Adelfa Properties vs.

CA Facts: The private respondents, Rosario Jimenez Castaneda and Salud Jimenez, and their brothers were the registered co-owners of a parcel of land in Las Pinas. Therir brothers sold their share consisting of one-half of said parcel of land, specifically the eastern portion thereof, to the petitioner, Adelfa Properties. They then executed a "Confirmatory Extrajudicial Partition Agreement" where the eastern portion of the lot, was adjudicated to the brothers and the western portion was allocated to the sisters. Thereafter, petitioner expressed interest in buying the western portion. An "Exclusive Option to Purchase" was executed between petitioner and private respondents. It was agreed by them that the selling price is P2,856,150 and that the sum of P50T received from petitioner as an option money shall be credited as partial payment upon consummation of the sale and the balance to be paid on Nov. 1989. They also agreed that in case of default on the part of the petitioner to pay the balance, the option shall be cancelled and 50% of the option money be forfeited in the favor of the respondents, and that they would refund the remaining 50% upon the sale of said property to a third party. Before petitioner could make payment, the respondents nephews and nieces filed a complaint against the petitioner for the annulment of the deed of sale. As a consequence, the petitioner informed private respondents that it would hold payment of the full purchase price and suggested that private respondents settle the case adding that ". . . if possible, although November 30, 1989 is a holiday, we will be waiting for you and said plaintiffs at our office up to 7:00 p.m." However, Respondent Salud Jimenez refused to heed the suggestion of petitioner and attributed the suspension of payment of the purchase price to "lack of word of honor." Thereafter, the private respondents informed petitioner through its counsel, that they were canccelling the transaction. The counsel then offered to pay the purchase price provided that P500,000.00 be deducted therefrom for the settlement of the civil case. This was rejected by private respondents. The private respondents then executed a Deed of Conditional Sale in favor of Emylene Chua over the same parcel. The petitioners counsel then informed the private respondents informing the latter that in view of the dismissal of the case against them, petitioner was willing to pay the purchase price, and he requested that the corresponding deed of absolute sale be executed. This was ignored by private respondents. The private respondents then sent a check for P25,000.00 representing the refund of 50% of the option money paid under the exclusive option to purchase. Private respondents then requested petitioner to return the owner's duplicate copy of the certificate of title of respondent Salud Jimenez. Petitioner failed to surrender the certificate of title, hence they filed for annulment of contract with damages, praying, among others, that the exclusive option to purchase be declared null and void. The trial court held that the agreement entered into by the parties was merely an option contract, and declaring that the suspension of payment by herein petitioner constituted a counter-offer which, therefore, was tantamount to a rejection of the option. The trial court then directed the cancellation of the exclusive option to purchase, declared the sale to intervenor Emylene Chua as valid and binding, and ordered petitioner to pay damages and attorney's fees to private respondents, with costs. This was affirmed in toto by the Court of Appeals. Issue: WON the "Exclusive Option to Purchase" executed between petitioner Adelfa Properties, Inc. and private respondents is an option contract Held:

Yes. The parties never intended to transfer ownership to petitioner except upon the full payment of the purchase price. Firstly, the exclusive option to purchase, although it provided for automatic rescission of the contract and partial forfeiture of the amount already paid in case of default, does not mention that petitioner is obliged to return possession or ownership of the property as a consequence of nonpayment. There is no stipulation anent reversion or reconveyance of the property to herein private respondents in the event that petitioner does not comply with its obligation. With the absence of such a stipulation, although there is a provision on the remedies available to the parties in case of breach, it may legally be inferred that the parties never intended to transfer ownership to the petitioner to completion of payment of the purchase price. In effect, there was an implied agreement that ownership shall not pass to the purchaser until he had fully paid the price. Consequently, an implied stipulation to that effect is considered valid and, therefore, binding and enforceable between the parties. It should be noted that under the law and jurisprudence, a contract which contains this kind of stipulation is considered a contract to sell. Moreover, that the parties really intended to execute a contract to sell, and not a contract of sale, is bolstered by the fact that the deed of absolute sale would have been issued only upon the payment of the balance of the purchase price, as may be gleaned from petitioner's letter dated April 16, 1990 16 wherein it informed private respondents that it "is now ready and willing to pay you simultaneously with the execution of the corresponding deed of absolute sale." Secondly, it has not been shown there was delivery of the property, actual or constructive, made to herein petitioner. The exclusive option to purchase is not contained in a public instrument the execution of which would have been considered equivalent to delivery. Neither did petitioner take actual, physical possession of the property at any given time. The distinction between an "option" and a contract of sale is that an option is an unaccepted offer. It states the terms and conditions on which the owner is willing to sell his land, if the holder elects to accept them within the time limited. If the holder does so elect, he must give notice to the other party, and the accepted offer thereupon becomes a valid and binding contract. If an acceptance is not made within the time fixed, the owner is no longer bound by his offer, and the option is at an end. A contract of sale, on the other hand, fixes definitely the relative rights and obligations of both parties at the time of its execution. The offer and the acceptance are concurrent, since the minds of the contracting parties meet in the terms of the agreement. A perusal of the contract in this case readily shows that there is indeed a concurrence of petitioner's offer to buy and private respondents' acceptance thereof. The rule is that except where a formal acceptance is so required, although the acceptance must be affirmatively and clearly made and must be evidenced by some acts or conduct communicated to the offeror, it may be made either in a formal or an informal manner, and may be shown by acts, conduct, or words of the accepting party that clearly manifest a present intention or determination to accept the offer to buy or sell. Thus, acceptance may be shown by the acts, conduct, or words of a party recognizing the existence of the contract of sale. - The records also show that private respondents accepted the offer of petitioner to buy their property under the terms of their contract. At the time petitioner made its offer, private respondents suggested that their transfer certificate of title be first reconstituted, to which petitioner agreed. After the title was reconstituted, the parties agreed that petitioner would pay either in cash or manager's check the amount of P2,856,150 for the lot. Petitioner was supposed to pay the same on November 25, 1989, but, it later offered to make a down payment of P50,000, with the balance of P2,806,150 to be paid on or before November 30, 1989. Private respondents agreed to the counter-offer made by petitioner. As a result, the so-called exclusive option to purchase was prepared by petitioner and was subsequently signed by private respondents, thereby creating a perfected contract to sell between them. Atkins, Kroll & Co. Vs. Cua Hian Tek Facts:

In 1951, the petitioner sent to respondent a letter, where a firm offer was made, describing the quantity and commodity of goods it had (sardines), as well as the price, shipment and supplier. The respondent accepted the offer unconditionally and delivered a letter of acceptance. However, due to shortage of catch of sardines by the packers in California, Atkins Kroll & Co., failed to deliver the commodities it had offered for sale. Because of this, the petitioner was sued and subsequently ordered to pay damages. Issue: WON the acceptance only created an option, which, lacking consideration, had no obligatory force. Held: The argument, maifestly assumes that only a unilateral promise arose when the offeree accepted. Such assumption is a mistake, because a bilateral cotract to sell and to buy was created upon acceptance. So much so that B. Cua Hian Tek could be sued, he had backed out after accepting, by refusing to get the sardines and/or to pay for their price. Indeed, the word "option" is found neither in the offer nor in the acceptance. Petitioner, however, insists the offer was a mere offer of option, because the "firm offer" Exh. A. was a continuing offer to sell until September 23, "an option is nothing more than a continuing offer" for a specified time. In our opinion implies more than that: it implies the legal obligation to keep open for the time specified. Yet the letter Exh. A did not by itself produce the legal obligation of keeping the offer open up ot Septmber 23. It could be withdrawn before acceptance, because it is admitted, there was no consideration for it. Furthermore, an option is unilateral: a promise to sell3 at the price fixed whenever the offeree should decide to exercise his option within the specified time. After accepting the promise and before he exercises his option, the holder of the option is not bound to buy. He is free either to buy or not to later. In this case, however, upon accepeting herein petitioner's offer a bilateral promise to sell and to buy ensued, and the respondent ipso facto assumed the obligations of a purchaser. He did not just get the right subsequently to buy or not to buy. It was not a mere option then; it was bilalteral contract of sale. Sanchez vs Rigos Facts: In an instrument entitled "Option to Purchase," executed by Severina Rigos, she "agreed, promised and committed ... to sell" to Nicolas Sanchez for the sum of P1,510.00 within two years from said date, a parcel of land in Nueva Ecija. It was agreed that said option shall be deemed "terminated and elapsed," if Sanchez shall fail to exercise his right to buy the property" within the stipulated period. Two years later, Sanchez deposited the sum of Pl,510.00 with the trial court and filed an action for specific performance and damages against Rigos for the latters refusal to accept several tenders of payment that Sanchez made to purchase the subject land. Rigos contended that the contract between them was only a unilateral promise to sell, and the same being unsupported by any valuable consideration, is null and void." Sanchez, on the other hand, alleged in his compliant that, by virtue of the option under consideration, "defendant agreed and committed to sell" and "the plaintiff agreed and committed to buy" the land described in the option. The lower court rendered judgment in favor of Sanchez and ordered Rigos to accept the sum Sanchez judicially consigned, and to execute in his favor the requisite deed of conveyance. The Court of Appeals certified the case at bar to the Supreme Court for it involves a question purely of law. Issue:

