CEBU WINLAND DEVELOPMENT CORPORATION V. ONG SIAO HUA, May 21, 2009; PUNO, C.J.

FACTS:
Cebu Winland Dev. Corp owns and are developers of a condominium called Cebu Winland Tower Condominium in
Cebu. Ong Siao Hua bought two condo units and 4 parking slots from petitioner. While Cebu tower Condo was under
construction, pet offered to sell to respondent condo units in promotional prices ( pet offered 3% discount provided
30% of purchase price is paid as downpayment and balance paid in 24 monthly installments. Respondent accepted
offer and bought the two condo units and 4 parking lots. Area per condo unit as indicated in petitioners price list is 155
sqm and price per square isP22,378.95. Parking lot price is 240,000 each.
Respondent paid P2, 298,655 as downpayment and issued 24 postdated check in 223,430 per check for balance of
the P5M purchase price. Net purchase price is P7M. Parties did not execute any written document in the transaction.
Possession was then turned over to respondent. After purchase price was fully paid with last check, respondent
requested pet for certificate of title to evidence ownership. Pet sent to respondent documents for respondent’s
signature for the Deed of Absolute Sale for the two condos.
Upon examination of the deed of absolute sale, respondent was distressed to find that state floor are was only 127
sqm contrary to the 155 sqm written in price list. Respondent verified and discovered that the actual area is only 110
sqm per unit. Respondent then demanded from petitioner refund of P2M for excess payments for difference in the
area. Petitioner refused.

ISSUES:
1. WON the sale here is one made with a statement of its area or at the rate of a certain price for a unit of
measure and not for a lump sum (1539, 1542)
2. WON the action has prescribed (1543)

HELD:
1. sale at a rate of a certain price per unit of measure
Manresa explains the distinction between Arts 1539 and 1542.

. . . If the sale was made for a price per unit of measure or number, the consideration of the
contract with respect to the vendee, is the number of such units, or, if you wish, the thing purchased
as determined by the stipulated number of units. But if, on the other hand, the sale was made for a
lump sum, the consideration of the contract is the object sold, independently of its number or
measure, the thing as determined by the stipulated boundaries, which has been called in law
a determinate object.

This difference in consideration between the two cases implies a distinct regulation of
the obligation to deliver the object, because, for an acquittance delivery must be made in
accordance with the agreement of the parties, and the performance of the agreement must
show the confirmation, in fact, of the consideration which induces each of the parties to enter
into the contract.

Important points in Rudolf Lietz, Inc. v. CA

Article 1539 governs a sale of immovable by the unit, that is, at a stated rate per unit area. In a unit price
contract, the statement of area of immovable is not conclusive and the price may be reduced or increased
depending on the area actually delivered. (aka whatever the amount delivered, what may be demanded is that
which is proportional to the amount obtained.)

When contract states only an estimate of the area of an immovable: actual area may not be the estimate,
however the discrepancy must not be substantial. The use of "more or less" or similar words in designating
quantity covers only a reasonable excess or deficiency.

Where both the area and the boundaries of the immovable are declared, the area covered within the
boundaries of the immovable prevails over the stated area. In cases of conflict between areas and
boundaries, it is the latter which should prevail.

It is not of vital consequence that a deed or contract of sale of land should disclose the area with
mathematical accuracy. It is sufficient if its extent is objectively indicated with sufficient precision to enable
one to identify it. An error as to the superficial area is immaterial. Thus, the obligation of the vendor is to
deliver everything within the boundaries, inasmuch as it is the entirety thereof that distinguishes the
determinate object.

Thus, in this case, it is undisputed by the parties that the purchase price of the subject properties was computed
based on the price list prepared by petitioner, or P22,378.95 per square meter. Thus, the agreement is on a sale at
a rate of a certain price per unit of measure and not one for a lump sum. Hence, it is Article 1539 and not Article
1542 which is the applicable law.

So, Ong can get either a proportional reduction of the price or the rescission of the contract, at his option. And he
chose the proportional reduction since what he wants is the P2,014,105.50 refund representing the proportional
reduction of the price paid to petitioner.

2.NO.
Petitioner argues that it delivered possession of the subject properties to respondent on October 10, 1996, hence,
respondent’s action filed on August 7, 1998 has already prescribed.

Respondent, on the one hand, contends that his action has not prescribed because the prescriptive period has not
begun to run as the same must be reckoned from the execution of the deeds of sale which has not yet been done.
Under the Civil Code, ownership does not pass by mere stipulation but only by delivery. Manresa explains, “the
delivery of the thing . . . signifies that title has passed from the seller to the buyer.” According to Tolentino, the purpose
of delivery is not only for the enjoyment of the thing but also a mode of acquiring dominion and determines the
transmission of ownership, the birth of the real right. The delivery under any of the forms provided by Articles 1497 to
1505 of the Civil Code signifies that the transmission of ownership from vendor to vendee has taken place.
In the case at bar, it appears that respondent was already placed in possession of the subject properties. However, it
is crystal clear that the deeds of absolute sale were still to be executed by the parties upon payment of the last
installment. This fact shows that ownership of the said properties was withheld by petitioner. Following case law, it is
evident that the parties did not intend to immediately transfer ownership of the subject properties until full payment and
the execution of the deeds of absolute sale. Consequently, there is no “delivery” to speak of in this case since what
was transferred was possession only and not ownership of the subject properties.

Court ruled that the transfer of possession of the subject properties on October 10, 1996 to respondent cannot be
considered as “delivery” within the purview of Article 1543 of the Civil Code. It follows that since there has been no
transfer of ownership of the subject properties since the deeds of absolute sale have not yet been executed by the
parties, the action filed by respondent has not prescribed.

