Vous êtes sur la page 1sur 21

Dignos vs.

Court of Appeals, and Jabil 158 SCRA 378 February 1988 FACTS: In July 1965, herein petitioners Silvestre T. Dignos and Isabela Lumungsod de Dignos (spouses Dignos) sold their parcel of land in Opon, LapuLapu to herein private respondent Antonio Jabil for the sum of P28,000 payable for two installments, with an assumption of indebtedness with the First Insular Bank of Cebu in the sum of P12,000 and the next installment of P4,000 to be paid in September 1965. In November 1965, the spouses Dignos sold the same parcel of land for P35,000 to defendants Luciano Cabigas and Jovita L. de Cabigas (spouses Cabigas) who were then US citizens, and executed in their favor an Absolute Deed of Sale duly registered in the Office of the Register of Deeds. Upon discovery of the 2nd sale of the subject land, Jabil filed the case at bar in the CFI of Cebu which rendered its Decision in August 1975 declaring the 2nd sale to the spouses Cabigas null and void ab initio and the 1st sale to Jabil not rescinded. The CFI of Cebu also ordered Jabil to pay the remaining P16,000 to the spouses Dignos and to reimburse the spouses Cabigas a reasonable amount corresponding the expenses in the construction of hollow block fences in the said parcel of land. The spouses Dignos were also ordered to return the P35,000 to the spouses Cabigas. Both Jabil and the spouses Dignos appealed to the Court of Appeals, which affirmed in July 1981 the CFI of Cebus Decision except for the part of Jabil paying the expenses of the spouses Cabigas for building a fence. The spouses Dignos contested that the contract between them and Jabil was merely a contract to sell and not a deed of sale. ISSUE: Is the contract between the parties a contract of sale or a contract to sell? COURT RULING: The Supreme Court affirmed the Decision of the Court of Appeals saying stated that all the elements of a valid contract of sale are present in the document and that the spouses Dignos had no right to sell the land in question because an actual delivery of its possession has already been made in favor of Jabil as early as March 1965. It was also found that the spouses Dignos never notified Jabil by notarial act that they were rescinding the contract, and neither did they file a suit in court to rescind the sale. There is no showing that Jabil properly authorized a certain Cipriano Amistad to tell petitioners that he was already waiving his rights to the land in question.

Artates vs. Urbi 37 SCRA 395 January 1971 FACTS: In September 1952, the proper land authorities issued in favor of herein appellant Lino Artates and Manuela Pojas (spouses Artates) a homestead which is covered by Patent No. V-12775 and duly registered in their names (OCT No. P-572). In October 1955, Lino Artates inflicted injuries upon herein defendant Daniel Urbi who then filed Civil Case No. 40 against the former. The Justice of the Peace of Court of the CFI of Camilaniugan, Cagayan, awarded damages in favor of Urbi in the amount of P1,476.35, so in June 1962, the Provincial Sheriff of Cagayan made a public sale of the homestead to satisfy the said judgment. The spouses Artates alleged that the sale of the homestead to satisfy Lino Artates indebtedness accrued in October 1955 violated the provision of the Public Land Law exempting said property from execution for any debt contracted within five years from the date of the issuance of the patent, and that Urbi executed a deed of sale of the same parcel of land in June 1961 for the sum of P2,676.35 to herein defendant Crisanto Soliven, who was a minor, to defraud them. In March 1953, the CFI of Camilaniugan, Cagayan, upheld the execution made by the Provincial Sheriff upon the homestead, and at declared null and void the sale of the land between Urbi and Soliven. ISSUE: Do the appellants spouses Artates possess absolute ownership over the homestead which is covered by a patent? COURT RULING: The Supreme Court reversed the decision appealed from and declared the spouses Artates to be entitled to the return and possession of the subject land without prejudice to their continuing obligation to pay the judgment debt, and expenses connected therewith. Considering the protective policy of the law, the Supreme Court reiterated that the Philippines public land laws, being copied from American legislation, resort to American precedents which held that the exemption from "debts contracted" by a homesteader include freedom from money liabilities, from torts or crimes committed by him, such as from bigamy or slander, breach of contract or other torts.