Was there a contract to buy and sell between the parties or only a unilateral promise to sell? Held: The Supreme Court affirmed the lower courts decision. The instrument executed in 1961 is not a "contract to buy and sell," but merely granted plaintiff an "option" to buy, as indicated by its own title "Option to Purchase." The option did not impose upon plaintiff Sanchez the obligation to purchase defendant Rigos' property. Rigos "agreed, promised and committed" herself to sell the land to Sanchez for P1,510.00, but there is nothing in the contract to indicate that her aforementioned agreement, promise and undertaking is supported by a consideration "distinct from the price" stipulated for the sale of the land. The lower court relied upon Article 1354 of the Civil Code when it presumed the existence of said consideration, but the said Article only applies to contracts in general. However, it is not Article 1354 but the Article 1479 of the same Code which is controlling in the case at bar because the latters 2nd paragraph refers to "sales" in particular, and, more specifically, to "an accepted unilateral promise to buy or to sell." Since there may be no valid contract without a cause or consideration, the promisor is not bound by his promise and may, accordingly, withdraw it. Pending notice of its withdrawal, his accepted promise partakes, however, of the nature of an offer to sell which, if accepted, results in a perfected contract of sale. Upon mature deliberation, the Court reiterates the doctrine laid down in the Atkins case and deemed abandoned or modified the view adhered to in the Southwestern Company case. Ang Yu Asuncion vs CA Facts: A Second Amended Complaint for Specific Performance was filed by herein petitioners against Bobby Cu Unjieng, Rose Cu Unjieng and Jose Tan who are tenants of the residential and commercial spaces owned by the former. It was alleged that in 1986, the petitioners informed respondents that they are offering to sell the premises and are giving them priority to acquire the same. Bobby Cu Unjieng offered a price of P6-million while the petitioners made a counter offer of P5-million. The tenants then asked the petitioners to put their offer in writing, to which request petitioners acceded. The respondents then asked that they specify the terms and conditions of the offer to sell. However, the petitioner failed to specify the terms and conditions of the offer to sell and because of information received that respondents were about to sell the property, respondents filed a complaint to compell the petitioners to sell the property to them. Ang Yu, et al. denied the material allegations of the complaint and interposed a special defense of lack of cause of action. Trial Court rendered a decision in favor of herein petitioner; offer to sell was never accepted by the plaintiffs for the reason that the parties did not agree upon the terms and conditions of the proposed sale, hence, there was no contract of sale at all. Court of Appeals affirmed the decision; In resume, there was no meeting of the minds between the parties concerning the sale of the property. While the case was pending in court, Cu Unjieng (tenants) executed a Deed of Safe in favor of BUEN REALTY DEVELOPMENT CORPORATION. Issue: WON there was a contract to sell between the parties Held: In the law on sales, the so-called "right of first refusal" is an innovative juridical relation. Needless to point out, it cannot be deemed a perfected contract of sale under Article 1458 of the Civil Code.

Neither can the right of first refusal, understood in its normal concept, per se be brought within the purview of an option. An option or an offer would require, among other things, 10 a clear certainty on both the object and the cause or consideration of the envisioned contract. In a right of first refusal, while the object might be made determinate, the exercise of the right, however, would be dependent not only on the grantor's eventual intention to enter into a binding juridical relation with another but also on terms, including the price, that obviously are yet to be later firmed up. Prior thereto, it can at best be so described as merely belonging to a class of preparatory juridical relations governed not by contracts (since the essential elements to establish the vinculum juris would still be indefinite and inconclusive) but by, among other laws of general application, the pertinent scattered provisions of the Civil Code on human conduct. Even on the premise that such right of first refusal has been decreed under a final judgment, like here, its breach cannot justify correspondingly an issuance of a writ of execution under a judgment that merely recognizes its existence, nor would it sanction an action for specific performance without thereby negating the indispensable element of consensuality in the perfection of contracts. 11 It is not to say, however, that the right of first refusal would be inconsequential for, such as already intimated above, an unjustified disregard thereof, given, for instance, the circumstances expressed in Article 19 12 of the Civil Code, can warrant a recovery for damages. The final judgment in Civil Case No. 87-41058, it must be stressed, has merely accorded a "right of first refusal" in favor of petitioners. The consequence of such a declaration entails no more than what has heretofore been said. In fine, if, as it is here so conveyed to us, petitioners are aggrieved by the failure of private respondents to honor the right of first refusal, the remedy is not a writ of execution on the judgment, since there is none to execute, but an action for damages in a proper forum for the purpose. Earnest Money Limson vs CA Facts: Petitioner Lourdes Ong Limson, alleged that in July 1978 respondent spouses de Vera, through their agent, offered to sell to her a parcel of land in Paraaque. She agreed to buy the property at the price of P34.00 per square meter and gave the sum of P20,000.00 to respondent spouses as "earnest money;". The spouses signed a receipt therefor and gave her a 10-day option period to purchase the property; that respondent Lorenzo de Vera then informed her that the subject property was mortgaged to the spouses Ramos and that the respondent Lorenzo de Vera asked her to pay the balance of the purchase price to enable him and his wife to settle their obligation with the Ramoses. They then agreed to consummate the transaction but due to the failure of the respondents and the spouses Ramos no transaction was formalized. In a second meetingshe claimed that she was willing and ready to pay the balance of the purchase price but the transaction again did not materialize as respondent spouses failed to pay the back taxes of subject property. Subsequently, petitioner allegedly gave respondent Lorenzo de Vera three (3) checks in the total amount of P36,170.00 for the settlement of the back taxes of the property and for the payment of the quitclaims of the three (3) tenants of subject land. The amount was purportedly considered part of the purchase price and respondent Lorenzo de Vera signed the receipts therefor. She then learnedn from the agent of respondent spouses that the property was the subject of a negotiation for the sale to respondent Sunvar Realty Development Corporation (SUNVAR). The Deed of Sale between respondent spouses and SUNVAR was executed. The petitioner then filed an action, claiming that the deed of sale should be annuled and TCTin the name of respondent SUNVAR canceled. She also insisted that a Deed of Sale between her and respondent spouses be now executed upon her payment of the balance of the purchase price agreed upon.

The trial court held in favor of thepetitioner but this was completely reversed by the Court of Appeals. Issue: WON what was perfected between the petitioner and respondent spouses was a contract of option or contract to sell Held: In the interpretation of contracts, the ascertainment of the intention of the contracting parties is to be discharged by looking to the words they used to project that intention in their contract, all the words, not just a particular word or two, and words in context, not words standing alone.[17] 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 formers property at a fixed price of P34.00 per square meter within ten (10) days from 31 July 1978. 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 to respondent spouses was referred to as "earnest money." However, a careful examination of the words used indicates that the money is not earnest money but option money. "Earnest money" and "option money" are not the same but distinguished thus: (a) earnest money is part of the purchase price, while option money is the money given as a distinct consideration for an option contract; (b) earnest money is given only where there is already a sale, while option money applies to a sale not yet perfected; and, (c) when earnest money is given, the buyer is bound to pay the balance, while when the would-be buyer gives option money, he is not required to buy,[18] but may even forfeit it depending on the terms of the option. There is nothing in the Receipt which indicates that the P20,000.00 was part of the purchase price. Moreover, it was not shown that there was a perfected sale between the parties where earnest money was given. Finally, when petitioner gave the "earnest money," the Receipt did not reveal that she was bound to pay the balance of the purchase price. In fact, she could even forfeit the money given if the terms of the option were not met. Thus, the P20,000.00 could only be money given as consideration for the option contract. That the contract between the parties is one of option is buttressed by the provision therein that should the transaction of the property not materialize without fault of petitioner as buyer, respondent Lorenzo de Vera obligates himself to return the full amount of P20,000.00 "earnest money" with option to buy or forfeit the same on the fault of petitioner. It is further bolstered by the provision therein that guarantees petitioner that she or her representative would be notified in case the subject property was sold or encumbered to a third person. Finally, the Receipt provided for a period within which the option to buy was to be exercised, i.e., "within ten (10) days" from 31 July 1978. Doubtless, the agreement between respondent spouses and petitioner was an "option contract" or what is sometimes called an "unaccepted offer." During the option period the agreement was not converted into a bilateral promise to sell and to buy where both respondent spouses and petitioner were then reciprocally bound to comply with their respective undertakings as petitioner did not timely, affirmatively and clearly accept the offer of respondent spouses. Hence the petition was denied. San Miguel Properties vs. Huang Facts: Petitioner San Miguel Properties Philippines, Inc. is a domestic corporation engaged in the purchase and sale of real properties. Part of its inventory are two parcels of landin Pasig City. On February 21, 1994, the properties were offered for sale for P52,140,000.00 in cash. The offer was made to Atty. Helena M. Dauz who was acting for respondent spouses as undisclosed principals. In a letter, Atty. Dauz signified her clients interest in purchasing the properties for the amount for which they were offered by petitioner, under the following terms: That they would enclose the sum of P1M representing e earnest-deposit money, subject to the following conditions.

1. They will be given the exclusive option to purchase the property within the 30 days from date of acceptance of the offer. 2. During said period, they will negotiate on the terms and conditions of the purchase 3. In the event that they do not come to an agreement on the transaction, the said amount of P1M shall be refundable to them in full upon demand. . . . Isidro A. Sobrecarey, petitioners vice-president and operations manager for corporate real estate, indicated his conformity to the offer by affixing his signature to the letter and accepted the "earnestdeposit" of P1 million. Upon request of respondent spouses, Sobrecarey ordered the removal of the "FOR SALE" sign from the properties. Atty. Dauz and Sobrecarey then commenced negotiations. On April 25, 1994, Atty. Dauz asked for an extension of 45 days from April 29, 1994 to June 13, 1994 within which to exercise her option to purchase the property, adding that within that period, "[we] hope to finalize [our] agreement on the matter."[4] Her request was granted. However, the petitioner informed Atty. Dauz that because the parties failed to agree on the terms and conditions of the sale despite the extension granted by petitioner, the latter was returning the amount of P1 million given as "earnest-deposit." On July 20, 1994, respondent spouses, through counsel, wrote petitioner demanding the execution within five days of a deed of sale covering the properties. Respondents attempted to return the "earnest-deposit" but petitioner refused on the ground that respondents option to purchase had already expired. On August 16, 1994, respondent spouses filed a complaint for specific performance against petitioner. Upon a motion to dismiss by the petitioner alleging that (1) the alleged "exclusive option" of respondent spouses lacked a consideration separate and distinct from the purchase price and was thus unenforceable and (2) the complaint did not allege a cause of action because there was no "meeting of the minds" between the parties and, therefore, no perfected contract of sale...the trial court dismissed the action. This however was reversed by the Court of Appeals. In holding that there is a perfected contract of sale, the Court of Appeals relied on the following findings: (1) earnest money was allegedly given by respondents and accepted by petitioner through its vice-president and operations manager, Isidro A. Sobrecarey; and (2) the documentary evidence in the records show that there was a perfected contract of sale. Issue: WON Held: With regard to the alleged payment and acceptance of earnest money, the Court holds that respondents did not give the P1 million as "earnest money" as provided by Art. 1482 of the Civil Code. They presented the amount merely as a deposit of what would eventually become the earnest money or downpayment should a contract of sale be made by them. The amount was thus given not as a part of the purchase price and as proof of the perfection of the contract of sale but only as a guarantee that respondents would not back out of the sale. Respondents in fact described the amount as an "earnestdeposit." In the present case, the P1 million "earnest-deposit" could not have been given as earnest money as contemplated in Art. 1482 because, at the time when petitioner accepted the terms of respondents offer of March 29, 1994, their contract had not yet been perfected. This is evident from the following conditions attached by respondents to their letter.