TOMAS K. CHUA vs. COURT OF APPEALS and ENCARNACION VALDES-CHOY

G.R. No. 119255
April 9, 2003

FACTS: Encarnacion Valdes-Choy advertised for sale her paraphernal house and lot in Makati. They agreed on a
purchase price of P10,800,000.00. Chua gave P100,000 to Valdes-Choy as earnest money They agreed that the
balance is payable on or before 15 July 1989. Failure to pay balance on or before the said date forfeits the earnest
money.
On July 13, 1989, Valdes-Choy as vendor and Chua as vendee signed two Deeds of Absolute Sale. The first Deed of
Sale covered the house and lot for the purchase price of P8,000,000.00. The second Deed of Sale covered the
furnishings, fixtures andmovable properties contained in the house for the purchase price of P2,800,000.00. The
parties also computed the capital gains tax to amount to P485,000.00.
The next day, Valdes-Choy deposited the P485,000.00 manager's check to her account and check to the counsel who
undertook to pay the capitalgains tax. Chua showed to Valdes-Choy a PBCom manager's check for P10,215,000.00
representing the balance of the purchase price. Chua, however, did not give this PBCom manager's check to Valdes-
Choy because the TCT was still registered in the name of Valdes-Choy. Chua required that the Property be registered
first in his name before he would turn over the check to Valdes-Choy. This angered Valdes-Choy who tore
up the Deeds of Sale, claiming that what Chua required was not part of their agreement. Valdes-Choy demanded the
payment of the remaining purchase balance be first deposited in her account before she transfers the title of the
property to him.
Chua filed a complaint for specific performance against Valdes-Choy.
ISSUE: Can Chua (vendee) compel Valdes-Choy (vendor) to transfer the title of the property?
HELD:
NO. Chua’s condition that a new TCT should first be issued in his name, a found neither in the law nor in the contract
to sell as evidenced by the Receipt. Thus, at this point Chua was not ready, able and willing to pay the full purchase
price which is his obligation under the contract to sell. Chua was also not in a position to assume the principal
obligation of a vendee in a contract of sale, which is also to pay the full purchase price at the agreed time. Article
1582 of the Civil Code provides that –
Art. 1582. The vendee is bound to accept delivery and to pay the price of the thing sold at the time and place
stipulated in the contract.
In this case, the contract to sell stipulated that Chua should pay the balance of the purchase price “on or before 15
July 1989.” The signed Deeds of Sale also stipulated that the buyer shall pay the balance of the purchase price upon
signing of the deeds. However, on the agreed date, Chua refused to pay the balance of the purchase price as required
by the contract to sell, the signed Deeds of Sale, and Article 1582 of the Civil Code. Chua was therefore in default and
has only himself to blame for the rescission by Valdes-Choy of the contract to sell.
Accordingly, since Chua refused to pay the consideration in full on the agreed date, which is a suspensive condition,
Chua cannot compel Valdes-Choy to consummate the sale of the Property. Chua acquired no right to compel Valdes-
Choy to transfer ownership of the Property to him.

[G.R. No. 133895. October 2, 2001]

ZENAIDA M. SANTOS, petitioner, vs. CALIXTO SANTOS, ALBERTO SANTOS, ROSA SANTOS-CARREON and
ANTONIO SANTOS, respondents.

FACTS:
Petitioner Zenaida M. Santos is the widow of Salvador Santos, a brother of private respondents Calixto, Alberto,
Antonio, all surnamed Santos and Rosa Santos-Carreon.

The spouses Jesus and Rosalia Santos owned a parcel of land. On it was a four-door apartment administered by
Rosalia who rented them out. The spouses had five children, Salvador, Calixto, Alberto, Antonio and Rosa.

On January 19, 1959, Jesus and Rosalia executed a deed of sale of the properties in favor of their children Salvador
and Rosa. Rosa in turn sold her share to Salvador on November 20, 1973. Despite the transfer of the property to
Salvador, Rosalia continued to lease and receive rentals from the apartment units.

On November 1, 1979, Jesus died. Six years after or on January 9, 1985, Salvador died, followed by Rosalia who
died the following month. Shortly after, petitioner Zenaida, claiming to be Salvador’s heir, demanded the rent from
Antonio Hombrebueno, a tenant of Rosalia. When the latter refused to pay, Zenaida filed an ejectment suit against
him with the Metropolitan Trial Court of Manila, Branch 24, which eventually decided in Zenaida’s favor.

On January 5, 1989, private respondents instituted an action for reconveyance of property with preliminary injunction
against petitioner in the Regional Trial Court of Manila, where they alleged that the two deeds of sale executed on
January 19, 1959 and November 20, 1973 were simulated for lack of consideration. They were executed to
accommodate Salvador in generating funds for his business ventures and providing him with greater business
flexibility.

In her Answer, Zenaida denied the material allegations in the complaint and as special and affirmative defenses,
argued that Salvador was the registered owner of the property, which could only be subjected to encumbrances or
liens annotated on the title; that the respondents’ right to reconveyance was already barred by prescription and
laches; and that the complaint stated no cause of action.

On March 17, 1993, the trial court decided in private respondents’ favor. The trial court reasoned that notwithstanding
the deeds of sale transferring the property to Salvador, the spouses Rosalia and Jesus continued to possess the
property and to exercise rights of ownership not only by receiving the monthly rentals, but also by paying the realty
taxes. Also, Rosalia kept the owner’s duplicate copy of the title even after it was already in the name of Salvador.

Further, the spouses had no compelling reason in 1959 to sell the property and Salvador was not financially capable
to purchase it. The deeds of sale were therefore fictitious. Hence, the action to assail the same does not prescribe.

