Dizon vs.

Court of Appeals

G.R. No. 122544 302 SCRA 288

FIRST DIVISION
Ponente: Martinez, J

Facts:

On 1974, Private respondent Overland Express Lines, Inc (lessee) entered into a Contract of Lease with
Option to Buy with petitioners (lessors) involving a land situated at Quezon City for one (1) year.
During that period the respondent was granted an option to purchase the land. 1976, for failure of
lessee to pay the rentals the petitioners filed an action for ejectment. The City Court rendered judgment
ordering lessee to vacate the leased premises and to pay the rentals in arrears and damages with
interests. Lessee filed a petition enjoining the enforcement of said judgment and dismissal of the case
for lack of jurisdiction. Such petition was denied. Thereafter, lessee filed for an action for specific
performance to compel the execution of a deed of sale pursuant to the option to purchase and the
receipt of the partial consideration given to Alice Dizon and for the fixing of period to pay the balance.
Respondent Court of Appeals rendered a decision upholding the jurisdiction of City Court and
concluding that there was a perfected contract of sale between the parties due to the said partial
payment. Petitioner’s motion for reconsideration was denied by the respondent Court.

HTP.

Issues:

Whether the Quezon City court has jurisdiction over the ejectment case?

Whether the money given constitutes partial consideration to the option to purchase the land?

Whether or not there is a perfected contract of sale?

Ruling:
1. The petitioneres had a cause of action to institute an ejectment suit against the lessee with the City
Court thus the city court (now MTC) has jurisdiction over it. The filing of lessor of a suit with the
RTC did not divest the City Court of its jurisdiction to take cognizance over the ejectment case.
GAITE vs FONACIER

|
G.R. No. L-11827
FACTS
Fonacier, owner of mining claims, constituted Gaite as his attorney-in-fact. Gaite was authorized to
enter into a contract with otherpersons with respect to the mining claims.Gaite then entered into a
contract with Larap Iron Mines, a company Gaite solely owned, to develop the mining claims. Later,
Fonacier
abruptly decided to revoke Gaite’s authority as attorney
-in-fact. Afterwards, Gaite sold the developments his company made in the mining claims areas and the
ore already mined for a sum of moneyto Fonacier. Fonacier secured the sale with a surety company.
Part of the money was paid upon sale while the other part was payableout of the first loan of credit
covering the first shipment of iron ore and the first amount derived from the local sale of the iron
ore. After the surety expired, Gaite demanded payment of the remainder of the purchase price
but Fonacier refused arguing no sale of ironore had yet taken place.
ISSUE
WHETHER OR NOT THE SELLING OF THE IRON ORES IS A SUSPENSIVE CONDITION FOR PAYING
GAITE
HELD: NO.

The sale isn’t a suspensive condition but is only a suspensive period or term. This interpretation is
supported by:1. The contract expresses no contingency in the buyer
’s obligation to pay. The contract
recognizes the existence of an obligation to pay and only the maturity is deferred2. Gaite never desired
or assumed to run the risk of losing his right over the ore without getting paid for it as shown by his
insistence ona surety
3. Treating the condition as a suspensive condition would leave payment at the
debtor’s

discretion because the ore will be sold only when the debtor wants it to be sold.
4. In onerous contracts the rules of interpretation favor the greater reciprocity of interest and because
sale is onerous this rule applies.
Greater reciprocity is obtained if the buyer’s
obligation to pay is deemed existing compared to such obligation non-existing until the ore was sold