The first condition for an option period of 30 days sufficiently shows that a sale was never perfected. As petitioner correctly points out, acceptance of this condition did not give rise to a perfected sale but merely to an option or an accepted unilateral promise on the part of respondents to buy the subject properties within 30 days from the date of acceptance of the offer. Such option giving respondents the exclusive right to buy the properties within the period agreed upon is separate and distinct from the contract of sale which the parties may enter.[11] All that respondents had was just the option to buy the properties which privilege was not, however, exercised by them because there was a failure to agree on the terms of payment. No contract of sale may thus be enforced by respondents. Furthermore, even the option secured by respondents from petitioner was fatally defective. Under the second paragraph of Art. 1479, an accepted unilateral promise to buy or sell a determinate thing for a price certain is binding upon the promisor only if the promise is supported by a distinct consideration. Consideration in an option contract may be anything of value, unlike in sale where it must be the price certain in money or its equivalent. There is no showing here of any consideration for the option. Lacking any proof of such consideration, the option is unenforceable. Equally compelling as proof of the absence of a perfected sale is the second condition that, during the option period, the parties would negotiate the terms and conditions of the purchase. Thus, it is not the giving of earnest money, but the proof of the concurrence of all the essential elements of the contract of sale which establishes the existence of a perfected sale. In the absence of a perfected contract of sale, it is immaterial whether Isidro A. Sobrecarey had the authority to enter into a contract of sale in behalf of petitioner. This issue, therefore, needs no further discussion. WHEREFORE, the decision of the Court of Appeals is REVERSED and respondents complaint is DISMISSED. SELLERS TITLE IS VOIDABLE Edu vs Gomez Facts: In June 1970, The Office of the Commission on Land Transportation received a report that a 1968 model Volkswagen car allegedly owned by Lt. Walter Bala of Clarck Airbase was stolen from his residence. Agents of the Anti-Carnapping Unit (ANCAR) recognized the car in the possession of Lucila Abello and immediately seized and impounded the car as stolen property. Romeo F. Edu, then Commissioner of Land Transportation, then seized the car. Lucila Abello filed a complaint for replevin with damages. The court found that the car in question was acquired by Abello by purchase from its registered owner, Marcelino Guansing, for P9,000.00, under a notarial deed of absolute sale. She had been in possession of it since 1971. The court ruled in favor of Abella. Issue: WON Abella had a better right to the vehicle in question. Held: The court held that there is no merit in the petition considering that the acquirer or the purchaser in good faith of a chattel of movable property is entitled to be respected and protected in his possession as if he were the true owner thereof until a competent court rules otherwise. In the meantime, as the true owner, the possessor in good faith cannot be compelled to surrender possession nor to be required to institute an action for the recovery of the chattel, whether or not an indemnity bond is issued in his favor. The filing of an information charging that the chattel was illegally obtained through estafa from its true owner by the transferor of the bona fide possessor does not warrant disturbing the possession of the chattel against the will of the possessor.

Duran vs IAC Facts: Circe Duran owned 2 parcels of land in Caloocan City. She left the Philippines in June 1854. In 1963, a Deed of Sale of the two lots was made in favor of Circes mother, Fe, who afterwards mortgaged the same property to Erlinda Marcelo-Tiangco. When Circe came to know about the mortgage, she wrote to the Register of Deeds of Caloocan informing that she had not given her mother any authority to sell or mortgage any of her properties. Since she failed to get an answer from the RD. So she returned to the Philippines in May 1966. Meanwhile, when Fe failed to redeem the mortgaged properties and foreclosure proceedings were initiated by Marcelo- Tiangco. Circe claims that the sale in favor of her mother is a forgery saying that at the time of its execution in 1963, she was in the US. Fe alleges that the signatures of Circe in the Deed are genuine and the mortgage made by Fe is valid. Issue: . Held: Yes. Good faith consists in the possessors belief that the person from who he received the thing was the owner of the same and could convey his title. Good faith, while it is always to be presumed in the absence of proof to the contrary, requires a well-founded belief that the person from whom title was received was himself the owner of the land, with the right to convey it. WHEN OBLIGATION TO DELIVER ARISES Addison vs. Felix Facts: Maciana Felix and Balbino Tioco purchased from Addison four parcels of land to which Felix paid, at the time of the execution of the deed, the sum of P3,000. She likewise bound herself to the remainder in installments, the first of P,2000 on July 15, 1914, the second of P5,000 thirty days after the issuance to her of a certificate of title under the Land Registration Act, and further, within 10 years from the date of such title, P10 for each coconut tree in bearing and P5 for each such tree not in bearing that might be growing on said parcels of land on the date of the issuance of title to her, with the condition that the total price should not exceed P85,000. It was further stipulated that Felix was to deliver to the Addison 25% of the value of the products that she might obtain from the four parcels "from the moment she takes possession of them until the Torrens certificate of title be issued in her favor," and that within 1 year from the date of the certificate of title in her favor, Marciana Felix may rescind the contract of purchase and sale. In January 1915, Addison , sued to compel Felix to pay the first installment of P2,000, demandable, in accordance with the terms of the contract of sale. The defendants Felix and her husband Tioco contended that Addison had absolutely failed to deliver the lands that were the subject matter of the sale, notwithstanding the demands they made upon him for this purpose. The evidence adduced shows Addison was able to designate only 2 of the 4 parcels, and more than 2/3 of these two were found to be in the possession of one Juan Villafuerte, who claimed to be the owner of the parts he so occupied. The trial court held the contract of sale to be rescinded and ordered Addison to return to Felix the P3,000 paid on account of the price, together with interest thereon at the rate of 10% per annum. Issue Was there a delivery made and, therefore, a transfer of ownership of the thing sold? WON Tiangco was a buyer in good faith and for value

Held: SC affirmed the decision of the lower court. The thing is considered to be delivered when it is placed "in the hands and possession of the vendee." It is true that the same article declares that the execution of a public instrument is equivalent to the delivery of the thing which is the object of the contract, but, 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. Symbolic delivery through the execution of a public instrument is sufficient 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. 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 are opposed by a third persons will, then the delivery has not been effected. In the case at bar, therefore, it is evident, that the mere execution of the instrument was not a fulfillment of the vendor's obligation to deliver the thing sold, and that from such non-fulfillment arises the purchaser's right to demand, as she has demanded, the rescission of the sale and the return of the price. Pasagui vs Villablanca Facts: Calixto Pasagui and Fausta Mosar brought a parcel of agricultural land in Leyte from the Eustaquia and Catalina Bocar. A document of sale was executed, notarized and registered. However, the defendant spouses Ester and Zosimo Villablanca, "illegally and without any right, whatsoever, took possession of the property harvesting from the coconut plantation thereon, thus depriving plaintiffs" of its possession. Despite demands for surrender, the defendants or refused to return said parcel of land to the former. Thus, Pasagui and Mosar filed a complaint, but this was dismissed for lack of jurisdiction, stating that the case was one for forcible entry. An appeal on a pure question of law was interposed to the SC. Issue: WON the action is one of forcible entry, within the exclusive jurisdiction of the municipal court. Held: It is true that the execution of the deed of absolute sale in a public instrument is equivalent to delivery of the land subject of the sale. This presumptive delivery only holds true when there is no impediment that may prevent the passing of the property from the hands of the vendor into those of the vendee. It can be negated by the reality that the vendees actually failed to obtain material possession of the land subject of the sale. The plaintiffs-appellants had not acquired physical possession of the land since its purchase on. As a matter of fact, their purpose in filing the complaint is precisely to "get the possession of the property." In order that an action may be considered as one for 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 of the means provided in section 1, Rule 70 of the Revised Rules of Court, namely: force, intimidation, threats, strategy and stealth. 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. Banzon vs Cruz

Facts: In 1952, Maximo Sta. Maria obtained a crop loan from the PhilippineNational Bank (PNB), with Associated Insurance & Surety Co., Inc., acting as surety for Sta. Maria, Antonio Banzon (Banzon) and Emilio Naval (Naval) as inseminators for Associated. When Sta. Maria failed to pay PNB the amount of the loan , PNB demanded payment from Associated who, instead of paying PNB, filed a complaint against the three. In 1957, the the CFI granted the petition of Associated, and ordered thereindefendants to pay Associated jointy and severally. Associated then levied Banzons two lots inCaloocan to satisfy the judgment. Since it was the highest bidder at the execution sale, a certificate of sale was issued in its favor. Associated later demanded from Banzon the delivery of the latters owners duplicate of certificate of title, to which Banzon refused. This prompted Associated to file a complaint for an order directing him to present the certificate and for another order to cancel the certificatedand to issue a new one in the name of Associated. The trial court ruled in favor of Associated. However, it was then discovered that Associated never discharged its liability with PNB.PNB then filed a complaint against Sta. Maria, his siblings and Associated. After thetrial court ruled in favor of PNB, Sta. Maria began paying his outstanding loan with the former, which amounted to only of the amount earlier awarded to Associated to be paid to PNB. After collecting from Sta. Maria, PNB released Associated from itsobligation as surety. This should have put an end to the matter and Banzons two lots thereforerestored fully to his ownership, but it was then discovered that Associated has allowed and permitted the execution and levy of one Pedro Cardenas of one of Banzons two parcels of land being held byAssociated as trustee, which then resulted to the issuance of a new title in the name of Cardenas. Thereafter, Banzon, having learned of PNBs release of Associated, filed acomplaint for reconveyance of the two parcels of land, one of which is under Cadenass name and the other in Banzon's name. Issue: WON Banzon has the right to ask for reconveyance of his two lots in question. Held: Yes, he has. When Associated nevertheless prematurely and contary to the intent andcondition of the basic 1957 judgment levied in execution on the two Caloocan City lots of Banzon theinterest it acquired was clearly impressed with a trust character. Such acquisition of Banzon'sproperties by Associated was effected, if not through fraud on Associated's part, certainly throughmistake and there Associated was "by force of law, considered a trustee of implied trust for the benefitof the person from whom the property comes" by virtue of Article 1456 of the Code since Associatednot having paid nor having been compelled to pay the bank had no right in law or equity to so executethe judgment against Banzon as indemnitor. Had there been no fraudulent concealment or suppressionof the fact of such non-payment by Associated or a mistaken notion just assumed without factual basisthat Associted had paid the bank and was thus entitled to enforce its judgement against Banzon asindemnitor, the writ for execution of the judgment against Banzon's properties would not been issued.Associated therefore stands legally bound by force of law to now discharge its implied trust and return EDCA Publishing vs Santos Facts: A person who identified himself as Professor Jose Cruz placed an order through telephone with Edca Publishing. He ordered 406 books, payable on delivery. Cruz issued a personal check as payment. Then he sold some of the books to Leonor Santos who, after verifying the sellers ownership from the invoice shown, paid Cruz. Meanwhile, Edca being suspicious over the second order placed by Cruz verified with De La Salle College where he had claimed to be dean and was informed that no such person was under its employ. It was also found out that there was no account with the bank against which he had drawn his check. It was later found out that his real name was Tomas de la Pena. Edca reported this to the police, which set a trap and arrested de la Pena.