Upon appeal, the Court of Appeals affirmed the trial court’s decision. It held that in order for the execution of a public
instrument to effect tradition, as provided in Article 1498 of the Civil Code, [5] the vendor shall have had control over
the thing sold, at the moment of sale. It was not enough to confer upon the purchaser the ownership and the right of
possession. The thing sold must be placed in his control. The subject deeds of sale did not confer upon Salvador the
ownership over the subject property, because even after the sale, the original vendors remained in dominion, control,
and possession thereof. The appellate court further said that if the reason for Salvador’s failure to control and
possess the property was due to his acquiescence to his mother, in deference to Filipino custom, petitioner, at least,
should have shown evidence to prove that her husband declared the property for tax purposes in his name or paid the
land taxes, acts which strongly indicate control and possession.

ISSUE:
1. Whether the payments of realty taxes and retention of possession are indications of continued ownership by the
original owners
2. Whether a sale through a public instrument is tantamount to delivery of the thing sold
3. Whether the respondents’ cause of action has prescribed
4. Whether the petitioner can invoke the “Dead Man’s Statute

HELD:
1. It is true that neither tax receipts nor declarations of ownership for taxation purposes constitute sufficient proof of
ownership. They must be supported by other effective proofs. These requisite proofs we find present in this case. As
admitted by petitioner, despite the sale, Jesus and Rosalia continued to possess and administer the property and
enjoy its fruits by leasing it to third persons. Both Rosa and Salvador did not exercise any right of ownership over it.
Before the second deed of sale to transfer her 1/2 share over the property was executed by Rosa, Salvador still
sought the permission of his mother. Further, after Salvador registered the property in his name, he surrendered the
title to his mother. These are clear indications that ownership still remained with the original owners. In Serrano vs.
CA, 139 SCRA 179, 189 (1985), we held that the continued collection of rentals from the tenants by the seller of realty
after execution of alleged deed of sale is contrary to the notion of ownership.
Petitioner argues that Salvador, in allowing her mother to use the property even after the sale, did so out of respect for
her and out of generosity, a factual matter beyond the province of this Court. Significantly, in Alcos vs. IAC, 162 SCRA
823, 837 (1988), we noted that the buyer’s immediate possession and occupation of the property corroborated the
truthfulness and authenticity of the deed of sale. Conversely, the vendor’s continued possession of the property
makes dubious the contract of sale between the parties.

2. Nowhere in the Civil Code, however, does it provide that execution of a deed of sale is a conclusive presumption of
delivery of possession. The Code merely said that the execution shall be equivalent to delivery. The presumption can
be rebutted by clear and convincing evidence. Presumptive delivery can be negated by the failure of the vendee to
take actual possession of the land sold.
In Danguilan vs. IAC, 168 SCRA 22, 32 (1988), we held that for the execution of a public instrument to effect tradition,
the purchaser must be placed in control of the thing sold. When there is no impediment to prevent the thing sold from
converting to tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the execution of a
public instrument is sufficient. But if, notwithstanding the execution of the instrument, the purchaser cannot have the
enjoyment and material tenancy nor make use of it himself or through another in his name, then delivery has not been
effected.
As found by both the trial and appellate courts and amply supported by the evidence on record, Salvador was never
placed in control of the property. The original sellers retained their control and possession. Therefore, there was no
real transfer of ownership.
Moreover, in Norkis Distributors, Inc. vs. CA, 193 SCRA 694, 698-699 (1991), citing the land case of Abuan vs.
Garcia, 14 SCRA 759 (1965), we held that the critical factor in the different modes of effecting delivery, which gives
legal effect to the act is the actual intention of the vendor to deliver, and its acceptance by the vendee. Without that
intention, there is no tradition. In the instant case, although the spouses Jesus and Rosalia executed a deed of sale,
they did not deliver the possession and ownership of the property to Salvador and Rosa. They agreed to execute a
deed of sale merely to accommodate Salvador to enable him to generate funds for his business venture.

3. In Lacsamana vs. CA, 288 SCRA 287, 292 (1998), we held that the right to file an action for reconveyance on the
ground that the certificate of title was obtained by means of a fictitious deed of sale is virtually an action for the
declaration of its nullity, which does not prescribe. This applies squarely to the present case. The complaint filed by
respondents in the court a quo was for the reconveyance of the subject property to the estate of Rosalia since the
deeds of sale were simulated and fictitious. The complaint amounts to a declaration of nullity of a void contract, which
is imprescriptible. Hence, respondents’ cause of action has not prescribed.

