engage in the bankingbusiness in the Philippines.
On June 25, 1926, Otto Ranft called the office of the plaintiff to purchase abaca hemp, and he
was offered the bales of hemp as described in the contested negotiable quedans.The
parties agreed to the aforesaid price, and on the same date the quedans, together with the
covering invoice, were sent to Ranft by the Plaintif, without having been paid for the hemp,
but the Plaintif’s understanding was that the payment would be made against the same
quedans, and it appear that in previous transaction of the same kind between the bank and
thePlaintif, quedans were paid one or two days after their delivery to them.
Immediately these quedans were pledged by Otto Ranft to theDefendant HSBC to secure the
payment of his preexisting debts to the latter. The baled hemp covered by these warehouse
receipts was worth P31,635.00; 6 receipts were endorsed in blank by the Plaintif and Otto
Ranft, and 2 were endorsed in blank, by Otto Ranft alone.
On the evening of the said delivery date, Otto Ranft died suddenly at his house in the City
of Manila. When the Plaintif found out, it immediately demanded the return of the quedans,
or the payment of the value, but was told that the quedans had been sent to the herein
Defendant as soon as they were received by Ranft.
Shortly thereafter the Plaintiff filed a claim for the aforesaid sum of P31,645.00 in the intestate
proceedings of the estate of the deceased Otto Ranft,which on an appeal from the decision of
the committee on claims, was allowed by the CFI of Manila.
In the meantime, demand had been made by the Plaintiff on the Defendant bank for the
return of the quedans, or their value, which demand was refused by the bank on the ground
that it was a holder of the quedans in due course.
ISSUE: Whether or not the quedans endorsed in blank gave the HSBC rightful and valid title to
the goods?
HELD: YES. SC ruled in favor of Defendant HSBC.
It may be noted first, that the quedans in question were negotiable in form; second, that they
were pledged by Otto Ranft to the Defendant bank to secure the payment ofhis preexisting
debts to said bank; third, that such of the quedans as were issued in the name of the Plaintiff
were duly endorsed in blank by the Plaintiff and by Otto Ranft; and fourth, that the two
remaining quedans which were duly endorsed in blank by him.
The bank had a perfect right to act as it did, and its action is in accordance with sections 47,
38, and 40 of the Warehouse Receipts Act.
MASICLAT VS CENTENO 2. The general principle of law as enunciated in A1505 CC that where one of 2 persons must
suffer the fraud of a third, the loss should fall upon him who has enabled the third person to
do the wrong, does not apply for the ff. reasons: there was no definite finding that the
FACTS: Defendant-respondent Centeno owned 15 sacks of rice offered for sale at her store unknown purchaser was same person who sold the rice to Masiclat, Centeno could not have
situated on a street near public market. In been so negligent as to allow the unknown purchaser to run away with said rice and enable
the morning of Jan. 21, 1951, a person approached defendant him to sell it to Masiclat, it evident that in fact Centeno kept an eye on the rice in question.
and offered her to purchase the rice in question. Defendant agreed to sell 15 sacks of rice
in question at P26/sack, which the buyer promised to pay as
soon as he would receive the price ILAO-QUIANAY VS MAPILE
of his adobe stones which were being then unloaded from a truck owned by Francisco
Tan, then parked at the opposite side of the street in front of the Union Grocery facing the
defendant’s store. Relying on this promise and upon the request of said purchaser, the FACTS: Subject of the case was a parcel of land owned by the deceased Simplicio Ilao, in a
defendant ordered the rice in question loaded in judicial settlement of Ilao’s estate, the heirs found an adverse claim annotated at the back of
the said truck, of which the plaintiff was the caretaker, TCT no. 48529 claimed by certain Juanito Ibarra. Respondent filed a motion to exclude
expecting that as soon as the adobe stones would be paid, said purchaser would pay her property from inventory on ground that it does not form part of Ilao’s estate having disposed
the price of the rice. of during lifetime. Petitioner’s filed a case for quieting of title and damages before the RTC of
Manila. Relevantly, Ibarra filed a petition for issuance of new owner’s duplicate copy of subject
While the rice was being loaded on the truck and even thereafter, defendant kept an eye on it property on the ground that it was lost by fire. Respondent filed a case for specific performance
waiting for the purchaser to come to pay her. When the adobe stones were completely and declaring a nullity of Contract claiming that claim of Ibarra over the property was sold to