Edca also sought the assistance of the police and forced their way into the store of the private respondents and threatened Santos for buying stolen property. They seized the books without warrant and then turned them over to the petitioner. Issue: WON EDCA was unlawfully deprived of movable property (books) in the hands of another because the check issued by Cruz in payment was dishonored Held: First, the contention of petitioner that Santos has not established ownership over the disputed books because they have not even shown the receipt evidencing the purchase, is without merit. The possession of movable property acquired in good faith is equivalent to title. Second, Santos acquired the books in good faith as found by the lower courts. She first ascertained the ownership and relied on the invoice shown to her by de la Pena. Santos was in the business of buying and selling books and often deal with hard-up sellers who urgently have to part with their books at reduced prices. Third, and on the real issue, on whether Edca had been unlawfully deprived of the books, Edca argued that the impostor acquired no title to the books because of the lack of funds in the check issued and want of consideration. This is without merit. Nonpayment of purchase price only gives rise to the right to demand payment or rescission of the contract. Actual delivery was made to the impostor and thus, ownership was acquired by him. Non-payment was a matter privy to him and Edca and doesn't involve Santos who later acquired the books. Alliance Tobacco Corporation vs Philippine Virgina Tobbaco Facts: The PVTA, entered into a contract of procuring, redrying and servicing with the FVTR for the1963 tobacco trading operation. The PVTA also entered into a merchandising loan agreement with ATC where PVTA agreed to lend it P25K for the purchase of flue-cured Virginia. The next month, ATC shipped to FVTR bales of tobacco, out of which only 89 were graded and weighed. Since the grading and weighing was not resumed, ATC informed PVTA that some tobacco of the plaintiff were not graded and weighed and were no longer in the premises FVTR's Redrying Plant. PVTA then replied that the tobacco in question were considered accepted.chanro The operations of FVTR in Bauang stopped. ATC then asked that its ungraded and un-weighed tobacco be withdrawn from the Redrying Plant. The defendants PVTA and FVTR refused to allow the plaintiffs request because according to them the tobacco sought to be withdrawn were subject of a merchandising loan and owned by defendant, PVTA. Unfortunately, the remaining un-graded and unweighed 174 bales were lost while they were in the possession of the FVTR. Having learned of such loss in 1965, ATC demanded for its value and the application of the same to its merchandising loan with PVTA but both the latter and the FVTR refused to heed said demands.chanrobles virtual law library ATC then filed a complaint against the defendants, for them to pay the value of the bales accepted by them. The trial court held that the PVTA should not be held responsible for the lost bales of tobacco because they were not yet properly graded and weighed and that petitioner failed to present the weigher's tally sheets and warehouse receipts or quedans. An appeal was also denied. Issue: WON there is a perfected contract of sale between ATC and PVTA with respect to the remaining bales of tobacco, so as to hold the latter liable for the loss of such while in the possession of the FVTR

Held: The Civil Code provides that ownerhip of the thing sold shall be transferred to the vendee upon the actual or constructive delivery thereof. There is delivery when the thing sold is placed in the control and possession of the vendee. Indeed, in tobacco trading, actual delivery plays a pivotal role, as was pointed out by the procedure formulated by the PVTA, which is followed by others in the industry. Delivery seals the contract of sale because the trader loses not only possession but also control over the shipment. Under an Ideal situation, the contract of sale could not have been perfected pursuant to Art. 1475 of the Civil Code because to determine the price of the tobacco traded, the shipment should first be inspected, graded and weighed. Strict application of this may result in adverse effects to small planters who would not be paid for the lost products of their toil. Applying principles of equity and fair dealing, since PVTA had virtual control over the lost tobacco bales, delivery thereof to the FVTR should also be considered effective delivery to the PVTA. Thus, the PVTA was directed to pay the amount of the bales of tobacco. SALE ON REAL PROPERTY BY UNIT OF MEASURE/NO. Sta. Ana Jr. vs. Hernandez Facts: The spouses Santa Ana owned a parcel of land in Bulacan. They they sold two (2) separate portions of the land for P11,000.00 to Rosa Hernandez. After the sale (there were two other previous sales to different vendees of other portions of the land), the spouses caused the preparation of a subdivision plan. Hernandez however, unlike the previous vendees, did not conform to the plan. She 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. This plan tallied with the areas that she had actually occupied. The spouses sued her claiming that she was occupying an excess of 17,000 square meters in area of what she had bought from them. Hernandez claimed that the alleged excess, was part of the areas that she bought. The trial court ruled for the spouses and ordered Hernandez to vacate the excess portions. An appeal was made to the CA which declared Hernandez the owner of the whole of the twolots of her own subdivision Plan notwithstanding their increased area as compared to that specified in the deed of sale. Issue: WON the deed of sale was for a lump sum, despite the fact that the boundaries given were not sufficiently certain and did not clearly identify the land. Held: The sale made was of a definite and identified tract, , that obligated the vendors to deliver to the buyer all the land within the boundaries, irrespective of whether its real area should be greater or smaller than what is recited in the deed. And this is particularly true where, the area given is qualified to be approximate only. "humigit kumulang", i.e., more or less). 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. In 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. Thus the decision of the CA was affirmed.

SALE OF REAL ESTATE MADE FOR A LUMP SUM Semira vs CA Facts: Gutierrez was the owner of a parcel of land in Batangas which she sold to Buenaventura in a document which stated the area of the land and its boundaries. Buenaventura An entered the premises based on the boundaries stated in the deed of sale. He then bought two additional parcels of land, located on the eastern boundary of the lot first sold to him. Buenaventura An sold the first parcel to his nephew, Cipriano Ramirez who also entered the premises based on the boundaries stated in the deed. The deed also stated the same boundaries and area of the lot, which was larger in actuality. This nephew then sold the land to Miguel Semira, the petitioner. The deed this time reflected a different area, the actual area of the land. The land was found to be larger than what was stated in the previous documents. Semira entered then the premises based on the boundaries and began construction of a rice mill. Buenaventura An then filed an action for forcible entry against Semira, alleging that latter illegally encroached on the other parcel of land previously bought by the former and that the land that was supposed to be occupied by the latter was smaller than the land he was actually occupying. The MTC ruled in favor of the petitioner but this was reversed by the RTC, whose decision was upheld by the CA. Issue: WON the petitioner owns the entire parcel of land following its established coundaries (making it larger). Held: The court sustained the petitioner. Where land is sold for a lump sum and not so much per unit of measure or number, the boundaries of the land stated in the contract determine the effects and scope of the sale, not the area thereof. Hence, the vendors are obligated to deliver all the 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 where the area is described as "humigit kumulang," that is, more or less. 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. Hence, when private respondent Buenaventura An sold the lot to his his nephewby means of a "Kasulatan ng Bilihan ng Lupa" which incorporated both the area and the definite boundaries of the lot, the former transferred not merely the 822.5 square meters stated in their document of sale but the entire area circumscribed within its boundaries. The fact that the area turned out to be 2,200 square meters; instead of only 822.5 square meters, is of no moment and does not entitle private respondent to the difference because the definite object sold was the lot in its entirety and not just any unit of measure or number. That the sale resulted in a disadvantage to private respondent does not confer on him any cause of action against petitioner. Balantakbo vs CA Facts: Laguna Agro-Industrial Coconut Cooperative, Inc. (LAGUNA) , filed an action to quiet title over a parcel of unregistered coconut land. They alleged that the land in question had been purchased by their predecessors from Balantakbos mother, the sale being evidenced by a deed, the seller's heirs, intruded into the land and harvested the coconuts found therein. Balantakbos denied knowledge of the sale and alleged that the land claimed sued for was different from that owned and held by them.