4. Lastly, petitioner in her memorandum seeks to expunge the testimony of Rosa Santos-Carreon before the trial court
in view of Sec. 23, Rule 130 of the Revised Rules of Court, otherwise known as the “Dead Man’s Statute.” It is too
late for petitioner, however, to invoke said rule. The trial court in its order dated February 5, 1990, denied petitioner’s
motion to disqualify respondent Rosa as a witness. Petitioner did not appeal therefrom. Trial ensued and Rosa
testified as a witness for respondents and was cross-examined by petitioner’s counsel. By her failure to appeal from
the order allowing Rosa to testify, she waived her right to invoke the dead man’s statute. Further, her counsel cross-
examined Rosa on matters that occurred during Salvador’s lifetime. In Goñi vs. CA, 144 SCRA 222, 231 (1986), we
held that protection under the dead man’s statute is effectively waived when a counsel for a petitioner cross-examines
a private respondent on matters occurring during the deceased’s lifetime. The Court of Appeals cannot be faulted in
ignoring petitioner on Rosa’s disqualification.
 Addison vs Felix
Facts:
Addison sold to Marciana Felix four parcels of land. Felix paid at the execution of the deed 3000 pesos of the
purchase price and the rest in installments. The terms are as follows:
2000 on June 15
5000 30 days after issuance of her certificate transfer of title
within ten ears from date of title, 10 pesos for each coconut tree bearing fruit and 5 pesos for each coconut tree
growing fruit which overall should not exceed 85000 pesos
25% of the products received from the moment of possession until Torrens title is made.
Within 1 year from date of certificate she may rescind the contract in which felix must return all products of the land
and Addison will refund all the money with 10 percent interest. Addison then filed a case compelling felix to pay the
first installment of 2000. Felix answered stating she’d like to rescind the contract plus the refund of her money for the
reason that the property was not delivered to her. It is noteworthy to include that after executing a deed of sale,
petitioner with Felix’s representative in order to deliver the land sold, he was only able to designate two lands, and of
the two lands two thirds were already occupied by one Villafuerte. The surveyor Santamaria was only able to survey
two lands as the other two were not designated to him. In order to make the survey, he said he needed a write of
injunction from the court to remove the occupants. This defendant tried to apply for but was dismissed.
Issue:
Where or not there was delivery of the land in question.
Held:
No. With respect to the other two lands, Addison was not even able to show them to the purchaser. As regards to the
other two, there was an adverse possessor named vilafuerte. It is true that the execution of a public documents is
equivalent to delivery of the thing but in order that this symbolic delivery may produce the effect of tradition, it is
necessary that the vendor shall had have such control over the thing sold that, at the moment of sale, its material
delivery could have been made. It is not enough to confer upon the purchaser ownership and right of possession. The
things must be placed in his control. It is evident that mere execution was not fulfillment of vendor’s obligation to
deliver the thing sold, and that from non fulfillment arises the purchaser’s right to demand the rescission of sale and
return the price.
If the sale had been made under the express agreement of imposing upon the purchaser the obligation to take
necessary steps to obtain material possession of it, and she knew that it was in the possession of a third person, such
would be valid. But this is not the case here.

Danguilan vs IAC

Facts: Apolonia Melad filed a complaint against Felix Daguilan with CFI Cagayan for recovery of a farm lot and a
residential lot which she claimed she had purchased from Domingo Melad in 1943 and were now being unlawfully
withheld by the Danguilan. She claimed to be the illegitimate daughter of Domingo and presented a deed of sale
purportedly signed by the latter. She only moved out in 1946 because Danguilan approached her and asked
permission to cultivate the land and to stay therein. She had agreed on condition that he would deliver part of the
harvest from the farm to her, which he did from that year to 1958. Deliveries later stopped thus the complaint.

Danguilan, on the other hand, is the husband of Isidra Melad, Domingo's niece. He presented a private instrument
which Domingo Melad also purportedly signed, giving to him the farm in 1943 another private instrument in which
Domigo also gave him the residential lot, on the understanding that the Danguilan would take care of the grantor and
would bury him upon his death.

Lower court ruled in favor of Danguilan. Upon appeal, the IAC modified the deicision and ruled that the conveyance of
the real properties in question were null and void, as they were donations of real property and as such should have
been effected through a public instrument.
Apolonia Melad alleges that the deed of sale was allegedly executed when the respondent was only three years old
and the consideration was supposedly paid by her mother, Maria Yedan from her earnings as a wage worker in a
factory. Danguilan, on the other hand, avers that this contract was simulated and prepared after Domingo's death.

Issue:
WON Apolonia Melad can be considered as the owner of the disputed properties

Held: Decision of trial court reinstated. Danguilan wins.

Based on the evidence adduced, it is clear that Domingo did intend to donate the properties to Danguilan. The fact
that the donation was executed in a private document is not material because the donation was onerous- the
properties were given to the Danguilan in exchange for his obligation to take care of the donee for the rest of his life
and provide for his burial. Hence, it could not come under the operation of Article 749 requiring donations of real
properties to be effected through a public instrument.

As to the deed of sale executed between Domingo and Apolonia, the record shows that the Apolonia Melad did not
take possession of the disputed properties and indeed waited until 1962 to file this action for recovery of the lands
from the Danguilan. If she did have possession, she transferred the same to the petitioner in 1946, by her own sworn
admission, and moved out to another lot belonging to her step-brother. She thus failed to show that she
consummated the contract of sale by actual delivery of the properties to her and her actual possession
thereof in concept of purchaser-owner.

As consistently held by jurisprudence, ownership does not pass by mere stipulation but only by delivery. That symbolic
delivery was effected through the deed of sale, which was a public instrument, Addison vs Felix controls:

"in order that this symbolic delivery may produce the effect of tradition, it is necessary that the vendor
shall have had such control over the thing sold that, at the moment of the sale, its material delivery could have
been made. It is not enough to confer upon the purchaser the ownership and the right of possession. The
thing sold must be placed in his control. When there is no impediment whatever to prevent the thing sold
passing into the tenancy of the purchaser by the sole will of the vendor, symbolic delivery through the
execution of a public instrument is sufficient. But if, notwithstanding the execution of the instrument, the
purchaser cannot have the enjoyment and material tenancy of the thing and make use of it himself or through
another in his name, because such tenancy and enjoyment are opposed by the interposition of another will,
then fiction yields to reality—the delivery has not been effected."

