1. Spouses Tongson vs.

Emergency Pawnshop Perfected contract of sale but there was Fraud in the
consummation stage
-Art. 1191- The power to rescind obligations is implied in
reciprocal ones, in case one of the obligors does not comply
with what is incumbent upon him.
The Injured party may ask between fulfillment or rescission
with payment of damages in either case. May seek rescission
even after he chose fulfillment should the latter be
impossible.
2. Spouses Delfrado vs. Caballero - Parties agreed on purchase price of P40,000 for a pre-
determined area of 4,000 sqm, more or less.
In a contract of sale of land mass, it is well-established that
the specific boundaries stated in the contract must control
over any statement wrt to area contained within its
boundaries
- “More or less” is defined as approximately, or which intend to cover
slight or unimportant inaccuracies in quantity. This implies both
parties assume risk of ordinary discrepancy.
-The Court, however, held that a discrepancy of 10,475 square meters
cannot be considered a slight difference in quantity. The difference in
the area is sizeable and too substantial to be overlooked. It is not a
reasonable excess or deficient that should be deemed included in the
deed of sale.
3.) Celestino Co vs. Collector (CIR) When a factory accepts a job that requires the use of extraordinary or
additional equipment, or involves services not generally performed by
it, it thereby contracts for a piece of work.
- In the case at bar, the orders exhibited were not shown to be
special. They were merely orders for work — nothing is shown to call
them special requiring extraordinary service of the factory. The
factory sold materials ordinarily manufactured by it — sash, panels,
mouldings — to Teodoro & Co., although in such form or combination
as suited the fancy of the purchaser. Such new form does not divest
the factory of its character as manufacturer. Neither does it take the
transaction out of the category of sales under Article 1467 above
quoted, because although the Factory does not, in the ordinary
course of its business, manufacture and keep on stock doors of the
kind sold to Teodoro, it could stock and/or probably had in stock the
sash, mouldings and panels it used therefor (some of them at least).
4.) CIR vs. Arnoldus Carpentry - Arnoldus Carpentry is a manufacturer. “Manufacturer”
includes every person who by physical or chemical process
alters the exterior texture or form or inner substance of any
raw material or manufactured or partially manufactured
product in such manner as to prepare it for a special use.
Based on Article 1467, what determines whether the contract
is one of work or sale is whether the thing has been
manufactured specially for the customer and “upon his special
order.” Thus, if the thing is specially done at the order of another,
this is a contract for a piece of work. If, on the other hand, the thing is
manufactured or procured for the general market in the ordinary
course of one’s business, it is a contract of sale. The one who has
ready for the sale to the general public finished furniture is a
manufacturer, and the mere fact that he did not have on hand a
particular piece or pieces of furniture ordered does not make him a
contractor only. The company had a ready stock of its shop products
for sale to its foreign and local buyers. The purchase orders from its
foreign buyers showed that they ordered by referring to the models
designated by petitioner. Even purchases by local buyers for television
cabinets were by orders for existing models except only for some
adjustments in sizes and accessories utilized. Thus, it is entitled to
the 7% tax exemption
5.) Dignos vs. Court of Appeals (CA) A deed of sale is absolute in nature although denominated as a "Deed
of Conditional Sale" where nowhere in the contract in question is a
 proviso or stipulation to the effect that title to the property sold is
reserved in the vendor until full payment of the purchase price, nor
is there a stipulation giving the vendor the right to unilaterally
rescind the contract the moment the vendee fails to pay within a
fixed period. In this case, there is no such stipulation reserving the
title of the property on the vendors nor does it give them the right to
unilaterally rescind the contract upon non-payment of the balance
thereof within a fixed period. Furthermore, all the elements of a valid
contract of sale under Article 1458 of the Civil Code are present.
6.) Coronel vs. Court of Appeals (CA) When the “Receipt of Down Payment” document was prepared and
signed by Romulo Coronel, the parties had agreed to a conditional
contract of sale the consummation of the contract is subject only to
the successful transfer of the certificate of Title.