TEODORO ACAP

, petitioner
VS.COURT OF APPEALS AND EDY DE LOS REYES
, respondentsG.R. No. 118114December 7, 1995
FACTS:
Teodoro Acap has been a tenant of a portion of land of Lot No. 1130 Hinigaran Cadastre since 1960. Thesaid lot was
formerly under the names of Spouses Vasquez and Lorenza Oruma. Upon their death,Felixberto, their only son, inherited
the lot. Felixberto sold the lot to Cosme Pido. Acap continued to be thetenant of the portion of the said land and paid
rentals to Pido, and upon his death, thereafter to his widowLaurenciana. When Pido died, his surviving heirs executed a
notarized
“
Declaration of Heirship and Waiverof Rights
”
 of the lot in favor of Edy de los Reyes. De los Reyes alleged that he and Acap entered into anoral lease agreement
whereby Acap accepted to pay him 10 cavans of rice per year as lease rental. Indefense, Acap denied having entered the
said agreement with de los Reyes and that he did not recognize delos Reyes
’s ownership over the land. De los Reyes filed a suit of recovery and possession against Acap and
for the payment of rentals accruing to him as owner of the said lot. The lower court rendered a decision infavor of de los
Reyes which was eventually affirmed by the Court of Appeals.
ISSUE:
(1)

Whether or not the Declaration of Heirship and Waiver of Rights is a recognized mode of acquiringownership by
private respondent over the lot in question(2)

Whether or not the said document can be considered a Deed of Sale in favor of private respondentof the lot in
question
RULING:
(1)

No. Private respondent cannot conclusively claim ownership over the subject lot on the sole basisof the
waiver document. Under Article 712 of the Civil Code, the modes of acquiring ownershipmay be through Original mode
(occupation, acquisitive prescription, law or intellectual creation)and Derivative mode (
mortis causa

–
sale, barter, donation, assignment or mutuum). In a contractof sale, a party obligates himself to transfer ownership and to
deliver a determinate thing while theother pays a price certain in money or its equivalent. On the other hand, a Declaration
of Heirshipand Waiver of Rights operate as a public instrument when filed with the Registry of Deeds wherebythe heirs
decide and divide the estate left by decedent among themselves as they see fit.(2)

No. A notice of adverse claim was filed with the Registry of Deeds which contained the Declarationof
Heirship with Waiver of Rights and was held at the back of the Original Certificate of Title(OCT) to the land
in question. This said notice, by its nature, does not prove of private respondent'sownership over the
tenanted lot. The Court emphasized that while the existence of said adverseclaim was duly proven, there was no
evidence whatsoever that a deed of sale was executed betweenthe parties transferring the rights in favor of private
respondent. An adverse claim cannot by itself be sufficient to cancel the OCT to the land and title the same in
private respondent's name.
DECISION:
WHEREFORE, premises considered, the Court renders judgment in favor of the plaintiff, Edy de los Reyes,and against
the defendant, Teodoro Acap, ordering the following, to wit: (1) Declaring forfeiture ofdefendant's
preferred right to issuance of a Certificate of Land Transfer under Presidential Decree No. 27and his farmholdings;
(2) Ordering the defendant Teodoro Acap to deliver possession of said farm to plaintiff,
and; (3) Ordering the defendant to pay P5,000.00 as attorney's fees, the sum of P1,000.00 asexpenses of
litigation and the amount of P10,000.00 as actual damages

Antonio De Santos vs City of ManilaGR L-211677June 29, 1972Facts:1)

A Contract of Exchange was executed between City of Manila and Arellano University.Five parcels of
land of City of Manila, 2,400 sq. meters in exchange for 3 parcels of landof Arellano University.2)
 The parcels of land of Arellano were needed for the Azcarraga Extension.3)

Antonio de Santos went forward and asked that such contract be declared null and voidbecause he has a
claim over Lot 1. In his claim, he also asked that he be given the rightto preemption and redemption.4)

The predecessor in interest of de Santos is Lopez. Lopez’ land, lot 4 was a subject of
expropriation because of the Legarda widening. Lopez be requested that he be given theestero
adjoining Lot 4 instead. The request was however held in abeyance when theLegarda widening project
was stopped.5)