(eventually, the Court said that both claims were weak, but the presumption is in favor of Danguilan who is in
possession)

PASAGUI V VILLABLANCA
FACTS: Appellants Calixto Pasugui and Fausta Mosar filed a complaint with the CFI of Cebu alleging that it paid and
in consideration of 2,800php, bought from appellees Bocar a parcel of agricultural land; that before they could take
possession of the property, defendants Villablanca illegally and without right took possession of the property
harvesting coconuts depriving plaintiffs of its possession. Plaintiffs demanded the return of the property but
defendants refused. Appellees moved to dismiss the petition on the ground that CFI had no jurisdiction over the
subject matter, the action being one of forcible entry.
ISSUE: Whether or not the case is of forcible entry.
HELD: No. In order that an action may be considered as one of forcible entry, it is not only necessary that the plaintiff
should allege his prior physical possession of the property but also that he was deprived of his possession by any
means provided in Sec. 1, Rule 70 of the Revised Rules of Court, namely: force, intimidation, threats, strategy and
stealth.
It is true that the mere act of a trespasser in unlawfully entering land would imply the use of force. In the case at bar,
no such inference could be made as plaintiffs-appellants had not claimed that they were in actual physical possession
of the property prior to the entry of the Villablancas.

Power Commercial and Industrial Corp. v. CA

FACTS:
1. Petitioner Power Commercial & Industrial Development Corporation (PowerCom), an industrial asbestos
manufacturer, needed a bigger office space and warehouse for its products.
2. January 31, 1979: Petitioner PowerCom entered into a contract of sale with the respondent spouses Reynaldo
and Angelita R. Quiambao—involving a 612-sq. m. parcel of land in San Antonio Village, Makati City
3. The parties agreed that petitioner PowerCom would pay private respondents spouses Quiambao P108,000.00 as
down payment, and the balance of P295,000.00 upon the execution of the deed of transfer of the title. Further,
petitioner assumed, as part of the purchase price, the existing mortgage on the land. In full satisfaction thereof,
he paid P79,145.77 to respondent PNB
4. June 1, 1979: respondent spouses mortgaged again said land to PNB to guarantee a loan of P145,000.00…
P80,000.00 of which was paid to respondent spouses. Petitioner PowerCom agreed to assume payment of the
loan.
5. June 26, 1979: the parties executed a Deed of Absolute Sale With Assumption of Mortgage. On the same
date, Mrs. C.D. Constantino, then General Manager of PowerCom, submitted to PNB said deed with a formal
application for assumption of mortgage
6. February 15, 1980: PNB informed respondent spouses that, for petitioner’s failure to submit the papers necessary
for approval pursuant to the former’s letter dated January 15, 1980, the application for assumption of mortgage
was considered withdrawn; that the outstanding balance of P145,000.00 was deemed fully due and demandable;
and that said loan was to be paid in full within fifteen (15) days from notice
7. Petitioner PowerCom paid PNB P41,880.45 on June 24, 1980 and P20,283.14 on December 23, 1980, payments
which were to be applied to the outstanding loan.
8. On March 17, 1982, petitioner filed Civil Case No. 45217 against respondent spouses for rescission and damages
9. Petitioner demanded the return of the payments it made on the ground that its assumption of mortgage was never
approved
10. May 31, 1983: while this case was pending, the mortgage was foreclosed. The property was subsequently bought
by PNB during the public auction
11. TC: ruled that the failure of respondent spouses to deliver actual possession to petitioner entitled the latter to
rescind the sale, and in view of such failure and of the denial of the latter’s assumption of mortgage, PNB was
obliged to return the payments made by the latter
12. CA: reversed the trial court. it held that the deed of sale between respondent spouses and petitioner did not
obligate the former to eject the lessees from the land in question as a condition of the sale, nor was the
occupation thereof by said lessees a violation of the warranty against eviction. Hence, there was no substantial
breach to justify the rescission of said contract or the return of the payments made

13. Petitioner contends:

 there was a substantial breach of the contract between the parties warranting rescission
 CA gravely erred in failing to consider in its decision that a breach of implied warranty under Article 1547 in
relation to Article 1545 of the Civil Code applies in the case-at-bar.

ISSUE:
1. WON the alleged “failure” of respondent spouses to eject the lessees from the lot in question and to deliver
actual and physical possession can be considered a substantial breach of condition
2. WON there was a substantial breach of the contract between the parties warranting rescission

RATIO:

The deed of sale provides:

“We hereby also warrant that we are the lawful and absolute owners of the above described property, free from any
lien and/or encumbrance, and we hereby agree and warrant to defend its title and peaceful possession thereof in favor
of the said Power Commercial and Industrial Development Corporation, its successors and assigns, against any
claims whatsoever of any and all third persons; subject, however, to the provisions hereunder provided to wit:”

1. The alleged “failure” of respondent spouses to eject the lessees from the lot in question and to deliver actual and
physical possession thereof cannot be considered a substantial breach of a condition for two reasons: first, such
“failure” was not stipulated as a condition -- whether resolutory or suspensive -- in the contract; and second, its
effects and consequences were not specified either. The provision adverted to by petitioner does not impose a
condition or an obligation to eject the lessees from the lot

If the parties intended to impose on respondent spouses the obligation to eject the tenants from the lot sold, it
should have included in the contract a provision similar to that referred to in Romero vs. Court of Appeals, where
the ejectment of the occupants of the lot sold by private respondent was the operative act which set into motion
the period of petitioner’s compliance with his own obligation, i.e., to pay the balance of the purchase price. In the
 case cited, the contract specifically stipulated that the ejectment was a condition to be fulfilled; otherwise, the
obligation to pay the balance would not arise. This is not so in the case at bar.

Absent a stipulation therefor, we cannot say that the parties intended to make its nonfulfillment a ground for
rescission. If they did intend this, their contract should have expressly stipulated so.