Heirs of Enrique Zambales vs. Court of Appeals & Nin Bay Mining Corp. 120 SCRA 897 February 1983 FACTS: The spouses Enrique Zambales and Joaquina Zambales (the Zambaleses), who are illiterate, were the homestead patentees of a parcel of land in the Municipality of Del Pilar, Roxas, Palawan, pursuant to Homestead Patent No. V-59502 dated September 6, 1955. They claimed in November 1956 that respondent Nin Bay Mining Corporation (Corporation) had removed silica sand from their land and destroyed the plants and other improvements thereon, to which said Corporation denied to have done so. On October 29, 1959, the Zambaleses, duly assisted by their counsel, Atty. Perfecto de los Reyes, and the Corporation, entered into a Compromise Agreement which state, among others, that the Zambaleses are giving the Corporation full power and authority to sell, transfer and convey on September 10, 1960 or at any time thereafter the whole or any part of herein subject property. On September 10, 1960, the Corporation sold the disputed property to Joaquin B. Preysler for the sum of P8,923.70 fixed in the Compromise Agreement. On December 6, 1969, or ten (10) years after the Trial Court's Decision based on the Compromise Agreement, and nine (9) years after the sale to Preysler, the Zambaleses filed a civil action in the CFI of Palawan for "Annulment of a Deed of Sale with Recovery of Possession and Ownership with Damages, alleging that Atty. de los Reyes and the Corporation induced them through fraud, deceit and manipulation to sign the Compromise Agreement. The trial court declared null and void the deed of sale executed between Preysler and the Corporation, but the Court of Appeals reversed the said decision after finding that the alleged fraud or misrepresentation in the execution of the Compromise Agreement had not been substantiated by evidence. ISSUE: Are the compromise agreement and the subsequent deed of sale valid and legal? COURT RULING: The Supreme Court sustained the finding of the appellate court that fraud and misrepresentation did not vitiate petitioners' consent to the Agreement because the latter were not as ignorant as they themselves tried to show. The Zambaleses were political leaders who speak in the platform during political rallies, and the lawyers they have hired belong to well-established law firms in Manila, which show that although they were illiterate, they are still well-informed. However, while the Compromise Agreement was held to be in violation of the Public Land Act, which prohibits alienation and encumbrance of a homestead lot within five years from the issuance of the patent. Although the issue was not raised in the Courts below, the Supreme Court has the authority to review matters even if they are not assigned as errors in the appeal, if it is found that their consideration is necessary in arriving at a just decision of the case. The bilateral promise to sell between the Zambaleses and the Corporation, and the subsequent deed of sale between Preysler and the latter were declared null and void.

Quiroga vs. Parsons Hardware 38 Phil 501 August 1918 FACTS: On January 24, 1911, plaintiff Andres Quiroga and J. Parsons (to whose rights and obligations the present defendant Parsons Hardware Co. later subrogated itself) entered into a contract, where it was stated among others that Quiroga grants in favor of Parsons the exclusive rights to sell his beds in the Visayan Islands under some conditions. One of the said conditions provided that Mr. Parsons may sell, or establish branches of his agency for the sale of "Quiroga" beds in all the towns of the Archipelago where there are no exclusive agents, and shall immediately report such action to Mr. Quiroga for his approval while another one passed on to Parsons the obligation to order by the dozen and in no other manner the beds from Quiroga. Alleging that the Parsons was his agent for the sale of his beds in Iloilo, Quiroga filed a complaint against the former for violating the following obligations implied in what he contended to be a contract of commercial agency: not to sell the beds at higher prices than those of the invoices; to have an open establishment in Iloilo; itself to conduct the agency; to keep the beds on public exhibition, and to pay for the advertisement expenses for the same; and to order the beds by the dozen and in no other manner. ISSUE: Is the defendant, by reason of the contract, a purchaser or an agent of the plaintiff for the sale of the latters beds in Iloilo? COURT RULING: The Supreme Court declared that the contract by and between the plaintiff and the defendant was one of purchase and sale, and that the obligations the breach of which is alleged as a cause of action are not imposed upon the defendant, either by agreement or by law. In order to classify a contract, due regard must be given to its essential clauses. In the contract in question, what was essential, as constituting its cause and subject matter, is that the plaintiff was to furnish the defendant with the beds which the latter might order, at the price stipulated, and that the defendant was to pay the price in the manner stipulated. There was the obligation on the part of the plaintiff to supply the beds, and, on the part of the defendant, to pay their price. These features exclude the legal conception of an agency or order to sell whereby the mandatory or agent received the thing to sell it, and does not pay its price, but delivers to the principal the price he obtains from the sale of the thing to a third person, and if he does not succeed in selling it, he returns it.