According to Supreme Court, the receipt of down payment document
manifests a clear intent of the Coronel’s to transfer the title to the
buyer, but since the title is still in the name effect the transfer even
though the buyers are able and willing to immediately pay the
purchase price. The agreement as well could not have been a contract
to sell because the seller or the Coronel’s made no express
reservation of ownership or the title of the land.
On Feb. 6, 1985, the Contract of Sale between the Coronel’s and the
Alcaraz’ became obligatory when the property originally registered in
the name of the Coronels' father was transferred in their names
under TCT, because Article 1181 provides “In Conditional Obligations,
the acquisition of rights as well as extinguishment or loss of those
already acquired shall depend upon the happening of the event which
constitutes the condition.
Further, parties may now reciprocally demand performance because
there was a perfected contract of sale by mere meeting of the minds,
as provided by Article 1475 of the NCC.
7.) Luzon Development Bank vs. Enriquez Contract to sell does not transfer ownership.
A contract to sell is one where the prospective seller reserves the
transfer of title to the prospective buyer until the happening of an
event, such as full payment of the purchase price. What the seller
obliges himself to do is to sell the subject property only when the
entire amount of the purchase price has already been delivered to
him. In this case, of the contract entered into by DELTA and Enriquez
provides for the reservation of DELTA's ownership until full payment
of the purchase price.
Since the Contract to Sell did not transfer ownership of Lot 4 to
Enriquez, said ownership remained with DELTA. DELTA could then
validly transfer such ownership (as it did) to another person (the
BANK). However, the transferee BANK is bound by the Contract to Sell
and has to respect Enriquez's rights thereunder. This is because the
Contract to Sell, involving a subdivision lot, is covered and protected
by PD 957 which affords buyers such as Enriquez the right to have her
contract to sell registered with the Register of Deeds in order to make
it binding on third parties.
While DELTA failed to register the Contract to Sell with the Register of
Deeds, this failure will not prejudice Enriquez or relieve the BANK
from its obligation to respect Enriquez's Contract to Sell. Despite the
non-registration, the BANK cannot be considered, under the
circumstances, an innocent purchaser for value of Lot 4 when it
accepted the latter as payment for DELTA's obligation.
Bound by the terms of the Contract to Sell, the BANK is obliged to
respect the same and honor the payments already made by Enriquez
for the purchase price of Lot 4. Thus, the BANK can only collect the
balance of the purchase price from Enriquez and has the obligation,
upon full payment, to deliver to Enriquez a clean title over the subject
property.
8.) Carabeo vs. Dingco That the kasunduan did not specify the technical boundaries
of the property did not render the sale a nullity. The
requirement that a sale must have for its object a determinate
thing is satisfied as long as, at the time the contract is entered
into, the object of the sale is capable of being made
 determinate without the necessity of a new or further
agreement between the parties (also pursuant to Article 1460
par. 2) As the above-quoted portion of the kasunduan shows
[giving reference to the area, the locality located and the
vicinity with reference to old trees], there is no doubt that the
object of the sale is determinate.
9.) National Grains Authority vs. IAC The object of the contract, being the palay grains produced in
Soriano's farmland and the NFA was to pay the same depending upon
its quality. The fact that the exact number of cavans of palay to be
delivered has not been determined does not affect the perfection of
the contract. Article 1349 of the New Civil Code provides: "... The fact
that the quantity is not determinate shall not be an obstacle to the
existence of the contract, provided it is possible to determine the
same, without the need of a new contract between the parties." In
this case, there was no need for NFA and Soriano to enter into a new
contract to determine the exact number of cavans of palay to be sold
.
- Art. 1475. The contract of sale is perfected at the moment there is a
meeting of minds upon the thing which is the object of the contract
and upon the price.
The acceptance referred to which determines consent is the
acceptance of the offer of one party by the other and not of the
goods delivered as contended by petitioners.