2. Requisites of Breach of Warranty Against Eviction: A breach of this warranty requires the concurrence of the
following circumstances:

(a) The purchaser has been deprived of the whole or part of the thing sold;
(b) This eviction is by a final judgment;
(c) The basis thereof is by virtue of a right prior to the sale made by the vendor; and
(d) The vendor has been summoned and made co-defendant in the suit for eviction at the instance of the vendee.

In the absence of these requisites, a breach of the warranty against eviction under Article 1547 cannot be
declared.

As correctly pointed out by CA, the presence of lessees does not constitute an encumbrance of the land, nor
does it deprive petitioner of its control thereof.

We note, however, that petitioner’s deprivation of ownership and control finally occurred when it failed and/or
discontinued paying the amortizations on the mortgage, causing the lot to be foreclosed and sold at public auction.
But this deprivation is due to petitioner’s fault, and not to any act attributable to the vendor-spouses.

BEHN MEYER & CO. v. TEODORO R. YANCO

Doctrine

In mercantile contracts of American origin, the letters, "F.O.B.," standing for the words "Free on Board," are

frequently used. The meaning is that the seller shall bear all expenses until the goods are delivered where

they are to be "F.O.B." According as to whether the goods are to be delivered "F.O.B." at the point of

shipment or at the point of destination determines the time when property passes.

Summary

A contract of sale was entered into by petitioner as the vendor with the defendant as the vendee. It states that

the subject matter of the sale was 80 drums of caustic soda, with 76% of Carabao brand, at the price of

$9.75 per one hundred pounds, cost, insurance, and freight included, to be shipped during March, 1916, to

be delivered to Manila and paid for on delivery of the documents. The goods were shipped from New York,

but before reaching Manila, the vessel was detained and some of the drums were confiscated so that when it

did reach its destination, Yanco refused to accept the delivery of the remaining drums and rejected

petitioner’s offer to wait for the rest of the shipment to arrive. Yanco then filed an action for damages, but

the petitioner argued that the former should bear the burden of the loss of merchandise because he was

already the absolute owner of the specific soda confiscated and that the place of delivery was not Manila.

However, the Court ruled, among other issues, that the word, Manila, in conjunction with the letters "c.i.f."
in the contract must mean that the contract price, covering costs, insurance, and freight, signifies that

delivery was to be made in Manila. Such a specification in a contract relative to the payment of freight

indicates the parties’ intention as to the place of delivery so that if the seller is to pay the freight, the

inference is strong that the duty of the seller is to have the goods transported to their ultimate destination and

that the title to the property does not pass until the goods have reached their destination. Thus, plaintiff has

not proved the performance on its part of the conditions precedent in the contract and since fulfilment of the

contract is impossible, Yanco, as the vendee, is entitled to rescind the contract of sale.

Facts:

On March 7, 1916, the parties signed a memorandum or a contract of sale which provides for “80

drums of caustic soda, with 76% of Carabao brand, at the price of $9.75 per one hundred pounds,

cost, insurance, and freight included, to be shipped during March, 1916, to be delivered to Manila

and paid for on delivery of the documents.” Behn, Meyer, and Co. was the vendor while Yanco was

the vendee with the selling price was P10,063.86.

Said goods were shipped onboard the steamship, Chinese Prince, from New York, but before it

reached Manila, the vessel was detained at Penang and 71 drums were confiscated. Only 9 drums

reached its destination and Yanco refused to accept it and rejected plaintiff’s offer of waiting for the

remainder of the shipment until its arrival, or of accepting the substitution of seventy-one drums of

caustic soda of similar grade from plaintiff's stock.

The plaintiff then sold, for the account of the defendant, eighty drums of caustic soda from which

there was realized the sum of P6,352.89. Deducting this sum from the selling price of P10,063.86,

we have the amount claimed as damages for the alleged breach of the contract.

Ratio/Issues

(1) Whether or not Behn, Meyer, and Co. committed a breach of the contract of sale (YES)

(The Court divided the issues into three component parts.)

a) SUBJECT MATTER AND CONSIDERATION – As to the offer made by the plaintiff,

the specific merchandise was never tendered, the soda it offered was not of the Carabao brand,

and that said offer was not made within the time that a March shipment, according to another
provision the contract, would normally have been available.

b) PLACE OF DELIVERY – The contract provided for "c.i.f. Manila, pagadero against delivery of documents." Its
determination always resolves itself into a question of fact. If the contract be silent as to the person or mode by which
the goods are to be sent, delivery by the vendor to a common carrier, in the usual and ordinary course of business,
transfers the property to the vendee. However, a specification relative to the payment of freight may be used to
indicate the parties’ intention as to the place of delivery so that it leads to two scenarios: If thebuyer is to pay the
freight, it is reasonable to suppose that he does so because the goods become his at the point of shipment. On the
other hand, if the seller is to pay the freight, the inference is equally so strong that the duty of the seller is to have the
goods transported to their ultimate destination and that title to property does not pass until the goods have reached
their destination.

The letters "c.i.f." found in British contracts, such as that found in the case, stand for cost, insurance, and freight and
signify that the price fixed covers not only the cost of the goods, but the expense of freight and insurance to be paid by
the seller.

The terms, c.i.f. and f.o.b., merely make rules of presumption which yield to proof of contrary intention.