Concrete Aggregates vs. CTA and CIR 185 SCRA 416 May 1990 FACTS: Petitioner, a domestic corporation duly existing under the laws of the Philippines, has an aggregate plant at Montalban, Rizal which processes rock aggregates mined by it from private lands, and maintains and operates a plant at Longos, Quezon City for the production of ready-mixed concrete and plant-mixed hot asphalt. Sometime in 1968, the agents of respondent Commission on Internal Revenue (CIR) conducted an investigation of petitioner's tax liabilities, and assessed and demanded payment from petitioner the amount of P244,002.76 as sales and ad valorem taxes for the first semester of 1968, inclusive of surcharges. Instead of paying, the petitioner appealed to respondent CTA. The said Court concluded that petitioner is a manufacturer subject to the 7% sales tax under the Section Section 186 of the 1968 National Internal Revenue Code, and ordered it to pay what the respondent CIR demands, plus interest at the rate of 14% per centum from January 1, 1973 up to the date of full payment thereof pursuant to Section 183 (now 193) of the same Code. Petitioner contends, however, that it is a contractor within the meaning of Section 191 under the same Code, that its business falls under "other construction work contractors" or "other independent contractors", and that it produced asphalt and concrete mix only upon previous orders. ISSUE: Is the petitioner a contractor subject to the 3% contractor's tax under Section 191 or a manufacturer subject to the 7% sales tax under Section 186? COURT RULING: The Supreme Court affirmed respondent CTAs decision and declared that petitioner is a manufacturer as defined by Section 194(x), now Section 187(x), of the Tax Code. It reiterated the respondent CTAs finding that petitioner was formed and organized primarily as a manufacturer; that it has an aggregate plant at Montalban, Rizal, which processes rock aggregates mined by it from private lands; it operates a concrete batching plant at Longos, Quezon City where the specified aggregates from its plant at Montalban are mixed with sand and cement, after which water is added and the concrete mixture is sold and delivered to customers; and at its plant site at Longos, Quezon City, petitioner has also an asphalt mixing machinery where bituminous asphalt mix is manufactured.

CIR vs. Court of Appeals and Ateneo de Manila COMMISSIONER OF INTERNAL REVENUE vs. COURT OF APPEALS G.R. No. 115349 April 18, 1997 Facts: ADMU Institute of Philippine Culture is engaged in social science studies of Philippine society and culture. Occasionally, it accepts sponsorships for its research activities from international organizations, private foundations and government agencies. On July 1983, CIR sent a demand letter assessing the sum of P174,043.97 for alleged deficiency contractors tax. Accdg to CIR, ADMU falls under the purview of independent contractor pursuant to Sec 205 of Tax Code and is also subject to 3% contractors tax under Sec 205 of the same code. (Independent Contractor means any person whose activity consists essentially of the sale of all kinds of services for a fee regardless of whether or not the performance of the service calls for the exercise or use of the physical or mental faculties of such contractors or their employees.) Issue: 1) WON ADMU is an independent contractor hence liable for tax? NO. 2) WON the acceptance of research projects by the IPC of ADMU a contract of sale or a contract for a piece of work? NEITHER. Held: 1) Hence, to impose the three percent contractors tax on Ateneos Institute of Philippine Culture, it should be sufficiently proven that the private respondent is indeed selling its services for a fee in pursuit of an independent business. 2) Records do not show that Ateneos IPC in fact contracted to sell its research services for a fee. In the first place, the petitioner has presented no evidence to prove its bare contention that, indeed, contracts for sale of services were ever entered into by the private respondent. Funds received by the Ateneo de Manila University are technically not a fee. They may however fall as gifts or donations which are taxexempt. Another fact that supports this contention is that for about 30 years, IPC had continuously operated at a loss, which means that sponsored funds are less than actual expenses for its research projects. In fact, private respondent is mandated by law to undertake research activities to maintain its university status. In fact, the research activities being carried out by the IPC is focused not on business or profit but on social sciences studies of Philippine society and culture. Since it can only finance a limited number of IPCs research projects, private respondent occasionally accepts sponsorship for unfunded IPC research projects from international organizations, private foundations and governmental agencies. However, such sponsorships are subject to private respondents terms and conditions, among which are, that the research is confined to topics consistent with the private respondents academic agenda; that no proprietary or commercial purpose research is done; and that private respondent retains not only the absolute right to publish but also the ownership of the results of the research conducted by the IPC.