10.) Servicewide Specialists vs. IAC Article 1484 of the New Civil Code prescribes three remedies which a
vendor may pursue in a contract of sale of personal property the price
of which is payable in installments, to wit: 1) to exact fulfillment of
the obligation; 2) cancel the sale; and 3) foreclose the mortgage on
the thing sold. These remedies are alternative and the vendor cannot
avail of them at the same time.
It is clear from the prayer of petitioner in its brief on appeal to the
appellate court that it had chosen the remedy of fulfillment when it
asked the appellate court to order private respondents to pay the
remaining unpaid sums under the promissory note. By having done
so, it has deemed waived the third remedy of foreclosure, and it
cannot therefore ask at the same time for a Writ of Replevin as
preparatory remedy to foreclosure of mortgage.
11.) Makati Sports Club vs. Cheng Considering that Mc Foods tendered its payment of ₱1,800,000.00 to
MSCI, even assuming that it was driven solely by the intent to
speculate on the price of the share of stock, it had all the right to
negotiate and transact, at least on the anticipated and expected
ownership of the share, with Hodreal. Art. 1461 provides: “Things
having a potential existence may be the object of the contract of sale.
The efficacy of the sale of a mere hope or expectancy is deemed
subject to the condition that the thing will come into existence.
The sale of a vain hope or expectancy is void.” In other words, there is
nothing wrong with the fact that the first installment paid by Hodreal
preceded the payment of Mc Foods for the same share of stock to
MSCI because eventually Mc Foods became the owner of a Class "A"
share covered by Certificate A 2243. Upon payment by Mc Foods of
₱1,800,000.00 to MSCI and the execution of the Deed of Absolute
Sale, it then had the right to demand the delivery of the stock
certificate in its name. The right of a transferee to have stocks
transferred to its name is an inherent right flowing from its ownership
of the stocks.
12.) Serra vs. CA The price or consideration here is definite and certain. The intention
of the parties is to peg the price of P210 per square meter. The
consideration here is distinct from the price. The building and
improvements to Serra’s property should bank fail to exercise its
option is considered a consideration distinct from the price, and it is
even more onerous.
13.) Republic of the Philippines vs. Philippine Price need not be in money. "Price . . . is always paid in terms of
money and the supposed payment being in kind, it is no payment at
Resources Development Corporation
all," citing Article 1458 of the new Civil Code. However, the same
Article provides that the purchaser may pay "a price certain in money
or its equivalent."
14.) Mapalo vs. Mapalo Key words: Donation, Fraud
There was consent but it was vitiated. Thus it is voidable. But
since there was no consideration, law and jurisprudence
provides that the contract should be void. The P500 as
consideration is deemed as absent and is not merely a false
consideration. The inexistence of a contract is permanent and
incurable and cannot be the subject of prescription. If it were a
false consideration, it was merely voidable.
15.) Payongayong vs.CA Key words: Double Sale: Ownership first recorded in registry
Art. 1544. If the same thing should have been sold to different
vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be
movable property.
Should it be immovable property, the ownership shall belong to the
person acquiring it who in good faith first recorded it in the Registry
of Property.
Should there be no inscription, the ownership shall pertain to the
person who in good faith was first in the possession; and, in the
absence thereof, to the person who presents the oldest title, provided
there is good faith.
The trial and appellate courts thus correctly accorded preferential
rights to respondents who had the sale registered in their favor. But
action for damages may be brought against the sellers.
16.) Adelfa vs CA Wherein: Brothers co-owners sold to Adelfa eastern portion of the
land. Adelfa expressed interest in buying the western portion of the
property from brothers.
An exclusive “Option to Purchase” was executed between Adelfa and
respondents; an option money of P50,000 was given to the latter.
The agreement between the parties is a contract to sell, and not an
option contract or a contract of sale.
Two features which convince that parties never intended to transfer
ownership except upon full payment of purchase price: (1) the
exclusive option to purchase does not mention that petitioner is
obliged to return possession or ownership of property as
consequence of non-payment; and (2) no delivery, actual or
constructive, was made to petitioner; option to purchase was not
included in a public instrument which would have effect of delivery.