Plaintiffs argue that the place of delivery was not Manila, but New York, however the Court ruled that it would not have
gone to the trouble of making fruitless attempts to substitute goods for the merchandise named in the contract, but
would have permitted the entire loss of the shipment to fall upon the defendant if it was so. To be noted is the fact that
the bill of lading was for goods received from Neuss Hesslein & Co. to be sent to the Bank of the Philippine Islands
with a draft upon Behn, Meyer & Co. and with instructions to deliver the same, and thus transfer the property to Behn,
Meyer & Co. when and if Behn, Meyer & Co. should pay the draft.

c) TIME OF DELIVERY - The contract provided for: "Embarque: March 1916," the merchandise was in fact shipped
from New York on the Steamship Chinese Prince on April 12, 1916.

d) PERFORMANCE – Plaintiff has not complied with his obligation under the contract and, as contemplated by article
1451 of the Civil Code, the vendee can demand fulfillment of the contract, and this being shown to be impossible, is
relieved of his obligation. There thus being sufficient ground for rescission, the defendant is not liable.

DAVAO VS. MISAMIS OCCIDENTAL

JOSE SANTA ANA, JR. and LOURDES STO. DOMINGO, petitioners, vs. ROSA HERNANDEZ, respondent.

FACTS:
Spouses Jose Santa Ana, Jr. and Lourdes Sto. Domingo, owned a 115,850-square meter parcel of land situated in
barrio Balasing, Sta. Maria, Bulaca. On 28 May 1954, they sold two (2) separate portions of the land for P11,000.00 to
the herein respondent Rosa Hernandez

The Contract of sale stated two basis for the object of the sale, namely: (1)12,500 sq. m. and 26,000 sq. m. at the rate
of P.29 per square meter; and (2) the recital of areas included with the mentioned of boundary properties.

After the sale the spouses caused the preparation of a subdivision plan, Psd-43187, was approved on 13 January
1955 by the Director of Lands. Rosa Hernandez, however, did not conform to the plan and refused to execute an
agreement of subdivision and partition for registration with the Register of Deeds of Bulacan; and she, likewise,
refused to vacate the areas that she had occupied. Instead, she caused the preparation of a different subdivision
plan, which was approved by the Director of Lands on 24 February 1955. This plan, Psd-42844, tallied with the
areas that the defendant, Rosa Hernandez, had actually occupied.

On 28 February 1955, herein petitioners-spouses filed suit against respondent Rosa Hernandez in CFI-Bulacan,
claiming that said defendant was occupying an excess of 17,000 square meters in area of what she had bought from
them. Defendant Rosa Hernandez, on the other hand, claimed that the alleged excess, was part of the areas that she
bought.

Argument of ROSA HERNANDEZ:

plaintiffs had sold two portions without clear boundaries but with exact areas (12,500 sq. m. and 26,000 sq. m.) at the
rate of P.29 per square meter or, as defendant Rosa Hernandez claimed, two portions, the areas of which were not
definite but which were well defined on the land and with definite boundaries and sold for the lump sum of P11,000.00.

Argument of STA. ANA SPOUSES:

Despite the incontestable fact that the deed of sale in favor of Rosa Hernandez recites a price in a lump sum
(P11,000.00) for both lots (Annex "C", Complaint, Rec. on App., p. 21), appellants insist that the recited area, i.e.
12,500 sq. m. and 26,000 sq. m. at the rate of P.29 per square meter, where the boundary properties was mentioned
should be taken as controlling.

Trial Court Decision: Finding for the plaintiffs, the said court ordered the defendant, among other things, to vacate
"the excess portions actually occupied by her and to confine her occupation only to Lots 4-a and 4-b as shown in the
plan, Exhibit E, of the plaintiffs . . .," referring to Psd-43187.

CA Decision: The Court of Appeals dismissed the complaint and declared Rosa Hernandez the owner of lots 4-a and
4-b in her plan, Psd-42844 citing Art. 1542 of the Civil Code as the basis

ISSUE: Whether or not the recital of the land area’s boundary properties is controlling in a contract of sale of lump
sum real property.

HELD:
The answer is in the affirmative.

Applying to the case Article 1542 of the new Civil Code:

In the sale of real estate, made for a lump sum and not at the rate of a certain sum for a unit of measure or
number, there shall be no increase or decrease of the price, although there be greater or less area or number
than that stated in the contract.

The same rule shall be applied when two or more immovables are sold for a single price; but if, besides
mentioning the boundaries, which is indispensable in every conveyance of real estate, its area or
number should be designated in the contract, the vendor shall be bound to deliver all that is included
within said boundaries, even when it exceeds the area or number specified in the contract; and, should
he not be able to do so, he shall suffer a reduction in the price, in proportion to what is lacking in the
area or number, unless the contract is rescinded because the vendee does not accede to the failure to
deliver what has been stipulated.

And this is particularly true where, as in the case now before this Court, the area given is qualified to be approximate
only
To hold the buyer to no more than the area recited on the deed, it must be made clear therein that the sale was made
by unit of measure at a definite price for each unit.

If the defendant intended to buy by the meter be should have so stated in the contract (Goyena vs. Tambunting,
supra).
The ruling of the Supreme Court of Spain, in construing Article 1471 of the Spanish Civil Code (copied verbatim in our
Article 1542) is highly persuasive that as between the absence of a recital of a given price per unit of measurement,
and the specification of the total area sold, the former must prevail and determines the applicability of the norms
concerning sales for a lump sum.

The Civil Code's rule as to sales "a cuerpo cierto" was not modified by Act 496, section 58, prohibiting the issuance of
a certificate of title to a grantee of part of a registered tract until a subdivision plan and technical description are duly
approved by the Director of Lands, and authorizing only the entry of a memorandum on the grantor's certificate of title
in default of such plan. The latter provision is purely a procedural directive to Registers of Deeds that does not attempt
to govern the rights of vendor and vendee inter se, that remain controlled by the Civil Code of the Philippines. It does
not even bar the registration of the contract itself to bind the land.