unloaded from the truck, the defendant looked for the purchaser, but the latter was not found. him. Trial Court rendered decision upholding the validity of the notarized Deed of Sale due to
So defendant decided to unload the rice from the truck but to her surprise plaintiff-petitioner the conflicting testimonies of the two handwriting experts. Petitioners filed a Motion for
Masiclat objected on the ground that he has bought it at P26/sack from a person whom he did Reconsideration which was countered by an Omnibus Motion to strike out Motion for
not know and whom he met only that morning for the first time. Defendant insisted in Reconsideration of petitioners being pro forma and seek a writ of execution, the latter was
unloading the rice and the plaintiff objected. Hence, defendant called a policeman to upheld and the former was denied hence, they appealed to the Court of Appeals which
investigate the matter and the latter brought the rice in question to the Municipal building affirmed the trial courts decision and stated that the appellate court does not take cognizance
where it was deposited pending investigation. Plaintiff then initiated this action for recovery of cases based on question of fact but only law via this petition for review hence, this appeal.
of possession of the rice in question.
ISSUE: Whether or not the alleged forgery will invalidate the Deed of Sale?
ISSUES: 1. WON the contract of sale was consummated between respondent Centeno and
unknown purchaser (alleged unknown seller to plaintiff). RULING: Question on whether Ilao’s signature in the Deed of Sale was a forgery is a question
of fact which requires appraisal and re-evaluation of the evidence presented by parties. Such
2. WON petitioners have a better title to the rice in question procedure is beyond the court’s dominion because factual findings of trial courts, especially
when affirmed by the Court of Appeals are binding on the Supreme Court but admits certain
HELD: 1. Although a contract of sale is perfected upon the parties having agreed as to the thing exceptions found under the 1997 revised Rules of Civil Procedure.
which is the subject matter of the contract and the price, ownership is not considered
transmitted until the property is actually delivered and the purchaser has taken possession The validity of the deed of sale should, therefore, be recognized, the only opposition thereto
and paid the price agreed upon. being the alleged forgery of Ilao’s signature which, was not satisfactorily demonstrated. There
Reasoning: is no doubt that the deed of sale was duly acknowledged before a notary public. As a notarized
The evidence does not clearly show the identity of the person who tried to buy the rice in document, it has in its favor the presumption of regularity and it carries the evidentiary weight
question from the respondent, and neither does it show that the same person was the one conferred upon it with respect to its due execution. It is admissible in evidence without further
who sold the commodity to Ramon Masiclat. proof of its authenticity and is entitled to full faith and credit upon its face.
The sale between the respondent Centeno and the unknown purchaserwas not
consummated because although the former allowed the rice in question to be loaded in the
truck, she did not intend to transfer its ownership until she was paid the stipulated price; and
this is very evident from the fact that respondent continually watched her rice and demanded VILLARTA VS CA
its unloading as soon as the unknown purchaser was missing. Respondent thus has not lost
ownership and legal possession thereof.
FACTS: Respondent Rosalinda Cruz entrusted to petitioner Victoria Villarta seven pieces
of jewelry on November1968. On December of the same year, Villarta exchanges one jewelry
to another and issued a post-dated check in favor of Cruz. Cruz deposited the check but it was
dishonored for lack of funds.
A case fpr estafa was filed against Villarta but she argued that she can only be civilly liable
because eventhough the check bounced, she only gave it for a pre-existing obligation. She
assets that a person cannot be imprisoned for non-payment of debt.

ISSUE: WON the transaction is a “sale or return”?

HELD: The transaction is not a sale or return but a sale on approval or sale on acceptance.
When Cruz gave the jewelry to Villarta on November, the clear intention is to make the latter
choose which item she wanted to buy. There was no meeting of the minds yet at this point and
hence, it cannot be considered as delivery.

If ownership over the jewelry was not transmitted on that date, then it could have been
transmitted only in December 1968, the date when the check was issued. In which case, it was
a “sale on approval” since ownership passed to the buyer Villarta, only when she signified
her approval or acceptance to the seller, Cruz, and the price was agreed upon.

It is still criminal fraud or deceit in the issuance of a check which is made punishable under the
Revised Penal Code, and not the non-payment of the debt.