SALE vs. CONTRACT FOR PIECE OF WORK By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and to deliver a determinate thing, and the other to pay therefore a price certain in money or its equivalent. By its very nature, a contract of sale requires a transfer of ownership. In the case of a contract for a piece of work, the contractor binds himself to execute a piece of work for the employer, in consideration of a certain price or compensation. If the contractor agrees to produce the work from materials furnished by him, he shall deliver the thing produced to the employer and transfer dominion over the thing. Whether the contract be one of sale or one for a piece of work, a transfer of ownership is involved and a party necessarily walks away with an object. In this case, there was no sale either of objects or services because there was no transfer of ownership over the research data obtained or the results of research projects undertaken by the Institute of Philippine Culture.

TOYOTA SHAW, INC. vs. COURT OF APPEALS G.R. No. L-116650 May 23, 1995 Facts: Sometime in June of 1989, Luna L. Sosa wanted to purchase a Toyota Lite Ace. It was then a sellers market and Sosa had difficulty finding a dealer with an available unit for sale. But upon contacting Toyota Shaw, Inc., he was told that there was an available unit. So on 14 June 1989, Sosa and his son, Gilbert, went to the Toyota office at Shaw. There they met Popong Bernardo, a sales representative of Toyota. Sosa emphasized to Bernardo that he needed the Lite Ace not later than 17 June 1989 because he, his family, and a balikbayan guest would use it on 18 June 1989 to go to Marinduque, his home province, where he would celebrate his birthday on the 19th of June. He added that if he does not arrive in his hometown with the new car, he would become a laughing stock. Bernardo assured Sosa that a unit would be ready for pick up at 10AM on 17 June 1989. Bernardo then signed the Agreements Between Mr. Sosa & Popong Bernardo of Toyota Shaw, Inc. P100 thousand was the downpayment, but the purchase price was not mentioned in the contract. It was also agreed upon by the parties that the balance of the purchase price would be paid by credit financing through B.A. Finance. Toyota contends, however, that the Lite Ace was not delivered to Sosa because of the disapproval by B.A. Finance of the credit financing application of Sosa. It further alleged that a particular unit had already been reserved and earmarked for Sosa but could not be released due to the uncertainty of payment of the balance of the purchase price. Toyota then gave Sosa the option to purchase the unit by paying the full purchase price in cash but Sosa refused. The financing corporation seemed to have not approved Sosas application. Issue: WON there was a perfected contract of sale? NO Held: Exhibit A or the Agreement is NOT a perfected contract of sale. Nothing was mentioned about the full purchase price and the manner the installments were to be paid. A definite agreement on the manner of payment of the price is an essential element in the formation of a binding and enforceable contract of sale. This is so because the agreement as to the manner of payment goes into the price such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. Definiteness as to the price is an essential element of a binding agreement to sell personal property. Exhibit A shows the absence of a meeting of minds between Toyota and Sosa. For one thing, Sosa did not even sign it. He was not dealing with Toyota but with Popong Bernardo. Bernardo was only a sales representative of Toyota and hence a mere agent of the latter. Exhibit A may be considered as part of the initial phase of the generation or negotiation stage of a contract of sale. Accordingly, in a sale on installment basis which is financed by a financing company, three parties are thus involved: the buyer who executes a note or notes for the unpaid balance of the price of the thing purchased on installment, the seller who assigns the notes or discounts them with a financing company, and the financing company which is subrogated in the place of the seller, as the

creditor of the installment buyer. Since B.A. Finance did not approve Sosas application, there was then no meeting of minds on the sale on installment basis. The Vehicle Sales Proposal was a mere proposal which was aborted in lieu of subsequent events. It follows that the VSP created no demandable right in favor of Sosa for the delivery of the vehicle to him, and its non-delivery did not cause any legally indemnifiable injury.