During the trial, LAGUNA claimed that the land which had been sold to its predecessors, was the land within the identified boundaries, regardless of the area. On the other hand, the Balantakbos stated that the land within said boundaries had an area of 6,870 square meters, more or less, only a portion thereof measuring 2,000 square meters, having been sold by their mother to the Sumayas: and they are therefore the owners of the remaining area of 4,870 square meters which they had in fact long possessed. The trial court ruled in favor of the Balantakbos, ruling that what was contemplated in the descriptive words "more or less" immediately following the stated area of 2,000 square meters in the description of the land was construable as referring only to a "slight difference" in said area, not to a difference as large as 4,870 square meters, or more than double the 2,000 square meters actually stated and intended to be sold. This decision was reversed by the CA, which declared LAGUNA the owner of the entire land, not only of a 2,000-square meter portion thereof, ruling that the area embraced within the stated boundaries prevails over the area set forth in the descriptions which must have been based on mere estimates, and that the buyer was entitled to receive all that was included within the boundaries thus stated in the deed of sale. Issue: WON between area described; or the actual boundaries of the land should prevail in case of conflict Held: It is quite well-settled that what really defines a piece of land is not the area, calculated with more or less certainty mentioned in the description, but the boundaries therein laid down, as enclosing the land and indicating its limits. In the present case, it is clear that the disputed parcel of unregistered land was sufficiently identified and described. Uniform descriptions of the subject lot were made in the Deed of Sale executed by Balantakbos mother in favor of LAGUNA, wherein the parcel of land was said to be fenced with madre-cacao trees and bounded on all sides by properties with identified owners or holders. Moreover, it was only in 1970 that the true area of the disputed property was determined after a survey, Balantakbos mother could not have sold in 1955 only a portion of the lot which then was known (or believed) to have an area of only 2,000 square meters, more or less, as mentioned in all the documents covering the land. This is a case where the land was sold a cuerpo cierto for a lump sum and not at the rate of a certain sum per unit of measure or number, with boundaries clearly delimited, hence the area embraced within said boundaries must be held to prevail over the area indicated in the documents. Thus, the petition was denied. Roble vs Arbasa Facts: The spouses Dominador Arbasa and Adelaida Roble purchased from Fidela Roble an unregistered parcel of land in Leyte. As reflected on the deed of sale, the property had a total land area of 240 square meters. Due to their diligent efforts in reclaiming a portion of the sea, this increased to 884 square meters. Adelaida Roble tolerated Fidelas continued stay, as well as their neices, Veronica and Lilibeth, at the house located on the parcel of land. Shortly after Fidelas death Veronica and Lilibeth claimed ownership of the house and the southern portion of the land. Arbasa then filed an action for quieting of title with damages. The trial court held that the deed of absolute sale executed by Fidela Roble covered only a total area of 240sm in favor of respondents and not the entire 884 sm claimed by respondents. Moreover, the house of

Fidela was not found on the 240 sms parcel subject of the deed of sale, and such improvement was not included in the sale. Upon appeal to the CA, it was observed rom the wording of the deed of sale, Fidela Roble sold to respondents the whole parcel of residential land bounded on the south by the seashore. The Court of Appeals opined that this technical description, as contained in the deed of sale, lent credence to the claim of respondents that they were responsible for reclaiming the 644 square meters claimed by petitioners. Issue: WON subject matter determinate as to its metes and bounds? Held: YES, it was determinate upon the sale of the property (described as 240sq.m. more or less) but since it had acquired area due to reclamation, there is a need to remand the case to the RTC to determine whether the land is a foreshore land or not. The sale that transpired on January 2, 1976 between vendor Fidela and vendee Adelaida was a sale for lump sum. 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 lesser area or number than that stated in the contract. 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. However, this rule admits of an exception. A vendee of land, when sold in gross or with the description more or less with reference to its area, does not thereby ipso facto take all risk of quantity in the land. The use of more or less or similar words in designating quantity covers only a reasonable excess or deficiency. An area of 644 square meters more is not reasonable excess or deficiency, to be deemed included in the deed of sale. RULES IN CASE OF DOUBLE SALE Paylago vs Jarabe Facts: The entire lot involved in this suit was originally covered by Homestead Patent issued in the name of Anselmo Lacatan. On his death, a certificate of title was was issued in the name his two sons and heirs, Vidal and Florentino Lacatan. Vidal Lacatan died sometime later. Vidal Lacatan's heirs, namely, Maximo, Tomas and Lucia executed a deed of sale in favor of the spouses Paylago, over the eastern portion of the entire lot. Upon Florentino Lacatans death, his children also executed a deed of salein favor of the same vendees over another portion of the same lot, whose western portion was allocated to the heirs of Vidal Lacatan. The two deeds of sale were excecuted and the portions of land described were segregated. However, it was disclosed that a portion (one half hectare) of the total area was being occupied by Jarabe. Hence, the action to recover possession and ownership of the said portion. The trial court found that the said area had been purchased by the defendants husband, evidenced by an unregistered deed of sale . The defendant was said to have been in continuous possession of the land and the plaintidds had known this fact, as evidenced by a deed of lease. This the plaintiffs were considered as not purchasers in good faith. It ruled in favor of Jarabe. This decision was affirmed in toto by the Court of Appeals. Issue:

Who has a better right in case of double sale of real property, the registered buyer or the prior but unregistered purchaser? Held: While plaintiffs-petitioners have a registered title, it cannot be denied that their acquisition and subsequent registration were tainted with the vitiating element of bad faith. Both Courts found that petitioners knew beforehand that the parcel of land in question was owned by Jarabe. Considering that the boundaries of the lands were well defined, the spouses Paylago must have known that the portion occupied by Jarabe under claim of ownership and leased to them by the latter was included in the description. Coupled with their knowledge that Jarabe purchased the same from Apolonio Lacatan, they should have inquired and made an investigation as to the possible defects of the title of the Lacatan heirs over the entire lot sold to them, granting that the latter's certificate of title was clear. This, they failed to do. They cannot now claim complete ignorance of defendantrespondent's claim over the property. As was well stated in one case, "a purchaser who has knowledge of facts which should put him upon inquiry and investigation as to possible defects of the title of the vendor and fails to make such inquiry and investigation, cannot claim that he is a purchaser in good faith and has acquired a valid title thereto". To be entitled to the priority, the second vendee must not only show prior recording of his deed of conveyance or possession of the property sold, but must, above all, have acted in good faith, that is to say, without knowledge of the existence of another alienation by his vendor to a stranger. Hence, the court affirmed the decision of the CA and trial court. Hanopol vs Pilapil Facts: Hanopol claimed ownership of a parcel land by virtue of a series of purchases effected by means of private instruments, executed by the former owners Siapo. He complained that the vendors took possession of the said property through fraud, threat and intimidation, pretending falsely to be the owners thereof and ejecting the Hanopols tenants thereon, and since then had continued to possess the land. Hanopol was declared exclusive owner of the land in question. However, Pilapil asserted title to the property on the strength of a duly notarized deed of sale executed in his favor by the same owners. This was duly registered. Issue: WON the registration of the second deed of sale in favor of appellee Pilapil affects his right as the first vendee. Held: It thus appears that the "better right" referred to in Act No. 3344 is much more than the mere prior deed of sale in favor of the first vendee. In the Lichauco case just mentioned, it was the prescriptive right that had supervened. Or, as also suggested in that case, other facts and circumstances exist which, in addition to his deed of sale, the first vendee can be said to have better right than the second purchaser. In the case at bar, there appears to be no clear evidence of Hanopol's possession of the land in controversy. In fact, in his complaint against the vendors, Hanopol alleged that the Siapos took possession of the same land under claim of ownership in 1945 and continued and were in such possession at the time of the filing of the complaint against them in 1948. Consequently, since the Siapos were in actual occupancy of the property under claim of ownership, when they sold the said land to Pilapil, such possession was transmitted to the latter, at least constructively, with the execution of the notarial deed of sale, if not actually and physically as claimed by Pilapil. Hanopol cannot have a better right than Pilapilwho, "was not shown to be a purchaser in bad faith".

Agricultural and Home Extension Development Group vs CA Facts: In 1972, the spouses Diaz sold to Bruno Gundran a parcel of land in Las Pinas. The owner's duplicate copy was turned over to Gudran. However, he did not register the sale because he was advised by the Reg of Deeds of the existence of notices of lis pendens on the title. In 1972, Gundran and the petitioner entered into a Joint Venture Agreement for the improvement and subdivision of the land. This agreement was not annotated on the title. In 1976, the spouses Diaz entered into another contracts of sale of the same property with Librado Cabautan, the private respondent. By virtue of a court order, the spouses obtained a new owner's copy of the certificate of title and the notices of lis pendens were cancelled and the Deed of Sale in favor of Cabautan was recorded. A new TCT was then issued in the name of Cabautan. Gundran and the petitioner then filed separate actions for reconveyance, seeking the cancellation of the certificate. The complaints however were dismissed. This was affirmed by the CA Issue: WON the Cabautan is an innocent purchaser for value and so entitled to the priority granted under Art. 1544 of the Civil Code. Held: It is not disputed that the first sale to Gudran was not registered while the second sale to Cabautan was registered. The courts were justified in according preferential rights to the private respondent who had registered the sale in his favor, as against the petitioner's co-venturer whose right to the same property had not been recorder. The petitioner claims that Cabautan was a purchaser in bad faith because he was fully aware of the notices of lis pendens and of the earlier sale of the land to Gundran. A purchaser in good faith is defined as "one who buys the property of another without notice that some other person has a right to or interest in such property and pays a full and fair price for the same time of such purchase or before he has notice of claim or interest of some other person in the property. Also, an examinatio of the TCT showed no annotation of any sale, lien, encumbrance or adverse claim in favor of Gundran or the petitioner. It is a welll-settled rule that when the property sold is registered under the Torrens system, registration is the operative act to convey or affect the land insofar as third persons are concerned. Thus, a person dealing with registered land is only charged with notice of the burdens on the property which are noted on the register. Balatbat v. CA Facts: A parcel of land was acquired by plaintiff Aurelio Roque and Maria Mesina during their conjugal union. Maria died in 1966. Ten years later, Aurelio filed a case for partition. The trial court held that Aurelio is entitled to the portion at his share in the conjugal property, and 1/5 of the other half which formed part of Marias estate, divided equally among him at his 4 children. A transfer certificate was then issued by the Register of Deeds of Manila. On April 1, 1980, Aurelio sold his 6/10 share to spouses Aurora Tuazon-Repuyan and Jose Repuyan, as evidenced by a deed of absolute sale. Aurora then caused the annotation of her affidavit of adverse claim. However, since the buyers failed to pay the balance of the purchase price, Aurelio filed a complaint for rescission of contract. In 1982, another deed of absolute sale was executed between Aurelio and his children, and Clara Balatbat, involving the entire lot. Balatbat filed a motion for the issuance of writ of possession, which was granted by the court, subject to valid rights and interests of third persons. Balatbat then filed a motion to intervene in the rescission case, but did not file her