The lower court ruled in favor of the City of Manila. The same was affirmed by CA.Issue:Whether or
not de Santos has the right to preemption or redemptionHeld:De Santos has no right to pre emption
or redemption. There is no element under Article 1622that was proven by de Santos. He did not acquire
any right to Lot 1 when Lopez sold him Lot 4,at most he only acquired the right to the latters claim

LO V. KJS ECO-FRAMEWORK SYSTEM PHIL INC G.R. NO 149420 (2003)

FACTS: Respondent KJS Eco-Framework System is a corporation engaged in the sale of steel
scaffoldings, while petitioner Sonny Lo, doing business under the name of San’s Enterprises, is a
building contractor.
1. In February 1990, petitioner ordered scaffolding equipments from the respondent amounting to P540,
425.80. He paid a down payment of P150,000 and the balance was to be paid in 10 monthly
installments
2. However, Lo was only able to pay the first 2 monthly installments due to financial difficulties despite
demands from the respondent
3. In October 1990, petitioner and respondent executed a deed of assignment whereby petitioner assigned
to respondent his receivables of P335,462.14 from Jomero Realty Corp
4. But when respondent tried to collect the said credit from Jomero Realty Corp, the latter refused to
honor the deed of assignment because it claimed that the petitioner was also indebted to it. As such,
KJS sent Lo a demand letter but the latter refused to pay, claiming that his obligation had been
extinguished when they executed the deed of assignment
5. Subsequently, respondent filed an action for recovery of sum of money against petitioner.
6. Petitioner argued that his obligation was extinguished with the execution of the deed of assignment of
credit. Respondent alleged that Jomero Realty Corp refused to honor the deed of assignment because it
claimed that the petitioner had outstanding indebtedness to it
7. The trial court dismissed the complaint on the ground that the assignment of credit extinguished the
bligation
8. Upon appeal, CA reversed the trial court decision and held in favor of KJS. CA held that
a. Petitioner failed to comply with his warranty under the deed
b. The object of the deed did not exist at the time of the transaction, rendering it void under
Art 1409 NCC
c. Petitioner violated the terms of the deed of assignment when he failed to execute and do all
acts necessary to effectually enable the respondent to recover the collectibles

ISSUE: WON the deed of assignment extinguished the petitioner’s obligation

HELD: No, the petitioner’s obligation was not extinguished with the execution of the deed of
assignment.

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, dacion en pago, 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.

In dacion en pago, as a special mode of payment, the debtor offers another thing to the creditor who
accepts it as equivalent of payment of an outstanding debt. In order that there be a valid dation in
payment, the following are the requisites: (1) There must be the performance of the prestation in lieu of
payment (animo solvendi) which may consist in the delivery of a corporeal thing or a real right or a
credit against the third person; (2) There must be some difference between the prestation due and that
which is given in substitution (aliud pro alio); (3) There must be an agreement between the creditor and
debtor that the obligation is immediately extinguished by reason of the performance of a prestation
different from that due. The undertaking really partakes in one sense of the nature of sale, that is, the
creditor is really buying the thing or property of the debtor, payment for which is to be charged against
the debtor’s debt. As such, the vendor in good faith shall be responsible, for the existence and legality
of the credit at the time of the sale but not for the solvency of the debtor, in specified circumstances.

Hence, it may well be that the assignment of credit, which is in the nature of a sale of personal
property, produced the effects of a dation in payment which may extinguish the obligation.
However, as in any other contract of sale, the vendor or assignor is bound by certain
warranties. More specifically, the first paragraph of Article 1628 of the Civil Code provides:
The vendor in good faith shall be responsible for the existence and legality of the credit at the time of
the sale, unless it should have been sold as doubtful; but not for the solvency of the debtor, unless it has
been so expressly stipulated or unless the insolvency was prior to the sale and of common knowledge.