Limketkai Sons Milling vs. CA [G.R. No. 118509. December 1, 1995] Post under case digests, Civil Law at Saturday, March 03, 2012 Posted by Schizophrenic Mind Facts: On June 23, 1988, Pedro Revilla, Jr., a licensed real estate broker was given formal authority by BPI to sell the lot for P1,000.00 per square meter. The owners of the Philippine Remnants concurred this arrangement. Broker Revilla contacted Alfonso Lim of petitioner company who agreed to buy the land. On July 9, 1988, Revilla formally informed BPI that he had procured a buyer, herein petitioner. On July 11, 1988, petitioner's officials, Alfonso Lim and Albino Limketkai, went to BPI to confirm the sale. VicePresident Merlin Albano and Asst. Vice-President Aromin entertained them. The parties agreed that the lot would be sold at P1,000.00 per square meter to be paid in cash. The authority to sell was on a first come, first served and non-exclusive basis; there is no dispute over petitioner's being the first comer and the buyer to be first served. Alfonso Lim then asked if it was possible to pay on terms. The bank officials stated that there was no harm in trying to ask for payment on terms because in previous transactions, the same had been allowed. It was the understanding, however, that should the term payment be disapproved, then the price shall be paid in cash. Two or three days later, petitioner learned that its offer to pay on terms had been frozen. Alfonso Lim went to BPI on July 18, 1988 and tendered the full payment of P33,056,000.00 to Albano. The payment was refused because Albano stated that the authority to sell that particular piece of property in Pasig had been withdrawn from his unit. The same check was tendered to BPI Vice-President Nelson Bona who also refused to receive payment. An action for specific performance withdamages was thereupon filed on August 25, 1988 by petitioner against BPI. In the course of the trial, BPI informed the trial court that it had sold the property under litigation to NBS on July 14, 1989. Issue: Whether or not such contract is covered by the statute of frauds. Held: In the case at bench, the allegation that there was no concurrence of the offer and the acceptance upon the cause of the contract is belied by the testimony of the very BPI official with whom the contract was perfected. Aromin and Albano concluded the sale for BPI. The fact that the deed of sale still had to be signed and notarized does not mean that no contract had already been perfected. A sale of land is valid regardless of the form it may have been entered into. The requisite form under Article 1458 of the Civil Code is merely for greater efficacy or convenience and the failure to comply does not affect the validity and binding effect of the act between parties. Therefore, such contract that was made constituted fraud and is covered by the statute of frauds. BPI should be held liable and can be sued for damages.

TRADERS ROYALBANK V CUISON LUMBER FACTS: Cuison Lumber obtained loans w/ Traders Bank and offered a payment arrangement. The bank replied through a letterof its resolution to grant to grant repurchase to the foreclosed property. Cuison Lumber did not make an express acceptance. DOCTRINE: A contract is perfected from the moment there is a meeting of the offer and acceptance upon the thing and the causethat constitute the contract. The offer must be certain and the acceptance absolute and unqualified. The ascertainment whetherthere is a meeting of minds depends on the circumstances surrounding the case. In this case, the contract was perfected asevince by subsequent acts of the parties: Cuison Lumber paid continuously and even asked for extensions.

MANILA METAL CONTAINER CORPORATION, vs. PHILIPPINE NATIONAL BANK G.R. No. 166862 December 20, 2006 CALLEJO, SR., J.: Facts: Petitioner Manila Metal Container Corporation (MMCC) obtained a loan of 900,000 from respondent bank in which he executed a real estate mortgage on one of its lots. MMCC however failed to comply with the payment of the loan. PNB then filed an extrajudicial foreclosure of the estate mortgage ans sought to have the property sold at a public auction. PNB was declared the winning bidder. MMCC then requested an extension of time to repurchase the property on instalment basis bit it was rejected by PNB. Meanwhile, the Special Assets Management Department (SAMD) had prepared a statement of account, and as of June 25, 1984 petitioner's obligation amounted to P1,574,560.47. When apprised of the statement of account, petitioner remitted P725,000.00 to respondent PNB as "deposit to repurchase," and Official Receipt No. 978191 was issued stating that The deposit of P725,000 was accepted by PNB on the condition that the purchase price is still subject to the approval of the PNB Board. SAMD then informed MMCC that the current market price of the lot was at 2,660,000 which the latter rejected with a counter offer and insisted that it should be 1,574,560. PNBs Board of Directors then accepted MMCCs offer to purchase the property but for 1,931,389 in cash. Again, MMCC insisted on the 1.5M. MMCCs claim rests on the argument that PNB approved the repurchase price of P1,574,560.47 for which it accepted P725,000.00 from Manila Metal. PNB cannot take advantage of its own delay and long inaction in demanding a higher amount based on unilateral computation of interest rate without the consent of Manila Metal. The trial court and the CA ruled that there was no perfected contract of sale because there was no meeting of the minds. Issue: Whether or not there is a perfected contract of sale between the parties. Held: No, there is none. A contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service. Under Article 1318 of the New Civil Code, there is no contract unless the following requisites concur: (1) Consent of the contracting parties; (2) Object certain which is the subject matter of the contract; (3) Cause of the obligation which is established. Contracts are perfected by mere consent which is manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Once perfected, they bind other contracting parties and the obligations arising therefrom have the form of law between the parties and should be complied with in good faith. Sales Case Digests Atty. Manuel Casio 2B S.Y. 2011-2012 Page | 15 By the contract of sale, one of the contracting parties obligates himself to transfer the ownership of and deliver a determinate thing, and the other to pay therefor a price certain in money or its equivalent. The absence of any of the essential elements will negate the existence of a perfected contract of sale. A contract of sale is consensual in nature and is perfected upon mere meeting of the minds. When there is merely an offer by one party without acceptance of the other, there is no contract. When the contract of sale is not perfected, it cannot, as an independent source of obligation, serve as a binding juridical relation between the parties. NOTE: In San Miguel Properties Philippines, Inc. v. Huang, the Court ruled that the stages of a contract of sale are as follows: (1) negotiation, covering the period from the time the prospective contracting parties indicate interest in the contract to the time the contract is perfected; (2) perfection, which takes place upon the concurrence of the essential elements of the sale which are the meeting of the minds of the parties as to the object of the contract and upon the price; and (3) consummation, which begins when the parties perform their respective undertakings under the contract of sale, culminating in the extinguishment thereof. In the instant case, the parties involved did not even get pass the negotiation stage. A qualified acceptance or one that involves a new proposal constitutes a counter-offer and a rejection of the original