complaint in intervention. However, the court ruled that the sale between Aurelio and Aurora was valid. This was affirmed by the CA hence this petition. Issue: WON there was a double sale. Held: In the case at bar, vendor Aurelio Roque sold 6/10 portion of his share to private respondents Repuyan on April 1, 1980. Subsequently, the same lot was sold again by vendor Aurelio Roque (6/10) and his children (4/10), represented by the Clerk of Court pursuant to Section 10, Rule 39 of the Rules of Court, on February 4, 1982. Undoubtedly, this is a case of double sale contemplated under Article 1544 of the New Civil Code. Evidently, private respondents Repuyan's caused the annotation of an adverse claim on the title of the subject property on July 21, 1980. The annotation of the adverse claim in the Registry of Property is sufficient compliance as mandated by law and serves notice to the whole world. Accordingly, private respondents who first caused the annotation of the adverse claim in good faith shall have a better right over herein petitioner. As between two purchasers, the one who has registered the sale in his favor, has a preferred right over the other who has not registered his title even if the latter is in actual possession of the immovable property. Further, even in default of the first registrant or first in possession, private respondents have presented the oldest title. Thus, private respondents who acquired the subject property in good faith and for valuable consideration established a superior right as against the petitioner. Hence the petition was dismissed. Caram vs Laureta Facts: In 1945, Marcos Mata conveyed a large tract of agricultural land in favor of Claro Laureta. The deed of absolute sale was not registered because it was not acknowledged before any authorized officer, since the civil government in Tagum, Davao was not as yet organized. However, Mata delivered to Laureta possession of the premises of the land together with the pertinent papers such as the Owner's Duplicate Original Certificate of Title, tax declaration, tax receipts and other papers related thereto. Since then Laureta occupied the land.y In 1947, the same land was sold by Mata to Fermin Z. Caram, Jr. The deed of sale was acknowledged. A transfer certificate of title afterwards was issued in favor of Caram. Laureta then filed an action for nullity, recovery of ownership and/or reconveyance with damages against Mata and Caram. Mata then answered that the privated deed between them existed but theis was acquired through duress, threat and intimidation. Mata also denied that he signed a deed of sale in favor of Caram, alleging that his consent was obtained through fraud and misrepresentation since he was illiterate and that he did not recieve a consideration for the sale. The trial court however, ruled in favor of Laureta. This decision was affirmed by the Court of Appeals, hence this petition. Issue: WON the sale to Laureta prevails over that made in favor of Laureta Held: The question to be determined now is, who was first in possession in good faith? A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. Laureta was first in possession of the property. He is also a possessor in good faith. It is true that Mata had alleged that the deed of sale in favor of Laureta was procured by force. Such defect, however, was cured when, after the lapse of four years from the time the

intimidation ceased, Marcos Mata lost both his rights to file an action for annulment or to set up nullity of the contract as a defense in an action to enforce the same. The principle that a person dealing with the owner of the registered land is not bound to go behind the certificate and inquire into transactions the existence of which is not there intimated should not apply in this case. It was known to Carams agents that there were no officials to ratify contracts of sale and make them registerable. Even if Mata disputed it, such sale could not have been registered. Applying the principle of agency, Caram as principal, should also be deemed to have acted in bad faith. Hence the first sale over Lauret prevailed over Caram Taneda vs CA Facts: Lazaro Taedo executed a deed of absolute sale in favor of his elder brother, Ricardo Taedo and the latters wife, Teresita Barrera in which he conveyed a parcel of land which he will inherit. Upon the death of his father, Lazaro executed an affidavit of conformity to reaffirm the said sale. He also executed another deed of sale in favor of the spouses covering the parcel of land he already inherited. Ricardo registered the last deed of sale in the registry of deeds in their favor. Ricardo later discovered that Lazaro sold the same property to his children through a deed of sale which was recorded in the Register of Deeds. The trial court ruled in favor of of the private respondents, and this was affirmed by the CA, ruling that the second deed of sale was valid and that its registration in good faith vested title in said respondents. Issue: WON the Tanedo spouses acted in good faith in registering the deed of sale, thus passing on to them the land in question. Held: Since a future inheritance generally cannot be a subject of a contract, the deed of sale and the affidavit of conformity made by Lazaro has no effect. The subject of dispute therefore is the deed of sale made by him in favor of spouses Taedo and another to his children after he already legally acquired the property. Thus, although the deed of sale in favor of private respondents was later than the one in favor of petitioners, ownership would vest in the former because of the undisputed fact of registration. On the other hand, petitioners have not registered the sale to them at all. Petitioners contend that they were in possession of the property and that private respondents never took possession thereof. As between two purchasers, the one who registered the sale in his favor has a preferred right over the other who has not registered his title, even if the latter is in actual possession of the immovable property. Tanongon vs Samson Facts: Cayco Marine Service (CAYCO) is engaged in the business of hauling oil. The respondents in this case were among the employees of CAYCO. They had filed a complaint against CAYCO and Olixzon for illegal dismissal, underpayment of wages, non-payment of holiday pay, rest day pay and leave pay. The labor arbiter dismissed the complaint for lack of merit. On appeal, it was reversed by the NLRC. The NLRC then issued a writ of execution directing the collection from CAYCO the award due for each respondent. A notice of levy/sale on execution of personal property was afterwards issued, and CAYCOs motor tanker was seized, to be sold at public auction. Doretea Tanongon then filed a third party claim, alleging that she was the owner of the subject motor tanker, having acquired the same from the owner of CAYCO. This was dismissed by the Labor arbirter but was reversed by the NLRC. On appeal, the CA then ruled that Tanongon was not a buyer in good faith, the sale having veen hastily conducted, confirming the respondents suspicion that Olizon had intended to overcome the enforcement of the Writ of Execution. Hence this Petition.

Issue: Whether or not petitioner Dorotea Tanongon is a buyer in good faith and for value. Held: Tanongon is not a purchaser in good faith and for value. It was observed that she, having known the issuance of the levy, she bought the tanker barely ten days before it was levied upon. Purchaser in good faith or an innocent purchaser for value is one who buys properly and pays a full and fair price for it at the time of the purchase or before any notice of some other persons claim on or interest in it. Petitioner should have inquired whether Olizon had other unsettled obligations and encumbrances that could burden the subject property. Any person engaged in business would be wary of buying from a company that is closing shop, because it may be dissipating its assets to defraud its creditors. Consolidated Rural Bank of Cagayan Valley vs CA Facts: The Madrid brothers were the registered owners of a parcel of land, which was subdivided into several lots, one of which was sold to Aleja Gamiao and Felisa Dayag. The deed of sale was not registered. Gamiao and Dayag declared the property for taxation purposes in their names. Gamiao and Dayag sold the southern half of the lot to Teodoro dela Cruz, and the northern half, to Restituto Hernandez. Later, Hernandez donated the northern half to his daughter, Evangeline del Rosario and the children of dela Cruz continued possession of the southern half after their fathers death. Subsequently, in a registered deed of sale, the Madrid brothers conveyed all their rights and interests over the lot to Pacifico Marquez. Marquez then subdivided the lot into eight and then mortgaged four of them to the CRB and the Rural Bank of Cagayan to separate loans. These deeds of real estate mortgage were registered. As Marquez defaulted in the payment of his loan, CRB caused the foreclosure of the mortgages in its favor and the lots were sold to it as the highest bidder. Marquez also sold one of the lots to Romeo Calixto. The Heirds of dela Cruz then filed a case for reconveyance and damages with regards to the southern part of the land (sold by Gamiao and Dayag), claiming to be null and void the the foreclosure sales; the mortgage to RBC; and the sale to Calixto; against Marquez, Calixto, RBC and CRB. Evangeline del Rosario, the successor-in-interest of Restituto Hernandez, also filed a Complaint in Intervention wherein she claimed the northern portion of the lot. The trial court then upheld Marquez ownership over the land subject matter, him being the vendee who first registered his sale. This ruling was reversed by the CA, which held that although Marquez was the first registrant, there was no showing that the registration of the deed of sale in his favor was coupled with good faith. Marquez admitted having knowledge that the subject property was being taken by the Heirs at the time of the sale. Also, the mortgagees RBC and CRB, merely relied on the certificates of title of the mortgaged properties. They did not ascertain the status and condition thereof according to standard banking practice. For failure to observe the ordinary banking procedure, the CA considered them to have acted in bad faith and on that basis declared null and void the mortgages made by Marquez in their favor. Issue: WON the rule on double sale is applicable in the case at bar. Held: In a situation where not all the requisites are present which would warrant the application of Art. 1544, the principle of prior tempore, potior jure or simply he who is first in time is preferred in right, should apply. The only essential requisite of this rule is priority in time; in other words, the only one who can invoke this is the first vendee. Undisputedly, he is a purchaser in good faith because at the time he bought the real property, there was still no sale to a second vendee. In the instant case, the sale to the Heirs by Gamiao and Dayag, who first bought it from Rizal Madrid, was anterior to the sale