Neither did petitioner take actual, physical possession of the property
at any given time. With this regard, there was an implied agreement
that ownership shall not pass to the purchaser until he had fully paid
the price. Also, the alleged option money was actually earnest
money since the amount was not distinct from the cause or
consideration for the sale of the property, but was a part thereof.
17.) EQUATORIAL VS. MAYFAIR -In a contract of lease which gave the lessee a 30-day exclusive option
to purchase the leased property in the event the lessor should desire
to sell the same, such contractual stipulation which does not provide
for a price certain nor terms of payment, actually grants a right of
first refusal and is not an option clause or an option contract.
-Where this right of first refusal clause found in a valid lease contract
was violated and the property was sold to a buyer who was aware of
the existence of such right, the resulting contract is rescissible by the
person who had the right…
-Whether or not Equatorial was the owner of the subject property
and could thus enjoy the fruits and rentals? NO, nor right of
ownership was transferred from Carmelo to Equatorial since there
was failure to deliver the property to the buyer.
18.) Limson vs. CA Keywords: SUNVAR. Not “Earnest Money”. Contract of
Option and not a Contract to Sell.
The above Receipt readily shows that respondent spouses and
petitioner only entered into a contract of option; a contract by which
respondent spouses agreed with petitioner that the latter shall have
the right to buy the former's property at a fixed price of P34.00 per
square meter within ten (10) days. Respondent spouses did not sell
their property; they did not also agree to sell it; but they sold
something, i.e., the privilege to buy at the election or option of
petitioner. The agreement imposed no binding obligation on
 petitioner, aside from the consideration for the offer.
The consideration of P20,000.00 paid by petitioner is not earnest
money but option money. There is nothing in the Receipt which
indicates that the P20,000.00 was part of the purchase price.
When the option period expired, the exclusive right of petitioner to
buy the property of respondent spouses ceased.
19.) Tapec vs CA Keywords: Ancient Documents; Public Document vs. Private
Document
the private document is an ancient document under the rules of
evidence. The deed of sale in a private writing in favor of private
respondent's grandparents is an ancient document whose proof of
authenticity was no longer necessary because of the concurrence of
the requisites in Section 21, 24 Rule 132 of the Rules of Court. It was
already more than thirty years old at the time it was offered in
evidence in 1986. 26 It was produced from the custody of respondent
Raguirag, an heir of the vendees in the said instrument. And it is
unblemished by any alteration or circumstances of suspicion.
The private instrument is a deed of sale in which all the requisites of a
valid contract are present and which is binding upon the parties. The
trial court erroneously held that it is invalid because it is not in a
public document as required by Article 1358 of the Civil Code. Article
1358 does not invalidate the acts or contracts enumerated therein if
they are not embodied in public documents.
20.) Chiao vs. Alcantara MINORITY and Ratification; valid
Ramon Alcantara, in his minority, may not be allowed to execute the
deed of sale, but his act of ratification, the contract was given a
binding effect. Doctrine in Mercado vs. Espiritu applies and it is not
necessary for his vendee to actually part with cash, as long as the
contract is supported by a valid consideration.
That about one month after the date of the conveyance, the appellee
informed the appellants of his minority, is of no moment, because
appellee's previous misrepresentation had already estopped him from
disavowing the contract. Said belated information merely leads to the
inference that the appellants in fact did not know that the appellee
was a minor on the date of the contract.
21.) Mercado and Mercado vs Espiritu Sale of Real Estate by Minors is Valid
The courts, in their interpretation of the law, have laid down the rule
that the sale of real estate, made by minors who pretend to be of
legal age, when it fact they are not, is valid, and they will not be
permitted to excuse themselves from the fulfillment of the
obligations contracted by them, or to have them annulled in
pursuance of the provisions of Law 6 title 19, of the 6th Partida; and
the judgment that holds such a sale to valid and absolves the
purchaser from the complaint filed against him does not violate the
laws relative to the sale of minors' property, nor the juridical rules
established in consonance therewith.