offer. A counter-offer is considered in law, a rejection of the original offer and an attempt to end the negotiation between the parties on a different basis. What happened is that MMCC offered to repurchase which PNB rejected. It then offered the down payment of 700K+ as partial payment of the 1.5M. This was never approved by the PNB for they demanded 1.9M. But again, MMCC insisted on the 1.5M. There was never an acceptance to speak off in the first place. A contract of sale was never perfected.

HEIRS OF SANDEJAS, SR v. LINA (G.R. No. 141634, February 5, 2001) Civil Law/ Sales/Contract to Sell: (1) A contract of sale is not invalidated by the fact that it is subject to probate court approval. The transaction remains binding on the seller-heir, but not on the other heirs who have not given their consent to it. (2) In a contract to sell, the payment of the purchase price is a positive suspensivecondition. The vendor's obligation to convey the title does not become effective in case of failureto pay. When a contract is subject to a suspensive condition, its birth or effectivity can take placeonly if and when the condition happens or is fulfilled. The suspensive condition did not reduce the conditional sale between Eliodoro Sr. andrespondent to one that was and a definite, clear and absolute document of sale," as contendedby petitioners. Upon the occurrence of the condition, the conditional sale became a reciprocallydemandable obligation that is binding upon the parties. Heirs of Sandejas vs Alex Lina G.R. No. 141634 February 5, 2001 Facts: The facts of the case, as narrated by the Court of Appeals (CA). On February 17, 1981, Eliodoro Sandejas, Sr. filed a petition, in the lower court praying that letters of administration be issued in his favor for the settlement of the estate of his wife, Remedios Sandejas, who died on April 17, 1955. On July 1, 1981, Letters of Administration were issued by the lower court appointing Eliodoro Sandejas, Sr. as administrator of the estate of the late Remedios Sandejas. Likewise on the same date, Eliodoro Sandejas, Sr. took his oath as administrator. On November 19, 1981, the 4th floor of Manila City Hall was burned and among the records burned were the records of Branch XI of the Court of First Instance of Manila. As a result, he filed a Motion for Reconstitution of the records of the case on February 9, 1983. On February 16, 1983, the lower court in its Order granted the said motion. On April 19, 1983, an Omnibus Pleading for motion to intervene and petition-in-intervention was filed by Movant Alex A. Lina alleging among others that on June 7, 1982, movant and administrator Eliodoro P. Sandejas, in his capacity as seller, bound and obligated himself, his heirs, administrators, and assigns, to sell forever and absolutely and in their entirety the following parcels of land which formed part of the estate of the late Remedios R. Sandejas. It showed that there was receipt of money with promise to sell and to buy with the sum of P100,000.00 Issues:

a) Whether or not Eliodoro P. Sandejas Sr. is legally obligated to convey title to the property referred to in the subject document which was found to be in the nature of a contract to sell where court approval was not complied with? b) Whether or not he was guilty of bad faith despite the conclusion of the CA that he [bore] the burden of proving that a motion for authority to sell had been filed in court? c) Whether or not undivided shares of Eliodoro in the subject property is (3/5) and the administrator of the latter should execute deeds of conveyance within thirty days from receipt of the balance of the purchase price from the respondent? d)Whether or not the respondent's petition-in-intervention was converted to a money claim and whether the [trial court] acting as a probate court could approve the sale and compel the petitioners to execute [a] deed of conveyance even for the share alone of Eliodoro P. Sandejas Sr.? Held: The Petition is partially meritorious. Obligation With a Suspensive Condition Petitioners argue that the CA erred in ordering the conveyance of the disputed 3/5 of the parcels of land, despite the nonfulfillment of the suspensive condition -- court approval of the sale -- as contained in the "Receipt of Earnest Money with Promise to Sell and to Buy" (also referred to as the "Receipt"). Instead, they assert that because this condition had not been satisfied, their obligation to deliver the disputed parcels of land was converted into a money claim. The agreement between Eliodoro Sr. and respondent is subject to a suspensive condition -- the procurement of a court approval, not full payment. There was no reservation of ownership in the agreement. In accordance with paragraph 1 of the Receipt, petitioners were supposed to deed the disputed lots over to respondent. This they could do upon the court's approval, even before full payment. Hence, their contract was a conditional sale, rather than a contract to sell as determined by the CA. When a contract is subject to a suspensive condition, its birth or effectivity can take place only if and when the condition happens or is fulfilled. Thus, the intestate court's grant of the Motion for Approval of the sale filed by respondent resulted in petitioners' obligation to execute the Deed of Sale of the disputed lots in his favor. The condition having been satisfied, the contract was perfected. Henceforth, the parties were bound to fulfill what they had expressly agreed upon. Court approval is required in any disposition of the decedent's estate per Rule 89 of the Rules of Court. Reference to judicial approval, however, cannot adversely affect the substantive rights of heirs to dispose of their own pro indiviso shares in the co-heirship or co-ownership. In other words, they can sell their rights, interests or participation in the property under administration. A stipulation requiring court approval

does not affect the validity and the effectivity of the sale as regards the selling heirs. It merely implies that the property may be taken out of custodia legis, but only with the court's permission. It would seem that the suspensive condition in the present conditional sale was imposed only for this reason. First Collateral Issue: Jurisdiction of Settlement Court Petitioners also fault the CA Decision by arguing, inter alia, (a) jurisdiction over ordinary civil action seeking not merely to enforce a sale but to compel performance of a contract falls upon a civil court, not upon an intestate court; and (b) that Section 8 of Rule 89 allows the executor or administrator, and no one else, to file an application for approval of a sale of the property under administration. In the present case, the Motion for Approval was meant to settle the decedent's obligation to respondent; hence, that obligation clearly falls under the jurisdiction of the settlement court. To require respondent to file a separate action -- on whether petitioners should convey the title to Eliodoro Sr.'s share of the disputed realty -- will unnecessarily prolong the settlement of the intestate estates of the deceased spouses. Second Collateral Issue: Intervenor's Standing Petitioners contend that under said Rule 89, only the executor or administrator is authorized to apply for the approval of a sale of realty under administration. Hence, the settlement court allegedly erred in entertaining and granting respondent's Motion for Approval. Third Collateral Issue: Bad Faith Petitioners assert that Eliodoro Sr. was not in bad faith, because (a) he informed respondent of the need to secure court approval prior to the sale of the lots, and (2) he did not promise that he could obtain the approval. However, Eliodoro Sr. did not misrepresent these lots to respondent as his own properties to which he alone had a title in fee simple. The fact that he failed to obtain the approval of the conditional sale did not automatically imply bad faith on his part. The CA held him in bad faith only for the purpose of binding him to the conditional sale. This was unnecessary because his being bound to it is, as already shown, beyond cavil. Fourth Collateral Issue: Computation of Eliodoro's Share Petitioners aver that the CA's computation of Eliodoro Sr.'s share in the disputed parcels of land was erroneous because, as the conjugal partner of Remedios, he owned one half of these lots plus a further one tenth of the remaining half, in his capacity as a one of her legal heirs. Hence, Eliodoro's share should be 11/20 of the entire property. Respondent poses no objection to this computation. On the other hand, the CA held that, at the very least, the conditional sale should cover the one half (1/2) pro indiviso conjugal share of Eliodoro plus his one tenth (1/10) hereditary share as one of the ten legal heirs of the decedent, or a total of three fifths (3/5) of the lots in administration.