ESGUERRA VS. TRINIDAD

SUMMARY
Petitioners Feliciano Esguerra et. al sold to the Trinidad spouses a portion consisting of 5,000 sq.m. from the land
which they previously acquired from their grandparents. (Lot. No. 3591). During the cadastral survey it was discovered
that the 5,000 sqm portion actually measured 6,268 square meters. The Esguerras filed two separate complaints for
the nullification of the OCTs on the ground that they were procured through fraud or misrepresentation. According to
the SC, Article 1542 of the Civil Code applies. In the sale of real estate made for a lump sum and not at the rate of a
certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a
greater or less areas or number than that stated in the contract.

FACTS
The Esguerra spouses were the owners of several parcels of land in Meycauayan Bulacan, half of which they sold to
their grandchildren (Feliciano Esguerra et. al, herein petitioners). The remaining portion were sold to their other
grandchildren, the brothers Eulalio and Julian Trinidad.

Eulalio Trinidad later sold his share of the land to his daughters (Virginia & Primitiva, respondents herein) via a
notarized Kasulatan ng Bilihang Tuluyan ng Lupa 3 dated October 13, 1965. A portion of the land consisting of 1,693
square meters was later assigned as Lot No. 3593. The Trinidad sisters applied for a registration of title of Lot No.
3593 and the LRA awarded the lot in their favor and issued Original Certificate of Title No. 0-3631.

Meanwhile, Feliciano Esguerra et. al (petitioners) sold to the parents of the Trinidad sisters (Eulalio and Damiana) a
portion consisting of 5,000 sq.m. from the land which they previously acquired from their grandparents. (Lot. No. 3591)

During the cadastral survey conducted in the late 1960s, it was discovered that the about 5,000-square meter portion
of petitioner Esguerras' parcel of land sold to the Trinidad spouses which was assigned Lot No. 3591 actually
measured 6,268 square meters. The lot was registered and the Register of Deeds of Bulacan issued OCT No. 0-6498.
The lot was then passed on to the Trinidad sisters upon the death of their parents.

The Esguerras filed two separate complaints for the nullification of the two OCTs on the ground that they
were procured through fraud or misrepresentation.

RTC dismissed the case. CA also dismissed the appeal.

RATIO
Issue 1: W/N Eulalio Trinidad acquired the lots from the Esguerra grandparents through fraud
NO. It is settled that fraud is a question of fact and the circumstances constituting the same must be alleged and
proved in the court below. In the present cases, as did the trial court, the appellate court found no fraud in
respondents' acquisition and registration of the land. Under the Torrens System, an OCT enjoys a presumption of
validity, which correlatively carries a strong presumption that the provisions of the law governing the registration of
land which led to its issuance have been duly followed.

Issue 2: W/N Article 1542 of the New Civil Code is applicable in this case
YES.

The courts below correctly characterized the sale of Lot No. 3591 as one involving a lump sum contract. The Bilihan
ng Lupa shows that the parties agreed on the purchase price of P1,000.00 on a predetermined, albeit unsurveyed,
area of 5,000 square meters and not on a particular rate per unit area.

According to Article 1542 of the Civil Code, in the sale of real estate, made for a lump sum and not at the rate of a
certain sum for a unit of measure or number, there shall be no increase or decrease of the price, although there be a
greater or less areas or number than that stated in the contract.

Under Article 1542, what is controlling is the entire land included within the boundaries, regardless of whether the real
area should be greater or smaller than that recited in the deed. This is particularly true since the area of the land in
OCT No. 0-6498 was described in the deed as "humigit kumulang ," that is, more or less.
Note: Comparison with a unit price contract
In sales involving real estate, the parties may choose between two types of pricing agreement:
a unit price contract wherein the purchase price is determined by way of reference to a stated rate per unit area (e.g .,
P1,000 per square meter), or a lump sum contract which states a full purchase price for an immovable the area of
which may be declared based on an estimate or where both the area and boundaries are stated (e.g ., P1 million for
1,000 square meters, etc.).

In a unit price contract, the statement of area of immovable is not conclusive and the price may be reduced or
increased depending on the area actually delivered. If the vendor delivers less than the area agreed upon, the vendee
may oblige the vendor to deliver all that may be stated in the contract or demand for the proportionate reduction of the
purchase price if delivery is not possible. If the vendor delivers more than the area stated in the contract, the vendee
has the option to accept only the amount agreed upon or to accept the whole area, provided he pays for the additional
area at the contract rate.

Issue 3: W/N prescription has already set in

Yes.

The appellate court noted that when the complaints were filed in 1994, more than 27 years had elapsed from the
issuance of OCT No. 0-3631 and more than 20 years from the issuance of OCT No. 0-6498. The prescriptive period of
one (1) year had thus set in.

Even assuming that petitioners' actions are in the nature of a suit for quieting of title, which is imprescriptible, the
actions still necessarily fail since petitioners failed to establish the existence of fraud.

It is a fundamental principle in land registration that a certificate of title serves as evidence of an indefeasible and
incontrovertible title to the property in favor of the person whose name appears therein. Such indefeasibility
commences after the lapse or expiration of one year from the date of entry of the decree of registration when all
persons are considered to have a constructive notice of the title to the property. After the lapse of one year, therefore,
title to the property can no longer be contested.

FALLO

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of
Appeals are AFFIRMED. Costs against petitioners.

CEBU WINDLAND VS. ONG

VILLARTA V. CA (May 29, 1987)

FACTS:
Respondent Rosalinda Cruz entrusted to petitioner Victoria Villarta seven pieces of jewelry on November 1968. 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.

An estafa case was filed against Villarta but she argued that she can only be civilly liable because even though the
check bounced, she only gave it for a pre-existing obligation. She contends 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. Vallarta, 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.