by the Madrid brothers to Marquez. The Heirs also had possessed the subject property first in time. Thus, applying the principle, the Heirs, have a superior right to the subject property. Moreover, it is an established principle that no one can give what one does not have nemo dat quod non habet. Accordingly, one can sell only what one owns or is authorized to sell, and the buyer can acquire no more than what the seller can transfer legally. In this case, since the Madrid brothers were no longer the owners of the subject property at the time of the sale to Marquez, the latter did not acquire any right to it. Also, the claim of Marquez still cannot prevail over the right of the Heirs since according to the evidence he was not a purchaser and registrant in good faith. Marquez knew at the time of the sale that the subject property was being claimed or taken by the Heirs. This was a detail which could indicate a defect in the vendors title which he failed to inquire into. The rule also equally applies to mortgagees of real property. Hence, the petition was denied. Dela Merced vs GSIS Facts: Governor Jose C. Zulueta and his wife were the owners of parcels of land in Antonio Village, Pasig City. They made several loans, as security for which they mortgaged the said lands covered by different TCTs. It was expressly stipulated in the mortgage deed that certain lots within TCT No. 26105 shall be excluded from the mortgage because they have been either previously sold to third parties or donated to the government. The Zulueta spouses then sold to Francisco dela Merced and Evarista Mendoza, several lots covered by TCT No. 26105 where, a Deed of Absolute Sale was executed. The Zuluetas defaulted in the payment of their loans. Thus, GSIS extrajudicially foreclosed the mortgages and, at the foreclosure sale GSIS was awarded the mortgaged properties as the highest bidder. Since the Zuluetas did not redeem the properties within the reglementary period, title to the properties was consolidated to GSIS. GSIS then held a sale at public auction of its acquired assets. Elizabeth D. Manlongat and Ma. Therese D. Manlongat, purchased one of the lots. A complaint for declaratory relief, injunction and damages, was filed by Victor Lemonsito and several others, against Benjamin Cabusao, an officer of the Municipal Task Force on Squatters of the Municipal Engineers Office of Pasig. They averred that they were owners of houses in various lots in Antonio Village, having constructed the same with the permission of the late Jose C. Zulueta before the same was foreclosed by GSIS; and that Cabusao was threatening to demolish plaintiffs houses on the alleged ground that they were squatters on the lots. Col. dela Merced also instituted an action against GSIS and the spouses Zulueta, praying, among others, that the foreclosure sale, insofar as his lots were concerned, be declared null and void. The trial court granted his prayer. It also declared as null and void the certificates of title issued to GSIS covering the said lots, as well as sold to the Manlongat spouses. This decision however,was reversed by the CA. Issue: WON the petitioners have a better right over the properities than GSIS Held: It was held that the registered right of GSIS as mortgagee of the property is inferior to the unregistered right of Francisco dela Merced. The unrecorded sale is preferred for the reason that if the original owner had parted with his ownership of the thing sold then he no longer had ownership and free disposal of that thing so as to be able to mortgage it again. Registration of the mortgage is of no moment since it is understood to be without prejudice to the better right of third parties. Also, GSIS admitted it received a letter from dela Merced, stating that he had acquired the subject lots by virtue of a deed of absolute sale. They also admitted the fact that they replied that Merceds claim of ownership over Block 8, Lot 8, of TCT No. 26105 had no problem; but his claim to Lots 6, 7, 10 and 11 of Block 2, of the same title, was not very clear. Therefore, GSIS had full knowledge of the claim of ownership of dela Merced over the aforementioned lots even before their sale at public auction to Elizabeth Manlongat.

Also, GSIS had at its disposal vast resources with which it could adequately protect its loan activities, and therefore is presumed to have conducted the usual due diligence checking the actual status, condition, utilization and occupancy of the property offered as collateral. It could not have been unaware that the property had been built on by small lot buyers. As to the title of Manlongat, this was derived through sale or transfer from GSIS, whose acquisition over the property proceeded from a foreclosure sale that was null and void. Since no one can transfer a greater right to another than he himself has, the subsequent certificates of title of GSIS and of Manlongat over the property are both void, because of the legal truism that the spring cannot rise higher than the source. Hence, the petition was granted.

San Lorenzo Development Corporation vs. CA Facts: The Spouses Lu sold two parcelsof land in Laguna to respondent Pablo Babasanta, for the price of fifteenpesos (P15.00) per square meter. Babasanta made a downpayment of P50,000.00 as evidenced by a memorandumreceipt issued by Pacita Lu on August 1986. Babasanta wrote a letter to Pacita Lu to demand the execution ofa final deed of sale in his favor so that he could effect fullpayment of the purchase price. He also notified the spouses about having received information that the spouses sold the same property to another without his knowledge and consent. He demanded that the second sale be cancelled and that a final deed of sale be issued in his favor. Pacita Lu replied that when the balance of the purchase price became due, he requested for a reduction of the price and when she refused, Babasanta backed out of the sale. Babasanta then filed a complaint for specific performance and damages against them. Thereafter, SLDC filed a Motion for Intervention, alleging that the parcels of land had been sold to it in May1989, in aDeed of Absolute Sale with Mortgage. It alleged that it was abuyer in good faith and for value and therefore it had a betterright over the property in litigation. SLDC also argued that it had no obligation to look beyond the titles submitted to it by the Spouses Lu particularly because Babasantas claims were not annotated on the certificates of title at the time the lands were sold to it. The trial court ruled that since both Babasanta and SLDC did not register the respective sales in their favor, ownership of the property should pertain to the buyer who first acquired possession of the property. The trial court equated the execution of a public instrument in favor of SLDC as sufficient delivery of the property to the latter. It concluded that symbolic possession could be considered to have been first transferred to SLDC and consequently ownership of the property pertained to SLDC who purchased the property in good faith. Upon appeal, the CA set aside the judgement of the trial court, and declared the first sale as valid and subsisting. Hence, this petition. Issue: Who between SLDC and Babasanta has a better right over the two parcels of land subject of the instant case in view of the successive transactions executed by the Spouses Lu. Held: The court held that the agreement between Babasanta and the Spouses Lu is a contract to sell and not a contract of sale. The perfected contract to sell imposed upon Babasanta the obligation to pay the balance of the purchase price. Babasanta should have made the proper tender of payment and consignation of the price in court as required by law, which he failed to do. Mere sending of a letter by the vendee expressing the intention to pay without the accompanying payment is not considered a valid tender of payment.

Since the transaction between the parties is a contract of sale and not a contract to sell, Babasantas claim of ownership should nevertheless fail. Babasanta did not acquire ownership by the mere execution of the receipt by Pacita Lu acknowledging receipt of partial payment for the property. For one, the agreement between Babasanta and the Spouses Lu, though valid, was not embodied in a public instrument. Hence, no constructive delivery of the lands could have been effected. There was no delivery to Babasanta, whether actual or constructive, which is essential to transfer ownership of the property. Thus, even on the assumption that the perfected contract between the parties was a sale, ownership could not have passed to Babasanta in the absence of delivery, since in a contract of sale ownership is transferred to the vendee only upon the delivery of the thing sold. Carumba vs. CA Facts: The spouses Canuto, by virtue of a "Deed of Sale of Unregistered Land with Covenants of Warranty", sold a parcel of land, partly residential and partly coconut land in Camarines Sur, to the spouses Carumba for the sum of P350.00. The deed was never registered. A complaint for a sum or money was filed by Santiago Balbuena against the spouses Canuto, wherein judgement was rendered in favor of Balbuena. The ex-officio Sheriff issued a "Definite Deed of Sale of the propertywhich was registered and declared for taxation purposes in the name of Santiago Balbuena. The trial court, finding that after execution of the document Carumba had taken possession of the land, planting bananas, coffee and other vegetables thereon, declared him to be the owner of the property under a consummated sale; held void the execution levy made by the sheriff, and nullified the sale in favor of Balbuena. The CA, declared that there having been a double sale of the land subject of the suit Balbuena's title was superior to that of his adversary, since the execution sale had been properly registered in good faith and the sale to Carumba was not recorded. Issue: WON Balbuena had a better right to the property, since the sale to him had been properly registered. Held: The court disagreed. While under the invoked Article 1544 registration in good faith prevails over possession in the event of a double sale by the vendor of the same piece of land to different vendees, said article is of no application to the case at bar, even if Balbuena, the later vendee, was ignorant of the prior sale made by his judgment debtor in favor of petitioner Carumba. The reason is that the purchaser of unregistered land at a sheriff's execution sale only steps into the shoes of the judgment debtor, and merely acquires the latter's interest in the property sold as of the time the property was levied upon. The time of the levy does not clearly appear, it could not have been made prior to the time when the decision against the former owners of the land was rendered in favor of Balbuena. But the deed of sale in favor of Canuto had been executed two years before, and while only embodied in a private document, the same, the fact that the Carumba had taken possession of the unregistered land sold, sufficed to vest ownership on the said buyer. When the levy was made by the Sheriff, therefore, the judgment debtor no longer had dominical interest nor any real right over the land that could pass to the purchaser at the execution sale. Hence, the latter must yield the land to petitioner Carumba. Matabuena vs Cervantes FACTS:

In 1956, herein appellants brother Felix Matabuena donated a piece of lot to his common-law spouse, herein appellee Petronila Cervantes. Felix and Petronila got married only in 1962 or six years after the deed of donation was executed. Five months later, or September 13, 1962, Felix died. Thereafter, appellant Cornelia Matabuena, by reason of being the only sister and nearest collateral relative of the deceased, filed a claim over the property, by virtue of a an affidavit of self-adjudication executed by her in 1962, had the land declared in her name and paid the estate and inheritance taxes thereon. The lower court declared that the donation was valid inasmuch as it was made at the time when Felix and Petronila were not yet spouses, rendering Article 133 of the Civil Code inapplicable. ISSUE: WON the ban on donation between spouses during a marriage applies to a common-law relationship. HELD: 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 stated in Buenaventura vs. Bautista (50 OG 3679, 1954), 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. Rublas vs Batiller Facts: Before the war with Japan, Francisco Militante filed an application for registration of the parcel of land in question. After the war, the petition was heard and denied. Pending appeal, Militante sold the land to petitioner, his son-in-law. Plaintiff filed an action for forcible entry against respondent. Defendant claims the complaint of the plaintiff does not state a cause of action, the truth of the matter being that he and his predecessors-in-interest have always been in actual, open and continuous possession since time immemorial under claim of ownership of the portions of the lot in question. Issue: WON the contract of sale between appellant and his father-in-law was void because it was made when plaintiff was counsel of his father-in-law in a land registration case involving the property in dispute Held: The stipulated facts and exhibits of record indisputably established plaintiff's lack of cause of action and justified the outright dismissal of the complaint. Plaintiff's claim of ownership to the land in question was predicated on the sale thereof made by his father-in- law in his favor, at a time when Militante's application for registration thereof had already been dismissed by the Iloilo land registration court and was pending appeal in the Court of Appeals. Article 1491 of our Civil Code (like Article 1459 of the Spanish Civil Code) prohibits in its six paragraphs certain persons, by reason of the relation of trust or their peculiar control over the property, from acquiring such property in their trust or control either directly or indirectly and "even at a public or judicial auction," as follows: (1) guardians; (2) agents; (3) administrators; (4) public officers and employees; judicial officers and employees, prosecuting attorneys, and lawyers; and (6) others especially disqualified by law.