22.) Matabuena vs. Cervantes Donation without Marriage; Prohibition applies to common
law relationship
While Article 133 of the Civil Code considers as void a donation
between the spouses during marriage, policy consideration of
the most exigent character as well as the dictates of morality
requires that the same prohibition should apply to a common-
law relationship.
As earlier ruled, if the policy of the law is to prohibit donations in
favor of the other consort and his descendants because of fear
of undue and improper pressure and influence upon the donor,
then there is every reason to apply the same prohibitive policy to
persons living together as husband and wife without the benefit
of nuptials.
The lack of validity of the donation by the deceased to appellee
does not necessarily result in appellant having exclusive right to
the disputed property. As a widow, Cervantes is entitled to one-
half of the inheritance, and the surviving sister to the other half.
Article 1001, Civil Code: Should brothers and sisters or their
children survive with the widow or widower, the latter shall be
entitled to one-half of the inheritance and the brothers and
sisters or their children to the other half.
23.) Vda De Quirino vs. Palarca Lease building and improvements; Valid consideration
-Remember Serra vs. CA? Almost like zis
- That the option of the lessee is devoid of consideration is false. In
reciprocal contracts, like the one in question, the obligation or
promise of each party is the consideration for that of the other. In
Article 1350 of our Civil Code, "(i)n onerous contracts the cause is
understood to be, for each contracting party, the prestation or
promise of a thing or service by the other ... ." As a consequence,
"(t)he power to rescind obligations is implied in reciprocal ones, in
case one of the obligors should not comply with what is incumbent
upon him."
The consideration for the lessor's obligation to sell the leased
premises to the lessee, should he choose to exercise his option to
purchase the same, is the obligation of the lessee to sell to the lessor
the building and/or improvements constructed and/or made by the
former, if he fails to exercise his option to buy said premises. The
agreement to reduce the rental did not necessarily cancel or
extinguish the option.
24.) Ching vs Goyanko – Conveyance made in favor of his Common-Law Wife
is null and void. Public Policy
The proscription against sale of property between spouses applies
even to common law relationships.
The contract of sale was null and void for being contrary to morals
and public policy pursuant to Article 1409 and Article 1352 (contracts
with unlawful cause produce no effect). The sale was made by a
husband in favor of a concubine after he had abandoned his family
and left the conjugal home where his wife and children lived and from
whence they derived their support. The sale was subversive of the
stability of the family, a basic social institution which public policy
cherishes and protects.
-Donations between spouses during marriage are prohibited
because that would destroy the system of conjugal partnership, a
basic policy in civil law. It was also designed to prevent the exercise of
undue influence by one spouse over the other, as well as to protect
the institution of marriage, which is the cornerstone of family law.
This also applies to a couple living as husband and wife without
benefit of marriage.
25.) Rubias vs. Batiller – Sale of Lawyer from Father in Law. VOID by virtue of
1491 (5) and 1409 (7)
Void sale by virtue of 1491 (5) in relation to 1409 (7) which provides
that contracts expressly prohibited or declared void by law are
inexistent” and that these contracts “cannot be ratified. Neither can
the right to set up the defense of illegality be waived.”
26.) Distajo vs CA WHAT IS IT ABOUT: MOTHER HAS LOTS OF PARCELS OF LAND
The consent of the principal removes the transaction out of the
prohibition in Article 1491(2)
Under paragraph (2) of the above article, the prohibition against
agents purchasing property in their hands for sale or management is
not absolute. It does not apply if the principal consents to the sale of
the property in the hands of the agent or administrator. In this case,
the deeds of sale signed by Iluminada Abiertas shows that she gave
consent to the sale of the properties in favor of her son, Rufo, who
was the administrator of the properties. Thus, the consent of the
principal Iluminada Abiertas removes the transaction out of the
prohibition contained in Article 1491(2).
27.) Valencia vs. Cabanting Lawyer bought parcel of land pending litigation
(pending Certiorari proceeding): ACT IS PROHIBITED
AND LAWYER SUSPENDED *Legal ethics?