From the above provision, petitioner, as vendor or assignor, is bound to warrant the existence and
legality of the credit at the time of the sale or assignment. When Jomero claimed that it was no longer
indebted to petitioner since the latter also had an unpaid obligation to it, it essentially meant that its
obligation to petitioner has been extinguished by compensation. In other words, respondent alleged the
non-existence of the credit and asserted its claim to petitioner’s warranty under the
assignment. Therefore, it necessary for the petitioner to make good its warranty and pay the obligation.

Furthermore, the petitioner breached his obligation under the Deed of Assignment, to execute and do
all such further acts and deeds as shall be reasonably necessary to effectually enable said ASSIGNEE to
recover whatever collectibles said ASSIGNOR has in accordance with the true intent and meaning of
these presents.

Indeed, by warranting the existence of the credit, petitioner should be deemed to have ensured the
performance thereof in case the same is later found to be inexistent. He should be held liable to pay to
respondent the amount of his indebtedness.
Celestino Co vs Collector

Facts:
· Celestino Co doing business under the name of “Oriental Sash Factory”. From 1956-1951 it paid
percentage tax of 7% (National Revenue Code sec. 186) on the gross receipts of its sash, door, and
window factory. However on 1952 it began to claim liability only to contractor’s 3% tax (Instead of
7%) under sec. 191.
· Celestino claims that they do not manufacture ready made doors, sah, and windows for the public.
He claims hat they only do Special Orders for customers, thus, contending they are not
manufacturers. This did not convince the BIR and the Court of Tax Appeals.
· CTA said that their tradename gives an impression they do engage in manufacturing and their
records suggest that their huge earnings (P188, 754.69) cannot be from special orders from ther few
customers, but because it was from ready made products. They also offered themselves as a “factory”
to the public.

Issue: W/ON Petitioner is in engaged in manufacturing

Held: Yes. The company habitualy makes Sash, windows, and doors as it has been represented to the
public. The fact that the windows and doors are made only when customers place their orders, does not
alter the nature of the establishment, for it is obvious that they accept special orders other than making
ready made products. The factory does nothing more than sell the goods that it mass produces or
habitually makes.

CIR V ENGINEERING EQUIPMENT AND SUPPLY COMPANYFACTS:Engineering Equipment &

Supply (EES) was engaged in the business of designing and installing centralair-conditioning systems.
It was assessed by the Commissioner of Internal Revenue for 30% advancedsales tax, among other
penalties pursuant to an anonymous complaint filed before the BIR. EESvehemently objected and
argued that they are contractors and not manufacturers and should be liableonly for the 3% tax on sales
of services or pieces of work.The commissioner demanded upon Engineering the payment of the
assessed tax and suggested that

Engineering pay P10k as compromise for Engineering’s penal liability for violation of the Tax Code.
ISSUE:W/N EES is a contractor for a piece of work thus only liable for 3% taxHELD:Contractor
–
a person who, in the pursuit of the independent business, undertakes to do a specific jobor piece of
work for other persons, using his own means and methods without submitting himself tocontrol as to
the petty details.True test of contractor
–
he renders service in the course of an independent occupation representingthe will of his employer
only as to the result of his work, and not as to the means by which it isaccomplished.The SC found that
EES was not a manufacturer of air-conditioning units. While it imported such items,they were not for
sale to the general public and were used as mere components for the design of thecentralized air-
conditioning system, the designs and specifications of w/c are different for every client.Various
technical factors must be considered and it can be argued that no two plants are the same; allare
engineered separately and distinctly. Each project requires careful planning and meticulous layout.Such
central air-conditioning systems and their designs would not have existed were it not for thespecial
order of the party desiring to acquire it. EES is thus not liable for the sales tax.In comparison with
Celestino case:Engineering advertised itself as Engineering Equipment and Supply Company,
Machinery MechanicalSupplies, Engineers, Contractors while Orien
tal used “Oriental Sash Factory”. It also paid the contractors
tax on all the contracts for design and construction of central system unlike Oriental who did not
paycontractors tax. Engineering did not have ready-made air conditioning units for sale unlike
orientalwhose bulk of their sale came from ready-made doors and windowsAs for their liability for
violation of Tax Code, they should pay the whole amount not the one suggestedby the commissioner
Myrna Ramos vs Susana Sarao & Jonas Ramos
G.R. No. 149756
February 11, 2005

Facts:

Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the August 31, 2001
Decision of the Court of Appeals, WHEREFORE, the instant appeal is DISMISSED for lack of merit.
The decision dated January 19, 1995 of the Regional Trial Court, Branch 145, Makati City is
AFFIRMED in toto.