Petitioners' correct. The CA computed Eliodoro's share as an heir based on one tenth of the entire disputed property. It should be based only on the remaining half, after deducting the conjugal share. Ruling The proper determination of the seller-heir's shares requires further explanation. Succession laws and jurisprudence require that when a marriage is dissolved by the death of the husband or the wife, the decedent's entire estate - under the concept of conjugal properties of gains -- must be divided equally, with one half going to the surviving spouse and the other half to the heirs of the deceased.25 After the settlement of the debts and obligations, the remaining half of the estate is then distributed to the legal heirs, legatees and devices. We assume, however, that this preliminary determination of the decedent's estate has already been taken into account by the parties, since the only issue raised in this case is whether Eliodoro's share is 11/20 or 3/5 of the disputed lots. WHEREFORE, The Petition is hereby PARTIALLY GRANTED. The appealed Decision and Resolution are AFFIRMED with the MODIFICATION that respondent is entitled to only a pro-indiviso share equivalent to 11/20 of the disputed lots. SO ORDERED.

Laforteza vs. Machuca (G.R. No. 137552 June 16, 2000) Is Memorandum of Agreement merely a lease agreement with option to purchase? NO. it was a contract of sale, although it was denominated a contract to sell. A contract of sale is a consensual contract and is perfected at the moment there is a meeting of the minds upon the thing which is the object of the contract and upon the price. 10 From that moment the parties may reciprocally demand performance subject to the provisions of the law governing the form of contracts. The elements of a valid contract of sale under Article 1458 of the Civil Code are (1) consent or meeting of the minds; (2) determinate subject matter and (3) price certain money or its equivalent. In the case at bench, there was a perfected agreement between the petitioners and the respondent whereby the petitioners obligated themselves to transfer the ownership of and deliver the house. All the elements of a contract of sale were thus present. However, the balance of the purchase price was to be paid only upon the issuance of the new certificate of title in lieu of the one in the name of the late Francisco Laforteza and upon the execution of an extrajudicial settlement of his estate. This was only a suspensive condition on a conditional contract of sale. The issuance of the new certificate of title in the name of the late Francisco Laforteza and the execution of an extrajudicial settlement of his estate was not a condition which determined the perfection of the contract of sale. The petitioners fail to distinguish between a condition imposed upon the perfection of the contract and a condition imposed on the performance of an obligation. Failure to comply with the first condition results in the failure of a contract, while the failure to comply with the second condition only gives the other party the option either to refuse to proceed with the sale or to waive the condition. Earnest money is something of value to show that the buyer was really in earnest, and given to the seller to bind the bargain. Whenever earnest money is given in a contract of sale, it is considered as part of the purchase price and proof of the perfection of the contract. Contention: the failure of the respondent to pay the balance of the purchase price was a breach of the contract and was a ground for rescission thereof. CONTENTION WRONG. It is not disputed that the petitioners did not make a judicial or notarial demand for rescission. Besides, that the delay of one month in payment was a mere casual breach that would not entitle the respondents to rescind the contract.

YU TEK v. GONZALES G.R. No. L-9935 February 1, 1915 Trent, J.

Doctrine: There is a perfected sale with regard to the thing whenever the article of sale has been physically segregated from all other articles.

Facts: Gonzalez received P3,000 from Yu Tek and Co. and in exchange, the former obligated himself to deliver 600 piculs of sugar of the first and second grade, according to the result of the polarization, within the period of three months. It was also stipulated that in case Gonzales fails to deliver, the contract will be rescinded he will be obligated to return the P3,000 received and also the sum of P1,200 by way of indemnity for loss and damages.

Plaintiff proved that no sugar had been delivered to him under the contract nor had he been able to recover the P3,000.

Gonzales assumed that the contract was limited to the sugar he might raise upon his own plantation; that the contract represented a perfected sale; and that by failure of his crop he was relieved from complying with his undertaking by loss of the thing due.

Issue: Whether or not there was a perfected contract of sale

Held: No. This court has consistently held that there is a perfected sale with regard to the thing whenever the article of sale has been physically segregated from all other articles.

In the case at bar, the undertaking of the defendant was to sell to the plaintiff 600 piculs of sugar of the first and second classes. Was this an agreement upon the thing which was the object of the contract? For the purpose of sale its bulk is weighed, the customary unit of weight being denominated a picul.

Now, if called upon to designate the article sold, it is clear that the defendant could only say that it was sugar. He could only use this generic name for the thing sold. There was no appropriation of any particular lot of sugar. Neither party could point to any specific quantity of sugar and say: This is the article which was the subject of our contract.

We conclude that the contract in the case at bar was merely an executory agreement; a promise of sale and not a sale. There was no perfected sale