The prohibition in Article 1491(5) applies only to the sale or
assignment of property which is the subject of litigation to the
persons disqualified therein. For the prohibition to operate, the sale
or assignment must take place during the pendency of the litigation
involving the property.
In the case at bar, while it is true that Atty. Arsenio Fer. Cabanting
purchased the lot after finality of judgment, there was still a pending
 certiorari proceeding. A thing is said to be in litigation not only if there
is some contest or litigation over it in court, but also from the
moment that it becomes subject to the judicial action of the judge.
Logic indicates, in certiorari proceedings, that the appellate court may
either grant or dismiss the petition. Hence, it is not safe to conclude,
for purposes under Art. 1491 that the litigation has terminated when
the judgment of the trial court become final while a certiorari
connected therewith is still in progress. Thus, purchase of the
property by Atty. Cabanting in this case constitutes malpractice in
violation of Art. 1491 and the Canons of Professional Ethics. Clearly,
this malpractice is a ground for suspension.
28.) RAMOS vs NGASEO – Lawyer sale. Mere demand for delivery of the litigated property
does not cause the transfer of ownership, hence, not a prohibited
transaction within the contemplation of Article 1491. REPRIMANDED
ONLY.
In this case, there was no actual acquisition of the property in
litigation since the respondent only made a written demand for its
delivery which the complainant refused to comply.
The prohibition on purchase is all embracing to include not only sales
to private individuals but also public or judicial sales.
29.) Fornlida vs. RTC Branch 164 – MORTGAGED TO ATTY’S FEES then acquired after
foreclosure= PROHIBITED; VOID.
The fact that the property in question was first mortgaged by the
client to his lawyer and only subsequently acquired by the latter in a
foreclosure sale long after the termination of the case will not remove
it from the scope of the prohibition for at the time the mortgage was
executed the relationship of lawyer and client still existed, the very
relation of trust and confidence sought to be protected by the
prohibition, when a lawyer occupies a vantage position to press upon
or dictate terms to a harassed client. Considering that the mortgage
contract, entered into in contravention of Article 1491 of the Civil
Code, is expressly prohibited by law, the same must be held inexistent
and void ab initio
30.) Southern Motors vs Moscoso Do the attachment and subsequent sale of the mortgaged truck
amount to a foreclosure of the mortgage, hence, S (seller-creditor) is
not entitled to deficiency judgment? *A deficiency judgment is an
unsecured money judgment against a borrower whose mortgage
foreclosure sale did not produce sufficient funds to pay the underlying
promissory note, or loan, in full.
No. There is nothing unlawful or irregular in B’s act of attaching the
mortgaged truck. Since S has chosen to exact the fulfillment of B’s
obligation, it may enforce execution of the judgment that may be
favorably rendered thereon, on all personal and real properties of B
not exempt from execution sufficient to satisfy such judgment.
31.) Fiestan vs CA SPECIAL AGENCY: The prohibition DOES NOT apply where the sale of
the property in dispute was made under a special power inserted in
or attached to the real estate mortgage pursuant to Section 5 of Act
No. 3135, as amended, a special law which governs extra-judicial
foreclosure of real estate mortgage. The power to foreclose is not an
ordinary agency that contemplates exclusively the representation of
the principal by the agent but is primarily an authority conferred upon
the mortgagee for the latter’s own protection. By virtue of the
exception, the title of the mortgagee-creditor over the property
cannot be impeached or defeated on the ground that the mortgagee
cannot be a purchaser at his own sale.
32.) Ordonio vs Eduarte ASSIGNMENT TO LAWYER PROHIBITED
The prohibition APPLIES when, for example, a lawyer has not paid for
the property and it was merely ASSIGNED to him in consideration of
legal services rendered at a time when the property is still subject of a
pending case.
33.) Daroy vs Abecia Prohibition DOES NOT apply to the sale of a parcel of land, acquired
by a client to satisfy a judgment in his favor, to his attorney as long as
the property was not the subject of the litigation.