On February 21, 1991, Spouses Jonas Ramos and Myrna Ramos executed a contract over their conjugal
house and lot in favor of Susana S. Sarao for and in consideration of P1,310,430. Entitled "DEED OF
SALE UNDER PACTO DE RETRO," the contract, inter alia, granted the Ramos spouses the option to
repurchase the property within six months from February 21, 1991, for P1,310,430 plus an interest of
4.5 percent a month. It was further agreed that should the spouses fail to pay the monthly interest or to
exercise the right to repurchase within the stipulated period, the conveyance would be deemed an
absolute sale.

On July 30, 1991, Myrna Ramos tendered to Sarao the amount of P1,633,034.20 in the form of two
manager’s checks, which the latter refused to accept for being allegedly insufficient. On August 8,
1991, Myrna filed a Complaint for the redemption of the property and moral damages plus attorney’s
fees. On August 13, 1991, she deposited with the RTC two checks that Sarao refused to accept.

On December 21, 1991, Sarao filed against the Ramos spouses a Petition "for consolidation of
ownership in pacto de retro sale", the civil cases were later consolidated and jointly tried before RTC in
Makati.

After trial, the RTC dismissed the Complaint and granted the prayer of Sarao to consolidate the title of
the property in her favor. Aggrieved, Myrna elevated the case to the CA.

The appellate court sustained the RTC’s finding that the disputed contract was a bonafide pacto de retro
sale, not a mortgage to secure a loan. It ruled that Myrna Ramos had failed to exercise the right of
repurchase, as the consignation of the two manager’s checks was deemed invalid. She allegedly failed
(1) to deposit the correct repurchase price and (2) to comply with the required notice of consignation.

Issues:

a) Whether or not the honorable appellate court erred in ruling the subject Deed of Sale under Pacto de
Retro was, and is in reality and under the law an equitable mortgage?

b) Whether or not the honorable appellate court erred in affirming the ruling of the court a quo that
there was no valid tender of payment of the redemption price neither [sic] a valid consignation in the
instant case?

c) Whether or not [the] honorable appellate court erred in affirming the ruling of the court a quo
denying the claim of petitioner for damages and attorney’s fees?

Held:

The Petition is meritorious in regard to Issues 1 and 2.

A Pacto de Retro Sale or an Equitable Mortgage?

Respondent Sarao avers that the herein Petition should have been dismissed outright, because petitioner
(1) failed to show proof that she had served a copy of it to the Court of Appeals and (2) raised questions
of fact that were not proper issues in a petition under Rule 45 of the Rules of Court. This Court,
however, disregarded the first ground; otherwise, substantial injustice would have been inflicted on
petitioner. Since the Court of Appeals is not a party here, failure to serve it a copy of the Petition would
not violate any right of respondent. Service to the CA is indeed mentioned in the Rules, but only to
inform it of the pendency of the appeal before this Court.
As regards Item 2, there are exceptions to the general rule barring a review of questions of fact. The
Court reviewed the factual findings in the present case, because the CA had manifestly overlooked
certain relevant and undisputed facts which, after being considered, justified a different conclusion.

Pacto de Retro Sale Distinguished from Equitable Mortgage

The pivotal issue in the instant case is whether the parties intended the contract to be a bona fide pacto
de retro sale or an equitable mortgage.