Fundamental consideration of public policy render void and inexistent such expressly prohibited purchase (e.g. by public officers and employees of government property intrusted to them and by justices, judges, fiscals and lawyers of property and rights in litigation and submitted to or handled by them, under Article 1491, paragraphs (4) and (5) of our Civil Code) has been adopted in a new article of our Civil Code, viz, Article 1409 declaring such prohibited contracts as " inexistent and void from the beginning." Indeed, the nullity of such prohibited contracts is definite and permanent and cannot be cured by ratification. The public interest and public policy remain paramount and do not permit of compromise or ratification. In his aspect, the permanent disqualification of public and judicial officers and lawyers grounded on public policy differs from the first three cases of guardians, agents and administrators (Article 1491, Civil Code), as to whose transactions it had been opined that they may be "ratified" by means of and in "the form of a new contact, in which cases its validity shall be determined only by the circumstances at the time the execution of such new contract. The causes of nullity which have ceased to exist cannot impair the validity of the new contract. Thus, the object which was illegal at the time of the first contract, may have already become lawful at the time of the ratification or second contract; or the service which was impossible may have become possible; or the intention which could not be ascertained may have been clarified by the parties. The ratification or second contract would then be valid from its execution; however, it does not retroact to the date of the first contract."

Simulation Payongayong vs CA Facts: Eduardo Mendoza was the registered owner of a parcel mortgaged the parcel of land to the Meralco Employees Savings secure a loan. He then executed a deed of sale with Assumption of favor of petitioners It is stated in the deed that petitioners bound the balance of the mortgage indebtedness of Mendoza to MESALA. of land in Caloocan. In 1985, He and Loan Association (MESALA) to Mortgage over the parcel of land in themselves to assume payment of

However, without the knowledge of petitioners, Mendoza made a second mortgage on the same property to MESALA to secure another loan. Mendoza then executed a Deed of Absolute Sale over still the same property in favor of respondents. MESALA then cancelled and released the real estate mortgage over the property. After knowing this the, petitioners filed a complaint for annulment of deed of absolute sale and transfer certificate of title with recovery of possession and damages against Mendoza. They then alleged that Mendoza maliciously sold to respondents the property which was priorly sold to them and that respondents acted in bad faith in acquiring it, the latter having had knowledge of the existence of the Deed of Absolute Sale with Assumption of Mortgage between them (petitioners) and Mendoza. The trial court ruled in favor of the respondents. This was affirmed by the CA. Issue: WON the deed of sale executed by Mendoza in favor of private respondents was simulated therefore null and void. Held: The cancellation of Mendozas certificate of title over the property and the procurement of the name of respondents, which acts were directed towards the fulfillment of the purpose of the contract, unmistakably show the parties intention to give effect to their agreement. The claim of simulation does not thus lie. That petitioners and respondents were forced to litigate due to the deceitful acts of the spouses Mendoza, this Court is not unmindful. It cannot be denied, however, that petitioners failure to

register the sale in their favor made it possible for the Mendozas to sell the same property to respondents. Under the circumstances, this Court cannot come to petitioners succor at the expense of respondents-innocent purchasers in good faith. Petitioners are not without remedy, however. They may bring an action for damages against the spouses Mendoza. Thus the petition was denied. Meeting of Minds as to Price Mapalo vs Mapalo Facts: The spouses Miguel and Candida Mapalo, simple illiterate farmers, were registered owners of a residential land in Pangasinan. In 1963, they decided to donate the eastern part of the land to Maximo, Miguels brother who was about to get married. However, they were deceived into signing a deed of absolute sale over the entire land in his favor. Their signatures were procured by fraud by Maximo and his attorney. Even if the document of sale stated that the spouses would recive a consideration of P500, the spouses did not receive anything. Following this, the spouses built a fence of permanent structure in the middle of their land, segregating the eastern and western section. Not known to them, Maximo gad registered the deed over the said land and sold it the Narsicos who also registered the land. At first, they took possession of only the eastern portion but then filed a suit aganist the spouses for possession of the lands western portion. The spouses then filed a counterclaimed that the deed of sale between the Mapalos was procured by fraud and the Narsicos were buyers in bad faith. They then asked that both the deeds of sale over the land in question be declared null and void as to the western half. The court ruled in favor of the spouses but this was reversed by the Court of Appeals on the ground that the consent of the Mapalo spouses to the deed of sale of 1936 having been obtained by fraud, the same was voidable, not void ab initio, and, therefore, the action to annul the same, within four years from notice of the fraud, had long prescribed. It reckoned said notice of the fraud from the date of registration of the sale on March 15, 1938. Issue: WON the document purporting to sell the entire land in favor of Mazimo was void, not merely voidable as to the western portion of the land for being absolutely simulated or fictitious. Held: The court held that under the Old civil code, the statement of a false consideration renders the contract voidable unless it is proveb that it is supported by another real consideration. But contracts without a cause or consideration produce no effect whatsoever. From the facts it can be seen that there was in fact no consideration,and the statement of one in the deed will not suffice to bring it under the rule of the Old Civil Code as stating a false consideration. The court has also ruled that a contract of purchase and sale is null and void and produces no effect whatsoever where the same is without cause or consideration in that the purchase price which appears thereon as paid has in fact never been paid by the purchaser to the vendor. Needless to add, the inexistence of a contract is permanent and incurable and cannot be the subject of prescription. Hence, the CA ruling was reversed and the trial court;s decision was affirmed in toto.

Villanueva vs CA Facts: The petitioner Gamaliel Villanueva has been a tenant-occupant of a unit in the 3-door apartment building erected on a parcel of land in QC owned by Jose Dela Cruz and his wife. In 1986, Dela Cruz offered the sale of the parcel of land with the apartment to Gamaliel and his mother, Irene, to which they showed interest. Because the property was in arrears in the payment of the realty taxes, respondent approached Irene Villanueva and asked for a certain amount to pay for the taxes so that the property would be cleared of any incumbrance. She gave P10T on two occassions. It was agreed by them that the P10T would form part of the sale price of P550,000.00. Sometime thereafter, Dela Cruz went to Irene bringing with him Ben Sabio, a tenant of one of the units, and requested her and her son to allow Sabio to purchase half of the property where the unit occupied by him pertained. They consented, so that they would just purchase the other half portion and would be paying only P265T. The property was then subdivided and two separate titles were then secured by DelaCruz and Sabio. In 1987, the spouses executed a Deed of Assignment (over the portion of land where the Villanuevas apartment was situated) in favor of the spouses Pili. The Villanuevas then complained that there was already an agreement between them that the land owned by the spouses DelaCruz would be sold to the villanuevas. The court ruled in favor of the spouses DelaCruz. Hence this appeal Issue: WON there was a perfected contract of sale of subject property between petitioners and respondents spouses Dela Cruz Held: To settle the above conflicting claims of the parties, petitioners could have presented the contract of sale allegedly prepared by private respondent Jose dela Cruz but was not signed by him. Unfortunately, the contract was not presented in evidence, which, according to the, was in the possession of dela Cruz. However, the court held that even if such draft deed existed, it does not necessarily follow that there was already a definite agreement as to the price. Moreover, if there was such an agreement, there is the fact that de la Cruz did not sign it. If indeed the draft deed of sale was that important to petitioners' cause, they should have shown some effort to procure it. But petitioners made no such effort. And even if produced, it would not have commanded any probative value as it was not signed. Sale is a consensual contract. He who alleges it must show its existence by competent proof. Here, the very essential element of price has not been proven.

Velasco vs CA Facts:

Lorenzo Velasco filed a suit against the Magdalena Estate, Inc, alleging that they had entered into a contract of sale where the latter offered to sell a parcel of residential land in New Manila for the total purchase price of P100,000.00, to which Velasco agreed. He also alleged that the agreement was that he was to give a down payment of P10,000.00 to be followed by P20,000.00 and the balance of P70,000.00 would be paid in installments, the equal monthly amortization of which was to be determined as soon as the P30,000.00 down payment had been completed. He also alleged that he had paid the P10,000.00 on in 1962 and that when in 1964, when he tendered to the defendant the payment of the additional P20,000.00 to complete the P30,000.00 the defendant refused to accept and likewise refused to execute a formal deed of sale obviously agreed upon. This complaint was dismissed by the trial court and a subsequent appeal to the CA was also dismissed. Issue: Whether or not a contract of sale was perfected becuase the minds of the parties did not meet in regard to the manner of payment Held: The court held that the material averments contained in the petitioners' complaint themselves disclose a lack of complete "agreement in regard to the manner of payment" of the lot in question. In the case at bar, both petitioners and respondent still had to meet and agree on how and when the down-payment and the installment payments were to be paid. Such being the situation, it cannot, therefore, be said that a definite and firm sales agreement between the parties had been perfected over the lot in question. The court has already ruled before that a definite agreement on the manner of payment of the purchase price is an essential element in the formation of a binding and unforceable contract of sale. The fact, therefore, that the petitioners delivered to the respondent the sum of P10,000 as part of the down-payment that they had to pay cannot be considered as sufficient proof of the perfection of any purchase and sale agreement between the parties herein under article 1482 of the new Civil Code, as the petitioners themselves admit that some essential matter the terms of payment still had to be mutually covenanted.

Almendra vs IAC Facts Aleja Ceno, was first married to Juanso Yu Book, with with whom she had three children. During this marriage, Aleja acquired a parcel of land which she declared in her name. Upon his death, Aleja and her daughter returned to the Philippines from China, where they lived. After Juanso Yu Book's death, Bernardina filed against her mother a case for the partition of the said property. The court, finding that the property was subdivided into four lots, granted ownership of two of these to Bernardina. Meanwhile, Aleja married Santiago Almendra with whom she had four children. During this marriage, they had acquired several parcels of land by sale and by inheritance. While Santiago was alive, he apportioned all these properties among Aleja's children in the Philippines, including Bernardina. After

Santiago's death, Aleja sold to her children Angeles and Roman several properties, one of which was described as half-portion, pertaining to her conjugal share with Santiago. Upon Alejas death, her children from her first marriage filed a complaint against Angeles and Roman for the annulment of the deeds of sale in their favor. This was granted but overturned by the IAC, which upheld the validity of the contracts. Issue: WON the appellate court erred in having sanctioned the sale of particular portions of yet undivided real properties. Held: The court ruled that there was indeed due execution of the deeds but it cannot put an impruatur on the itrinsic validity of all the sales. The sale of the land to Angeles, of the conjugal property may only be considered valid as a sale of Aleja's one-half interes ttherein. Aleja could not have sold particular the portion specified in the deed of sale in absence of proof that the conjugal partnership property had been partitioned after the death of Santiago. Before such partition, Aleja could not claim title to any definite portion of the property for all she had was an ideal or abstract quota or proportionate share in the entire property.