In a pacto de retro, ownership of the property sold is immediately transferred to the vendee a retro,
subject only to the repurchase by the vendor a retro within the stipulated period. The vendor a retro’s
failure to exercise the right of repurchase within the agreed time vests upon the vendee a retro, by
operation of law, absolute title to the property. Such title is not impaired even if the vendee a retro fails
to consolidate title under Article 1607 of the Civil Code.

On the other hand, an equitable mortgage is a contract that -- although lacking the formality, the form
or words, or other requisites demanded by a statute -- nevertheless reveals the intention of the parties to
burden a piece or pieces of real property as security for a debt. The essential requisites of such a
contract are as follows: (1) the parties enter into what appears to be a contract of sale, but (2) their
intention is to secure an existing debt by way of a mortgage. The nonpayment of the debt when due
gives the mortgagee the right to foreclose the mortgage, sell the property, and apply the proceeds of the
sale to the satisfaction of the loan obligation.

Equitable Mortgage Presumed to be Favored by Law

Jurisprudence has consistently declared that the presence of even just one of the circumstances set forth
in the forgoing Civil Code provision suffices to convert a contract to an equitable mortgage. Article
1602 specifically states that the equitable presumption applies to any of the cases therein enumerated.

In the present factual milieu, the vendor retained possession of the property allegedly sold. Petitioner
and her children continued to use it as their residence, even after Jonas Ramos had abandoned them. In
fact, it remained as her address for the service of court orders and copies of Respondent Sarao’s
pleadings.

The presumption of equitable mortgage imposes a burden on Sarao to present clear evidence to rebut it.
Corollary to this principle, the favored party need not introduce proof to establish such presumption;
the party challenging it must overthrow it, lest it persist. To overturn that prima facie fact that operated
against her, Sarao needed to adduce substantial and credible evidence to prove that the contract was a
bona fide pacto de retro. This evidentiary burden she miserably failed to discharge.

Contrary to Sarao’s bare assertions, a meticulous review of the evidence reveals that the alleged
contract was executed merely as security for a loan.

Second Issue: Propriety of Tender of Payment and Consignation

Tender of payment is the manifestation by debtors of their desire to comply with or to pay their
obligation If the creditor refuses the tender of payment without just cause, the debtors are discharged
from the obligation by the consignation of the sum due. Consignation is made by depositing the proper
amount to the judicial authority, before whom the tender of payment and the announcement of the
consignation shall be proved. All interested parties are to be notified of the consignation. Compliance
with these requisites is mandatory.

The trial and the appellate courts held that there was no valid consignation, because petitioner had
failed to offer the correct amount and to provide ample consignation notice to Sarao. This conclusion is
incorrect.

Third Issue: Moral Damages and Attorney’s Fees

Petitioner seeks moral damages in the amount of P500,000 for alleged sleepless nights and anxiety over
being homeless. Her bare assertions are insufficient to prove the legal basis for granting any award
under Article 2219 of the Civil Code. Verily, an award of moral damages is uncalled for, considering
that it was Respondent Sarao’s accommodation that settled the earlier obligation of the spouses with the
commercial bank and allowed them to retain ownership of the property.
Neither have attorney’s fees been shown to be proper. As a general rule, in the absence of a contractual
or statutory liability therefor, sound public policy frowns on penalizing the right to litigate. This policy
applies especially to the present case, because there is a need to determine whether the disputed
contract was a pacto de retro sale or an equitable mortgage.

WHEREFORE, the Petition is partly GRANTED and the assailed Decision SET ASIDE. Judgment is
hereby rendered:

(1) DECLARING (a) the disputed contract as an equitable mortgage, (b) petitioner’s loan to
Respondent Sarao to be in the amount of P1,633,034.19 as of July 30, 1991; and (c) the mortgage on
the property -- covered by TCT No. 151784 in the name of the Ramos spouses and issued by the
Register of Deeds of Makati City --as discharged

(2) ORDERING the RTC to release to Sarao the consigned amount of P1,633,034.19

(3) COMMANDING Respondent Sarao to return to petitioner the owner’s copy of TCT No. 151784 in
the name of the Ramos spouses and issued by the Register of Deeds of Makati City

(4) DIRECTING the Register of Deeds of Makati City to cancel Entry No. 24057, the annotation
appearing on TCT No. 151784

(5) ORDERING petitioner to pay Sarao in the amount of P67,567.10 as reimbursement for real
property taxes. No pronouncement as to costs. SO ORDERED.

CABALES vs. CA Case Digest

NELSON CABALES and RITO CABALES vs. COURT OF APPEALS, JESUS FELIANO and
ANUNCIANO FELIANO

G.R. No. 162421, August 31, 2007

FACTS:
Sometime in 1964, Rurfino Cabales died leaving behind a parcel of land in Southern Leyte to his wife,
Saturnina and six children, namely, Bonifacio, Francisco, Alberto, Albino, Lenora, and Rito. On 1971,
the brothers and co-owners Bonifacio, Alberto and Albino sold the property to Dr. Corrompido with a
right to repurchase within eight (8) years. On 1972, prior to the redemption of the property, Alberto
died leaving behind his wife and son, Nelson, herein petitioner.

Sometime later and within the redemption period, the said brothers and their mother, in lieu of Alberto,
tendered their payment to Dr. Corrompido. Subsequently, Saturnina, and her four children, Bonifacio,
Albino, Francisco and Leonora sold the said land to Spouses Feliano. It was provided in the deed of
sale that the shares of Nelson and Rito, being minor at the time of the sale, will be held in trust by the
vendee and will paid upon them reaching the age of 21.

In 1986, Rito received the sum of 1,143 pesos from the Spouses Feliano representing his share from the
proceeds of the sale of the property. It was only in 1988, that Nelson learned of the sale from his uncle,
Rito. He signified his intention to redeem the property in 1993 but it was only in 1995 that he filed a
complaint for redemption against the Spouses Feliano. The respondent Spouses averred that the
petitioners are estopped from denying the sale since: (1) Rito already received his share; and (2)
Nelson, failed to tender the total amount of the redemption price.

The Regional Trial Court ruled in favour of Spouses Feliano on the ground that Nelson was no longer
entitled to the property since, his right was subrogated by Saturnina upon the death of his father,
Alberto. It also alleged that Rito had no more right to redeem since Saturnina, being his legal guardian
at the time of the sale was properly vested with the right to alienate the same.

The Court of Appeals modified the decision of the trial court stating that the sale made by Saturnina in
behalf of Rito and Nelson were unenforceable.

ISSUE:

Whether or not the sale made by a legal guardian (Saturnina) in behalf of the minors were binding upon
them.

HELD:
With regard to the share of Rito, the contract of sale was valid. Under Section 1, Rule 96 “A guardian
shall have the care and custody of the person of his ward, and the management of his estate, or the
management of the estate only. x x x” Indeed, the legal guardian only has the plenary power of
administration of the minor’s property. It does not include the power of alienation which needs judicial
authority. Thus, when Saturnina, as legal guardian of petitioner Rito, sold the latter’s pro indiviso share
in subject land, she did not have the legal authority to do so. Accordingly, the contract as to the share of
Rito was unenforceable. However, when he received the proceeds of the sale, he effectively ratified it.
This act of ratification rendered the sale valid and binding as to him.

With respect to petitioner Nelson, the contract of sale was void. He was a minor at the time of the sale.
Saturnina or any and all the other co-owners were not his legal guardians; rather it was his mother who
if duly authorized by the courts, could validly sell his share in the property. Consequently, petitioner
Nelson retained ownership over their undivided share in the said property. However, Nelson can no
longer redeem the property since the thirty day redemption period has expired and thus he remains as
co-owner of the property with the Spouses Feliano.